Essentially, Bevilacqua acquired title, post-foreclosure, from U.S. Bank. Unfortunately, it was MERS mortgage and MERS had not yet assigned the mortgage to U.S. Bank. Thus, U.S. Bank was not "the mortgagee, or his executors, administrators, successors or assigns," and it had no authority to deed the property to Bevilacqua.
Bevilacqua recognized that because of this defect in the foreclosure proceeding, the prior owner, Pablo Rodriguez, may still have an interest in the property. To clear his title, Bevilacqua filed a try title action. This would have required Rodriguez to bring his claim of an interest in the property, or be forever barred from claiming any interest in the future.
The Massachusetts law provides, in relevant part:
If the record title of land is clouded by an adverse claim, or by the possibility thereof, a person in possession of such land claiming an estate of freehold therein or an unexpired term of not less than ten years, and a person who by force of the covenants in a deed or otherwise may be liable in damages, if such claim should be sustained, may file a petition in the land court stating his interest, describing the land, the claims and the possible adverse claimants so far as known to him, and praying that such claimants may be summoned to show cause why they should not bring an action to try such claim.
There was no question that Bevilacqua was "a person in possession." However, the Court found that the statute also required that "a plaintiff must hold a 'record title' to the land in question" to have standing to bring a try title action. Though the Court admitted that there was very little precedent for it to rely on, it found support in two cases from 1894 and 1901.
The 1894 case of Arnold v Reed had held that mere possession was not sufficient and "title appearing 'on the record' was also necessary." Here, Bevilacqua did have a recorded deed, however the Court found that it was insufficient because "recording is not sufficient in and of itself... to render an invalid document legally sufficient."
"As a result," the Court wrote, "it is the effectiveness of a document that is controlling rather than its mere existence. The effectiveness of the quit-claim deed to Bevilacqua thus turns, in part, on the validity of his grantor's title. Accordingly, a single deed considered without reference to its chain of title is insufficient to show 'record title' as required by [the statute]."
This may make sense in the context of the Arnold case, decided more than a century ago, but it is not really consistent with the plain language of the statute, which only requires the plaintiff be to "in possession" and "claiming an estate of freehold therein." If Bevilacqua actually did have a valid deed, and held "record title" as interpreted by the Court, he would have had no need for the try title action.
The word "claiming," to me, means that the plaintiff must have at least color of title. "Color of Title" means:
"The appearance of a legally enforceable right of possession or ownership. A written instrument that purports to transfer ownership of property but, due to some defect, does not have that effect. A document purporting to pass title to land, such as a deed that is defective due to a lack of title in the grantor, passes only color of title to the grantee."
The fact that Bevilacqua paid good and valuable consideration for his interest in the property and received a deed, which although defective was recorded to provide constructive notice to all parties, should have been enough for him to be able to claim a freehold estate; he at least had color of title.
The Court's holding essentially would require that Bevilacqua be able to prove that he would prevail in the try title action before allowing him to bring it - despite the fact that nobody was contesting his title - not even Rodriguez, the prior owner.
Aside from that, however, the practical considerations also weigh in favor of holding that Bevilacqua had standing to bring a try title action. The Court found that although Bevilacqua was barred from bringing an action to try title, he would not be barred from bringing other actions regarding the title to his property. Specifically, in a footnote, the Court wrote:
Nothing contained herein is intended to limit Bevilacqua's right, if he can show himself to be mortgagee of the property, to pursue foreclosure under the appropriate statutes. The record does not disclose if Bevilacqua presently holds the promissory note secured by Rodriguez's mortgage. Whether the holder of a mortgage may foreclose the equity of redemption without also holding the note is a question that is not before us.
But, what is the practical difference in this case between a try title action and a new foreclosure? Rodriguez would still be subject to the same requirement for service in both cases, and he would be permitted the same opportunity to claim any interest he held in the property. Presumably, Rodrigeuz was properly served in both cases, and he never once appeared to defend his interest. If the only person that could claim an adverse interest in the property is not interested in asserting such a right, why are we wasting so much money, and judicial resources, trying to prevent someone from clearing the title?
It appears that the only difference is the time and cost involved. Clearly the foreclosure will take longer and cost much more... just to get to the same result. Perhaps the trial judge raised this issue on his own, merely to jab at the banks for their shoddy foreclosure practices (and for that I kind of admire him), but the effect here will not hurt the banks nearly as much as it will the innocent homeowners who acquire "bad title" and the title companies who insure them.
Fortunately, I'm in Ohio... not Massachusetts. Our "try title" equivalent, a "quiet title" action, is much more clear.
An action may be brought by a person in possession of real property, by himself or tenant, against any person who claims an interest therein adverse to him, for the purpose of determining such adverse interest. Such action may be brought also by a person out of possession, having, or claiming to have, an interest in remainder or reversion in real property, against any person who claims to have an interest therein, adverse to him, for the purpose of determining the interests of the parties therein.
The only requirement here seems to be "possession." Of course, our statute was last updated in 1973 and is much more modern that the century old statute in Massachusetts. We have all heard the expression "possession is nine-tenth of the law." There is a reason for that... if a person is in possession, and another who may claim a superior interest is not challenging that possession, perhaps that is because he doesn't want it. If that is the case... who are we to decide otherwise?