Spence v. Spence
| Decision Date | 30 January 2006 |
| Docket Number | No. 26104.,26104. |
| Citation | 628 S.E.2d 869 |
| Court | South Carolina Supreme Court |
| Parties | Deborah W. SPENCE, Appellant, v. Deborah W. SPENCE and Floyd D. Spence, Jr., as the Personal Representatives of the Estate of Floyd D. Spence, Wayne K. Wilkes, Susan A. Wilkes, Donna T. Cromer, Roy Bunyan Cromer, Jr., Robert P. Wilkins, Jr., Floyd D. Spence, Jr., Zachariah W. Spence, Benjamin D. Spence and Caldwell D. Spence, Defendants, of whom Donna T. Cromer and Roy Bunyan Cromer, Jr., are the Respondents. |
William E. Booth, III, of Columbia, for Appellant.
Robert L. Widener and Robert W. Dibble, Jr., both of McNair Law Firm, of Columbia, for Respondents.
Appellant filed a petition for rehearing in this matter pursuant to Rule 221, SCACR. Respondents filed a return in opposition. We deny the petition for rehearing, but withdraw the former majority and dissenting opinions, and substitute the attached majority and dissenting opinions in their place. Chief Justice TOAL and Justice PLEICONES would grant the petition for rehearing and decide this case in accordance with their dissenting opinions.
IT IS SO ORDERED.
/s/ Jean H. Toal, C.J
/s/ James E. Moore, J
/s/ John H. Waller, Jr., J
/s/ E.C. Burnett, III, J.
/s/ Costa M. Pleicones, J.
This appeal raises the issue of whether the circuit court properly dismissed the plaintiff's complaint for failure state a claim against two defendants because the defendants were innocent or bona fide purchasers for value of real property without notice of the plaintiff's adverse claim or alleged title defect. We certified this case from the Court of Appeals pursuant to Rule 204(b), SCACR. We affirm.
In May 1999, the late Floyd D. Spence (Owner 1) executed and delivered a deed conveying a parcel of real property located in Spence Plantation, a development at Lake Murray in Lexington County, to his wife, Deborah W. Spence (Owner 2). This 1999 deed, which was not recorded at the time, identified a 0.72-acre parcel. The parcel was a portion of some 163 acres originally owned by Owner 1, according to allegations in the complaint.
In January 2000, Owner 2 agreed to sell the lakefront lot to Wayne K. Wilkes and Susan A. Wilkes (Owner 3) for $250,000. Robert P. Wilkins, Jr. (Agent), an attorney at law and a real estate agent, acted as agent for Owner 2.1 The lot was independently surveyed by Owner 3 after questioning the boundaries verbally described by Agent in an on-site inspection.
Owner 2 alleges in her complaint she signed a deed conveying 0.72 acre to Owner 3 on April 3, 2000, with the understanding Agent would hold the deed until the closing date. Owner 2 alleges she and Owner 1 denied Agent's request, made on behalf of Owner 3, to redefine the lot's boundaries so that it contained 0.82 acre — one-tenth of an acre more.
Owner 2 further alleges Agent wrongfully and without her permission or knowledge (1) modified, submitted to county planning officials for approval, and caused to be recorded on April 20, 2000, a revised plat dated February 1, 2000, which shows a 0.82-acre parcel as Lot 42; (2) substituted a new page for the first page of the 1999 deed, which Owner 1 previously had signed conveying the lot to Owner 2, to identify a 0.82-acre parcel as Lot 42; and (3) substituted a new page for the first page of the 2000 deed, which Owner 2 previously had signed conveying the lot to Owner 3, to identify a 0.82-acre parcel as Lot 42 and the revised plat showing the new lot.
The closing on the sale of the lot occurred April 20, 2000. The 1999 gift deed and the 2000 sale deed were publicly recorded with the Lexington County Register of Deeds four days later.
In 2002, Owner 3 sold the 0.82-acre lot to Donna T. Cromer and Roy Bunyan Cromer, Jr. (Owner 4), respondents, for $340,000. According to allegations in the complaint, documents pertaining to Lot 42 then on record with the register of deeds were: (1) the 1999 gift deed from Owner 1 to Owner 2 conveying Lot 42 consisting of 0.82 acre; (2) two earlier deeds described in the derivation clause of the 1999 deed, of which Lot 42 was a portion; (3) the 2000 sale deed from Owner 2 to Owner 3 conveying Lot 42 consisting of 0.82 acre; (4) the Spence Plantation — Phase IV plat with a revision date of February 1, 2000, showing Lot 42 consisting of 0.82 acre; and (5) the original 1997 plat of Spence Plantation — Phase IV, which did not show Lot 42, but revealed that the area next to Lot 41 and from which Lot 42 later was later created was held by Owner 1. Furthermore, the complaint alleges the original 1999 gift deed from Owner 1 to Owner 2 conveying a 0.72-acre lot in the area of Lot 42 was never publicly recorded.
Owner 2 seeks reformation of the deeds due to mutual mistake, seeks a declaratory judgment that the lot size is 0.72 acre, and alleges Agent committed legal malpractice by negligently altering the deeds. Owner 4 moved pursuant to Rule 12(b)(6), SCRCP, to dismiss Owner 2's complaint for failure to state facts sufficient to constitute a cause of action against them.
The circuit court granted the motion and dismissed the case against Owner 4 with prejudice, ruling the "Complaint gives rise to no reasonable interpretation other than that the Cromers [Owner 4] were bona fide purchasers for value." The circuit court denied Owner 2's motion for reconsideration. This appeal follows.
Did the circuit court err in dismissing with prejudice, pursuant to Rule 12(b)(6), SCRCP, Owner 2's claims against Owner 4 because Owner 4 was an innocent or bona fide purchaser for value of the lot in question without notice of an alleged title defect or adverse claim?
Under Rule 12(b)(6), SCRCP, a defendant may move to dismiss a complaint based on a failure to state facts sufficient to constitute a cause of action. In considering such a motion, the trial court must base its ruling solely on allegations set forth in the complaint. If the facts and inferences drawn from the facts alleged in the complaint, viewed in the light most favorable to the plaintiff, would entitle the plaintiff to relief on any theory, then the grant of a motion to dismiss for failure to state a claim is improper. Baird v. Charleston County, 333 S.C. 519, 511 S.E.2d 69 (1999). In deciding whether the trial court properly granted the motion to dismiss, the appellate court must consider whether the complaint, viewed in the light most favorable to the plaintiff, states any valid claim for relief. Gentry v. Yonce, 337 S.C. 1, 522 S.E.2d 137 (1999). A motion to dismiss under Rule 12(b)(6) should not be granted if facts alleged and inferences reasonably deducible therefrom entitle the plaintiff to relief under any theory. Id. Furthermore, the complaint should not be dismissed merely because the court doubts the plaintiff will prevail in the action. Toussaint v. Ham, 292 S.C. 415, 357 S.E.2d 8 (1987).
Owner 2 presents four arguments alleging the circuit court erred in dismissing with prejudice her claims against Owner 4 pursuant to Rule 12(b)(6).
Owner 2 contends the circuit court erred in dismissing her complaint against Owner 4 because Owner 4 had a duty of inquiry to further examine a potential title defect or adverse claim. We disagree.
A purchaser may assert a plea in equity of a bona fide purchaser for value, without notice of defect in his title, by showing (1) he has actually paid in full the purchase money (giving security for the payment is not sufficient, nor is past indebtedness a sufficient consideration); (2) he purchased and acquired the legal title, or the best right to it; and (3) he purchased bona fide, i.e., in good faith and with integrity of dealing, without notice of a lien or defect. The bona fide purchaser must show all three conditions — actual payment, acquiring of legal title, and bona fide purchase — occurred before he had notice of a title defect or other adverse claim, lien, or interest in the property. S.C. Tax Commn. v. Belk, 266 S.C. 539, 543, 225 S.E.2d 177, 179 (1976); Jones v. Eichholz, 212 S.C. 411, 422, 48 S.E.2d 21, 25-26 (1948); Kirton v. Howard, 137 S.C. 11, 36, 134 S.E. 859, 868 (1926); Black v. Childs, 14 S.C. 312, 318 (1880); S.C.Code Ann. § 30-7-10 (Supp. 2004);2 92A C.J.S. Vendor & Purchaser § 483 (2000).
There are two basic forms of notice by which a purchaser may be charged with knowledge of the rights of another in real property: actual notice and constructive/inquiry notice. Belk, 266 S.C. at 544-43, 225 S.E.2d at 179; Jones, 212 S.C. at 422, 48 S.E.2d at 25-26; Epps v. McCallum Realty Co., 139 S.C. 481, 498-99, 138 S.E. 297, 302 (1927).
We have explained in the context of an action brought under the South Carolina Tort Claims Act that Strother v. Lexington County Recreation Commn., 332 S.C. 54, 64 n. 6, 504 S.E.2d 117, 122 n. 6 (1998) (citations omitted). Moreover, "[a]ctual notice may be shown by direct evidence or inferred from factual circumstances." Id. at 65, 504 S.E.2d at 123.
Similarly, in the context of a real estate transaction, a purchaser of real property has actual notice of a title defect or other claim, lien, or interest adverse to his own in a particular property when he actually knows about the defect or claim, or when a reasonable person, if made aware of the same information known to the buyer, would be charged...
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