## Facts

- Joseph Conley obtained a loan secured by a mortgage on Torrens-registered property in Ramsey County, Minnesota.
- The mortgage was assigned to M & I Bank FSB, which recorded the mortgage with the county recorder but did not register it with the registrar of titles.
- After Conley defaulted, M & I foreclosed and purchased the property at a sheriff’s sale for $118,000, but again failed to register its foreclosure-derived interest with the registrar of titles.
- Joshua S. Collier learned of the foreclosure sale, contacted M & I to purchase its interest, and was refused.
- Collier then bought the property from Conley for $5,000 and promptly registered his deed with the registrar of titles.
- Collier petitioned for an order directing issuance of a new certificate of title and declaratory relief; M & I claimed a superior interest based on its earlier mortgage and foreclosure purchase.
- The district court granted summary judgment to M & I, ruling Collier was not a good-faith purchaser; the court of appeals reversed; the Minnesota Supreme Court granted review.

## Issues

1. Whether a purchaser’s actual knowledge of an unregistered adverse interest in Torrens property precludes the purchaser from qualifying as a good-faith purchaser under Minnesota’s Torrens Act.
2. Whether Collier’s $5,000 purchase constituted valuable consideration sufficient to claim protection as a purchaser for value under the Torrens Act.

## Decision

- The Minnesota Supreme Court reversed the court of appeals and reinstated summary judgment for M & I.
- The court held that Collier’s actual knowledge of M & I’s unregistered interest prevented Collier from being a good-faith purchaser under the Torrens Act.
- Because Collier lacked good faith, his registered deed did not take priority over M & I’s earlier, though unregistered, interest.

## Legal Principles

- Under Minnesota’s Torrens Act, “good faith” includes a notice/knowledge component; actual knowledge of an unregistered adverse interest defeats good-faith purchaser status.
- Registration priority protections in the Torrens system apply to purchasers who rely on the register without actual notice of conflicting unregistered rights.
- Torrens registration does not permit a purchaser with actual knowledge of a prior adverse interest to defeat that interest solely by registering first.

## Conclusion

The Minnesota Supreme Court held that a buyer of Torrens property who proceeds with actual knowledge of an unregistered adverse interest is not a good-faith purchaser and cannot obtain priority by registering a deed ahead of that known interest, so M & I’s interest prevailed over Collier’s registered title.


In re Collier, 726 N.W.2d 799 (Minn. 2007)