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    "judges": [
      "Judges Vaughn and Hedrick concur."
    ],
    "parties": [
      "PHILBIN INVESTMENTS, INC. v. ORB ENTERPRISES, LIMITED AND DOVE, LIMITED"
    ],
    "opinions": [
      {
        "text": "ERWIN, Judge.\nDefendants first assign as error the trial court\u2019s denial of their motion to dismiss, asserting lack of jurisdiction over the person, insufficiency of service of process, and incapacity of plaintiff to sue. We note at the outset that the \u201cStipulations of Record on Appeal\u201d contain the following:\n\u201c1. That the Buncombe County Superior Court had jurisdiction over all parties to this action and the subject matter therein.\n2. . . . that said action was properly before the Court.\u201d\nThus, defendants cannot now be heard to assert lack of jurisdiction over the person or insufficiency of service of process. In any event, the defect in service asserted by defendants is without merit. They contend that the sheriff\u2019s return, showing service on \u201cS. Thomas Walton,\u201d instead of on \u201cS. Thomas Walton, Registered Agent,\u201d renders service deficient. But the return further shows that service was made at the very address to which the sheriff was directed to serve defendants through their registered agent. Defendants do not contend that Walton was not their registered agent. It is clear that the return here showed service on the defendants.\nIn their contention that plaintiff lacked capacity to sue, defendants rely on the fact that plaintiff\u2019s articles of incorporation had been suspended pursuant to N.C. G.S. 105-230 at the time suit was brought. (The suspension occurred on 1 March 1973, and this suit was filed on 4 September 1974.) Defendants\u2019 contention has no merit; plaintiff had capacity to sue on 4 September 1974. Our reasoning, based on a reading of the cases and construction of the applicable statutes, is fully consistent with this Court\u2019s opinion in Swimming Pool Co. v. Country Club, 11 N.C. App. 715, 182 S.E. 2d 273 (1971), and need not be repeated here. See also Parker v. Homes, Inc., 22 N.C. App. 297, 206 S.E. 2d 344 (1974); 3 N.C. Index 3d, Corporations \u00a7 26.\nDefendants also assign error to the trial court\u2019s denial of defendant Orb Enterprises, Limited\u2019s motion for summary judgment. As we conclude that the trial court properly granted plaintiff\u2019s motion for summary judgment against defendant Orb, it follows that defendant Orb\u2019s motion was properly denied. Defendants admitted execution of a full warranty deed to plaintiff and that there was an outstanding deed of trust on the property. (While we note that the deed to plaintiff from defendant Orb does not show Orb\u2019s corporate seal, this defect is cured by N.C. G.S. 47-71.1, 1973 Session Laws, c. 479.)\nDefendants contend that an issue of fact exists as to whether or not it was the intent of the parties that Orb convey real property to plaintiff by warranty deed. Evidently, defendants\u2019 contention is based on mistake. However, there is no indication in the record that the plaintiff expected less than a full warranty deed, and that is what Orb delivered to it. In effect, defendants seek to reform the deed, but the mistake of only one party to an instrument, absent fraud, is not ground for relief by reformation. Setzer v. Insurance Co., 257 N.C. 396, 126 S.E. 2d 135 (1962).\nFurther, this Court stated in Parker v. Pittman, 18 N.C. App. 500, 197 S.E. 2d 570 (1973) that:\n\u201cEven where appropriate grounds for reformation are asserted, \u2018[w]hen a solemn document like a deed is revised by court of equity, the proof of mistake must be strong, cogent and convincing.\u2019 Hege v. Sellers, 241 N.C. 240, 84 S.E. 2d 892.\u201d 18 N.C. App. at 505, 197 S.E. 2d at 573.\nDefendants further assert that no consideration passed between plaintiff and defendant Orb, and therefore, the deed is \u201cvoid.\u201d Assuming a lack of consideration, such is not the law; \u201c. . . a deed in proper form is good and will convey the land described therein without any consideration, except as against creditors or innocent purchasers for value.\u201d Smith v. Smith, 249 N.C. 669 at 676, 107 S.E. 2d 530 at 535 (1959). This is a suit between the original grantor and original grantee, neither creditors nor innocent purchasers being involved.\nIn their answer, the defendants admitted Orb\u2019s conveyance to plaintiff by full warranty deed the property in question and that, if the deed is a warranty deed, the covenants contained therein, or at least the covenant against encumbrances, was breached upon the delivery of the deed, in that there was an outstanding deed of trust on the property. The deed recites no exceptions as to any encumbrance not warranted against. As Professor Webster stated in Webster, Real Estate Law in North Carolina, \u00a7 190, p. 223: \u201cThe covenant against encumbrances is a covenant that there are no encumbrances outstanding against the premises at the time of the conveyance.\u201d Even the grantee\u2019s actual knowledge and record notice of the existence of an encumbrance do not constitute a defense to a grantee\u2019s action to recover damages for grantor\u2019s breach of the covenant against encumbrances. Gerdes v. Shew, 4 N.C. App. 144, 166 S.E. 2d 519 (1969). An issue in Gerdes related to whether or not the plaintiff was estopped to assert breach of the covenant against encumbrances where the provisions of the written sales contract provided that upon approval of title by purchaser\u2019s attorney, conveyance would be made by warranty deed and that if title were found defective, the owners would be notified and given opportunity to correct the defect, but plaintiff did not so notify the defendants. In ruling that the plaintiff was not so estopped, Judge Parker wrote for this Court:\n\u201cAcceptance of this argument would render completely meaningless all of the covenants in defendants\u2019 deed. If defendants did not mean to be bound by their covenants, they should not have included them in their deed. Execution and delivery of the deed containing full covenants established the extent of their obligations thereunder. It is presumed that the prior sales contract and all prior negotiations leading up to closing of the sale, insofar as they related to any matters covered by the covenants in defendants\u2019 deed, became merged in the deed itself.\u201d Gerdes v. Shew, supra, 4 N.C. App. at 150-151, 166 S.E. 2d at 524.\nWe conclude that there were no genuine issues as to any material fact regarding the liability of defendant Orb to plaintiff. We note that the trial court only granted summary judgment for plaintiff against Orb, and ordered that a trial be held as to the amount of damages, if any, to be recovered. This the trial court could do under Rule 56(c) and (d). This is a case where no defense was shown to exist, and summary judgment is therefore proper. See Harrison Associates v. State Ports Authority, 280 N.C. 251, 185 S.E. 2d 793 (1972), petition for rehearing denied, 281 N.C. 317 (1972); Kessing v. Mortgage Corp., 278 N.C. 523, 180 S.E. 2d 823 (1971).\nJustice Huskins, speaking for the Supreme Court in Caldwell v. Deese, 288 N.C. 375, 218 S.E. 2d 379 (1975), stated in reference to Rule 56: \u201cThe rule is designed to permit penetration of an unfounded claim or defense in advance of trial and to allow summary disposition for either party when a fatal weakness in the claim or defense is exposed.\u201d 288 N.C. at 378, 218 S.E. 2d at 381.\nThe judgment appealed from is\nAffirmed.\nJudges Vaughn and Hedrick concur.",
        "type": "majority",
        "author": "ERWIN, Judge."
      }
    ],
    "attorneys": [
      "Van Winkle, Buck, Wall, Starnes, Hyde & Davis, by Russell P. Brannon, for plaintiff appellee.",
      "S. Thomas Walton, for defendant appellants."
    ],
    "corrections": "",
    "head_matter": "PHILBIN INVESTMENTS, INC. v. ORB ENTERPRISES, LIMITED AND DOVE, LIMITED\nNo. 7728SC312\n(Filed 21 March 1978)\n1. Appeal and Error \u00a7 42\u2014 jurisdiction challenged on appeal \u2014 defendants bound by stipulations in record\nDefendants could not on appeal assert lack of jurisdiction over the person or insufficiency of service of process since the \u201cStipulations of Record on Appeal\u201d specifically stated that the Buncombe County Superior Court had jurisdiction over all the parties and the subject matter and the action was properly before the court; moreover, service upon defendants was sufficient though the sheriff\u2019s return showed service upon \u201cS. Thomas Walton,\u201d instead of \u201cS. Thomas Walton, Registered Agent.\u201d\n2. Corporations \u00a7 26\u2014 articles of incorporation suspended \u2014 capacity to sue\nDefendants\u2019 contention that plaintiff lacked capacity to sue because plaintiff\u2019s articles of incorporation had been suspended pursuant to N.C.G.S. 105-230 at the time suit was brought is without merit.\n3. Reformation of Instruments \u00a7 1.1\u2014 unilateral mistake \u2014 no reformation\nWhere there was no indication in the record that plaintiff expected less than a full warranty deed, and that was what one defendant delivered to it, defendants\u2019 attempt to reform the deed by claiming mistake was ineffectual, since the mistake of only one party to an instrument, absent fraud, is not ground for relief by reformation.\n4. Deeds \u00a7 8\u2014 no consideration \u2014 validity of deed\nDefendants\u2019 contention that a warranty deed executed by one defendant to plaintiff was void because no consideration passed between the parties is without merit, since a deed in proper form is good and will convey the land described therein without any consideration, except as against creditors or innocent purchasers for value.\n5. Deeds \u00a7 24.2\u2014 action for breach of covenant against encumbrances \u2014 defense of knowledge and record notice\nEven a grantee\u2019s actual knowledge and record notice of the existence of an encumbrance do not constitute a defense to a grantee\u2019s action to recover damages for grantor\u2019s breach of a covenant against encumbrances.\nAPPEAL by defendants from Martin, Judge. Order entered 30 December 1976 in Superior Court, BUNCOMBE County. Heard in the Court of Appeals 6 February 1978.\nOn 4 September 1974, plaintiff filed a complaint alleging that on 10 May 1972, defendant Orb conveyed to plaintiff by full warranty deed a tract of land and that the warranties had been breached because at the time the warranty deed was delivered there was an outstanding deed of trust on the tract of land, which was foreclosed and the land in question sold. Defendants filed a motion to dismiss for lack of jurisdiction over the person of defendants, for insufficiency of service of process and for lack of capacity of plaintiff to sue. The trial court entered an order denying defendants\u2019 motion, and the judge refused to sign a notice of appeal tendered by defendants. Defendants answered the complaint, denying liability on several grounds including failure to state a claim, lack of capacity to sue on the part of the plaintiff, lack of a corporate seal on the warranty deed, lack of intention that the deed be considered a warranty deed, mutual mistake as to the warranties in the deed and lack of consideration for the deed. Both parties moved for summary judgment. The deposition of J. C. Duyck, president of plaintiff corporation, reveals that: on or about 10 May 1972, the corporation owned a motel in Asheville; at about that time, plaintiff entered into an agreement with Billy Bryant to sell the motel to Bryant with part of the purchase price to be paid by the conveyance of five lots in Buncombe County; in connection with that transaction, plaintiff retained Attorney S. Thomas Walton (who represents defendants in this action); it was agreed that Walton would be paid with one of the five lots and that, in order to accomplish this, all five lots would be conveyed to Orb which would then convey to plaintiff four of the lots with the other lot remaining in the name of either Walton or Orb; Duyck\u2019s understanding throughout this transaction was that he was to receive a full warranty deed; no monetary consideration changed hands between plaintiff and defendant in this transaction; at a time subsequent to the sale of the motel and the conveyance of the five lots, plaintiff learned of the existence of a deed of trust on the property in question; this deed of trust was later foreclosed and the property sold. The court entered an order denying defendant Orb\u2019s motion for summary judgment and allowing plaintiff\u2019s motion for summary judgment against defendant Orb and ordering that the action be promptly calendared for trial on the issue of damages. Defendants appealed.\nVan Winkle, Buck, Wall, Starnes, Hyde & Davis, by Russell P. Brannon, for plaintiff appellee.\nS. Thomas Walton, for defendant appellants."
  },
  "file_name": "0622-01",
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