Kozdras v. Land/Vest Properties, Inc.

*46Quirico, J.,

(dissenting, with whom Wilkins, J., joins). The court today holds that a party whose land has been registered to another may, through collateral proceedings, successfully attack the decree of registration without proving any fraudulent intent on the part of the registrant. I disagree on two grounds. First, I think that the effort to bring this case within the rule of State St. Bank & Trust Co. v. Beale, 353 Mass. 103 (1967), has forced the court to rely on a number of assumptions which are unsupported by the record before us. Second, and more fundamentally, I do not believe that by its use of the word “fraud” in G. L. c. 185, § 45, and elsewhere in the Land Registration Act, the Legislature intended to authorize collateral attack on decrees of registration in circumstances like those presented here. In my view, today’s decision creates an exception to the comprehensive scheme enacted by G. L. c. 185, §§ 26-56A “almost as broad as the scope of the general rule otherwise contained in that [chapter].” National Academy of Sciences v. Cambridge Trust Co., 370 Mass. 303, 313 (1976) (Wilkins, J., dissenting in part). The extension of the doctrine announced in the State St. Bank & Trust Co. case to the facts of this case leaves entirely unclear the degree of care a would-be registrant of title must exercise to obtain the benefits of the land registration procedure provided by the Legislature. The result reached by the Superior Court, and today affirmed by this court, thus injects into our system for land registration precisely the element of uncertainty and the concomitant potential for litigation that the system was designed to protect against.

To understand what is at stake in this case, it is necessary to expand somewhat on the court’s account of the facts giving rise to this controversy. Some time prior to September, 1970, the Associates entered into negotiations with the “Fuller Farm Trust” for the purchase of a tract of unimproved land located in the town of North Andover. This tract, known as the “Fuller Farm,” lies in an area of North Andover which had historically been a “common,” an area of some three thousand acres in which, as the prior owner *47put it, “everybody agrees the titles were bad and nobody knows who owns what.” In the course of the negotiations with the Associates, Charles Cyr, a registered Land Court engineer, surveyed the estate held by the Fuller Farm Trust and prepared a plan of that estate displaying some 195 acres. According to uncontradicted testimony taken before the Superior Court judge, Cyr prepared the plan under the supervision of the seller and was paid eleven thousand ($11,000) dollars by the seller.

As the seller also testified in the proceeding below, the Cyr plan was the only survey of the Fuller Farm which was available at the time of the sale, there was no reason to assume it to be inaccurate, and the Associates relied on it. It is true that on sheet 3 of the plan, which set forth the Kozdrases’ boundary, there is a discrepancy of some 60 acres between the area for which the Fuller Farm Trust held deeds and the area shown on the Cyr plan. The Associates apparently thought this discrepancy to be accounted for by the generally faulty state of title in the area and by the seller’s claim of adverse possession. Significantly, the Land Court found that claim of adverse possession to be valid, a finding that has not been challenged except by the Kozdrases. Also significant is the fact that the twelve acres now claimed by the Kozdrases comprise less than a tenth of the entire parcel purchased by the Associates. In my view, there was sufficient evidence to support the Superior Court judge’s finding that the inclusion of the Kozdras land in the Cyr plan did not result from any intentional wrongdoing on the Associates’ part.

In any event, the Cyr plan was filed by the Associates with their petition for registration as their description of the land sought to be registered. See G. L. c. 185, § 28. The apparent reason for the registration proceeding was to ascertain the area of, and to settle title to, the land the Associates had purchased. There is nothing suspect or even unusual in this use of the land registration procedure. We have repeatedly recognized that a registration proceeding provides an appropriate forum for establishing a title ac*48quired by adverse possession. Rothery v. MacDonald, 329 Mass. 238, 242 (1952). Hurlbut Rogers Mach. Co. v. Boston & Me. R.R., 235 Mass. 402 (1920). See Keith v. Kennard, 222 Mass. 398 (1916) (upholding registration of title gained by prescription).

The court suggests that the Kozdrases “reified] on the integrity of the submitted plan,” supra at 45, thereby clearly implying that the defect in the notice to the Kozdrases was caused by the defect in the Associates’ registration petition. These conclusions reflect an incomplete understanding of the statutory procedure. The filing of the petition for registration merely initiates the registration proceeding; the Land Court is then charged with protecting the interests of persons who might be adversely, affected by a decree of registration. After a petition is filed, the Land Court is required to refer it to an examiner of title who must then “search the records and investigate all facts stated in the petition, or otherwise brought to his notice, and . . . file in the case a report thereon, concluding with a certificate of his opinion upon the title.” G. L. c. 185, § 37, as amended by St. 1977, c. 151, § 1. Section 37 at the time of this proceeding further provided that if the examiner’s opinion proved to be adverse to the petitioner, the petitioner could nevertheless elect to proceed.1 The Associates did so elect.

It was only at this point in the proceeding that notice to the Kozdrases was required. It is significant, however, that the required notice is based on the facts as stated in the examiner’s report, not the petition for registration. This point is explicit in G. L. c. 185, § 38, which provided at the time of this proceeding that “the recorder shall, immediately upon the filing of the examiner’s opinion, or upon the filing of the petitioner’s election, as the case may be, cause notice of the filing of the petition to be published in a newspaper published in the district where any portion of the land lies.” *49The published notice must name “all persons known to have an adverse interest,” as well as all adjoining owners and occupants. “The court shall also, within seven days after publication of said notice in a newspaper, cause a copy thereof to be sent by the recorder by mailing a registered letter to every person named therein whose address is known.” G. L. c. 185, § 39.

The Kozdrases’ status as an abutter seems clearly to have been a “[fact] stated in the petition” within the meaning of § 37, and thus within the scope of the examiner’s mandatory investigation. That the discrepancy between the Cyr plan and the official records escaped both the Associates and the Land Court is, as the Superior Court judge put it, “incredible.” Neither party put the examiner’s report on the record, and in its absence, I do not mean in any way to question its accuracy. As it stands, however, the record before us shows only that the Associates’ petition for registration included an error in their description of the land sought to be registered, and that that error was somehow incorporated into the notice received by Frank Kozdras.

This case is thus wholly distinguishable from State St. Bank & Trust Co. v. Beale, supra, which the court cites as controlling. That case involved the sufficiency of a bill in equity filed in the Land Court by the plaintiff, alleging that the defendant had perpetrated a fraud on the court resulting in the issuance to him of a certificate of title to a parcel of land which he knew at all times belonged to the plaintiff. The alleged fraud included the following acts by the defendant: (a) falsely stating in his petition for registration that he did not know of any other persons having an interest in the property when he knew that the plaintiff was the owner thereof, with the result that the published notice of the petition did not name the true owner and no registered mail notice was sent to the owner, and (b) obtaining two affidavits, which the defendant knew to be false, that he and predecessors in interest had acquired title to the property by adverse possession. The judge of the Land Court held that this was in the nature of a petition for review under *50G. L. c. 185, § 45, which was not seasonably started within one year after the entry of the decree of registration, and further that the Land Court had no jurisdiction to award damages in equity for fraud in procuring the decree, and he therefore sustained the defendant’s demurrer. This court held that to be error: “It is well settled that a traditional remedy for a person who has been deprived of land through fraud is specific restitution. ‘A person who has tortiously acquired or retained a title to land ... is under a duty of restitution to the person entitled thereto.’ Restatement: Restitution, § 130. The duty to make such restitution is often enforced by imposing a constructive trust. In Barry v. Covich, 332 Mass. 338, [342 (1955)], we said, ‘A constructive trust may be said to be a device employed in equity, in the absence of any intention of the parties to create a trust, in order to avoid the unjust enrichment of one party at the expense of the other where the legal title to the property was obtained by fraud . . ..’ Restatement: Restitution, § 160.” State St. Bank & Trust Co., supra at 105.

In reaching the result described above in the State St. Bank & Trust Co. case, this court relied in part on the fact that G. L. c. 185 provides (a) in § 45, that “any person aggrieved by such decree [of registration] in any case may pursue his remedy in tort against the petitioner or against any other person for fraud in procuring the decree,” (b) in § 62 which deals with the presentation of the owner’s duplicate certificate upon the transfer of registered land, that “ [i]n all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud,” and (c) in § 75, that “[w]hoever claims an interest in registered land by reason of any implied or constructive trust shall file for registration with the assistant recorder a statement thereof containing [specified information].”

As is evident from this discussion, the State St. Bank & Trust Co. case involved a deliberate plan by the defendant to seize title to a parcel of land which he knew belonged to the bank. He pursued a preconceived plan to impose a fraud on the Land Court by withholding the name of the *51known owner of the property, and then filing false affidavits as to adverse possession, one executed by an assessor who swore to facts which he and the defendant knew were false. The differences between that case and this are, to my mind, differences not of degree, but of kind. First, the error in the Associates’ petition did not put the Land Court “in the same position as were the plaintiffs,” a finding made below and quoted by the court with apparent approval, supra at 41. The court’s notice to the Kozdrases was presumably based on its own investigation of the Associates’ petition. Second, although the court today repeatedly speaks in terms of “knowing,” “wilful,” or “reckless” actions on the part of the Associates, I think the judge’s finding that the Associates were guilty of no intentional wrongdoing is supported by the record, and thus binding on this court. The Associates’ failure to investigate fully the boundaries shown on the Cyr plan can plausibly be explained by the fact that they thought any record discrepancy would be accounted for by their claim of adverse possession. Third, nothing which the Associates did in the present case deprived Kozdras of notice of the Land Court proceedings. The name “Frank Kozdras” appeared near the beginning of the legal notice which was published in an area newspaper, and the name “Kozdras” appeared in the body of the notice. A copy of the notice was mailed to Frank Kozdras by registered mail, and was actually received by him. The notice expressly referred to a plan which had been filed with the petition and which showed the land sought to be registered. The notice expressly informed Kozdras and other persons named as follows: “If you desire to make any objection or defense to said petition you or your attorney must file a written appearance and an answer under oath ... in the office of the Recorder of said Court in Boston . . . or in the office of the Assistant Recorder of said Court at the Registry of Deeds at Lawrence . . . where a copy of the plan filed with said petition is deposited, on or before the twenty-third day of August next.”

Kozdras took his copy of the notice of the Land Court proceeding to an attorney for professional advice. He was *52aware of his right to file an appearance and answer, but, believing that his land was not affected, he elected not to do so. An examination of the plan filed with the Associates’ petition might have alerted Kozdras to the fact that it actually included the Kozdras land in that proposed to be registered as the land of the Associates. His failure to examine the plan and to file an appearance and answer in the Land Court resulted ultimately in the entry of a default against him, and the entry of the decree declaring the Associates to be the owners of what had theretofore been the Kozdras land. “One who has neglected to take the necessary and essential steps provided by a statute creating a remedy [in the instant case, G. L. c. 185, § 41, permitting the filing of an appearance and an answer] has no right to the remedy.” St. George’s Church v. Primitive Methodist Church, 315 Mass. 202, 204 (1943) (involving the failure of a party to file a sworn statement of its adverse claim in a Land Court proceeding).

I therefore think that today’s opinion must be read as squarely adopting the doctrine of “constructive” fraud as a ground on which to attack a decree of registration. This court has recognized the doctrine of either “technical fraud” or “constructive fraud,” or both, in a number of decisions. Many of the cases on this point were cited or discussed most recently in our opinion in National Academy of Sciences v. Cambridge Trust Co., 370 Mass. 303, 308-310 (1976). We pointed out there that this doctrine “has been developed primarily in the context of actions seeking rescission of contracts and of tort actions for deceit.” Id. at 309. Those actions usually involved a situation where a person purported to speak of his own knowledge about a fact which was capable of ascertainment, and about which the speaker had no such knowledge and his statement was not true. In that decision we cited the case of Page v. Bent, 2 Met. 371, 374 (1841), where the court said: “The principle is well settled, that if a person make a representation of a fact, as of his own knowledge, in relation to a subject matter susceptible of knowledge, and such representation is not true; if the *53party to whom it is made relies and acts upon it, as true, and sustains damage by it, it is a fraud and deceit, for which the party making it is responsible.”

In National Academy of Sciences, supra at 309, we then noted that “an analogous standard might be applicable to misrepresentations in the accounts of fiduciaries” and then cited several cases applying that “analogous standard.” The vital basis for all such cases was the existence of a fiduciary relationship between the person who allegedly made the misrepresentation and the person who claimed to have been damaged thereby. There was no such relationship in this case between the Kozdrases and the Associates. Instead, they were adversaries in a judicial proceeding. There is nothing in the record to indicate that the Associates violated any fiduciary duty which they owed to Kozdras.

More important than the result in this specific case, however, is the extent to which today’s decision impairs the carefully balanced system of rights and remedies contained in the Land Registration Act as a whole. The statutory provisions and the prior decisions of this court, as well as other relevant commentary, all emphasize the preeminence of the policies of certainty and finality there embodied. Today’s recognition of “constructive” or “technical” fraud as an exception to those policies in my opinion represents a drastic and unwarranted inroad into the legislative scheme.

In our prior cases, we have said that a petition for the registration of title to land is “a proceeding in rem dealing with a tangible res [and it] may be instituted and carried to judgment without personal service upon claimants within the State or notice by name to those outside of it, and not encounter any provision of either Constitution [State or Federal]. Jurisdiction is secured by the power of the court over the res.” Tyler v. Court of Registration, 175 Mass. 71, 75 (1900). It is “a judicial proceeding to clear titles against all the world . . . , for the very meaning of such a proceeding is to get rid of unknown as well as known claims.” Id. at 73. “Registration is the act which passes title and is the act of the court. . . . The purpose of registration law is to *54bind the land and to quiet title to it. Registration is conclusive upon every one, with a few exceptions not material to the issues in this case, and the rights of innocent purchasers for value are given special protection. . . . Persons dealing with the land in the future may rely on the files at the registry and the interests of no one require changes in the records.” Malaguti v. Rosen, 262 Mass. 555, 567-568 (1928). General Laws c. 185, has been described as “a statute that is ... an elaborate legislative plan for the registration of titles to land, where, subject to certain exceptions, all rights of ownership and interests in the land are shown by certificates of title.” St. George's Church v. Primitive Methodist Church, 315 Mass. 202, 205 (1943).

Much the same point is made by nonjudicial commentators on the system. “The Torrens System, developed because of the need of a judicial process for forever settling the title to real estate, establishes an indefeasible title that is free of all claims, so that anyone dealing with the property can be sure that the only claims on the property are the ones that are registered (with some minor exceptions as specified in the statute [G. L. c. 185, § 46]). The system takes much of the uncertainty and expense out of title searching. Uncertainty is taken out by the judicial decree which cuts off all speculation or doubts as to the title’s validity as of the time of the decree. Money and time are saved by the short title search made possible by the decree.” G.P. Davis, Massachusetts Conveyancers’ Handbook § 125, at 193-194 (2d ed. 1967).

The circumstances in which collateral attack on a decree of registration is permitted by the statute are accordingly limited. General Laws c. 185, § 38, as amended by St. 1977, c. 151, § 2, prescribes the form of the notice of the filing of the petition. The notice is required to name all persons known to have an adverse interest in the property in question, and is then addressed generally “to all whom it may concern.” The notice contains a description of the land. It informs persons desiring to object that they must file a written appearance and an answer at a stated office of *55the court where a copy of the plan filed with the petition is on file; and it warns that unless such an appearance is so filed a default will be recorded, the petition will be taken for confessed, and the party “will be forever barred from contesting said petition or any decree entered thereon.” General Laws c. 185, § 42, states that “[b]y the description in the notice, ‘to all whom it may concern’, all the world are made parties defendant and shall be concluded by the default and order [that the petition be taken for confessed].” It provides further that “[a]fter such default and order, the court may enter a decree confirming the title of the petitioner and ordering registration thereof.”

General Laws c. 185, § 45, states that the “decree of confirmation and registration . . . shall be conclusive upon and against all persons, including the commonwealth, whether mentioned by name in the petition, notice or citation, or included in the general description ‘to all whom it may concern’. Such decree shall not be opened by reason of the absence, infancy or other disability of any person affected thereby, nor by any proceeding at law or in equity for reversing judgments or decrees; subject, however, to the right of any person deprived of land, or of any estate or interest therein, by a decree of registration obtained by fraud to file a petition for review within one year after the entry of the decree, provided no innocent purchaser for value has acquired an interest.... But any person aggrieved by such decree [of registration] . . . may pursue his remedy in tort against the petitioner or against any other person for fraud in procuring the decree” (emphasis supplied).

These provisions of the statute, as well as our prior decisions based upon them, indicate to me that proof of something more than inadvertence is required to overcome the finality of a decree of registration. The instant case is an anomaly; the petitioners, the court, and the Kozdrases all failed to discover the error in description, and as a result the statutory safeguards against such errors failed. In the absence of proof of intentional wrongdoing, however, I believe that the Legislature intended that a decree of registra*56tion, once final, be immune to collateral attack.2 I am not unsympathetic to the Kozdrases’ plight, nor do I mean to condone the morality of the position now taken by the Associates. Here, however, we are called upon to ascertain and enforce the intent of the Legislature as expressed in a statute, not to decide as an initial matter whether the Associates should be held liable for their actions or inaction. Cf. National Academy of Sciences v. Cambridge Trust Co., supra at 313-314 (Wilkins, J., dissenting in part). Because I cannot agree that today’s opinion does justice to the letter and spirit of the land registration statute, G. L. c. 185, I dissent.

The 1977 amendment to § 37, see note 7, supra, has eliminated the requirement that a petitioner elect in writing to proceed further following an adverse report from the title examiner. This change is not relevant here.

I note in this regard that the possibility of losses arising through “error, omission, mistake or misdescription,” G. L. c. 185, § 101, did not escape the Legislature’s attention; the Assurance Fund established by G. L. c. 185, § 99-109, creates a remedy specifically directed to such losses without sacrificing the other benefits of the registration system. The section strengthens my belief that the Legislature intended to distinguish “fraud” from “error, omission, mistake or misdescription,” a distinction largely erased by today’s decision.