## Facts

- J.J. Cleary entered a 1946 land sale contract with the State of Nevada but did not receive a patent (legal title) until 1952; the contract was never recorded.
- In 1949, before receiving the patent and while holding only an equitable interest, Cleary granted Sierra Pacific Power Company a power-line easement over approximately 2.1 acres.
- The power company recorded the easement, constructed poles, and maintained power lines on the easement area.
- After issuance of the 1952 patent, the property passed through successive owners; plaintiffs acquired title in 1964.
- Before plaintiffs’ purchase closed, a title search was performed that stopped at the 1952 state patent and did not search earlier; the recorded 1949 easement was not found.
- Chelsea Title & Guaranty Co. issued an owners’ title insurance policy that did not list the easement as an encumbrance and excluded coverage for “easements, claims of easement, or encumbrances which are not shown by the public records.”
- Plaintiffs sued the insurer for damages for failing to disclose the recorded easement; the district court entered judgment for the insurer, treating the easement as a “wild” document outside the chain of title.

## Issues

1. Whether a recorded easement granted and recorded before the grantor acquired record title by state patent is outside the chain of title as a “wild” instrument.
2. Whether such an instrument is “shown by the public records” within the meaning of a title policy that excludes easements not shown by the public records.
3. Whether the title insurer is liable for omitting the easement as an encumbrance in the policy.

## Decision

- The Supreme Court of Nevada affirmed judgment for the title insurer.
- The court held the 1949 easement was a “wild” instrument because it was recorded before Cleary acquired record title by patent.
- Because it was outside the chain of title, the easement was not “shown by the public records” as used in the policy.
- The unrecorded 1946 land sale contract could not create a recorded link to bring the easement into the chain of title, and “relation back” did not expand the record chain for notice or coverage purposes.
- The insurer therefore had no liability under the policy for failing to list the easement.

## Legal Principles

- A chain of title for record notice consists of conveyances by successive holders while they hold record title; instruments recorded before a grantor acquires record title (or after the grantor conveys it away) are outside the chain of title and are “wild” as to subsequent purchasers.
- In a title insurance policy insuring against matters “shown by the public records,” that phrase is construed in relation to the chain of title a reasonably diligent search would examine, not merely whether an instrument is physically recorded somewhere in county records.
- An unrecorded agreement creating equitable interests does not expand the record chain of title for constructive notice or for determining what defects are “shown by the public records” under a title policy.
- A title insurer is not liable for failing to disclose a recorded but chain-of-title-extrinsic (“wild”) easement when the policy excludes easements not shown by the public records.

## Conclusion

The court held that an easement recorded before the grantor obtained record title by state patent was a “wild” document outside the chain of title and therefore not “shown by the public records” under the policy, relieving the title insurer of liability for omitting it.


Ryczkowski v. Chelsea Title & Guar. Co., 449 P.2d 261 (Nev. 1969)