Court Opinion

ID: 3647179
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:03:01.03326+00
Date Added: 2024-06-11T14:08:08.018040
License: Public Domain

The right of the plaintiff to recover in this action depends entirely upon the validity of the deed of trust under which he claims title. If, for any cause, that deed was ineffectual to pass the title of the property described therein as against creditors or purchasers, then he must fail in this action and the judgment rendered by his Honor at the trial in the Superior Court must be affirmed. It is well and thoroughly settled by repeated decisions of this Court that "until a deed is proved in the manner prescribed by statute, the public register has no authority to put it on his book; the probate is his warrant, and his only warrant, for doing so." And unless the deed has been duly proved, the registration is ineffectual to pass the title as against creditors and purchasers. Duke v. Markham,105 N.C. 131, and cases cited in the annotated Report.
Section 1005, Revisal, provides that "The following forms of probate for deeds and other conveyances executed by a corporation shall be deemed sufficient, but shall not exclude other forms of probate which would be deemed sufficient in law," and then follow four forms for the probate of corporate deeds. No one of these forms was followed, even in substance, in the probate of the deed of trust in this case. Registration was necessary to give validity to the deed as against creditors or purchasers. Our inquiry, therefore, is, Is the form of probate sufficient in law? An examination of the statutory form of probate prescribed in those cases in which the corporation executing the instrument affixes its common seal will disclose that there is required proof under oath that *Page 69 
the seal affixed is the common seal of the corporation, and that it was affixed by an officer of the corporation. The Legislature in these authorized forms seemed to regard that fact essential in each form of probate where the corporation had adopted a common seal. It seemed to recognize the doctrine that where a corporate act must be executed by an instrument under seal and the corporation had adopted a common seal, the corporation spoke through and by its seal, and (89) that the seal did not prove itself. The reason for this requirement was thus stated by the Court of New Jersey in an early case,Den v. Vreelandt (1800), 2 Halstead, 352: "On the contrary, the seals of private courts, or private persons, are not evidence of themselves; there must be a proof of their credibility. It cannot be presumed that they are universally known, and consequently they must be attested by the oath of some one acquainted with them." This reason, so well expressed, has lost none of its strength by the lapse of time.
In 1 A.  E. Ency., 963, the following is stated as essentially required to make the probate sufficient: "It must appear from the certificate, when read in connection with the deed, that the person making the acknowledgment was authorized to execute the instrument for the corporation; that he was known, or proved, to the officer to be the corporate official he represented himself to be, and that he acknowledged the instrument to be the act and deed of the corporation." And at p. 964, same volume, it is further stated: "A substantial showing of the requisite facts is all that is required, and where the instrument purports to be the act of the corporation, the certificate will not be held defective because it recites that the person who executed it, in behalf of and under authority from the corporation, acknowledged it to be `his' act and deed instead of that of the corporation."
In our opinion, this authority states the requisites of a valid probate of a corporate deed as liberally as ought to be sanctioned; any further extension would be easily abused. In the probate of the deed of trust used in this case the corporate officials simply acknowledge their signatures; they do not acknowledge the instrument to be either "the act and deed of the corporation" or "his" act and deed; the acknowledgment of this fact is entirely omitted, as is any proof that the seal affixed is the corporate seal. We have examined all the cases which we could discover by diligent search, in which the sufficiency of the acknowledgment of a corporate deed has been presented, and we have been able to find no case sustaining a probate which did not contain more than the probate attached to the deed of trust in this case. (90)Bason v. Mining Co., 90 N.C. 417; Heath v. Cotton Mills,115 N.C. 202; Shaffer v. Hahn, 111 N.C. 1; R. R. v. Lewis, 53 Iowa 101, and cases cited, note 11 A.  E. Enc., 965. *Page 70 
It may not be amiss to say that we think the time has well come when the Legislature can, with propriety and safety, strike out in section 1005, Revisal, the words, "but shall not exclude other forms of probate which would be deemed sufficient in law," and thus prescribe statutory forms of probate of corporate deeds. Doubt and uncertainty would be removed, and as corporations have entered so largely into the business of our people, they have become familiar with the forms to be followed to give validity to corporate deeds. After careful examination of the authorities, we are constrained to hold that the deed of trust, under which the plaintiff claims, was not sufficiently proven to authorize its registration, and therefore, it must necessarily follow that the deed passed no title and created no lien upon the property therein described as against creditors or purchasers. It is declared by section 1224, Revisal, that "All the real and personal property of an insolvent corporation, wheresoever situated, and all of its franchises, rights, privileges, and effects shall, upon the appointment of a receiver, forthwith vest in him, and the corporation shall be divested of the title thereto." But it has been held by this court, and is a generally accepted doctrine, that "the appointment of a receiver does not divest the property of prior existing liens," but the court, through its receiver, "receives such property impressed with all existing rights and equities, and the relative rank of claims and standing of liens remains unaffected by the receivership." 1 Pomeroy's Equity Jurisprudence, sec. 155; Pelletier v. Lumber Co., 123 N.C. 596; Bank v. Bank, 127 N.C. 432;Fisher v. Bank, 132 N.C. 769; Garrison v. Vermont Mills, ante, 1.
Upon the appointment of the receiver of the National Graphite Company on the ground of insolvency, the real estate of that corporation forthwith vested in him, and as the deed of trust, under which the plaintiff claims, was ineffectual because of its invalid probate to divest the title of the corporation or create a lien thereon, as against (91) creditors and purchasers, it must follow that the deed of the receiver, made pursuant to the orders of the court, was effective to pass the title of the property of the corporation. Having reached this conclusion, it is unnecessary to consider the other questions urged in the argument before us. Some of them have been considered by this Court in the recent case of Clement v. King,152 N.C. 456, and would seem to be decided in that case. In our opinion, therefore, the judgment of his Honor was correct, and it is
Affirmed.
Cited: Spruce v. Hunnicutt, 166 N.C. 206; Power Corporation v. PowerCo., 168 N.C. 221. *Page 71