September, 1966 a Message from the Chairman of the Title Insurance Section
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TITLE ~ws THE OFFICIAL PUBLICATION OF THE AMERICAN LAND TITLE ASSOCIATION 3 SEPTEMBER, 1966 A MESSAGE FROM THE CHAIRMAN OF THE TITLE INSURANCE SECTION September, 1966 Once more I am indebted to our President for allowing me to use this space to tell you about some of the plans for the Annual Conven tion at Miami Beach, October 16th to the 20th. The workshop sessions, all of them, are shaping up as among the best we have ever had. At 2 :00 P.M., October 17th, there will be three of these, one on "Joint Title Plant Operation" moderated by Bob Haines, the second on "Errors and Omissions Insured Coverage" moderated by Past President George Harbert, and the third, at long last, brings the young generation of title men to the front in a panel discussion on "Youth Looks at a Venerable Profession" moderated by Jack Rattikin, Jr. At 3 :00 P.M., on the same day, Percy I. Hop kins, Jr., will moderate a panel discussion on "Abstracters, Title In surance Agents and Bar Funds". On Wednesday, October 18th at 2 :00 P.M., Andrew S. Boyce, of the Small Business Administration will moderate a management problems seminar, and Bob Kratovil will moderate a panel discussion on "Affirmative Insurance and Its Pitfalls" and at 3 :00 P.M. there will be a "Government Potpourri" moderated by Gordon Smith and consisting of discussion on governmental requirements as seen by Leonard Tambor, Acting Rehabilitation Loan and Grant Officer of HUD; A. M. Prothro, General Counsel of FHA and Colonel Robert Reed, General Counsel of FNMA. All of the above will be in addition to a great lineup of speakers and a magnificent social calendar. It seems that great planning will be required to "catch" all of the "action", so get your reservations in and, as they say in the airlines ad "Come on down" TITLE NEWS THE OFFICIAL PUBLICATION OF THE AMERICAN LAND TITLE ASSOCIATION EDlTORIAL OFFICE: Premier Bldg., 17 25 Eye St., N.W., Washington, D.C. 20006 296-3671 FEATURES: Escrow Closings and Disbursements 2 More About the Annual Convention 12 DEPARTMENTS: A Message from the Chairman of the Title Insurance Section Inside front cover State Association Corner: Idaho 8 New Jersey 9 Dear Dicky 10 In the News 18 Meeting Timetable Inside back cover ON THE COVER: VOLUME XLV The lovely lady on t he cover of this issue of Title News is Miss NUMBER 9 Bonnie Mut·ray, a distinguished and talented entertainer. Miss 1966 Murray will appeal' on the program of entertainment sponsored by Howard Lanin and his orchestra at the Annual Banquet Wednesday evening, October 19, (see page 12 ). Page 1 ESCROW CLOSINGS AND DISBURSEMENTS By Roger K. Boothe, Kansas City Title Insurance Company Given May 13, 1965, Title School, University of Missouri, sponsored by Missouri Land Title Association. e in the title business, who the business sophistication of the W initially are sought to com people involved, and, in my office, pile the evidence of the status of it is a typical application that we title of real estate which is the are also requested to perform some subject of some transaction, find type of escrow duties, and it is a ourselves increasingly under re rare transaction that is closed quest to also act as a middle-man without someone acting for all to the transaction or that is, as an parties in the distribution of vari escrow agent. I notice that in all ous instruments and money in sections of the country where I volved. And so, since we often find have had occasion to process title ourselves in the middle of a trans insurance applications that the action, acting as escrow agent for several parties engaged in the all parties, I think it is well to transactions are becoming less in pause at times and examine the clined to deal directly with one duties and obligations we under another, but increasingly seem to take, contemplate on what difficul prefer to handle the transaction ties and problems will be encoun through a third party arrange tered, forsee what sort of trouble ment. This is true, notwithstanding some situations an escrow agent the size of the transaction, or can get himself into, and construct Page 2 a program and practice to keep criticism upon your request that ourselves from getting into such something be done in a proper trouble. way. They become impatient if it Now, when one reviews over the slows the transaction down, and several rules relating to the proper delays closing. They become indig handling of an escrow, he is in nant if they get the feeling that clined to think them pretty sticky, you may not trust them very and, when considered against a much, which you may not! There practical situation, perhaps a bit is really no answer to this other unrealistic. In this regard, I wish than developing a strong set of to make clear that I have not come emotional shoulders, but, I do find here with the intent of insisting that one response that goes as far upon any inflexible set of rules or as any in mollifying them is that standards to be applied to all cases they came to you with their trans of escrow closings in which we will action to insure that it would be find ourselves involved. Practices, handled properly, and that that is be they escrow or other, differ as what you are trying to do. to locale, and, even in a given Well, to get into a discussion locale, differ as to what customer about the handling of an escrow is involved. However, I think that, transaction, we should first ask while a set of standards by neces "what is an escrow?" And, right sity will be varied from place to away, we find ourselves in an ar place, and from transaction to gument with the purists. They transaction, that still we should point to the legal definition of the know just what these standards term, and show that it defines an are, so that if in some case a "escrow" as a written instrument, variation becomes appropriate, we a deed, mortgage or other written can feel at least that we are engagement, that is delivered to a making an "intelligent variation", third party, with instructions for that is, knowing the rule we are him to deliver it to yet another varying from, why it is being done party upon the performance or in this particular case, and have fulfillment of some condition. satisfied ourselves that it will be From this definition, we see that safe in this instance. the deed or instrument itself while On the other hand, I would urge being held by the third party that to all possible extent, we ad awaiting performance of the con here to the proper practices in the dition is the escrow. But in actual handling of our escrow transac practice and usage, the term "es tions. These practices, after all, are crow" has devolved to mean, not for our own protection, and for the the instrument that is delivered to protection of the people who have a third party, but rather the whole placed their transaction in our arrangement, under which the hands for exactly that purpose. third party is selected by the Those of you who have not previ parties actively interested in the ously handled escrow closing, but transaction (buyers, sellers, lend will in the future, will find, virtu ers) to collect from all parties to ally every time, that customers are the transaction whatever each is capable of offering substantial to supply (money, items, written Page 3 instrument), and, at the proper benefit-and what should their time, distribute them appropri benefits be? ately. This meaning of the term I believe that one over-riding "escrow" as such an arrangement reason, and a very valid one, I has become established, common might add, why the average per place, and well understood, and I son seeks the services of an es think it entirely practical and crow agent, is because he realizes proper to use it in this sense in that he little knows or understands our day to day business dealings. the machinery of a real estate I think that we can all see that transaction, and wants it to be an escrow can be arranged for supervised by some disinterested many different types of transac person who does. We in this busi tions, be in a sale of or loan on ness can all concur, I am sure, in real estate, or an exchange of se the observation that people gener curities, etc. One common form of ally have at best a foggy, vague escrow that comes to my mind, idea of what real property prac which to me affords a very basic tices, procedure and law consist of. and simple example of the idea of An abstract is something that is an escrow, is that of a betting put in a cabinet or deposit box, arrangement. That is, Mr. Smith and almost forgotten. The term bets that the Yankees will take "fee simple absolute" makes no the series within five games. Mr. sense whatever to them, and, why Brown bets that they will not. The would it? Real property is a spe two deposit their wages with Mr. cialized field, and they make no Jones, who is to hold the money true pretense that it is theirs. But until one of three possible condi still, it is often by far the most tions first occurs, that is: (1) the expensive and large scale transac Yankees win the series within the tion of their lives.