{ "id": 8521856, "name": "JACK L. SCHUMAN and wife, JEAN O. SCHUMAN; LEONARD LAUFE and wife, SYMOINE LAUFE; HARVEY MANN and wife, RHODA MANN v. ROGER BAKER AND ASSOCIATES, INC., A North Carolina Corporation (formerly known and entitled as ROGER BAKER, INC.); ROGER J. BAKER; CHARLES G. BEEMER, Trustee; ROBERT EPTING, Trustee; THE NORTHWESTERN BANK, A North Carolina Banking Corporation; and FRANKLIN PARK LIMITED PARTNERSHIP", "name_abbreviation": "Schuman v. Roger Baker & Associates, Inc.", "decision_date": "1984-09-04", "docket_number": "No. 8315SC772", "first_page": "313", "last_page": "317", "citations": [ { "type": "official", "cite": "70 N.C. App. 313" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "83 S.E. 2d 885", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1954, "opinion_index": 0 }, { "cite": "240 N.C. 709", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8609953 ], "year": 1954, "opinion_index": 0, "case_paths": [ "/nc/240/0709-01" ] }, { "cite": "97 S.E. 2d 105", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1957, "opinion_index": 0 }, { "cite": "245 N.C. 687", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8618824 ], "year": 1957, "opinion_index": 0, "case_paths": [ "/nc/245/0687-01" ] }, { "cite": "33 S.E. 2d 129", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1945, "opinion_index": 0 }, { "cite": "225 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8597127 ], "year": 1945, "opinion_index": 0, "case_paths": [ "/nc/225/0001-01" ] }, { "cite": "206 S.E. 2d 162", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "opinion_index": 0 }, { "cite": "285 N.C. 418", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565013 ], "year": 1974, "opinion_index": 0, "case_paths": [ "/nc/285/0418-01" ] }, { "cite": "282 S.E. 2d 779", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "783" } ], "opinion_index": 0 }, { "cite": "304 N.C. 159", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565468 ], "year": 1981, "pin_cites": [ { "page": "165" } ], "opinion_index": 0, "case_paths": [ "/nc/304/0159-01" ] }, { "cite": "146 S.E. 713", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1929, "opinion_index": 0 }, { "cite": "196 N.C. 657", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8628639 ], "year": 1929, "opinion_index": 0, "case_paths": [ "/nc/196/0657-01" ] }, { "cite": "79 S.E. 2d 213", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1953, "opinion_index": 0 }, { "cite": "239 N.C. 33", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625531 ], "year": 1953, "opinion_index": 0, "case_paths": [ "/nc/239/0033-01" ] }, { "cite": "140 S.E. 2d 769", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1965, "opinion_index": 0 }, { "cite": "264 N.C. 33", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8570301 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/nc/264/0033-01" ] }, { "cite": "109 S.E. 259", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1921, "opinion_index": 0 }, { "cite": "182 N.C. 518", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656574 ], "year": 1921, "opinion_index": 0, "case_paths": [ "/nc/182/0518-01" ] }, { "cite": "19 S.E. 665", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1894, "pin_cites": [ { "parenthetical": "purchaser need only follow \"up the stream of title\"" } ], "opinion_index": 0 }, { "cite": "114 N.C. 585", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651061 ], "year": 1894, "pin_cites": [ { "parenthetical": "purchaser need only follow \"up the stream of title\"" } ], "opinion_index": 0, "case_paths": [ "/nc/114/0585-01" ] }, { "cite": "84 S.E. 2d 892", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1954, "pin_cites": [ { "parenthetical": "covenant not in direct line of title ineffective" } ], "opinion_index": 0 }, { "cite": "241 N.C. 240", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8606692 ], "year": 1954, "pin_cites": [ { "parenthetical": "covenant not in direct line of title ineffective" } ], "opinion_index": 0, "case_paths": [ "/nc/241/0240-01" ] }, { "cite": "137 S.E. 2d 174", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1964, "pin_cites": [ { "parenthetical": "focusing solely on links in title chain" } ], "opinion_index": 0 }, { "cite": "262 N.C. 330", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567516 ], "year": 1964, "pin_cites": [ { "parenthetical": "focusing solely on links in title chain" } ], "opinion_index": 0, "case_paths": [ "/nc/262/0330-01" ] }, { "cite": "247 F. 2d 112", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 397771 ], "year": 1957, "pin_cites": [ { "parenthetical": "chattel mortgage in the name of corporate president insufficient against corporation" } ], "opinion_index": 0, "case_paths": [ "/f2d/247/0112-01" ] }, { "cite": "8 S.E. 353", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1888, "opinion_index": 0 }, { "cite": "101 N.C. 497", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651009 ], "year": 1888, "opinion_index": 0, "case_paths": [ "/nc/101/0497-01" ] } ], "analysis": { "cardinality": 627, "char_count": 9707, "ocr_confidence": 0.788, "pagerank": { "raw": 3.028121384987405e-07, "percentile": 0.8543683434825737 }, "sha256": "4375b1cef9d8a7a58346d97add081c398f34fdb2bd069163e7bbf3de11474935", "simhash": "1:9011564440b5e74e", "word_count": 1552 }, "last_updated": "2023-07-14T18:14:59.534868+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Wells and Becton concur." ], "parties": [ "JACK L. SCHUMAN and wife, JEAN O. SCHUMAN; LEONARD LAUFE and wife, SYMOINE LAUFE; HARVEY MANN and wife, RHODA MANN v. ROGER BAKER AND ASSOCIATES, INC., A North Carolina Corporation (formerly known and entitled as ROGER BAKER, INC.); ROGER J. BAKER; CHARLES G. BEEMER, Trustee; ROBERT EPTING, Trustee; THE NORTHWESTERN BANK, A North Carolina Banking Corporation; and FRANKLIN PARK LIMITED PARTNERSHIP" ], "opinions": [ { "text": "JOHNSON, Judge.\nThe trial judge certified that there was no just reason for delay in entering judgment for Northwestern. Therefore, this appeal is properly before this Court. G.S. 1A-1, Rule 54(b).\nAlthough the facts outlined above appear complicated, the resolution of the controversy on this appeal depends quite simply on the application of our recording statute for deeds of trust, G.S. 47-20. This statute is virtually identical to the statute governing outright conveyances, G.S. 47-18, and the two are construed alike. Francis v. Herren, 101 N.C. 497, 8 S.E. 353 (1888). These statutes provide in essence that the party winning \u201cthe race to the court house\u201d will have priority in title disputes. See J. Webster, Real Estate Law in North Carolina \u00a7 331 (1971).\nIt is evident in the present case that Northwestern \u201cwon the race\u201d to the court house and has priority under the statute. Roger Baker, Inc., plaintiffs\u2019 grantor, did not acquire and register its title until one month after the execution of the deed of trust to plaintiffs. Plaintiffs do not argue that recordation of the earlier grant to Baker individually constituted substantial compliance with the statute, nor does such an argument appear to have support in the case law. See McKnight v. M. & J. Finance Corp., 247 F. 2d 112 (4th Cir. 1957) (chattel mortgage in the name of corporate president insufficient against corporation). Therefore, the plaintiffs\u2019 deed of trust lay outside of Roger Baker, Inc.\u2019s chain of title. Northwestern, in examining title for purposes of its agreement with the successor Roger Baker & Associates, Inc., was not required to search outside its line of title. See Morehead v. Harris, 262 N.C. 330, 137 S.E. 2d 174 (1964) (focusing solely on links in title chain); Hege v. Sellers, 241 N.C. 240, 84 S.E. 2d 892 (1954) (covenant not in direct line of title ineffective); Maddox v. Arp, 114 N.C. 585, 19 S.E. 665 (1894) (purchaser need only follow \u201cup the stream of title\u201d). Therefore, Northwestern had no notice of plaintiffs\u2019 deed under the law and should prevail.\nOur inquiry would ordinarily end there. However, plaintiffs assert that since Northwestern had actual notice of the prior deed of trust, the doctrine of estoppel by deed operates to estop it from denying plaintiffs\u2019 earlier deed. In Door Co. v. Joyner, 182 N.C. 518, 109 S.E. 259 (1921), our Supreme Court, while recognizing the doctrine of estoppel by deed, held that a subsequent purchaser with neither actual nor constructive notice had superior title by virtue of his prior registration. The Court, plaintiffs argue, left unanswered the question of whether actual notice to the subsequent purchaser would defeat the statutory priority. They accordingly urge the application of estoppel by deed as grounds for reversal.\nWe note first that the leading commentator interprets Door Co. v. Joyner otherwise. See Webster, supra, \u00a7 341 at 427. We agree, believing that Webster\u2019s interpretation, that even actual notice of a prior deed will not defeat prior registry, better expresses the policies embodied in the law. Therefore, plaintiffs\u2019 argument must fail.\nOur Supreme Court has repeatedly held that no notice, however fulf or formal, will supply the want of registration of a deed. Bourne v. Lay & Co., 264 N.C. 33, 140 S.E. 2d 769 (1965); Dulin v. Williams, 239 N.C. 33, 79 S.E. 2d 213 (1953). These cases, read (1) with those cases limiting the duty to search to the chain of title, see Morehead v. Harris, supra, (2) with those cases making registration of deeds defective as to material particulars ineffective, see McClure v. Crow, 196 N.C. 657, 146 S.E. 713 (1929), and (3) with the statutory recording and indexing requirements, see G.S. 47-20.1 (same county); G.S. 161-14.2 et seq., clearly indicate that registration outside the chain of title has the same effect on notice as no registration. Plaintiffs, although they apparently alleged fraudulent conduct by Northwestern in their complaint, forecast no such evidence nor do they argue any fraud on Northwestern\u2019s part before this Court. Therefore, any actual notice to Northwestern is insufficient to supply the want of proper registration.\nWe are aware that our Supreme Court has recently stated that \u201cOur registration statute does not protect all purchasers, but only innocent purchasers for value.\u201d Hill v. Memorial Park, 304 N.C. 159, 165, 282 S.E. 2d 779, 783 (1981). However, this statement in Hill referred to situations in which a separate official notice of litigation had been served on the purchasers or notice of lis pendens had been filed. The cases cited in Hill to support the quoted statement both involved lis pendens notice. See Lawing v. Jaynes, 285 N.C. 418, 206 S.E. 2d 162 (1974); Whitehurst v. Abbott, 225 N.C. 1, 33 S.E. 2d 129 (1945). The means of constructive or actual notice discussed in Hill are statutorily mandated, formal means of notice of litigation; we do not read them to extend to other less formal means of notice. Therefore, we hold that Northwestern is not estopped to deny plaintiffs\u2019 title.\nThe policy behind the recording statutes supports our conclusion. The General Assembly, by enacting these laws, clearly intended that prospective purchasers should be able to safely rely on the public records. See Hayes v. Ricard, 245 N.C. 687, 97 S.E. 2d 105 (1957); Clark v. Butts, 240 N.C. 709, 83 S.E. 2d 885 (1954). To adopt plaintiffs\u2019 position would require prospective purchasers to search outside the chain of title in every case, and thus inject a new element of uncertainty into the process, contrary to this longstanding policy. We note also the recent adoption of G.S. 47-20.5, which requires that after-acquired property clauses in security agreements be extended or re-recorded after each subsequent purchase of real property. This indicates a legislative insistence that due recordation in the chain of title must remain the only effective means of protecting title.\nAccordingly, we conclude that Northwestern has shown a complete defense as a matter of law. The summary judgment in its favor was properly granted and must be\nAffirmed.\nJudges Wells and Becton concur.", "type": "majority", "author": "JOHNSON, Judge." } ], "attorneys": [ "Newsom, Graham, Hedrick, Bryson, Kennon & Faison, by Joel M. Craig, for plaintiff appellants.", "Tuggle, Duggins, Meschan, Thornton & Elrod, P.A., by David F. Meschan and Henry B. Mangum, Jr., for defendant appellee." ], "corrections": "", "head_matter": "JACK L. SCHUMAN and wife, JEAN O. SCHUMAN; LEONARD LAUFE and wife, SYMOINE LAUFE; HARVEY MANN and wife, RHODA MANN v. ROGER BAKER AND ASSOCIATES, INC., A North Carolina Corporation (formerly known and entitled as ROGER BAKER, INC.); ROGER J. BAKER; CHARLES G. BEEMER, Trustee; ROBERT EPTING, Trustee; THE NORTHWESTERN BANK, A North Carolina Banking Corporation; and FRANKLIN PARK LIMITED PARTNERSHIP\nNo. 8315SC772\n(Filed 4 September 1984)\nEstoppel \u00a7 1; Registration \u00a7 4\u2014 deeds of trust \u2014 priority from registration \u2014 no es-toppel by deed\nWhere plaintiffs\u2019 debtor did not acquire and register its title until one month after the execution of its deed of trust to plaintiffs, a deed of trust to a bank registered after the debtor acquired title had priority over plaintiffs\u2019 deed of trust under G.S. 47-20, and actual notice by the bank of plaintiffs\u2019 prior deed of trust did not operate to defeat the bank\u2019s statutory priority under the doctrine of estoppel by deed.\nAppeal by plaintiffs from Barnette, Judge. Judgment entered 24 March 1983 in Superior Court, ORANGE County. Heard in the Court of Appeals 2 May 1984.\nRoger Baker, a developer, undertook to arrange financing for an office condominium in Chapel Hill. He attempted without success to obtain bank financing for both land acquisition and construction, but could only obtain non-binding commitments for construction loans, contingent in Northwestern Bank\u2019s (hereinafter \u201cNorthwestern\u201d) case upon his securing investors to finance purchase of the land. Baker then sought private investors, and obtained loans totalling $200,000 from plaintiffs. Plaintiffs received promissory notes from Roger Baker, Inc., the corporation actually running the project, and Roger Baker, Inc. executed a deed of trust in their favor on the subject property. At the time of execution, Roger Baker, Inc. did not hold title to the subject property. The deed of trust was duly recorded on 19 September 1980; it contained an agreement by plaintiffs to subordinate their deed of trust to a planned subsequent construction loan, and empowered the trustee to execute the requisite documents. The subject property was conveyed to Baker personally, not to Roger Baker, Inc., by deed recorded the same day. The subject property was transferred from Baker personally to Roger Baker, Inc. in October 1981. Plaintiffs never re-recorded their deed.\nOn 26 January 1981, Roger Baker & Associates, Inc. (a successor corporation to Roger Baker, Inc.) executed a promissory note in favor of Northwestern for $1,000,000. The note was secured by a deed of trust on the subject property which was recorded 29 January 1981. The trustee on plaintiffs deed of trust executed an agreement subordinating that deed to Northwestern\u2019s deed on 5 February 1981. Thereafter, Roger Baker & Associates, Inc. failed to make payments to plaintiffs as promised. Plaintiffs instituted the present action in February 1982, seeking among other relief to have the subordination agreement set aside and to enforce their notes against the subject real property. Roger Baker & Associates, Inc. obtained removal to the United States Bankruptcy Court; that Court later remanded parts of the action to the Superior Court for determination. Northwestern thereupon properly moved for and obtained summary judgment on all claims against it. Plaintiffs appeal.\nNewsom, Graham, Hedrick, Bryson, Kennon & Faison, by Joel M. Craig, for plaintiff appellants.\nTuggle, Duggins, Meschan, Thornton & Elrod, P.A., by David F. Meschan and Henry B. Mangum, Jr., for defendant appellee." }, "file_name": "0313-01", "first_page_order": 345, "last_page_order": 349 }