Recent Real Property Decisions
Chris Burti, Vice President and Legal Counsel

Timber Deed Priority

Fordham v. Eason, 505 S.E.2d 895, (N.C.App. 1998) is a decision that should give the title examiner some concern. We can hope it will be overturned or overruled. In Fordham a landowner executed a timber-cutting contract with the plaintiff Fordham Timber Company, Inc.(Fordham) which was not recorded. Subsequently appellant American Woodland Industries, Inc. (American) secured a two year "Timber Purchase and Sales Agreement" from the landowner. This agreement was recorded and Woodland began cutting. At this point Fordham secured a preliminary injunction stopping Woodland from cutting and subsequently commenced logging the tract itself. Woodland filed an answer and counterclaim alleging wrongful timber cutting and abuse of process. The trial court issued summary judgment in favor of Fordham on the wrongful cutting issue and the Court of Appeals affirmed, remanding on the abuse of process issues.

The court reasoned that since Woodland was not the owner of the land itself it could not assert a claim for wrongful cutting of timber and trespass. The opinion cites N.C.G.S.§ 1-539.1 as follows: "[a]ny person, firm or corporation not being the bona fide owner thereof or agent of the owner who shall without the consent and permission of the bona fide owner enter upon the land of another and injure, cut or remove any valuable wood, timber, shrub or tree therefrom, shall be liable to the owner of said land for double the value of such wood, timber, shrubs or trees so injured, cut or removed. (Emphasis added)." The court goes on to say that "[I]n no sense was woodland the ‘owner’ of the lands in question. . . . ‘In order to sustain an action for permanent damages to the freehold, or to the ownership interest, such as an action for unlawful cutting of timber, plaintiff must allege and show that he is the owner of the land from which the timber was cut. Woodard v. Marshall, 14 N.C.App. 67, 187 S.E.2d 430, 431 (1972) (emphasis added)."

The right to take timber from land is well established to be a profit à prendre which is an interest in land that must be granted in writing to satisfy the Statute of Frauds, Council v. Sanderlin, 183 N.C. 253, 111 S. E. 365, (1922). It is very similar to an easement and the rules governing it are essentially the same. In Fordham the court never discussed this aspect of the factual basis giving rise to the action. If the "agreement" recorded by Woodland was sufficient to convey the timber rights in the land then that interest should be sufficient to support an action under N.C.G.S.§ 1-539.1 since Woodland would own a recorded interest in the land itself. Considering the facts of the case this may not necessarily seem to be the fairest outcome but North Carolina has long relied on the protections provided by our recording acts for those who pay for an interest in land. The court here apparently never considers the real property issues and treats the timber rights as merely contractual. We would hope that if appealed the case would be remanded to the trial court for a determination as to the status of the "agreement" as a conveyance if the record on appeal does not so reflect.

Land Sale Contracts

 Lamberth v> McDaniel, 506 S. E. 2d 295, (N.C.App. 1998) is yet another case arising from disputes over defaulted land sale contracts. This case strengthens the line of cases holding that an executory agreement for the purchase and sale of land creates a similar relationship between purchaser and vendor as between mortgagor and mortgagee. This relationship is governed by the same rules. The court held that the purchaser has the right to redeem upon default by paying all amounts due and this right cannot be waived at the time of the agreement.

In this matter the vendors brought an action alleging that purchasers had forfeited under the contract and seeking possession, past due payments and property taxes. Purchasers responded claiming tender of the balance as a defense. The contract contained a provision that upon default continuing for more than thirty days the vendors had the option to declare the contract forfeit and treat all payments as rent. The trial court granted summary judgment in favor of the purchasers.

The court in affirming the trial court cites as follows: ‘It has been held repeatedly that "the relation between vendor and vendee in an executory agreement for the sale and purchase of land is substantially that subsisting between mortgagee and mortgagor, and governed by the same general rules. . . . As between the parties, the vendor may be considered a mortgagee and the vendee a mortgagor."' Brannock v. Fletcher, 271 N.C. 65, 155 S.E.2d 532, (1967). The Lamberth court went on to say that "upon default, vendee-mortgagors have a right to redeem their interest under the contract to prevent forfeiture." (citing Anderson v. Moore, 233 N.C. 299, 302, 63 S.E.2d 641, 644 (1951)).

This decision points out that even if the purchasers are behind in their payment and have surrendered possession they still have a right to redeem. "‘Having surrendered possession, they were still entitled--even if they were in arrears--to tender to defendants the unpaid balance of the purchase price within a reasonable time and to have specific performance of their contract to convey.’ Brannock at 73, 155 S.E.2d at 540-41."

This case is significant to real property practitioners for several reasons. Often title examinations will reveal a defaulted land sale contract without any indication that an action has been brought to enforce the forfeiture. However, a vendor may judicially clear the title in several ways. The vendor may bring an action to quiet title, bring an action to declare the contract at an end or bring a judicial foreclosure. The vendor may use non-judicial means if the purchaser is cooperative, such as accepting a quit claim deed or termination of contract executed by the purchaser. Declaring the contract forfeit and accepting possession, without more, may make the title unmarketable in light of the numerous cases protecting the rights of the purchaser. A vendor is likely to be better served by conveying the land and taking a purchase money note and deed of trust considering the relative ease and certainty of a power of sale foreclosure.

 

Easements

Brown v. Weaver-Rogers Associates, Inc., 505 S.E.2d 322 (N.C.App. 1998) clarifies somewhat the issues surrounding what elements are necessary to adequately describe an easement. In this matter plaintiff alleged that he has a right under a deed of easement to open a road across certain lots in stone Creek subdivision. The defendants contested this allegation, the matter was submitted upon a set of stipulated facts and documents and the trial court found the easement void because of its failure to include a description of the dominant estate.

An adjoining landowner that was the predecessor in title to the lot owners of the subdivision granted an easement to the plaintiff’s predecessor in title (Jones). The easement was a forty foot strip described by metes and bounds and granted the "right, privilege and easement, now and hereafter to construct, improve, inspect, maintain and repair a roadway, which shall be a public thoroughfare . . ." to Jones, "his heirs and assigns,". The easement appears as a "40’ Access Easement" on a plat of the subdivision recorded in 1972. It also appears upon a plat of the Jones property (also subdivided into lots), recorded in 1986, along with an additional 20 feet located on the Jones property and adjacent to the 40-foot easement.

The Court of Appeals overturned the trial court, stating: "While it is true that deeds of easement must reasonably identify the easement, the servient and the dominant tenements, we hold that extrinsic evidence may be considered in locating the dominant estate when the deed of easement clearly describes the easement itself and the servient estate." The court cites cases for the proposition that construction of easements should reflect the intent of the parties. The court goes on to distinguish between an easement in gross and an easement appurtenant. The decision points out that an easement "will never be presumed as personal when it may fairly be construed as appurtenant", Gibbs v. Wright, 17 N.C.App. 495, 195 S. E.2d 40, (1975).

After construing the easement in question as appurtenant the opinion points out the general rule that "[w]hen granting an easement appurtenant, ‘[t]he instrument must identify with reasonable certainty the easement created and the dominant and servient tenements.’ Oliver v. Ernul, 277 N.C. 591, 597, 178 S.E.2d 393, 396 (1971); Borders v. Yarbrough, 237 N.C. 540, 75 S.E.2d 541 (1953). The defendants contended that the deed of easement is void when it does not expressly describe the dominant tenement. The court disagreed. The opinion cites a line of cases concerning the admissibility of parol evidence in order to clarify a latent ambiguity contained in a deed. The court goes on to say that "where the deed of easement clearly describes the location of the easement and the servient estate, this Court has held the lack of a clear description of the dominant estate to be a latent, rather than a patent ambiguity. Cochran v. Keller, 84 N.C.App. 205, 352 S.E.2d 602, (1987); appeal after remand, 89 N.C.App. 496, 366 S.E.2d 602 (1988), disc. Review denied, 322 N.C. 605, 370 S.E.2d 244 (1988). ‘A latent ambiguity "will not be held to be void for uncertainty but parol evidence will be admitted to fit the description to the thing intended."’ Id at212, 352 S.E.2d at 463." This court determined that the trial court should have considered the extrinsic evidence to resolve the latent ambiguity and remanded.

There is an obvious drafting lesson to real property practitioners in this case. However, it is comforting to note that the omission of a description of the dominant estate is not fatal to an easement. When discovered in a title examination such defects should be reported to the Title Company.