Badger v. Benfield

WELLS, Judge. Plaintiffs argue that their complaint is legally sufficient to state a claim upon which relief can be granted and that the court erred in dismissing it. A complaint should not be dismissed for failure to state a claim unless it appears to a certainty that the plaintiff is entitled to no relief under any state of facts which could be proved in support of his claim. Sutton v. Duke, 277 N.C. 94, 176 S.E. 2d 161 (1970). In considering a motion made pursuant to G.S. 1A-1, Rule 12(b)(6), the allegations of the complaint are to be taken as true. Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E. 2d 282 (1976). The allegations of the complaint here, taken as true, establish that Republic Bank’s deed of trust did not have priority over plaintiffs’ warranty deed because it was not indexed until after plaintiffs’ deed was duly registered and that therefore plaintiffs were not legally obligated to satisfy the mortgage. Priority of instruments affecting an interest in real property which are required to be recorded is established by the priority of their registration. See Webster, Real Estate Law in North Carolina § 332 (1971). An instrument shall not be deemed registered until it has been properly indexed. N.C. Gen. Stat. § 161-22(h) (Cum. Supp. 1985); Cotton Co. v. Hobgood, 243 N.C. 227, 90 S.E. 2d 541 (1955); Heaton v. Heaton, 196 N.C. 475, 146 S.E. 146 (1929). Since Republic Bank’s deed of trust was not indexed until after plaintiffs’ deed was duly registered, it did not have priority over plaintiffs’ interest. A register of deeds will not be held liable for failure to properly index an instrument unless the default of the register of deeds was the proximate cause of pecuniary injury to the claimant. Manufacturing Co. v. Hester, 177 N.C. 609, 98 S.E. 721 (1919). Moreover, liability will not be imposed on the register of deeds if the negligence of the claimant caused or concurred in causing the injury. Id. Since plaintiffs were not legally obligated to pay off Republic Bank’s mortgage, defendant’s alleged failure to properly index the deed of trust was not the proximate cause of their injury. Plaintiffs were put on notice of the late indexing of the deed of trust by the title searches performed; thus, they caused their own injury. [430] The allegations of the complaint establish that plaintiffs are not entitled to recover damages from defendant because of his alleged failure to properly index the deed of trust. Accordingly, we hold the court acted correctly in dismissing the action. Affirmed. Judges Arnold and Martin concur.