Land Regisitration pt. 2: The Torrens System

“Abstract vs Torrens Land

ABSTRACT LAND refers to parcels of land that have not been registered, or more commonly, land that is not “Torrens.” Prior to the enactment of the Torrens act (now Minn. Stat. §508) in 1901, all land was abstract land. The office of the county recorder accepts all instruments for recording which affect non-Torrens land. In order to determine the status of title to abstract land, in Ramsey County, private abstract companies prepare new, or continue already existing, “abstracts of title.” An abstract of title is a compilation of all of the instruments (beginning with the original grant or patent from the U.S. government) affecting the particular parcel of land under examination. The abstractor makes entries, in numerical order, of only the essential parts of each instrument shown, although sometimes the abstractor will photocopy the instrument and show it as an exhibit to the entry. In general, attorneys examine the abstract and from such an exam, issue a title opinion. Each time the title is transferred, the abstract must be continued to date and re-examined, again from the original grant or patent to the present date. Over time the abstract becomes longer, bulky and more difficult to examine.

By contrast, land which is registered or “TORRENS is governed by a specific statute, Minn. Stat. §508. One of the hallmarks of the registration proceeding is the issuance of a “certificate of title,” which effectively replaces the old “abstract of title.” In general, only those matters appearing on the certificate of title need to be examined. Immediately following the judicial hearing and signing of the decree of registration, the decree is filed with the registrar, who then issues a certificate of title in the name of the owner, subject only to all adjudicated encumbrances (and statutory exceptions).

Usually title to abstract land is registered under chapter 508 because of title defects disclosed by an examination of the abstract. However, developers or others often desire to eliminate the abstract in favor of having the more “USER-FRIENDLY” CERTIFICATE OF TITLE, as compared to the cumbersome abstract of title. Under the Torrens system, it is no longer necessary to examine, over and over again with every transaction, each instrument dating back to the U.S. government. Instead, only an examination of those matters appearing on the certificate of title must be made.

Another unique feature of the Torrens system is that all instruments are reviewed by the Torrens clerk for accuracy prior to filing, and many instruments must be certified by the examiner (or deputy examiner) before the registrar of titles may accept them for filing. See page 15 of the “Guide to the Torrens System” for a list of the type of instrument that will need prior written approval. This aspect of the Torrens system ASSURES THE ACCURACY of certain conveyances or other matters, such as adding a street vacation to the body of the certificate of title.”

More on Revoking a Deed of Trust

Further proof that your deed of trust is a conveyance of a future interest in your land to a person not in esse (relevant to the previous post):

Ҥ 161-22. Index of registered instruments.

(a) Except as otherwise provided by statute, the register of deeds shall provide and keep in the register’s office full and complete alphabetical indexes of the names of the parties to all liens, grants, deeds, mortgages, bonds, and other instruments required or authorized to be registered, and the indexes shall state in full the names of all parties, whether grantors, grantees, vendors, vendees, obligors, or obligees. The full names of parties shall be entered in the indexes in accordance with the minimum indexing standards adopted pursuant to

(d) Deeds of trust may be indexed in the names of the grantor and beneficiary only.”

So, because the conveyance is to a trustee that is undetermined when the deed of trust is executed, only you (grantor) and lender (beneficiary) are to be named in the index when recorded.

If registering the deed of trust vested the title in the trustee, he/she/it would be named.

A Remedy for the Ill. Update… still researching!

I wanted to tell my readers that I am still actively researching things such as tax law, trust law, and property interest.  Some recent moments of clarity:

In the NC code under “Land registration”:

“Chapter 43.

Land Registration.

Article 1.

Nature of Proceeding.

§ 43-1.  Jurisdiction in superior court.

For the purpose of enabling all persons owning real estate within this State to have the title thereto settled and registered, as prescribed by the provisions of this Chapter, the superior court of the county in which the land lies in the State shall have exclusive original jurisdiction of all petitions and proceedings had thereupon,  under the rules of practice and procedure prescribed for special proceedings except as herein otherwise provided. (1913, c. 90, s. 1; C.S., s. 2377.)

 § 43-2.  Proceedings in rem; vests title.

The proceedings under any petition for the registration of land, and all proceedings in the court in relation to registered land, shall be proceedings in rem against the land, and the decrees of the court shall operate directly on the land, and vest and establish title thereto in accordance with the provisions of this Chapter. (1913, c. 90, s. 2; C.S., s. 2378.)”

It is important to read this with an open mind- I believe that when the word “settled” is used, it means something other than “finalized” or established”.  Look at this:

“Settlor

One who establishes a trust—a right of property, real or personal—held and administered by a trustee for the benefit of another.”

Also, Article 9 under that same chapter says:

“Article 9.

Removal of Land from Operation of Torrens Law.

§ 43-56.  Proceedings.

Any land brought under the provisions and operation of this Chapter before April 16, 1931, may be removed and excluded therefrom by a motion in writing filed in the original cause wherein said land was brought under the provisions and operation of said Chapter,…”

Notice the phrase “provisions of this chapter”…

“provision (Act of supplying), noun accommodation, arrangement, catering, donation, endowment, furnishing, preparation, procurement, providence, purveyance, serving

This can be read as an offer for government services, aka privilege. It is a contract with the county, as evidenced here:

“§ 43-20.  Decree and registration run with the land.

The obtaining of a decree of registration and the entry of a certificate of title shall be construed as an agreement running with the land, and the same shall ever remain registered land, subject to the provisions of this Chapter and all amendments thereof. (1913, c. 90, s. 26; C.S., s. 2395.)”

The land is presumed under contract eternally after registration, until that presumption is rebutted. That’s what the “Removal of Land from Operation of Torrens Law” section referenced above is for.  It prescribes the method of breaking that agreement and presumption.

Once removed from Torrens registration, the land can very easily be placed into/under your own trust:

“Chapter 36C: North Carolina Uniform Trust Code.

Article 4.

Creation, Validity, Modification, and Termination of Trust.

§ 36C-4-401.  Methods of creating trust.

A trust may be created by any of the following methods:

(1)        Transfer of property by a settlor to a person as trustee during the settlor’s lifetime or by will or other disposition taking effect upon the settlor’s death including either of the following:

a.         The devise to the trustee of the trust as provided in G.S. 31-47.

b.         The designation of the trust as beneficiary of life insurance or other death benefits as provided in G.S. 36C-4-401.1.

(2)        Declaration by the owner of property that the owner holds identifiable property as trustee unless the transfer of title of that property is otherwise required by law.

(3)        Exercise of a power of appointment in favor of a trustee.

(4)        A court by judgment, order, or decree, including the establishment of a trust pursuant to section 1396p(d)(4) of Title 42 of the United States Code.

 I believe we’ve already done “(1)” when signing a deed of trust, and “(2)” is how we initially take it back, and claim private ownership.  Look up the legal definition of “Declaration”– it is not just a statement, but a formal written statement in the nature of an affidavit. This declaration gets recorded, not registered.

It just gets more and more interesting.  So, at this stage, you are trustee AND beneficiary of the land. Legally speaking, you are the holder of the legal title, while the beneficiaries are privately known.

But wait… the deed of trust conveyed full legal title to land that you didn’t know you owned (how else could you convey title?), and the lender is listed as beneficiary to that trust.

How can two people, the named trustee on the deed of trust, and yourself, subsequent declarant of trusteeship of the land, both hold legal title?  The deed of trust hasn’t even been cancelled yet…

Or maybe it has…

“Chapter 45.

Mortgages and Deeds of Trust.

Article 4.

Satisfaction.

§ 45-36.4. Definitions.

As used in this Article, the following terms mean:

(15) Satisfy. – With respect to a security instrument, to terminate the effectiveness of the security instrument.”

Is an instrument that gave a trustee legal title still valid, when the same grantor of legal title records a declaration claiming back that legal title? What do you think?

I say that the D of T is no longer effective, and thus satisfied/cancelled/good riddanced.

Fascinating stuff. No wonder the law always refers to “payment OR performance of the obligation…”:

“(1a) Borrower. – A person primarily liable for payment or performance of the obligation secured by the real property described in a security instrument.”

(17) Secured obligation. – An obligation the payment or performance of which is secured by a security interest.

There are no less than fifteen instances of the phrase “payment or performance” within Chapter 45 Mortgages and Deeds of Trust.  Why can’t they use the word “payment” alone?  Is putting the title back in your own possession and care the “performance” needed to satisfy and cancel the D of T? I don’t know, but I intend to find out.

Covering the Chink in the Armor: More on the True Nature of the Property Tax

This includes some review, to drive these principles home and further clarify.

__________________________________________

In the previous posts, I have expected you to swallow that your property tax is being imposed incorrectly– fraudulently, to tell the truth. Do you believe it?

Back to the Statutes

The “exemptions and exclusions” clause, and related section on remedies, states that non-business property is personal property not used in the pursuit of profitable enterprise. Throughout “105 Taxation”, personal property is referred to as “anything that’s not real property”, and uses tricky methods to paint the picture of sharply defined classes of property according to whether something is moving or not. Okay. Something is taxable if it cannot be moved? An odd basis and justification for taxing something, isn’t it?

The real deciding factor on whether something is taxable is whether or not it is used in some privileged activity. Personal property, in its true sense, is anything that can be owned. Real property is a category of personal property used in a commercial fashion. That is the reason for that misleading “definition” of Real Property:

“Article 11 – Short Title, Purpose, and Definitions.

§ 105-273.  Definitions.

The following definitions apply in this Subchapter:

(13)      Real property, real estate, or land. – Any of the following:

a.         The land itself.

b.         Buildings, structures, improvements, or permanent fixtures on land.

c.         All rights and privileges belonging or in any way appertaining to the property.

Notice “Any of the following–“. A definition is not supposed to list possibilities of what a term could mean. Doing this leaves the reader to think that the listed items are always real property. From a legal/statutory construction standpoint, it is really only saying that those items CAN be Real Property.

The real determining factor of whether something can be taxed is HOW IT IS USED. If you are using your home as a matter of right, that is not a taxable use. Remember, rights and privileges are not the same. Privilege is a subset of rights, which are conditional and can be taken away. Hardly inalienable. True rights, human rights, cannot be taken away unless you allow it. You and I are both responsible for clearly establishing which rights those are, on an ongoing basis.

“§ 105-275.  Property classified and excluded from the tax base.

The following classes of property are designated special classes under Article V, Sec. 2(2), of the North Carolina Constitution and are excluded from tax:

(16)      Non-business Property. – As used in this subdivision, the term “non-business property” means personal property that is used by the owner of the property for a purpose other than the production of income and is not used in connection with a business. The term includes household furnishings, clothing, pets, lawn tools, and lawn equipment. The term does not include motor vehicles, mobile homes, aircraft, watercraft, or engines for watercraft.”

When you read this, you my automatically put “Real Estate” and “Real Property” out of the realm of possibility in your mind. Don’t do it. That was the intent of the ones who wrote this– to be legal only in a very technical sense when it is analyzed closely by an experienced person. It is easily construed wrongly by the average man and woman.

The assumption is:

They are only speaking of movable objects, not houses.

That is not true, and here’s why.  If personal property, in the class of movable objects, is not taxable when not used in a business effort, why would a house be taxable if not used for business, but to live one’s private life in? Think about that for a few minutes.

Then read this:

Black’s Law, 5th Edition:

“Personal property. In broad and general sense, everything that is the subject of ownership, not com­ ing under denomination of real estate. A right or interest in things personal, or right or interest less than a freehold in realty, or any right or interest which one has in things movable.
Generally, all property other than real estate.    It is sometimes designated as personalty when real estate is termed realty.    Personal property also can refer to property which is not used in a taxpayer’s trade or business or held for the production or collection of income.    When used in this sense, personal property could include both realty (e.g., a personal residence) and personalty (e.g., personal effects such as clothing and furniture).”

How does that grab you? This non-business property can be your house. You need to establish that with the county, who is operating under the presumption that your house and land are used in business. Why? That presumption makes them money. Rather dishonest, I would say.

However, a clear method for establishing the facts is indicated in the “Taxation” title;

“Article 27 – Refunds and Remedies.

§ 105-381.  Taxpayer’s remedies.

(a)        Statement of Defense. – Any taxpayer asserting a valid defense to the enforcement of the collection of a tax assessed upon his property shall proceed as hereinafter provided.

(1)        For the purpose of this subsection, a valid defense shall include the following:

a.         A tax imposed through clerical error;

b.         An illegal tax;

c.         A tax levied for an illegal purpose.

(2)        If a tax has not been paid, the taxpayer may make a demand for the release of the tax claim by submitting to the governing body of the taxing unit a written statement of his defense to payment or enforcement of the tax and a request for release of the tax at any time prior to payment of the tax.

(3)        If a tax has been paid, the taxpayer, at any time within five years after said tax first became due or within six months from the date of payment of such tax, whichever is the later date, may make a demand for a refund of the tax paid by submitting to the governing body of the taxing unit a written statement of his defense and a request for refund thereof.

…”

There you have it.

An assertion, of course is a statement that is made but not proven.

§ 105-282.1. Applications for property tax exemption or exclusion; annual review of property exempted or excluded from property tax.

(a)        Application. – Every owner of property claiming exemption or exclusion from property taxes under the provisions of this Subchapter has the burden of establishing that the property is entitled to it. If the property for which the exemption or exclusion is claimed is appraised by the Department of Revenue, the application shall be filed with the Department. Otherwise, the application shall be filed with the assessor of the county in which the property is situated. An application must contain a complete and accurate statement of the facts that entitle the property to the exemption or exclusion and must indicate the municipality, if any, in which the property is located. Each application filed with the Department of Revenue or an assessor shall be submitted on a form approved by the Department. Application forms shall be made available by the assessor and the Department, as appropriate.

Except as provided below, an owner claiming an exemption or exclusion from property taxes must file an application for the exemption or exclusion annually during the listing period.

(1)        No application required. – Owners of the following exempt or excluded property do not need to file an application for the exemption or exclusion to be entitled to receive it:

a.         Property exempt from taxation under G.S. 105-278.1 or G.S. 105-278.2.

b.         Special classes of property excluded from taxation under G.S. 105-275(15), (16), (26), (31), (32a), (33), (34), (37), (40), (42), or (44).”

So this class of non-business property as mentioned in 16 does not require an application, merely an assertion and demand establishing your right to use it free of taxation. Is the law saying you have to prove the land/house is not taxable? No, just establish that it is such.

Good ol’ Black’s Law 5th again:

Establish.    This word occurs frequently in the Constitu­tion of the United States, and it is there used in different    meanings:  ( 1 )  To settle firmly, to fix unal­terably; as to establish justice, which is the avowed object of the Constitution. (2) To make or form; as to establish uniform laws governing naturalization or bankruptcy. (3) To found, to create, to regulate; as: “Congress shall have power to establish post-offices.” (4) To found, recognize, confirm, or admit; as: “Con­ gress shall make no law respecting an establishment of religion.” See Establishment clause. (5) To cre­ate, to ratify, or confirm, as: “We, the people . . . do ordain and establish this Constitution.”    Ware v. U. S., 71 U.S. (4 Wall.) 617, 18 L.Ed. 389.

To settle, make or fix firmly; place on a permanent footing; found; create; put beyond doubt or dispute; prove; convince. Wells Lamont Corp. v. Bowles, Em.App., 149 F.2d 364, 366. To enact permanently. To bring about or into existence.”

A firm statement that your property is non-business property is sufficient. It’s all in the law.

Furthermore, this is the only place where a duty to pay the tax is mentioned:

“Article 28 – Special Duties to Pay Taxes.

§ 105-383. Fiduciaries to pay taxes.

§ 105-384. Duties and liabilities of life tenant.

§ 105-385. Duty to pay taxes on real property; judicial sales; sales under powers; governmental purchasers.

§ 105-386. Tax paid by holder of lien; remedy.

if you’re interested, read within the links. “Special duties” means “Specific duties”, not some rare or unusual situation. It is specifying who has the duty. Please find a section that indicates someone living in a house having a duty to pay tax on it. I have looked and looked. I know you won’t find it.

Not that anyone reads my blog… yet.

I would like to make these posts short and sweet, believe me, but if I only say enough for it to make sense to me, it is pointless to write. I want to bring others, and myself, into a better understanding of the law as pertains to the average man and woman.  The “common understanding” of laws is a MIS-understanding in most cases, even by those imposing the laws.

Let’s all please put aside political differences and stand together against the corporate authority finding any way it can to increase the bottom line by extracting ever more energy from us. Is your energy valuable? is it also limitless? You have the right to use it for yourself. Right now, it is being sucked away to enrich the rich. Leaving minimum wage low is a hidden tax. Have more respect for the people around you than the soulless, fictional corporate authority.

Why I am I using that term “corporate authority“? I guess that’s my next area to tackle in umpteen entries.

Until then,

Peace.

Are you a North Carolina taxpayer? Today’s juicy bit…

Do you fit the definition of “taxpayer” within the law used to tax your pay?

You tell me:

“Chapter 105 – Taxation.

Article 4.

Income Tax.

Part 1.  Corporation Income Tax.

§ 105-130.  Short title.

This Part of the income tax Article shall be known and may be cited as the Corporation Income Tax Act. (1939, c. 158, s. 300; 1967, c. 1110, s. 3; 1998-98, ss. 42, 61, 68.)

§ 105-130.1.  Purpose.

The general purpose of this Part is to impose a tax for the use of the State government upon the net income of every domestic corporation and of every foreign corporation doing business in this State.

The tax imposed upon the net income of corporations in this Part is in addition to all other taxes imposed under this Subchapter. (1939, c. 158, s. 301; 1967, c. 1110, s. 3; 1998-98, s. 69.)

§ 105-130.2.  Definitions.

The following definitions apply in this Part:

(3)        Corporation. – A joint-stock company or association, an insurance company, a domestic corporation, a foreign corporation, or a limited liability company.

(9)        Gross income. – Defined in section 61 of the Code.

(12)      Parent. – A corporation is a parent of another corporation when, directly or indirectly, it controls the other corporation by stock ownership, interlocking directors, or by any other means whatsoever exercised by the same or associated financial interests, whether the control is direct or through one or more subsidiary, affiliated, or controlled corporations.

(18)      Taxpayer. – A corporation subject to the tax imposed by this Part.

§ 105-134.2.  Individual income tax imposed.

(a)        A tax is imposed upon the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually and shall be computed at the following percentages of the taxpayer‘s North Carolina taxable income.”

§ 105-160.1.  Definitions.

The definitions provided in Part 2 of this Article shall apply in this Part except where the context clearly indicates a different meaning. “

And thus, it is left up to the reader to decide whether “taxpayer” in the “individual income tax imposed” section, clearly means something other than a corporation. Keep in mind, “Taxpayer. – A corporation subject to the tax imposed by this Part” is the definition for the whole Chapter 105 on Taxation.

The North Carolina General Assembly, businessmen all, have implemented rules to take your money.  If you let the presumption stand, and do not read the law, they can treat you (John Henry Doe) as a corporation, because you look and act like one.

I look forward to discussing this.