Court Opinion

ID: 9569867
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:18:10.175942+00
Date Added: 2024-06-11T12:04:11.472780
License: Public Domain

Judge John
dissenting.
I believe the trial court correctly concluded that plaintiffs, as a result of recordation of the easement in Orange County, were chargeable with constructive notice of the existence and entire course of that easement. In addition, contrary to the majority’s assertion, I also believe our law requires that “purchasers for value,” in order to claim protection under N.C. Gen. Stat. § 47-27 (1984), must indeed be “innocent.” See Hill v. Memorial Park, 304 N.C. 159, 165, 282 S.E.2d 779, 783 (1981) (N.C. recording statutes “do[] not protect all purchasers, but only innocent purchasers for value”) (emphasis added) (citations omitted); see also Green v. Miller, 161 N.C. 25, 31, 76 S.E. 505, 508 (1912) (purchaser without notice of right or interest of third party, who pays full and fair price at time of purchase or before notice, takes property free from right *42of third party “because he is regarded as an innocent purchaser .... It is a perfectly just rule, and it would be strange if the law were otherwise.”) (Emphasis added). Thus plaintiffs, having constructive notice the easement was located in Orange and Person counties, were not “innocent” purchasers of the land in question and therefore took title subject to the easement in both counties. Accordingly, I respectfully submit the trial court ruled properly and vote to affirm the court’s order in its entirety.
The purpose of North Carolina’s recording statutes is to “provide a single reliable means for purchasers to determine the state of the title to real estate,” Stegall v. Robinson, 81 N.C. App. 617, 619, 344 S.E.2d 803, 804 (citations omitted), disc. review denied, 317 N.C. 714, 347 S.E.2d 456 (1986), and to provide record notice “upon the absence of which a prospective innocent purchaser may rely.” Whitehurst v. Abbott, 225 N.C. 1, 5, 33 S.E.2d 129, 132 (1945). However, these statutes do “not protect all purchasers, but only innocent purchasers for value.” Hill, 304 N.C. at 165, 282 S.E.2d at 783 (emphasis added); see also Morehead v. Harris, 262 N.C. 330, 338, 340-42, 137 S.E.2d 174, 182, 183-85 (1964).
As a consequence of the statutes:
[a] purchaser of land is charged with notice of every description, recital, reference and reservation in deeds or muniments in his grantors’ chain of title, and ... if the facts disclosed in such chain or [sic] title are sufficient to put the purchaser on inquiry, he will be charged with notice of what a proper inquiry would have disclosed.
Hughes v. Highway Comm., 275 N.C. 121, 130, 165 S.E.2d 321, 327 (1969) (emphasis added) (citation omitted). “A purchaser . . . has constructive notice of all duly recorded documents that a proper examination of the title should reveal,” Stegall, 81 N.C. App. at 619, 344 S.E.2d at 804 (citation omitted), and such notice suffices to deprive a purchaser of “innocence” with respect to such documents. See Hill, 304 N.C. at 165, 282 S.E.2d at 783; see also Butler v. Winston, 223 N.C. 421, 427, 27 S.E.2d 124, 127 (1943). This principle of constructive notice implied from proper registration has long been recognized and relied upon by our courts. See, e.g., Clark v. R.R., 192 N.C. 280, 283, 135 S.E. 26, 27 (1926).
G.S. § 47-27, set out in the majority opinion, requires registration of easements in order for an interest in land claimed thereunder *43to be effective as against “purehaser[s] for a valuable consideration.” To defeat defendants’ claim to an easement, therefore, plaintiffs must be within the class of persons the registration statutes are designed to protect — “innocent purchasers for value,” Hill, 304 N.C. at 165, 282 S.E.2d at 783; that is, purchasers whose proper examination of the appropriate chain of title would reveal no “duly recorded documents” evidencing interests in the property adverse to their own. Stegall, 81 N.C. App. at 619, 344 S.E.2d at 804. Unlike the majority, I do not believe plaintiffs meet the test.
The deeds from Jack and Martha Chavis to the Halls, and in turn from the Halls to plaintiffs, both specifically referred to the land as being located in Person and Orange counties. Plaintiffs properly registered their deed in both counties, signifying their awareness of two recorded chains of title.
A proper, thorough title search by plaintiffs would have included “running the chain of title” to ascertain all previous owners of the land, and thereafter investigating all the “out” conveyances by each owner. See generally Patrick K. Hetrick & James B. McLaughlin, Jr., Webster’s Real Estate Law in North Carolina §§ 458 to 463, at 601-23, § 490, at 670 (3d ed. 1988). This would have been accomplished by utilizing the Grantee and Grantor Indexes maintained in both counties. These indexes refer the title-searcher to specific pages of separate volumes wherein copies of documents reflecting the listed transactions may be found. Id. § 460, at 608. This is significant because checking a grantor’s out-conveyances involves more than merely glancing at the brief description of the property in the Grantor Index — “[t]he recorded instruments themselves should be looked at . . . Id. § 463 at 622-23.
While this latter requirement of detailed examination of collateral deeds has been criticized, see Stegall, 81 N.C. App. at 620-21, 344 S.E.2d at 805-06, it is derived from admonitions adopted by our courts. See Reed v. Elmore, 246 N.C. 221, 230-32, 98 S.E.2d 360, 366-68 (1957). This Court followed and amplified Reed in Stegall v. Robinson, stating:
Reed stands for the rule that in title examination when checking the grantor’s out conveyances it is not enough to merely insure that the subject property was not conveyed out previously. The title examiner must read the prior conveyances to determine that they do not contain restrictions applicable to the use of the subject property.
*44Stegall, 81 N.C. App. at 620, 344 S.E.2d at 805. In addition, we recently had occasion to observe that “Reed remains good law today.” Gregory v. Floyd, 112 N.C. App. 470, 476, 435 S.E.2d 808, 812 (1993). Again, “[t]he law contemplates that a purchaser of land will examine each recorded deed and other instrument in his chain of title and charges him with notice of every fact affecting his title which an accurate examination of the title would disclose.” Waters v. Phosphate Corp., 310 N.C. 438, 441-42, 312 S.E.2d 428, 432 (1984) (citation omitted).
Plaintiffs impliedly concede they were required to examine the record chain of title in both counties wherein the tract of land in question is located. They further concede that, by virtue of prior registration of the easement in Orange County, they were put on constructive notice of the existence of the easement as to that county. Under the foregoing authorities, I respectfully submit, plaintiffs are further charged with constructive notice of the duly recorded out-conveyance by which the easement was created including the contents thereof. “ ‘The deed was notice to them of all it contained; otherwise, the purpose of the recording acts would be frustrated.’ ” Stegall, 81 N.C. App. at 620, 344 S.E.2d at 805 (quoting with approval Finley v. Glenn, 154 A. 299, 301 (Pa. 1931)). If plaintiffs had properly conducted the required title examination in Orange County, they would have discovered not only conveyance of an easement to the Walkers. They would also have found the extent and course of that easement unambiguously described in the deed of conveyance and thus ascertained, at least upon “prudent” inquiry pursued “with reasonable diligence,” Highway Comm. v. Wortman, 4 N.C. App. 546, 552, 167 S.E.2d 462, 466 (1969) (quoting Jones v. Warren, 274 N.C. 166, 173, 161 S.E.2d 467, 472 (1968)), its location in both Orange and Person counties.
Because plaintiffs had constructive notice of the entire course of the easement derived from the recorded instrument in Orange County, they took title subject to the easement in both counties, wherever the boundary line between them might be located. When a grantor burdens his property by written conveyance which appears in his chain of title, a subsequent purchaser from that grantor has constructive notice of that burden in the chain of title and takes subject thereto. Reed, 246 N.C. at 230, 98 S.E.2d at 366-67; Waters, 310 N.C. at 441-42, 312 S.E.2d at 432.
*45Under the limited circumstances of this case, therefore, I would approve the trial court’s determination that “plaintiffs’ constructive notice of the existence and course of the Walker easement did not stop at the Person County line; constructive notice is notice for all purposes and not fictionally discontinued or suspended by a county line which intersects a single parcel of land.” Therefore, I vote to affirm the court’s ruling that plaintiffs, being chargeable with constructive notice of the existence and course of the easement in both Orange and Person counties, were thus not “innocent” purchasers for a valuable consideration and were not entitled to rely upon G.S. § 47-27.