Tocci v. Nowfall

Stagy, C. J.,

dissenting: We have here, on admitted facts, the question whether defendants’ deed is a cloud on plaintiffs’ title. The answer is to be found, not alone in the execution of a power as between the parties (which is not mooted), but also in the application of our registration laws.

In plaintiffs’ paper chain of title is a deed executed by “Industrial Realty Company.” It is admitted that the Industrial Realty Company held title as trustee, and not otherwise. The defendants are purchasers for value, and claim title to the same property under a deed executed by “Industrial Realty Company, Trustee.” Both deeds are registered, but it is impossible for the deed under which plaintiffs claim to be indexed and cross-indexed so as to prefer it over the defendants’ deed. Dorman v. Goodman, 213 N. C., 406, 196 S. E., 352; Woodley v. Gregory, 205 N. C., 280, 171 S. E., 65. It is now the settled law of this jurisdiction that the proper indexing and cross-indexing of instruments required to be registered is an essential part of their registration. C. S., 3561; Story v. Slade, 199 N. C., 596, 155 S. E., 256; Bank v. Harrington, 193 N. C., 625, 137 S. E., 712; Fowle v. Ham, 176 N. C., 12, 96 S. E., 639; Ely v. Norman, 175 N. C., 294, 95 S. E., 543.

The plaintiffs then claim under an unregistered deed so far as the defendants are concerned. Eaton v. Doub, 190 N. C., 14, 128 S. E., 494. The defendants claim under a registered deed. It follows, therefore, that the defendants have the better title.

The general index of Mecklenburg County shows a large number of deeds executed by the Industrial Realty Company, some in its individual capacity (the deed under which plaintiffs claim is so indexed), others as trustee (defendants’ deed is so indexed). Under the decision in Dorman v. Goodman, supra, the plaintiffs are not entitled to recover.

It is true the ease was decided below on the insufficiency of the Rat-cliffe deed to convey the property in question, and the correctness of the judgment has been pressed upon us with confidence and conviction. Outside authorities are cited to sustain it. It is pointed out that had the trustee held an individual interest in the property, then according to our own decisions, its deed to plaintiffs’ predecessor in title would have con*560veyed only such interest. Matthews v. Griffin, 187 N. C., 599, 122 S. E., 465; Carraway v. Moseley, 152 N. C., 351, 67 S. E., 765.

Tbe novelty of tbe case in our Reports must be conceded. Never before bas a corporate trustee sold tbe same property to two persons and executed to one a deed in its individual capacity and to tbe other a deed as trustee. It is admitted on all bands that tbe defendants’ deed is in tbe proper form. v

Tbe cases cited in tbe opinion of tbe majority deal witb matters arising out of controversies between tbe parties or their privies. None forecloses tbe right of a purchaser for value who bolds under a properly registered deed. Tbe contrary conclusional characterizations, which in themselves usually invite scrutiny, find no support in tbe decided cases. Of course, an unregistered deed may be good as between tbe parties. But an unregistered deed availetb naught as against creditors and purchasers for value. C. S., 3309; Glass v. Shoe Co., 212 N. C., 70, 192 S. E., 899.

Tbe question of registration was not reached in tbe court below because unnecessary under tbe view which then prevailed, but this is not delimiting on tbe appellate Court. Tbe question is presented by tbe record. Tbe defendants claim title to tbe lot in question “by virtue of a good and valid conveyance,” and they have offered evidence to sustain it, including an exhibit which shows tbe pertinent pages of tbe general index to tbe registry of tbe county.

It is broadly stated by tbe majority, “there is no law requiring that tbe cross-index shall show tbe capacity in which tbe grantor acted in tbe making or execution of a deed.” Tbe rule is, that where one bas both an estate in and a power over property, the capacity in which be acts in making a deed will determine, not only tbe effect of tbe deed, but also tbe title and name of tbe grantor. Matthews v. Griffin, supra. Hence, tbe indexing and cross-indexing in “tbe names of all tbe parties” would include “tbe capacity in which tbe grantor acted” in a trustee’s deed to make tbe registration complete. Here, Mrs. Nowfall bolds under such a deed, and at tbe time she purchased tbe property there was nothing on the general index to indicate a prior sale of tbe same property by tbe “Industrial Realty Company, a Corporation, as Trustee,” tbe only capacity in which it was authorized to sell.

It is further suggested in tbe opinion of tbe majority that “a deed sufficient to convey title is sufficient to give notice of that fact when registered according to its tenor and in strict compliance witb tbe indexing statute.” Tbe conclusion is a non sequitur, and is at variance witb what was said in The Dorman Case. The fact that pertinent matters in pais may be resorted to in ascertaining tbe intention to execute a power seems to have been overlooked for tbe moment. Matthews v. Griffin, supra.

*561To be sure, a deed sufficient to convey tbe trust property would be good as against tbe creditors of tbe Realty Company, not because tbe indexing and cross-indexing of such a deed perforce gives notice, but for tbe very simple reason that at no time bas tbe property been liable to be taken for tbe debts of tbe Industrial Realty Company. Tbis reasoning, however, is not applicable to a purchaser for value. In no previous case bas tbe question here presented found its way to tbe appellate Court. Tbe pertinent authorities, however, settle tbe principle upon which it should be decided.

It is stated by tbe majority that tbe defendant’s position is not supported by The Dorman, The Woodley, and The Eaton Oases, and the observation is made, “in fact, none of them is related to tbe subject.” Maybe not, maybe they have changed their relations since they were decided, but it was upon tbe principles announced in these cases and faith in their maintenance that tbe defendant parted with her money, and she is now asking that we stand by them. “Parties have tbe right to act upon tbe decisions of tbis Court in acquiring titles” — Walker, J., in Jones v. Williams, 155 N. C., 179, at p. 190. See, also, Hill v. R. R., 143 N. C., 539, at p. 573. Tbe doctrine of stare decisis still obtains in tbe law as it pertains to tbe subject of real property, Whitley v. Arenson, 219 N. C., 121, regardless of bow it may have fared recently in other matters. See Board of Health v. Comrs. of Nash, ante, 140; Evans v. Rockingham Homes, Inc., ante, 253; Mosteller v. R. R., ante, 275. In some respects tbe instant case is not unlike Realty Corp. v. Fisher, 216 N. C., 197, 4 S. E. (2d), 518. It remains to be seen whether it will be as short lived. Bailey v. Hayman, 218 N. C., 175, 10 S. E. (2d), 667.

After some reference to “tbe common sense view . . . tbe rational view,” etc., tbe Court’s logic then runs into this dilemma: “Tbe making of tbe second deed to tbe same property was either an inadvertence on tbe part of tbe grantor or a fraud. In either event we see no reason in morals or in law why we should depart from long established principles to aid or confirm tbe transaction.” Why tbe self-sufficing animadversions if not in an effort to defend a position felt to be weak? There seems to be some discrepancy between tbe Court’s action and its rhetoric so far as Mrs. Nowfall is concerned. She is tbe only one that bas lost anything, and tbe transaction is allowed to stand as to her. Tbe Realty Company is in no position to make good its warranty, so she loses.

Tbe whole case is simply tbis: If tbe Ratcliffe deed, under which tbe plaintiffs claim, is sufficient to convey tbe property and tbe indexing and cross-indexing of tbis deed suffices to give notice, tbe plaintiffs are entitled to recover. On tbe other band, if tbe indexing and cross-indexing of tbis Ratcliffe deed is not sufficient to give notice, tbe defendants are entitled to recover. “As between two grantees, tbe one who *562first registered bis deed, though the later in date of execution, obtains the title, provided be is a purchaser for value.” Sills v. Ford, 171 N. C., 733, 88 S. E., 636; Threlheld v. Land Co., 198 N. C., 186, 151 S. E., 99.

In a matter of tbis kind, when one of two purchasers for value must lose, the only way out is for the Court to hew to the line and let the chips fall wherever they may. Mrs. Nowfall has an impeccable title; Mrs. Tocci has not. The judgment below should be affirmed.

BaeNhill and WiNborNe, JJ., concur in dissent.