{
  "id": 8185355,
  "name": "CHARLES H. HINNANT and DOROTHY W. HINNANT, Plaintiffs v. RICHARD B. PHILIPS and SHEILA A. PHILIPS, Defendants, and PEDRO MARTINEZ ESPINOSA; CECILIA M. RODRIGUEZ; JOHN T. MATTHEWS, TRUSTEE; and, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendant/Intervenors",
  "name_abbreviation": "Hinnant v. Philips",
  "decision_date": "2007-06-19",
  "docket_number": "No. COA06-1308",
  "first_page": "241",
  "last_page": "250",
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    {
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      "cite": "184 N.C. App. 241"
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    "id": 14983,
    "name": "North Carolina Court of Appeals"
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    {
      "cite": "N.C. Gen. Stat. \u00a7 161-22",
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          "parenthetical": "\"We concur with the defendant, as was also held by the Court below, that 'J. Mizell,' or 'Jo. Mizell,' was a sufficient cross-indexing for a judgment against 'Josiah Mizell[.]' \""
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          "parenthetical": "\"We concur with the defendant, as was also held by the Court below, that 'J. Mizell,' or 'Jo. Mizell,' was a sufficient cross-indexing for a judgment against 'Josiah Mizell[.]' \""
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          "parenthetical": "\"A party who may be affected by notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired if he had made the necessary effort to discover the truth.\""
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          "parenthetical": "\"A party who may be affected by notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired if he had made the necessary effort to discover the truth.\""
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    "judges": [
      "Judge BRYANT concurs.",
      "Judge STEELMAN concurs in result only with separate opinion."
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    "parties": [
      "CHARLES H. HINNANT and DOROTHY W. HINNANT, Plaintiffs v. RICHARD B. PHILIPS and SHEILA A. PHILIPS, Defendants, and PEDRO MARTINEZ ESPINOSA; CECILIA M. RODRIGUEZ; JOHN T. MATTHEWS, TRUSTEE; and, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendant/Intervenors"
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      {
        "text": "LEVINSON, Judge.\nDefendant-intervenors, Pedro Espinosa and Cecilia Rodriguez; John Matthews, Trustee; and Mortgage Electronic Registration Systems, Inc. (MERS), appeal from an order granting the motion of plaintiffs Charles and Dorothy Hinnant for execution on. a judgment obtained against Richard and Sheila Phillips (defendants). We affirm.\nThe factual and procedural history of this case began in 1982 when plaintiffs loaned money to defendants, secured by a promissory note executed by the parties. Defendants failed to make the required payments, and plaintiffs filed a complaint to collect the balance of the loan. Their complaint was captioned Hinnant v. Phillips, 87 CVD 1689. Plaintiffs obtained a default judgment on 18 March 1988, which was docketed and indexed with \u201cRichard Barry Phillips and Sheila Ann Phillips\u201d named as defendants.\nIn July 1988, after the docketing of the judgment in 87 CVD 1689, defendants bought a parcel of land in Johnston County (the subject property). Approximately ten years later, in 1998, plaintiffs filed a complaint to renew their judgment against defendants. The complaint, 98 CVD 272, was again captioned with the parties\u2019 names, but the last name \u201cPhillips\u201d was spelled \u201cPhilips\u201d with one \u201cL.\u201d In February 1998 plaintiffs obtained judgment in their favor; this judgment and the copy docketed by the Clerk of Court also spelled \u201cPhillips\u201d as \u201cPhilips.\u201d\nIn 2005 plaintiffs filed a motion in the cause seeking to collect on the judgment through sale of the subject property. However, by 2005 the property had changed hands several times. Defendants had defaulted on their mortgage, and the lender foreclosed on the property; thereafter, it was conveyed to a financial corporation. The subject property was then conveyed to Espinosa, who executed a promissory note in favor of MERS and its trustee, John Matthews.\nIn May 2006 the trial court allowed appellants to intervene in the case, to protect their rights in the subject property. At the hearing . conducted 8 May 2006, appellants argued that the judgment against plaintiffs was not an effective lien as against a bona fide purchaser. Appellants asserted that the claimed lien was invalid because it did not appear in the chain of title in a search for \u201cPhillips\u201d with two L\u2019s. Plaintiffs presented expert testimony that the standard of care for a title search includes checking for common spelling variants of a name, and that the approved practice is to enter part of a name (in this case, P-H-I-L) in order to catch minor errors or spelling variations. The trial court ruled in favor of plaintiffs, in an order finding in pertinent part that:\n1. Plaintiffs recovered a judgment against defendant Phillips (herein \u2018Defendants\u2019) docketed on March 18, 1988 . . . [the \u201cOriginal Judgment\u201d].\n2. Plaintiffs\u2019 brought an action to renew that judgment in this file, number 98 CVD 272, and prevailed in that action[.] . . . [T]he Complaint and . . . other pleadings, including the judgment, misspelled the Defendants\u2019 surname as \u201cPhilips,\u201d [not] \u201cPhillips,\u201d as in the earlier action.\n3. ... Plaintiffs\u2019 judgment against Defendants . .. [\u201cJudgment at Issue\u201d] was indexed in the Clerk of Court\u2019s computer system with the spelling, \u201cPhilips[,]\u201d . . . [and] docketed and indexed against, \u201cRichard Barry Philips and Sheila Philips,\u201d as opposed to, \u201cRichard Barry Phillips and Sheila Phillips,\u201d as was the case with the Original Judgment.\n4. . . . [In July 1998] Defendants took title to a certain parcel in Johnston County . . . [(the \u201csubject property\u201d)]. Such Deed is recorded in . . . the Johnston County Registry and . . . offered into evidence by the Plaintiffs and correctly spelled the [defendants\u2019] name ... as Richard Barry Phillips and Sheila A. Phillips.\n5. On November 30, 2001, Defendants . . . conveyed the Land to a trustee to secure their Note to Lender by Deed of Trust. . . (herein the \u201cDeed of Trust\u201d).\n6. The Deed of Trust was foreclosed [and] . . . the substitute trustee under the Deed of Trust . . . conveyed the Land to GMAC Mortgage Corporation.\n7. ... [In March] 2005, GMAC ... conveyed the Land to ... Pedro [M.] Espinosa and his wife, Cecilia M. Rodriguez, by deed recorded in [the] . . . Johnston County Registry.\n8. . . . Espinosa et ux conveyed title to the Land ... to secure a Note for such purchase by Deed of Trust. . . which Note and Deed of Trust are now owned and held by [MERS]. . . . Such Deed of Trust names . . . John T. Matthews, as Trustee.\n9. ... [The] judgment docket index was put on computer in 1989 and the use of the hard copy of the judgment index book was discontinued February 16, 2004.\n10. Plaintiffs called as a witness Rhonda Moore, [who] . . . worked in law offices since 1982 and as title [Page] searcher paralegal since 1985[.] . . . The Court qualified her as an expert witness in matters of title examination in eastern North Carolina, without objection.\n11. Ms. Moore . . . explained the protocol used in the AOC computers in the Office of the Clerk of the Superior Court of Johnston County, that only the name entered is pulled up for review on the screen. . . . [T]he exact letters typed in the screen on the computer are the letters in the index which appear. For example, inputting the letters, \u201cP-H-I-L-I-P-S,\u201d into the judgment computer would not reveal to the searcher a judgment against a person having the name, \u201cP-H-I-L-L-I-P-S.\u201d Ms. Moore\u2019s testimony was that she enters the letters \u201cP-H-I-L\u201d when checking judgments for Phillips or Philips because of the prevalence of each spelling. She testified such is her usual and customary practice^] . . .\n12. Ms. Moore offered an opinion . . . [that the] standard of care for a title examination in eastern North Carolina involving a judgment search for Phillips would be made by inputting \u201cP-H-l-L\u201d in the Clerk of Court computer system. . . .\n13. The printed computer index for \u201cP-H-I-L-L-I-P-S\u201d is [18] pages [and has] ... [2] entries for \u201cRick Phillips,\u201d [3] entries for \u201cRichard Phillips\u201d and [3] entries for \u201cRichard Barry Phillips.\u201d\n16. Plaintiffs\u2019 expert witness would have conducted her title examination of the judgment index by typing \u201cP-H-I-L\u201d into the judgment index system in the office of the Clerk of the Superior Court.\n20. The name, \u201cPHILIP\u201d is a variant spelling of the name, \u201cPHILLIPS,\u201d within the doctrine of idem sonans.\nOn these facts, the court concluded, in pertinent part, that:\n2. The foreclosure proceeding and the other judgments indexed under the spelling \u201cPhillips\u201d should have attracted the attention of or stimulated further inquiry by a title searcher.\n3. The foreclosure proceeding and the judgments indexed under the spelling \u201cPhillips\u201d were sufficient notice tp put a careful and prudent examiner upon inquiry; and by such inquiry the Judgment at Issue would have been found.\n6. The Judgment at Issue was properly docketed and indexed.\n7. [Appellants] could have discovered the Judgment at Issue with reasonable care and so had constructive notice of same.\n8. The Judgment at Issue attached to and became a lien on the Land upon acquisition of that Land by Defendants.\n9. Plaintiffs are entitled to levy execution on the Judgment at Issue and to the extent the same may involve the Land to . . . levy execution on the Land.\nThe trial court stayed the execution of its order pending resolution of this appeal.\nStandard of Review\nIn a bench trial \u201cin which the superior court sits without a jury, \u2018the standard of review is whether there was competent evidence to support the trial court\u2019s findings of fact and whether its conclusions of law were proper in light of such facts. Findings of fact by the trial court in a non-jury trial . . . are conclusive on appeal if there is evidence to support those findings. A trial court\u2019s conclusions of law, however, are reviewable de novo.' \u201d Luna v. Division of Soc. Servs., 162 N.C. App. 1, 4, 589 S.E.2d 917, 919 (2004) (quoting Shear v. Stevens Building Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992)). In the instant case, appellants do not challenge the trial court\u2019s findings of fact, which are therefore presumed correct. The court\u2019s legal conclusions regarding the existence of a valid lien are reviewed de novo.\nAppellants argue that, because judgment against defendants was docketed under a misspelling of defendants\u2019 last name, the judgment cannot be a valid lien on the subject property. We disagree.\nN.C. Gen. Stat. \u00a7 1-233 (2005) sets out requirements for docketing a judgment, and provides in relevant part that:\nEvery judgment . . . affecting title to real property, or requiring . . . the payment of money, shall be indexed and recorded by the clerk of said superior court on the judgment docket of the court. The docket entry must contain the file number for the case in which the judgment was entered, [and] the names of the parties[.] . . . The clerk shall keep a cross-index of the whole, with the dates and file numbers thereof[.] . . .\nG.S. \u00a7 1-233. Under N.C. Gen. Stat. \u00a7 1-234 (2005), a judgment docketed in accordance with G.S. \u00a7 1-233 creates a lien that is effective against third parties:\nUpon the entry of a judgment under G.S. 1A-1, Rule 58, affecting the title of real property, or directing . . . the payment of money, the clerk of superior court shall index and record the judgment on the judgment docket[.] . . . The judgment lien is effective as against third parties from and after the indexing of the judgment as provided in G.S. 1-233. The judgment is a lien on the real property in the county where the same is docketedf.] . . .\nG.S. \u00a7 1-234.\nDocketing a judgment provides notice of the existence of the lien on the property, and a judgment that is not docketed is ineffective as to third parties:\n[UJnless the judgment is docketed . . . there can be no lien by virtue of the judgment alone. The docketing is required, in order that third persons may have notice of the existence of the judgment lien. ... In our case no attempt whatever appears to have been made to have the judgment docketed, [and]... the judgment is not a lien upon the property, as against this defendant[.]\nHolman v. Miller, 103 N.C. 118, 120-21, 9 S.E. 429, 430 (1889).\nThe issue presented is whether the judgment docketed under the name \u201cPhilips\u201d instead of \u201cPhillips\u201d nonetheless provided sufficient notice, actual or constructive, to create a valid lien on the subject property. We conclude that on the facts of this case, the judgment was a lien on the property.\nPlaintiffs argue that a judgment docketed and indexed in substantial compliance with the pertinent statutes will establish a lien on the judgment debtor\u2019s property, while defendants contend that the statutory requirements must be strictly followed in all respects. The North Carolina Supreme Court addressed this issue in West v. Jackson, 198 N.C. 693, 153 S.E. 257 (1930). In West, a tract of land was jointly owned by a Jesse and Nora Hinton, who borrowed money to purchase the property, and executed a deed of trust to secure the loan. After Mr. Hinton died, Nora Hinton obtained a loan from plaintiff in her name, also secured by the property. When the first lender tried to foreclose, plaintiff argued that the first deed of trust did not create a valid lien on the property because both the deed and deed of trust were indexed under \u201cJesse Hinton and wife.\u201d The Court framed the issue thusly:\nThe statute . . . requires in substance that the indexes of recorded instruments . . . \u2018shall state in full the names of all the parties\u2019[.] . . . [C](instruction of this statute produces two divergent theories. Upon one hand it is asserted that as indexing and cross-indexing is an essential part of registration . . . and since such indexing is statutory, the statute should be complied with to the exact letter. Upon the other hand, it is insisted that the underlying philosophy of all registration is to give notice, and that hence the ultimate purpose and pervading object of the statute is to produce and supply such notice.\nIcL. at 694, 163 S.E. at 258. These are essentially the positions taken by the parties in the instant case. The Court then stated:\nTherefore, if the indexing and cross-indexing upon a given state of facts is insufficient to supply the necessary notice, then such indexing ought to fail as against subsequent purchasers or encumbrancers. Nevertheless, it is a universally accepted principle that \u201cconstructive notice from the possession of the means of knowledge will have the effect of notice, although the party was actually ignorant, merely because he would not investigate. It is well settled that if anything appears to a party calculated to attract attention or stimulate inquiry, the person is affected with knowledge of all the inquiry would have disclosed.\u201d\nId. (quoting Wynn v. Grant, 166 N.C. 39, 81 S.E. 949 (1914)) (citation omitted). West addresses the indexing of a deed of trust in the office of the register of deeds, rather than the docketing of a judgment. Although these situations are governed by different statutes, the principles enunciated in West pertaining to the effectiveness of the lien and placing the record or title examiner on notice are equally applicable to the instant case. \u201cIn [Ely v. Norman, 175 N.C. 294, 298, 95 S.E. 543, 545 (1918)], the [Supreme Court] quoted with apparent approval from the Supreme Court of Iowa to the effect that an index will hold a subsequent purchaser to notice thereof if enough is disclosed by the index to put a careful or prudent examiner upon inquiry, and if, upon such inquiry, the instrument would have been found.\u201d West, 198 N.C. 694, 153 S.E. 257. The Court \u201cconceded that the indexing and cross-indexing of the deed of trust in the case at bar is not a strict compliance with the statute\u201d but held that \u201cthere was sufficient information upon the index and cross-index to create the duty of making inquiry\u201d and held that the indexing of the deed and deed of trust was sufficient to create a lien on the property. Id. at 694-95, 153 S.E. at 258.\nThus, \u201cfor a recordation to be effective as notice there must be a substantial compliance with the indexing statutes. The general rule to be applied in determining the sufficiency of an irregular indexing has been stated by this Court in these terms:\n\u2018[T]he primary purpose of the law requiring the registration and indexing of conveyances is to give notice, and ... an index will hold a subsequent purchaser or encumbrancer to notice if enough is disclosed by the index to put a careful and prudent examiner upon inquiry, and if upon such inquiry the instrument would be found.\u2019 \u201d\nCuthrell v. Camden County, 254 N.C. 181, 184, 118 S.E.2d 601, 603 (1961) (recordation of old age assistance lien on property) (quoting Dorman v. Goodman, 213 N.C. 406, 412, 196 S.E. 352, 355 (1938)). Other appellate cases have held that a lien may be valid, despite minor docketing errors. See, e.g., Wilson v. Taylor, 154 N.C. 211, 218, 70 S.E. 286, 289 (1911) (\u201cA party who may be affected by notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired if he had made the necessary effort to discover the truth.\u201d) (citations omitted), and Valentine v. Britton, 127 N.C. 57, 58, 37 S.E. 74, 75 (1900) (\u201cWe concur with the defendant, as was also held by the Court below, that \u2018J. Mizell,\u2019 or \u2018Jo. Mizell,\u2019 was a sufficient cross-indexing for a judgment against \u2018Josiah Mizell[.]\u2019 \u201d).\nThe relationship between the standard of care for title examination and the question of the efficacy of the judgment to create a lien is as follows: If a title examiner exercising the standard of care would have found the judgment at issue, then it sufficiently complies with G.S. \u00a7 1-233 to create a lien on the property. In the instant case, plaintiffs established by uncontradicted expert testimony that in this case the standard of care for a reasonably prudent title examiner would be to search und\u00e9r part of the last name, such as \u201cP-H-I-L,\u201d which would have revealed the judgment at issue. Additionally, even a search under \u201cPhillips\u201d would indicate defendants\u2019 involvement in several other proceedings, including a foreclosure; this should have spurred further inquiry. We conclude that plaintiffs substantially complied with G.S. \u00a7 1-233, and agree with the trial court\u2019s findings and conclusions.\nAppellants, however, assert that the statutory requirements for indexing a judgment require \u201cstrict compliance\u201d and that any spelling error automatically renders the judgment unenforceable against a third party purchaser. Under the pertinent case law, particularly West v. Jackson, supra, we have reached a different conclusion. Moreover, the cases cited by appellants are neither binding precedent nor persuasive authority, as none are factually similar. In Holman v. Miller, cited by appellants, the court\u2019s decision was based on the fact that the judgment in question had not been docketed in a timely manner and not on any defect or spelling error in the docketing. Thus, the Court\u2019s discussion of docketing practices dating back to \u201cthe reign of Henry VIH\u201d is mere dicta. In Trust Co. v. Currie, 190 N.C. 260, 129 S.E. 605 (1925), also cited by appellants, the judgment in question was indexed under a totally different last name: \u201cQuick,\u201d rather than \u201cCurrie.\u201d\nAppellants contend that plaintiffs cannot maintain a priority lien against third party bona fide purchasers because plaintiffs were to blame for the erroneous indexing of the judgment. However, the issue before us is not identification of the party responsible for the misspelling of Phillips\u2019 name. Instead, we must determine whether the error, whatever its source, served to invalidate the judgment lien as to third party purchasers.\nWe conclude that the judgment of the trial court should be\nAffirmed.\nJudge BRYANT concurs.\nJudge STEELMAN concurs in result only with separate opinion.\n. N.C. Gen. Stat. \u00a7 1-233 (2005) governs docketing of judgments, while N.C. Gen. Stat. \u00a7 161-22 (2005) addresses documents filed with the Register of Deeds. .",
        "type": "majority",
        "author": "LEVINSON, Judge."
      },
      {
        "text": "STEELMAN, Judge,\nconcurs in the result.\nI concur in the result reached by the majority opinion.\nThe only evidence presented to the trial court as to the appropriate standard of care for the examination of the judgment docket in Johnston County was the testimony of Rhonda Moore. Based upon this testimony the trial court found as a fact that \u201c[t]he standard of care in eastern North Carolina, including Johnston County, for title searches in a case such as this one . . . requires a search of \u2018P-H-I-L\u2019 into the AOC computerized judgment index in the Office of the Clerk of the Superior Court.\u201d On appeal, appellant did not assign error to any of the trial court\u2019s findings of fact. This finding is thus binding upon this Court and compels the result in this case.\nThe trial court\u2019s findings of fact were carefully and narrowly drawn, and are limited to the specific evidence presented in this case. Our decision in this case should also be so limited.",
        "type": "concurrence",
        "author": "STEELMAN, Judge,"
      }
    ],
    "attorneys": [
      "Narron, O\u2019Hale and Whittington, P.A., by James W. Narron, for plaintiffs-appellees.",
      "Pendergrass Law Firm, PLLC, by James K. Pendergrass, Jr., and Christopher R. Bullock, for defendant-intervenor appellants."
    ],
    "corrections": "",
    "head_matter": "CHARLES H. HINNANT and DOROTHY W. HINNANT, Plaintiffs v. RICHARD B. PHILIPS and SHEILA A. PHILIPS, Defendants, and PEDRO MARTINEZ ESPINOSA; CECILIA M. RODRIGUEZ; JOHN T. MATTHEWS, TRUSTEE; and, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendant/Intervenors\nNo. COA06-1308\n(Filed 19 June 2007)\nJudgments\u2014 docketing \u2014 misspelling\u2014standard of care in title searching\nA judgment docketed under the name \u201cPhilips\u201d instead of \u201cPhillips\u201d provided sufficient notice, actual or constructive, to create a valid lien on the subject property. If a title examiner exercising the standard of care would have found the judgment, then it sufficiently complies with N.C.G.S. \u00a7 1-233.\nJudge Steelman concurring in the result.\nAppeal by defendant-intervenors from order entered 30 May 2006 by Judge Albert A. Corbett, Jr., in Johnston County District Court. Heard in the Court of Appeals 12 April 2007.\nNarron, O\u2019Hale and Whittington, P.A., by James W. Narron, for plaintiffs-appellees.\nPendergrass Law Firm, PLLC, by James K. Pendergrass, Jr., and Christopher R. Bullock, for defendant-intervenor appellants."
  },
  "file_name": "0241-01",
  "first_page_order": 273,
  "last_page_order": 282
}
