Virginia-Carolina Joint Stock Land Bank v. Mitchell

Adams, J. The deed from White and bis wife to Jernigan was executed on 13 May, 1916, and was filed for registration on 11 May, 1920, and duly recorded. On 1 August, 1916, Jernigan and bis wife gave O. W. Mitchell a mortgage on the land conveyed by White, which was registered on 3 March, 1911, and properly indexed. On the first day of May, 1926, Jernigan and bis wife executed a deed of trust to the Southern Trust Company to secure a loan to Jernigan of $5,400 by the Virginia-0arolina Joint Stock Land Bank, one of the plaintiffs. The deed of trust was filed for registration and we assume was registered on the day it was executed. Upon these facts the appellants rest their argument that the Land Bank can bold title to the land under the deed of trust as against the present bolder of the mortgage to Mitchell. In support of this position they advance two propositions: First, that the Mitchell mortgage cannot prevail against the title beld by the plaintiffs because they succeeded to the title of Jernigan first after bis deed was registered, and, in the second place, for the reason that in the examination of Jernigan’s title the plaintiffs were under no legal obligation to search for any records antedating the registration of the deed executed by White to Jernigan. By way of maintaining the first proposition the plaintiffs undertake to apply the doctrine of after-acquired property. They say that before the enactment of our present registration laws an after-acquired title enured to the benefit of one who bad taken a conveyance prior to tbe grantor’s acquisition of title, but that by virtue of these laws title now passes to tbe purchaser who claims under any unbroken chain of re *344 corded conveyances. They cite and rely upon the case of Sash and Door Company v. Joyner, 182 N. C., 518. The facts in that case are easily to be distinguished from those in the case before us. There it was admitted, or not denied, that Jones Smith had the legal title. On 28 February, 1913, he and his wife, to secure a debt due B. H. Bunn, executed to J. B. Ramsey a deed of trust, which was registered on 11 April, 1913. The trust was foreclosed and on 14 December, 1914, a conveyance was made to Mrs. Ella B. Ramsey and was registered on 9 January, 1915. On 20 August, 1917, Mrs. Ramsey conveyed the property to Nellie Smith by a deed which was registered on 22 August, 1917, and on 24 November, 1917, Nellie Smith and her husband executed to the Sash and Door Company, the plaintiff in that action, a deed of conveyance, which was registered on 25 January, 1918. The plaintiff had an unbroken chain of title — “a connected line of deeds.” The defendant offered a deed from Jones Smith and Nellie, his wife, to "William Bullock, which was dated 10 April, 1913, and registered 11 March, 1914; a deed of trust executed by Bullock and wife to J. N. Bone, trustee, which was dated 10 March, 1914, and registered on the day following; and a deed from Bone to Joyner, the defendant, giving 10 October, 1916, as the date of its execution and 5 February, 1917, as the date of its registration. The court held that as the plaintiff's title from the true owner had priority of registration it should prevail unless the title of Nellie Smith, acquired under the deed from Mrs. Ramsey, validated the deed which she and "her husband had executed to Bullock, and held, further, that it did not have this effect. In the following words the court stated the principle applicable to the facts in the cited cases: “A purchaser having the prior registry is not affected with constructive notice by reason of deeds or claims arising against his immediate or other grantor prior to the time when such grantor acquired the title, but the deed or instrument first registered after such acquisition shall confer the better right.” This principle might be invoked here if Jernigan had had no title to the land when he made the mortgage to Mitchell, and having thereafter acquired title had executed the deed of trust and the latter had been the first to be recorded after Jernigan received his deed. But these are not the facts in the present case. The controversy cannot be determined upon the principle of estoppel and after-acquired property. Jernigan executed the Mitchell mortgage more than two months after he had taken the deed from White. We do not assent to the suggestion that Jernigan got no title until his deed was registered. An unregistered deed conveys title from its delivery as against the grantor and all others except creditors and purchasers for value. Warren *345 v. Williford, 148 N. C., 474; Hughes v. Fields, 168 N. C., 520; Proffitt v. Insurance Co., 176 N. C., 680; Trust Co. v. Brock, 196 N. C., 24. The deed of trust under which the plaintiffs claim was executed about six years after the registration of the White deed and more than nine years after the registration of the mortgage to Mitchell. The plaintiffs had constructive notice of these facts and are bound by it unless, as they contend, they were not affected with notice of any registration preceding that of the deed from White. On this point, among other cases, the appellants cite Ford v. Unity Church Society at St. Joseph, 23 L. R. A., 561, which deals with a statute relating to the effect of the subsequently acquired title of a grantor, and is not applicable to the facts agreed on in the case under consideration. In that case it is said that a second purchaser should search the records until he finds the deed of his vendor but is not expected to look for conveyances from his vendor prior to the time the vendor acquired title. Jernigan acquired title before he executed the mortgage to Mitchell, and the plaintiffs when they examined his title, were notified of the date of his deed and in the absence of other evidence should have assumed that it was delivered at that time. Devereux v. McMahon, 108 N. C., 134. In these circumstances they are not entitled to priority for the asserted reason that they were exempt from the necessity of tracing the grantor’s title back to its source and ascertaining whether he had conveyed or encumbered the property during the time intervening between the execution and the registration of the deed from White. Judgment Affirmed.