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Title Insurance | History
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History
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ARE YOU
AWARE OF...
THE HISTORY OF TITLE INSURANCE?
In 1848, the treaty of Guadalupe Hidalgo gave California to the
United States, and in 1851, after California became a state in I1850,
congress appointed "A Board of Land Commissioners, " and
the "Rancho" boundaries began to be established and confirmed
in the United States.
In 1852-1853 the U.S. Government survey extended sectional township
and range lines over all public lands that were not ranches.
In 1859, the Atchisos, Topeka and Santa Fe railroad, chartered by Cyrus
K. Holliday, started construction westward in 1868, reaching Dodge City,
Kansas in 1872. It purchased the Atlantic and Pacific tracks to El Paso
and Needles. It leased Southern Pacific's line to Mojave and built through
Cajon Pass into San Bernardino in 1885. In 1887, by building to Azusa
and buying the Los Angeles and San Gabriel, it got its line into Los Angeles.
It immediately became involved in a rate war with the Southern Pacific.
With millions of acres of land available and reasonable and two railroads
in a transportation price war, the original tourist business began to
hum. Fares from Kansas City to Los Angeles dropped to $5.00 and finally
to $1.00. Trains on both roads had to run in sections to accommodate all
who wanted to come.
In the beginning "patents" were handed out by the government,
for people coming west.
"Title" - the evidence one has of right to possession of land.
The word "insurance" means an agreement to pay for loss or
damage arising from an event occurring within the prescribed time of the
agreement.
"Title Insurance" - insurance against loss resulting from
defects of title to a specifically described parcel of real property.
Defects may run to the fee (chain of title) or to encumbrances.
Until just over a hundred years or so ago, conveying real property,
although relatively simple by today's standards, did not include any form
of guaranty or insurance. Many of the transactions were handled by conveyances
some of whom were attorneys, who either personally searched the title
or obtained a title search or a form of abstract to ascertain ownership
of the property and to discover any encumbrances on the title. Historically,
before taking title to the property, the buyer required that the title
be free of any existing rights, interest, liens or encumbrances for which
the buyer would be responsible. Based on the
title search or the abstract, the title could be examined and an "opinion"
rendered by an attorney (or the conveyancer, if an attorney) stating whether
title was marketable. The need for title insurance arose when traditional
methods of conveying failed to provide safety to buyers or lenders.
In 1868, the court in Watson vs. Muirhead (1868) 57 pa 161, held that
the conveyancer was not negligent when he chose to ignore, following a
good faith consultation with an attorney, the existence of recorded judgements.
The innocent purchaser, who suffered financial damage because of the encumbrances
on title, had no recourse against the conveyancer or anyone else. As a
direct result of this decision, the Pennsylvania legislature enacted a
law that incorporated and regulated title insurance companies. Thereafter
throughout the country, many title insurance companies were organized
to insure purchasers against losses from title defects, liens and encumbrances.
Liz Esqueda
(562) 624-6714
Investors Title Company
101 E. Glenoaks Blvd.,
Glendale, CA 91207
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