Eaton v. Doub
| Decision Date | 24 June 1925 |
| Docket Number | 354. |
| Parties | 190 N.C. 14, 40 A.L.R. 273 v. DOUB ET AL. EATON |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Forsyth County; McElroy, Judge.
Action by O. B. Eaton against W. B. Doub and others. From a judgment for defendants, sustaining a demurrer ore tenus to the complaint, plaintiff appeals. Affirmed.
Statute requiring registration of deeds does not apply to rights and titles which need not be evidenced in writing.
Manly Hendren & Womble and Parrish & Deal, all of Winston-Salem for appellant.
Holton & Holton and Swink, Clement & Hutchins, all of Winston-Salem for appellees.
The facts alleged in the complaint are as follows: On May 21 1909, in consideration of $1,000, the Engle Land Company conveyed to plaintiff, by deed, a lot of land situate in the city of Winston-Salem. Plaintiff immediately went into possession of said lot, and within three months thereafter constructed thereon a large dwelling house which he has continuously, since 1909 to the present time, occupied as his home. During the fall of 1919 plaintiff placed on said lot, and made thereon, many improvements, which have greatly enhanced its value. These improvements were made in good faith by plaintiff, relying upon his belief, bona fide, that he had a good, indefeasible, and unincumbered title to said lot. On June 6, 1923, plaintiff conveyed a portion of said lot to the Burkhead Methodist Church South by deed containing full covenants of warranty. Said church thereafter erected a parsonage on the portion of the lot conveyed to it, at a cost of approximately $9,000. Plaintiff's possession of said lot has been open, adverse, notorious, and exclusive from and since the date of his deed from the Engle Land Company. This deed was dated May 21, 1909, and was duly registered in Forsyth county on September 9, 1924. At the date of the execution of said deed, Lindsay Patterson, a lawyer, residing in Winston-Salem, of high standing and repute, both morally and financially, was the president of the Engle Land Company and the owner of practically all of the stock of said company. Plaintiff, relying upon the friendly and cordial relations existing between the said Patterson and himself, and upon his confidence in him, did not register his deed at the time he received it, and thereafter forgot that he had failed to do so until September, 1924.
Defendants are judgment creditors of plaintiff's grantor, the Engle Land Company. Their judgments were obtained against the Engle Land Company and Lindsay Patterson, and were duly docketed on the judgment docket of the superior court of Forsyth county during the year 1922. These judgments, aggregating, with interest, about $12,000 were all docketed prior to the date of the registration of the deed of the Engle Land Company to plaintiff. The indebtedness upon which each of the judgments was obtained was incurred subsequent to January 1, 1917, and was the indebtedness of Lindsay Patterson and not of the Engle Land Company. Credit was extended by defendants to him and not to the company. He completely dominated and controlled the affairs and policies of the company, using the name of the company as a party to the obligations upon which judgments were rendered as a form. At the time the obligations were incurred to defendants, said company owned an inconsiderable amount of property, having theretofore disposed of practically all its property, consisting of land, which Patterson, through said company, had put on the market for sale.
The value of the land, less the enhanced value thereof by reason of said improvements, is substantially less than the amount of the docketed judgments of defendants, and is not in excess of $6,000, whereas the value of the property, with the improvements, is substantially in excess of the sum of $6,000.
Two of defendants have caused, and the others, unless restrained by order of court, will cause, executions to be issued upon the said judgments in their favor to the sheriff of Forsyth county. The said sheriff has advertised for sale, for the satisfaction of said judgments, all the right, title, and interest of the Engle Land Company in and to said land. Plaintiff prays judgment, first, that defendants be restrained and enjoined from proceeding further with the executions issued and now in the hands of the sheriff and from suing out further executions upon said judgments, and that said judgments be canceled and declared null and void as to the land described in the complaint; and, second, that, if the court shall adjudge that said judgments are liens upon said land, upon payment by plaintiff into the office of the clerk of the superior court of Forsyth county of such sum as may be adjudged as the value of said land, less the enhanced value by reason of the improvements, each and all said judgments, in so far as the land described in the complaint is concerned, be canceled.
No answer to the complaint has been filed by defendants. Upon the hearing of a motion by plaintiff for the continuance of a temporary restraining order to the trial defendants demurred, ore tenus, to the complaint. By the demurrer, defendants admit the facts to be as alleged in the complaint; Hayman v. Davis, 182 N.C. 563, 109 S.E. 554; Hipp v. Dupont, 182 N.C. 9, 108 S.E. 318, 18 A. L. R. 873. All relevant facts sufficiently pleaded in the complaint are admitted by a demurrer, ore tenus. N.C. Public Service Co. v. Southern Power Co., 179 N.C. 18, 101 S.E. 593, 12 A. L. R. 304; Broad Street Bank v. Bank, 183 N.C. 463, 112 S.E. 11, 22 A. L. R. 1124; Ollis v. Drexel Furniture Co., 173 N.C. 542, 92 S.E. 371.
Plaintiff's deed, registered September 9, 1924, is not valid as a conveyance by the Engle Land Company of the land described therein as against defendants, creditors of Engle Land Company, whose claims have been reduced to judgments. C. S. 3309. The land described in the deed, not having been conveyed to plaintiff as against defendants, was the real property of the Engle Land Company at the date of the docketing of the judgments. The judgments, docketed on the judgment docket of the superior court of Forsyth county, are liens upon said land. C. S. 614. They were liens on said land at date of the registration of plaintiff's deed, and plaintiff's title, under the deed as a conveyance, is subject to the liens of the judgments. Wimes v. Hufham, 185 N.C. 178, 116 S.E. 402; Mills v. Tabor, 182 N.C. 722, 109 S.E. 850; Maxton Realty Co. v. Carter, 170 N.C. 5, 86 S.E. 714; Trust Co. v. Sterchie, 169 N.C. 21, 85 S.E. 40; Tarboro v. Micks, 118 N.C. 162, 24 S.E. 729; Bostic v. Young, 116 N.C. 766, 21 S.E. 552.
The fact that defendants recovered judgments not only against the Engle Land Company, but also against Lindsay Patterson, and that the indebtedness upon which the judgments were recovered was his indebtedness, and not that of the company, as alleged in the complaint and admitted by the demurrer, cannot be held to affect the validity of the judgments, or the right of defendants to enforce the same, by execution and sale of the real property of the Engle Land Company, upon which the judgments are liens. Nor is the validity of the liens affected by the fact that the indebtedness upon which the judgments were rendered was incurred subsequent to January 1, 1917, at which time plaintiff had been in possession of the land under an unregistered deed for more than seven years. There is no allegation that the judgments were void for want of jurisdiction, or that they were procured by fraud, or that the indebtedness upon which they were rendered was fraudulent. Defenses which may have been made by the Engle Land Company before judgment are not now available to said company or to plaintiff. Brown v. Harding, 170 N.C. 253, 86 S.E. 1010, Ann. Cas. 1917C, 548; 34 C.J. 527; 15 R. C. L. 731. The judgments are valid. Plaintiff's deed for the land was not a conveyance of the land by the Engle Land Company as against defendants whose judgments were docketed prior to the date of its registration. The judgments are liens upon the land, as the real property of the Engle Land Company. Plaintiff's deed from said company is no bar as a conveyance to the right of defendants to have the land sold, under execution, as the property of the Engle Land Company.
Plaintiff, conceding that, upon the record, his deed is not a valid conveyance of the land by the Engle Land Company as against defendants, judgment creditors, whose judgments were docketed prior to the registration of the deed, contends that he had title to said land at time the judgments were docketed by possession, for seven years, under the unregistered deed as color of title. C. S. 428. The facts of possession, and of the requisite duration of such possession, prior to the docketing of the judgments, are admitted. This contention, therefore, presents the question as to whether an unregistered deed of the judgment debtor is color of title to the land described therein as against a judgment creditor, whose judgment has been duly docketed, and thus become a lien on the land described in the deed.
Both plaintiff, the grantee in the unregistered deed, and defendants, judgment creditors, whose docketed judgments are liens on the land, claim from a common source, to wit, the Engle Land Company. Under C. S. 3309, no conveyance of land is valid as against creditors or purchasers for value, but from the registration thereof.
In Collins v. Davis, 132 N.C. 106, 43 S.E. 579, this court said:
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