Appeal by defendants from judgment entered 13 February 2002 by
Judge James R. Vosburgh in Carteret County Superior Court. Heard
in the Court of Appeals 30 January 2003.
Mason & Mason, P. A., by L. Patten Mason, for plaintiff-
appellee.
Bryant and Stanley, by Richard L. Stanley, for defendant-
appellants.
HUNTER, Judge.
Beth L. Linnell (“defendant Linnell”) and William P. Gifford,
Sr. (“defendant Gifford”) (collectively “defendants”), in their
individual capacities and as trustees of the Droffig Family Trust,
appeal the trial court's grant of summary judgment in favor of
their mother, Patricia L. Gifford (“plaintiff”), after the court
concluded that a deed executed by plaintiff to defendants as
trustees was void ab initio. We reverse the trial court for the
reasons stated herein.
Plaintiff executed two deeds on 13 January 1992; one deed
pertained to property located in Barnstable County, Massachusetts,
and the other pertained to property located in Carteret County,North Carolina. Both deeds were a conveyance by plaintiff to
defendant Linnell as “Trustee of Droffig Family Trust.” On 16
January 1992, plaintiff executed a trust agreement entitled
“Indenture of Trust[,] Droffig Family Trust” that appointed
defendant Linnell and defendant Gifford as trustees of the Droffig
Family Trust. Plaintiff signed the trust agreement and alleged
that the attorney who prepared the agreement advised her that it
was revocable and could be terminated by plaintiff at any time.
The deed and trust agreement for the North Carolina property
remained with that attorney and were recorded at the Register of
Deeds of Carteret County on 14 June 1993, approximately eighteen
months after their execution.
Following the conveyance, plaintiff attempted to sell the
Massachusetts property. At that time, however, she learned that
the trust was purportedly irrevocable. Defendants voluntarily
reconveyed the Massachusetts property to plaintiff on 30 April 1992
so that plaintiff could sell her interest in the property.
At some point, plaintiff learned that the Droffig Family Trust
did not actually exist until 16 January 1992, three days after the
deed to the North Carolina property was executed. Plaintiff
subsequently filed a complaint on 27 March 2001 alleging, inter
alia:
7. Contrary to her understanding and as
a result of misrepresentation and fraud, the
plaintiff executed a document entitled
“Droffig Family Trust” which was signed by the
plaintiff on the 16th day of January, 1992.
8. At the time that the plaintiff
executed the deed . . . the Droffig FamilyTrust did not exist and, therefore, the
grantee of said deed was not a legal entity
and the deed, therefore, could not operate to
convey title to the defendants either
individually or as trustees.
. . . .
11. Since the deed above referenced
conveyed property to a trust which did not
exist at the time of said conveyance, the deed
. . . is void ab initio.
Defendants timely answered and raised several defenses such as
estoppel and the statute of limitations. Thereafter, defendants
filed a motion for summary judgment on 28 December 2001, followed
by plaintiff filing her own motion for summary judgment on 10
January 2002. Both parties' motions were accompanied by affidavits
and other supporting documentation.
The summary judgment hearing was held on 28 January 2002. In
a judgment filed 13 February 2002, the trial court granted
plaintiff's motion for summary judgment after concluding the deed
to the North Carolina property was “an unlawful cloud on
Plaintiff's title and . . . void ad initio[.]” Defendants appeal.
The two assignments of error brought forth by defendants
involve issues regarding a motion for summary judgment. On an
appeal from a grant of summary judgment, this Court reviews the
trial court's decision de novo. Falk Integrated Tech., Inc. v.
Stack, 132 N.C. App. 807, 809, 513 S.E.2d 572, 574 (1999). Thus,
when viewing the evidence in the light most favorable to the non-
movant, we must determine whether the trial court properly
concluded that the moving party showed, through pleadings and
affidavits, that there was no genuine issue of material fact andthat the moving party was entitled to judgment as a matter of law.
Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C. App. 729, 733, 504
S.E.2d 574, 577 (1998).
I.
Defendants initially argue the trial court erred in granting
summary judgment in favor of plaintiff because there were genuine
issues of material fact as to whether the deed was delivered to
them, via the attorney, and executed on the condition that the
Droffig Family Trust would be executed thereafter.
“The word 'deed' ordinarily denotes an instrument in writing,
signed, sealed, and delivered by the grantor, whereby an interest
in realty is transferred from the grantor to the grantee.”
Ballard
v. Ballard, 230 N.C. 629, 632-33, 55 S.E.2d 316, 319 (1949). North
Carolina clearly recognizes that delivery of a deed can be absolute
or conditional. James A. Webster, Jr.,
Webster's Real Estate Law
in North Carolina § 10-53, at 437 (Patrick K. Hetrick & James B.
McLaughlin, Jr. eds., 5th ed. 1999). One such conditional delivery
occurs “'[w]hen the maker of a deed delivers it to some third party
for the grantee, parting with the possession of it, without any
condition or any direction as to how he shall hold it for him, and
without in some way reserving the right to repossess it[.]'”
Buchanan v. Clark, 164 N.C. 56, 63, 80 S.E. 424, 427 (1913). In
that instance, “'the delivery is complete and the title passes at
once, although the grantee may be ignorant of the facts, and no
subsequent act of the grantor or any one else can defeat the effect
of such delivery[.]'”
Id. However, this Court has clearly held that “[t]o be operative
as a conveyance, a deed must designate as grantee [a living or] a
legal person[]” on the date of conveyance.
Piedmont & Western
Investment Corp. v. Carnes-Miller Gear Co., 96 N.C. App. 105, 107,
384 S.E.2d 687, 688 (1989) (holding that where a deed attempted to
convey property to a plaintiff corporation during that plaintiff's
administrative suspension, the deed could not operate to convey
title because the plaintiff had no legal existence on the date of
the conveyance).
See also James A. Webster, Jr.,
Webster's Real
Estate Law in North Carolina § 10-26, at 411 (Patrick K. Hetrick &
James B. McLaughlin, Jr. eds., 5th ed. 1999) (stating “[i]n order
for a deed to be valid it must designate an existing person or
legal entity as the grantee who is capable of taking title to the
real property at the time of the execution of the deed” (footnote
omitted)). Therefore, before determining whether delivery of a
deed (conditional or otherwise) was actually effective, we must
first determine whether there is a living or legal person to whom
that deed could be delivered.
Here, the deed specified that the property was being conveyed
to “[defendant] Linnell, Trustee of Droffig Family Trust[.]” The
parties do not dispute that the trust was not in existence on the
date plaintiff conveyed the property by deed. That lack of
existence resulted in the deed failing to identify a valid grantee
that was capable of taking title to the North Carolina property.
Defendants offered no evidence that the deed's subsequent“delivery,” via the attorney, was conditioned on the trust becoming
a valid grantee three days after the deed was executed.
Nevertheless, defendants further contend that since the deed
specified that the property was being conveyed to “[defendant]
Linnell, Trustee of Droffig Family Trust[,]” defendant Linnell was
designated as a valid grantee to whom that deed could be delivered
because she is a “living person.” Yet, the use of the words
“Droffig Family Trust” following the trustee's name and the
language of the trust agreement itself indicate that the property
was conveyed to defendant Linnell only in her representative
capacity and not in her individual capacity.
See Freeman v. Rose,
192 N.C. 732, 135 S.E. 870 (1926). Thus, we cannot overlook the
fact that defendant Linnell was not the intended grantee at the
time of the deed's execution, but was actually the representative
of a non-existing legal entity.
Accordingly, the deed was void for lack of a grantee on the
date of the conveyance.
II.
Defendants also argue that even if the Droffig Family Trust
was not a living or legal entity at the time of the conveyance,
summary judgment should have been granted in their favor because
plaintiff is estopped from denying the validity of the deed, and
plaintiff's claim that she executed the deed “[c]ontrary to her
understanding and as a result of misrepresentation and fraud[]” is
barred by the statute of limitations. Since our Supreme Court has
previously held that a void deed cannot be the basis of anestoppel,
see Fisher v. Fisher, 218 N.C. 42, 9 S.E.2d 493 (1940),
we need only address defendants' statute of limitations argument.
“The statute of limitations is 'inflexible and unyielding,'
and the defendants are vested with the right to rely on it as a
defense.”
Staley v. Lingerfelt, 134 N.C. App. 294, 299, 517 S.E.2d
392, 396 (1999) (citation omitted). In North Carolina, claims
alleging fraud or mistake are governed by a three-year statute of
limitations. N.C. Gen. Stat. § 1-52(9) (2001). A cause of action
grounded on either “shall not be deemed to have accrued until the
discovery by the aggrieved party of the facts constituting the
fraud or mistake.”
Id. “The trial court has no discretion when
considering whether a claim is barred by the statute of
limitations.”
Staley, 134 N.C. App. at 299, 517 S.E.2d at 396.
In the case
sub judice, defendants contend that plaintiff's
claims for misrepresentation and fraud are time barred because she
learned the trust was irrevocable when she attempted to sell the
Massachusetts property in April of 1992, approximately nine years
prior to the filing of her complaint. The evidence in the record
supports defendants' contention, especially in light of plaintiff's
failure to forecast evidence to the contrary.
See Pembee Mfg.
Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350,
353 (1985) (providing that “[o]nce a defendant has properly pleaded
the statute of limitations, the burden is then placed upon the
plaintiff to offer a forecast of evidence showing that the action
was instituted within the permissible period after the accrual of
the cause of action”). Further, plaintiff has also failed to cite,and this Court has not found, any case law or statutory authority
that clearly precludes the statute of limitations from being
applicable in a situation where a deed is deemed void for failure
to identify a valid grantee on the date of conveyance. Therefore,
we conclude a three-year statute of limitations applies to
plaintiff's claims for misrepresentation and fraud which results in
her action being barred. To hold otherwise would result in there
being no applicable statute of limitations to address the issue
presented by the facts in this case.
For the aforementioned reasons, we conclude that although the
trial court properly determined the deed was void, summary judgment
should have been granted in favor of defendants due to plaintiff's
failure to initiate her action within the prescribed statute of
limitations period.
Reversed.
Judges McGEE and CALABRIA concur.
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