Monday, November 19, 2012
This is a re-post of a fascinating, informative article that I wanted to share. The author is Paula Whitsell. The article was originally posted on www.realestatescoop.net, June 5, 2012. Happy Monday San Diego! Enjoy.
Hatfields vs. McCoys: Could Title Insurance have stopped the feud?
The History Channel’s release of its historical drama based upon the famous feud between the Hatfields and McCoys was met with outstanding success this week as it garnered the largest audience ever for a non-sports television event. The three part mini-series depicted the infamous American family feud, begun during the Civil War and lasting well into the 20th century. Although numerous theories abound as to how, exactly, the feud started, The History Channel’s depiction suggested that a primary catalyst had to do with a dispute over timber rights. During this time, timber was a family business, and it is well-documented that Devil Anse Hatfield, the patriarch of the Hatfield clan, was a monetary success in the timber business, while his counterpart and rival, Randall McCoy, continuously failed to secure a profit. The business rivalry eventually resulted in a real estate lawsuit dealing with issues of defining property ownership. I’d like to suggest that this lawsuit could have potentially been avoided, or at least tempered, had title insurance already been developed and distributed as a necessity in real estate transactions.
A specific instance of timber dispute occurred as the result of an oversight in an 1859 McCoy land purchase. The McCoys were logging timber on their land, assuming all rights to the real property encompassed by the purchase agreement. However, the Hatfields claimed that they had purchased the timber rights for that particular land in 1857. The issue went to court, but the McCoys ultimately prevailed, claiming that the seller of the land never informed them that the timber rights were not included in the purchase. Interestingly enough, this sort of dispute would have been avoided with modern day owner’s title insurance, now often considered a requirement for most real estate transactions but not developed until the 1870s.
There are two types of title insurance: owner insurance to protect the purchaser and lender insurance to protect the bank or lending institution. When purchasing with a mortgage, lender’s title insurance is generally mandatory, but it is fairly common for sellers to pay the premium for an owner’s title insurance policy as part of the purchase contract. The insurance is primarily intended to protect all parties from financial losses due to defects in titles to real property, and it usually insures a purchaser up to the full value of the purchase price. In essence, title insurance assures the purchaser of the validity of the title, specifically protecting against potential errors or omissions in the deed and examining records. Understanding and protecting rights to real property is a necessary part of real estate transactions, and although title insurance is not exclusive to the U.S., its development and form were central to the modernization of the real estate market.
Consequently, in the case of the McCoy timber rights, title insurance would have insured the purchased land from claims of ownership from the Hatfields because the purchase agreement did not list timber rights as an exception to the purchase. This is, of course, what was ultimately decided in the lawsuit, but owner’s title insurance would have acted as a barrier between the McCoys and the Hatfields, thereby releasing the McCoys of any potential liability for a title error. Ultimately, while it may be impossible to pinpoint exactly what ignited the Hatfield v. McCoy feud, it certainly seems that modern day title insurance could have deflected at least one catalyst to the outbreak of violence and hatred that plagued the two families into the 20th century.
