Heath v. Turner

WEBB, Judge. The plaintiffs do not argue an assignment of error as to the court’s ruling on Lots 2, 6 and 7 of the Margaret Hall tract. They do argue that the court erred in limiting their interest to a 3/11 undivided interest in Lots 3, 4 and 5. The defendants assign error to the court’s failure to hold that they are entitled to all the interest in these three lots. The defendants claim their title to Lots [710] 3, 4 and 5 based on a deed from B. F. Hobgood, Sr. who had a curtesy estate and purported to convey a fee simple title. The plaintiffs’ claim is based on a deed from B. F. Hobgood, Jr., who held a vested remainder in Lots 3, 4 and 5 subject to the life estate of his father. We believe this case is governed by the Real Property Marketable Title Act. It provides in part: “47B-1. Declaration of policy and statement of purpose. It is hereby declared as a matter of public policy by the General Assembly of the State of North Carolina that: (1) Land is a basic resource of the people of the State of North Carolina and should be made freely alienable and marketable so far as is practicable. (2) Nonpossessory interests in real property, obsolete restrictions and technical defects in titles which have been placed on the real property records at remote times in the past often constitute unreasonable restraints on the alienation and marketability of real property. (3) Such interests and defects are prolific producers of litigation to clear and quiet titles which cause delays in real property transactions and fetter the marketability of real property. (4) Real property transfers should be possible with economy and expendiency. The status and security of recorded real property titles should be determinable from an examination of recent records only. It is the purpose of the General Assembly of the State of North Carolina to provide that if a person claims title to real property under a chain of record title for 30 years, and no other person has filed a notice of any claim of interest in the real property during the 30-year period, then all conflicting claims based upon any title transaction prior to the 30-year period shall be extinguished. 47B-2. Marketable record title to estate in real property; 30-year unbroken chain of title of record; effect of marketable title. [711] (a) Any person having the legal capacity to own real property in this State, who, alone or together with his predecessors in title, shall have been vested with any estate in real property of record for 30 years or more, shall have a marketable record title to such estate in real property. (b) A person has an estate in real property, of record for 30 years or more when the public records disclose a title transaction affecting the title to the real property which has been of record for not less than 30 years purporting to create such estate either in: (1) The person claiming such estate; or (2) Some other person from whom, by one or more title transactions, such estate has passed to the person claiming such estate; with nothing appearing of record, in either case, purporting to divest such claimant of the estate claimed. (c) Subject to the matters stated in G.S. 47B-3, such marketable record title shall be free and clear of all rights, estates, interests, claims or charges whatsoever, the existence of which depends upon any act, title transaction, event or omission that occurred prior to such 30-year period. All such rights, estates, interests, claims or charges, however denominated, whether such rights, estates, interests, claims or charges are or appear to be held or asserted by a person sui juris or under a disability, whether such person is natural or corporate, or is private or governmental, are hereby declared to be null and void. (d) In every action for the recovery of real property, to quiet title, or to recover damages for trespass, the establishment of a marketable record title in any person pursuant to this statute shall be prima facie evidence that such person owns title to the real property described in his record chain of title. 47B-3. Exceptions. Such marketable record title shall not affect or extinguish the following rights: [712] (3) Rights, estates, interests, claims or charges of any person who is in present, actual and open possession of the real property so long as such person is in such possession. * * * 47B-8. Definitions. As used in this Chapter: * * * (2) The term “title transaction” means any transaction affecting title to any interest in real property, including but not limited to title by will or descent, title by tax deed, or by trustee’s, referee’s, commissioner’s, guardian’s, executor’s, administrator’s, or sheriffs deed, contract, lease or reservation, or judgment or order of any court, as well as warranty deed, quitclaim deed, or mortgage.” Under this act, if a person or those under whom he claims has a record title to real property of at least 30 years duration and there is nothing of record which by a title search of that chain would show a defect in the title, such a person has a marketable title in the property. See J. Webster, Real Estate Law in North Carolina § 508 (rev. ed. 1981). Any interests in the property, with certain exceptions set forth in G.S. 47B-3, which may have been created prior to that period are extinguished. G.S. 47B-4 provides for recording interests to the property to keep such interests from being extinguished. No interests were recorded in this case. In this case both plaintiffs and defendants have record titles of more than 30 years duration which could be examined without finding an exception. The defendants have a record title which commences with the deed from B. F. Hobgood, Sr. to J. A. Thigpen recorded in 1932. The plaintiffs have a record title which would reveal no exceptions if searched to the deed from B. F. Hobgood, Jr. to A. L. Mercer recorded in 1943. We believe the defendants’ title must prevail. G.S. 47B-3 provides that a marketable record title shall not affect the rights of a person who is in possession of the property. The superior court found as a fact that the defendants and their predecessors in title have been in possession of the property for more than 30 years. For this reason we do not believe the plaintiffs’ record title affects [713] the defendants’ marketable record title. See Webster, The Quest for Clear Land Titles, 44 N.C.L. Rev. 89, 108, 109 (1965). In 1929 B. F. Hobgood, Jr. took by descent a vested remainder in fee with possession postponed until the death of his father. G.S. 47B-3(2) defines “title transaction” to include “title ... by descent.” G.S. 47B-8(c) provides that a “marketable record title” shall be clear of “all rights . . . the existence of which depends upon any . . . title transaction . . . that occurred prior to such 30-year period.” We believe this section of the statute divests the plaintiffs of their interest. We note that there is no requirement that a person in possession of property hold it by adverse possession in order for his title to be perfected under the Real Property Marketable Title Act. The defendants and their predecessors did not hold adversely to the remainderman or his successors so long as the life tenant was living. The plaintiffs did not raise a constitutional question in the superior court or in this Court as to the Real Property Marketable Title Act as applied to this case, and we have not considered the due process question. For the reasons stated in this opinion, we hold that it was error for the superior court to hold that the plaintiffs had a 3/11 interest in Lots 3, 4 and 5. We hold that the defendants possess all interests in the land. We reverse and remand for a judgment consistent with this opinion. Reversed and remanded. Judge WELLS concurs. Judge MARTIN (Robert M.) dissents.