Whitehurst v. Abbott

Barnhill, J. E. L. Hinton was a devisee, executor, and propounder of tbe will of John L. Hinton. He purchased tbe interest of tbe other — 4 — devisees in tbe Camden County property. He and tbe other devisees were dealing inter partes in tbe property of tbe estate. He conveyed tbe land after tbe caveat was filed. Any claim tbat be was an innocent third party and tbat bis deed, executed pendente lite, conveyed a good title is without substance. To bold otherwise would open tbe door for parties to litigation to convey tbe subject matter of tbe litigation pending a hearing and thus render tbe court powerless to enforce its own decrees. Newbern v. Hinton, 190 N. C., 108, 129 S. E., 181. As to T. G. McPherson, grantee of E. L. Hinton, a different question arises. Had be purchased before tbe filing of tbe caveat unquestionably under our decisions bis title would have been unassailable. G. S., 31-19; Newbern v. Leigh, 184 N. C., 166, 113 S. E., 674; Whitehurst v. Hinton, 209 N. C., 392, 184 S. E., 66; Anno. 26 A. L. R., 270. But such is not tbe case. He acquired title to tbe property in Camden after tbe filing of tbe caveat from one of tbe devisees who was directly affected by tbe proceedings then pending in Pasquotank, tbe county in which tbe original will was probated. Is be charged with constructive notice of tbe claim of plaintiffs? At common law a pending suit was regarded as notice to all tbe world. Tbe complaint or cross-complaint, as tbe case might be, was tbe lis pendens and any person dealing with tbe property pendente lite was bound by tbe judgment rendered. Insurance Co. v. Knox, 220 N. C., 725, 18 S. E. (2d), 436; 34 Am. Jur., 363. Tbe ever-increasing volume of litigation rendered this common law rule so harsh and burdensome upon abstracters tbat tbe Legislature intervened and adopted tbe modifying Acts now incorporated in Article 11, chapter 1, General Statutes of North Carolina. Now tbe pending action does not constitute notice as to land in another county until and unless notice thereof is filed in tbe county in which tbe land is located. G. S., 1-116, et seq.; Collingwood v. Brown, 106 N. C., 362; Spencer v. Credle, 102 N. C., 68. When a will is probated in common form, any interested party may appear and enter a caveat. G. S., 31-32. But a caveat is an in rem proceedings. In effect it is nothing more than a- demand tbat tbe will be produced and probated in open court, affording tbe caveators an opportunity to attack it for tbe causes and upon tbe grounds set forth and alleged in tbe caveat. It is an attack upon tbe validity of tbe instrument purporting to be a will and not an “action affecting tbe title to real property.” Tbe will and not tbe land devised is tbe res involved in tbe litigation. Prospective purchasers were held to notice tbat probate jurisdiction was in Pasquotank County and if they acquired title without ascertaining tbe status of tbe proceedings in tbat county they did so at their peril.- Hence tbe lis pendens statute has no application. So contend tbe appellants. — 5 — Thus we are called upon to decide the force and effect of the Us pendens statute as it relates to a caveat proceedings. The registration statute, G. S., 43-18, modifies the common law rule of lis pendens. Its purpose is to stabilize titles by requiring recordation of all deeds, mortgages, or other paper writings which transfer or encumber the title to land. Our lis pendens statute, above cited, is designed to supplement the registration law and to provide a simple and readily available means of ascertaining the existence of adverse claims to land not otherwise disclosed by the registry. Notice under the Act is required to give constructive notice to prospective purchasers when the claim is in derogation of the record. Insurance Co. v. Knox, supra. The effect of lis pendens and the effect of registration are in their nature the same thing. They are only different examples of the operation of the rule of constructive notice. One is simply a record in one place and the other is a record in another place. Each serves its purpose in proper instances. They are each record notices upon the absence of which a prospective innocent purchaser may rely. Bearing this broad general purpose in mind, it would seem to be apparent that the Legislature intended the term “action,” as used in G. S., 1-116, to embrace all judicial proceedings affecting the title to real property or in which title to land is at issue. Naturally proceedings in court are divided into various classifications. Each class has its own particular label. But the word “action,” when unqualified is an inclusive term and connotes -all judicial proceedings of a civil nature maintained and prosecuted for the purpose of asserting a right or redressing a wrong. When qualified, as in the statute, by the term “affecting the title to real property,” it includes and embraces all such proceedings wherein the title to real property is at issue. Such is a caveat. Though not an adverse proceedings in the ordinary sense, interested parties are notified and given an opportunity to be heard. Legal rights.are at stake and the issues raised are tried as in other civil actions. While in one sense the will is the res involved in the caveat proceedings, it is quite clear that any final decree entered therein will directly affect the title to the land devised. The probated will constitutes a muniment of title unassailable except in a direct proceedings. G. S., 31-19. It operates as a conveyance of title to the land devised. Any action or proceedings contesting its validity directly assails the validity of such conveyance and necessarily involves the title. Hence the filing of notice under the Us pendens statute is essential to give constructive notice to those who are not directly interested in the proceedings. McIlwrath v. Hollander, 39 Am. Rep., 484. — 6 — But lis pendens notice under tbe statute is not exclusive. Nor is it designed to protect intermeddlers. "When a person acquires an interest in property pending an action in wbicb tbe title thereto is at issue, from one of tbe parties to tbe action, witb notice of tbe action, actual or constructive, be is bound by tbe judgment in tbe action just as tbe party from whom be bought would have been. This rule seems to be universal and is considered by all tbe courts to be absolutely necessary to give effect to tbe judgments of tbe courts because, if it was not so held, a party could always defeat tbe judgment by conveying in anticipation of it to some stranger and tbe claimant would be compelled to commence a new action against him. Rollins v. Henry, 78 N. C., 342; Jarrett v. Holland, 213 N. C., 428, 196 S. E., 314. “Our statute on tbe subject . . . only purports to deal witb constructive notice, and its effect on subsequent purchasers, but where one buys from a litigant witb full notice or knowledge of tbe suit, and of its nature and purpose, and tbe specific property to be affected, be is concluded or bis purchase will be held ineffective and fraudulent as to decree rendered in tbe cause and tbe rights thereby established. Griswold v. Muller, 15 Barbour, 520; Corwin v. Bensley, 43 Cal., 253-262; Wick v. Dawson, 48 West Va., 469-475; 25 Cyc., 1452; Bennett on Lis Pendens, 319.” Morris v. Basnight, 179 N. C., 298, 102 S. E., 389. Plaintiffs offered evidence tending to show that when tbe court proceedings was being beard at tbe January Term, 1919, McPherson was present in court and that be talked about tbe case in tbe presence of bis son and bis brother, all prior to tbe time be purchased. Upon this evidence, wbicb is uncontradicted, plaintiffs duly requested tbe court to give a peremptory charge on tbe second issue, wbicb is as follows: “Did T. G. McPherson purchase tbe lands in controversy for value and without notice of plaintiffs’ claim?” Tbe court declined to give tbe requested instruction. Instead it charged tbe jury that tbe burden rested upon tbe plaintiffs to show that McPherson “did not purchase it for value and that at tbe time be, T. G. McPherson, bad notice of plaintiffs’ claim to tbe land in question” and that if they failed to so find they should answer tbe second issue “Yes.” In this there was error prejudicial to tbe plaintiffs. As heretofore stated, a party directly interested in a judicial proceeding affecting tbe title to real property cannot convey a good title to the res pendente lite. Even so, tbe grantee acquires a good title provided be purchases (1) for value, and (2) without notice, actual or constructive. Both conditions must appear. Hence tbe absence of either is fatal. Tbe uncontroverted evidence tends to show and it seems to be admitted that Hinton conveyed to McPherson pendente lite. This being true, bis deed was ineffective and fraudulent as against tbe final decree — 7 — in the pending action. Upon such showing plaintiffs were entitled to judgment, certainly as against McPherson, unless it should be made to appear that he purchased for value and without notice. This is an affirmative defense and he who claims to be a tona fide purchaser for value without notice so as to avoid the defective character of his deed has the burden of proving that fact. Hughes v. Fields, 168 N. C., 520, 84 S. E., 804; King v. McRackan, 168 N. C., 621, 84 S. E., 1027 (affirmed on rehearing, King v. McRackan, 171 N. C., 752, 88 S. E., 226); 27 R. C. L., 737. The conditions under which defendant acquired title are on this record immaterial. At that time there was no presumptively valid will of record operating as a muniment of title. It had been annulled by decree of court. It protects a purchaser only until vacated. G. S., 31-19. It follows that his title rests squarely upon the title possessed by his grantor. If McPherson was an innocent purchaser for value, his deed to defendant conveyed title in fee to the land therein described. Conversely, if McPherson purchased with notice, then immediately upon the entry of the final decree in the caveat proceedings invalidating the will, the plaintiffs, as heirs at law of J. C. Hinton, by operation of law, became seized and possessed of an undivided interest in the Camden County land. From that instant they were tenants in common with McPherson. His deed to defendant thereafter executed conveyed only such interest as he possessed and the vested interest of plaintiffs can be defeated only by twenty years’ adverse possession pleaded by defendant. But defendant insists that even though, at the time he purchased, the will was void, the certified copy thereof filed in Camden County was still of record without any notation or entry that would operate as notice to him of the judgment entered in Pasquotank County and that he had the right to rely on this record as a valid link in his chain of title. We cannot so hold. ® Whatever may be the effect of eh. 108, Public Laws 1921, the rights of the parties to this action accrued prior to its enactment and are to be controlled by the law as it existed before the effective date of that statute. At that time it was the original will as probated in the county in which the testator resided at the time of his death that constituted the muniment of title as to all land devised. C. S., 4145. Ownership under the will in nowise is made dependent upon the certified copy directed to be recorded in the county where the land lies. C. S., 4163. The only purpose of the certified copy disclosed by the pertinent statute was to give information to abstracters and to direct their attention to the source of title — the will as originally probated. Hence when the original will was annulled by judicial decree the certified copy ceased to have any force and effect for any purpose. — 8 — Nor is defendant protected by tbe provisions of sec. 2 of the 1921 statute. At the time of its enactment the final decree had been entered. There was no valid will of record. If McPherson purchased with notice title had vested in plaintiffs. The Legislature was without authority to divest them of their title and revest it in McPherson. It is not to be presumed that the General Assembly so intended. In any event the Act cannot be so construed. Sections 17, 19, Art. I, N. C. Const. It follows that there must be a new trial in accord with this opinion. It is so ordered. New trial.