TOMIKA INVESTMENTS, INC., v. MACEDONIA TRUE VINE PENTECOSTAL HOLINESS CHURCH OF GOD, INC., NO. COA98-1387, NORTH CAROLINA COURT OF APPEALS, (2000) is a case that illustrates the misnaming of a corporation in a deed is not usually fatal to the effectiveness of the conveyance. The decision arises out of a case on appeal by defendant from judgment entered in Forsyth County Superior Court. Originally heard in the Court of Appeals 24 August 1999. This opinion supersedes a previous opinion affirming the judgment of the trial court filed in 1999.

The events giving rise to the controversy began in 1990 when Macedonia True Vine Pentecostal Holiness Church of God, Inc. (Macedonia), made a loan secured by a deed of trust on its real estate. Macedonia frequently had difficulty making the monthly payments on time. In the summer of 1996, the lender gave notice of foreclosure because of the church's delinquency. The foreclosure sale was scheduled and Macedonia was unable to make other arrangements for financing. Immediately before the scheduled foreclosure sale, Macedonia secured a deal with Thomas Latimer, the sole shareholder of Tomika Investment Company (Tomika). Macedonia would convey the property to Tomika. Tomika would then pay the amount past due to the lender and pay additional sums to the other lien creditors, and allow Macedonia to lease the same property with an option to repurchase it. This agreement was reached the day before the foreclosure sale was scheduled and documents were prepared that evening. In the haste of preparing the documents, an error was made in the name of the grantee. The correct corporate name was "Tomika Investment Company," but "Tomika Investments Incorporated" was used.

Macedonia defaulted and Tomika filed a summary ejectment action. Macedonia appealed the magistrate’s adverse ruling to the district court, filing several counterclaims and defenses, including a claim that the deed was void because of the misstatement of the name of one of the parties. Macedonia sought substantial damages from plaintiff, and the matter was removed to the superior court division as a matter of right. Plaintiff moved to amend its name on the complaint to the proper name of "Tomika Investment Company," and the trial court allowed "Tomika Investment Company" to be added as an additional plaintiff. Macedonia moved to join Thomas Latimer as a necessary and proper party to the litigation, and the motion was allowed. Plaintiff moved for summary judgment, and the trial court granted Tomika’s motion as to Macedonia's claim that the deed was void. The case was submitted to a jury that found for Tomika, and further found that Macedonia was indebted to Tomika in the sum of $102,655.96. The trial court awarded attorney fees, costs, and interest to plaintiff. Macedonia appealed, assigning errors.

Macedonia raised three questions on appeal. The issue of whether the trial court erred in granting the motion for summary judgment on Macedonia's claim that the deed to its property was void is the issue of significance to real property practitioners. Tomika acknowledged that its proper corporate name was "Tomika Investment Company," rather than "Tomika Investments, Inc.," as shown on the deed. Macedonia contended in its response that the deed to Tomika was void as a matter of law because of the misnomer. The Court of Appeals noted that "Macedonia cites no authority for the proposition that the deed to Tomika was void because the corporation was not correctly identified as ‘Company’ rather than ‘Inc.’. A misnomer in the name of a corporate grantee does not render the conveyance void, however. Gold Mining Co. v. Lumber Co., 170 N.C. 273, 87 S.E. 40 (1915). In Gold Mining Company, a deed was executed to the trustees of the ‘Troy (N.Y.) and North Carolina Gold Mining Company.’ At the time of the conveyance, however, there was no corporation by that exact name, the correct name of the corporation being ‘Troy and North Carolina Gold Mining Company.’ In discussing the disparity in the corporate name, our Supreme Court stated that ‘[a]s to the plaintiff being described by the wrong name in the deed, this is at most but a misnomer or latent ambiguity, which can be explained by parol evidence so as to fit the description to the person or corporation intended. . . . A corporate name is essential, but the inadvertent or mistaken use of the name is ordinarily not material if the parties really intended the corporation by its proper name. If the name is expressed in the written instrument, so that the real name can be ascertained from it, this is sufficient; but if necessary, other evidence may be produced to establish what corporation was intended.’ Id. at 277- 78, 87 S.E. at 42. See also Byrd v. Patterson, 229 N.C. 156, 48 S.E.2d 45 (1948); Institute v. Norwood, 45 N.C. (Busb. Eq.) 65 (1852); Patrick K. Hetrick & James B. McLaughlin, Jr., Webster's Real Estate Law in North Carolina § 10-32 (4th ed. 1994)."

The Court determined that the ambiguity in the deed was latent, that no evidence was presented that Macedonia was prejudiced by the misstatement of the corporate name and that it knew it was dealing with a corporation named "Tomika Investment" or "Tomika Investments," of which Latimer was President. The Court noted that, Tomika executed a lease with option to buy in favor of Macedonia, and impressed its corporate seal bearing its correct corporate name on the lease at the same time the deed was executed. The Court of Appeals held that the trial court correctly granted summary judgment on this issue.

We frequently are requested to assist with title issues involving corporate misnomers. In most of these situations, the misnomer is clearly not misleading as in Tomika. The title examiners reporting the misnomer have typically verified that the misnamed entity does not exist on the records of the North Carolina Secretary of State. In such cases, most insurers will typically provide coverage where corrective measures are no longer practicable and there does not appear to be any controversy as to ownership.