Abstractors – Are you Searching ALL the Indices?

A recent Minnesota Case is a great example of the liability that abstractors carry.  An owner of Property purchased two new parcels, putting a mortgage on both parcels, along with a parcel previously owned.

The Scott County Recorders office, when indexing the documents, properly filed it Grantor-Grantee, but missed indexing the legal description on the third parcel in the mortgage that was previously owned.

A court battle ensued as to whether or not there was constructive notice, because the mortgage was not shown on the Tract Index.  To make a long story short, the court ruled that the mortgage could be found using the Grantor-Grantee, and that the mortgage was in fact a lien on the land.

I presume that this happened due to the fact that most computerized systems allow copying of names and legal descriptions between documents, and that the County Employee missed the fact that there were 3 parcels being mortgages, while only 2 were being purchased at that time.

While not a standard  practice to search the grantor-grantee index for mortgages (especially with all the common names in Minnesota) it does make you think.  It also reminds me how we rely on such things as affidavits to ask for additional information on sales.  I have to say,  I don’t like it, but I think the court was correct in its assessment.  Until just five years ago, or so, the Grantor-ee Indices were the only legal indices in the state, but with the change in law requiring a tract index in addition to the Reception book, I think we began to rely on the tract more than ever.  I think if I were doing a large commercial transaction in particular, I would double check the Grantor-grantee.  After all, it doesn’t take long if you have it on computer, and you could have tremendous liability.