Daily Development for Tuesday, January 22, 2008
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri

RECORDING ACTS; REGISTRATION; ACTUAL KNOWLEDGE: The presence of electricity poles and use of electricity by a property owner do not prove the property owner had actual knowledge of the location of an easement for purposes of amending the certificate of title to registered land.

Commonwealth Elec. Co. v. MacCardell, 876 N.E.2d 405 (Mass. 2007).

Commonwealth Electric Company ("Commonwealth") sought to install a transformer on an electric pole located on the property of Leslie H. MacCardell ("MacCardell"). The poles were placed on the property years before pursuant to an easement deed granted by a prior owner to Commonwealth's predecessor. Although that easement deed did not identify the precise location of the right of way, the electric pole and accompanying wires were installed on the property.

Later, after a subsequent owner filed a successful action to register title to the property in the land registry, the issued certificate of title to the property mistakenly omitted a reference to the easement. (The easement was shown on the certificate of an adjacent parcel.)  When MacCardell purchased the property, she received this certificate of title, which had not been corrected.

Commonwealth petitioned the Land Court to amend the certificate of title based on the mistake and the physical presence of the poles, but the court found for MacCardell and the appeals court affirmed. "[S]ubsequent purchasers of registered land for value and in good faith take free from all encumbrances except those noted on the certificate [of title]." Easements also must be shown on the certificate to bind such good faith purchasers.

The court noted two exceptions to this rule: First, where the certificate describes facts that would lead a reasonable person to inquire further; and second, where the buyer has "actual knowledge" of the easement.

Here, the Supreme Judicial Court considered only the second exception, explaining that actual knowledge requires "some intelligible oral or written information that indicates the existence of an encumbrance or prior unregistered interest." The Supreme Judicial Court held that the mere presence of the poles and MacCardell's use of electricity did not sufficiently prove actual knowledge of the easement on her part and that the registered land statute did not allow the court to imply an easement by prescription.

Comment 1: Of course, in most recording theory states, the existence of conditions on the ground puts one on inquiry notice of what interests those conditions might signify, and probably first on the list are lines and poles.  Note that it is likely that MacCardell probably had actual knowledge of the presence of the lines and poles when she acquired the property, but this also doesn't seem to matter to the court.

This case underscores the significance of registered title regimes in providing clear title, and also underscores some of the problems with the system.

Comment 2:  One wonders whether there is an action for negligence either against the registrar or some other party for the erroneous deed.  One assumes that in the original action to register title, Commonwealth would have had to have been a named party, since it apparently had a recorded easement at that time.  Was Commonwealth negligent in not following up to be sure that the final registration incorporated its interest? 

Comment 3: The court at first appears to assume that its rule would apply even if the landowner had actual knowledge of the presence of poles and lines on the land at the time of purchase.  But later it states that one reason for protecting the landowner in this case is the fact that the average lay person does not know the exact boundaries of his or her land.  This may suggest that where, in fact, a landowner had actual knowledge, such as through a survey, of an encroachment or other competing structure, a court could distinguish the present case.  But don't hold your breath. 

Readers are encouraged to respond to or criticize this posting.

Items reported on DIRT and in the ABA publications related to it  are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters.  The same is true of all commentary provided by contributors to the DIRT list.  Accuracy of data provided and opinions expressed  by the DIRT editor the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a
source that is readily accessible by members of
the general public, and should take that fact
into account in evaluating confidentiality


DIRT is an internet discussion group for serious
real estate professionals. Message volume varies,
but commonly runs 5 - 15 messages per work day.

Daily Developments are posted every work day.  To
subscribe, send the message

subscribe Dirt [your name]



To cancel your subscription, send the message
signoff DIRT to the address:


for information on other commands, send the message
Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only
commercial and general real estate matters but also focuses upon residential real estate matters.  Because real estate brokers generally find this service more valuable, it is namedBrokerDIRT.  But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list.  If you subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as BrokerDIRT carries all DIRT traffic in addition to the residential discussions.
To subscribe to BrokerDIRT, send the message

subscribe BrokerDIRT [your name]



To cancel your subscription to BrokerDIRT, send the message
signoff BrokerDIRT to the address:


DIRT is a service of the American Bar Association
Section on Real Property, Probate & Trust Law and
the University of Missouri, Kansas City, School
of Law.  Daily Developments are copyrighted by
Patrick A. Randolph, Jr., Professor of Law, UMKC
School of Law, but Professor Randolph grants
permission for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided that
no charge is imposed for such distribution and
that appropriate credit is given to Professor
Randolph, DIRT, and its sponsors.

DIRT has a WebPage at:
https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=3D http://www.umkc.edu/dirt/

Members of the ABA Section on Real Property, Probate
and Trust Law or of the National Association of Realtors can subscribe to a quarterly hardcopy report that includes all DIRT Daily Developments, many other cases, and periodic reviews of real estate oriented literature and state legislation by contacting Antonette Smith at (312) 988 5260 or asmith4@staff.abanet.org 


To be removed from this mailing list, please go to
<https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=3D http://listserv.umkc.edu/listserv/wa.exe?SUBED1=3DBROKERDIRT%26A=3D1& gt;
or send an email message to the address listserv@listserv.umkc.edu,
with the text SIGNOFF BROKERDIRT in the body of the message. Problems
or questions should be directed to manager@listserv.umkc.edu.