Court Opinion

ID: 9854424
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:07:31.330969+00
Date Added: 2024-06-11T09:23:04.632493
License: Public Domain

*438Chief Justice Exum
dissenting.
Believing that the trial court and the Court of Appeals correctly concluded that the state was not entitled to rely on sovereign immunity to defeat a claim for betterments in an action to try title successfully prosecuted by the state, I respectfully dissent from the majority’s conclusion to the contrary and vote to affirm the decision of the Court of Appeals.
A claim for betterments is not a separate action in the nature of an action for damages against one who successfully prosecutes an action for title to real property. It is, instead, a petition filed in the cause itself. The purpose of the betterments doctrine is to prevent the successful title claimant from being unjustly enriched by taking not only the title but also the value of permanent improvements made to the land in good faith by the one who loses title. The one who loses title may recover for betterments only when (1) the improvements are permanent in nature and made under a bona fide belief that the improver had good title, and (2) reasonable grounds for such belief existed. N.C.G.S. § 1-340 (1983); Pamlico County v. Davis, 249 N.C. 648, 107 S.E. 2d 306 (1959). The betterments doctrine is rooted in the equitable notion that one who successfully claims title to realty from another who held the land in a good faith belief that he owned it ought to pay for the permanent improvements which will be acquired with the title. Otherwise the successful title claimant will be unjustly enriched and the good faith improver unjustly deprived to the extent of the value of the improvements.
This right to betterments is a doctrine that has gradually grown up in the practice of courts of equity .... [I]t may now be considered as an established principle of equity that whenever a plaintiff seeks the aid of a court of equity to enforce his title against an innocent person, who has made improvements on land, without notice of superior title, believing himself to be the absolute owner, aid will be given to him, only upon the terms that he shall make due compensation to such innocent person to the extent of the enhanced value of the premises, by reason of the meliorations or improvements, upon the principle that he who seeks equity must do equity.
Wharton v. Moore, 84 N.C. 479, 482 (1881).
*439When the doctrine of betterments is so understood, it seems clear that sovereign immunity should not relieve the state from its equitable obligation to pay for permanent improvements to realty it receives when it successfully prosecutes an action for title to the realty. To apply sovereign immunity to relieve the state from this kind of obligation skirts dangerously close to depriving a citizen of property without due process of law. The state takes but it does not pay.
Since the doctrine of sovereign immunity is of the common law, it is this Court’s province to say how it will be applied or whether it will be applied at all. Smith v. State, 289 N.C. 303, 222 S.E. 2d 412 (1976). I would not apply it to defeat a citizen’s claim for betterments in an action for title brought by the state.
This result may be reached by the application of at least three legal theories, all of which seem equally appropriate. The first is that a betterments claim is not a claim against the state to which the doctrine of sovereign immunity properly applies. To enforce a betterments claim against the state does not mean that the state must pay out public funds without receiving concomitant benefits; it means, rather, that the state must pay only for what, at its own instance, it demands and receives. The doctrine of sovereign immunity is a shield against payments of the former kind, not a sword to cut off a citizen’s right to be paid for what the state takes.
The second is that when the state brings an action for title to realty, it impliedly waives the benefits of sovereign immunity as to whatever claim for betterments may be shown and consents to pay this claim. We held in Smith that sovereign immunity would not be available to the state as a defense to a contract action against it, concluding that, “whenever the State . . . enters into a valid contract, the State implicitly consents to be sued for damages on the contract in the event it breaches the contract.” 289 N.C. at 320, 222 S.E. 2d at 423-24. The Court in Smith felt that since the state had voluntarily obtained the services of the other contracting party it was simply unfair to preclude that party via the doctrine of sovereign immunity from having any recourse against the state for the state’s alleged breach of the agreement. So it is with the state’s voluntary decision to institute against a citizen an action for title to realty. If the state prevails *440it is unfair to absolve the state from its equitable obligation under the betterments doctrine to pay the citizen who loses title for the permanent improvements to the realty which the state receives.
Finally, I think N.C.G.S. § 41-10.1 (1984) should be interpreted, as the Court of Appeals interpreted it, to constitute an express waiver of sovereign immunity as a defense to a claim for betterments in an action for title brought by the state.
My position is consistent with the result in Pamlico County v. Davis, 249 N.C. 648, 107 S.E. 2d 306. Counties in North Carolina enjoy sovereign immunity. Guthrie v. Ports Authority, 307 N.C. 522, 299 S.E. 2d 618 (1983). Although the sovereign immunity point was not raised, we nevertheless in Davis upheld, under the betterments doctrine, a jury award for the defendant against Pamlico County, which had successfully prosecuted its action for title.
Justice Webb joins in this dissenting opinion.