North Carolina’s statutory marital interest, dower and curtsey is not always well understood. It is an odd interest. One could argue that it is not unlike a riddle, especially when trying to explain it to a client. It is not an intestate share, but you might trade it for one. It is not an immediate possessory interest in real property, but it might become a one-third life estate in the same real property. It is not an equitable distribution right but it can be waived along with marital or dower rights in a pre- or post-marital agreement. Most people never use it, because they never need it.

It is a benefit of marriage, not of close friends, and disappears upon divorce. Historically, it is a little bit of social engineering that tries to make it hard

for your spouse to disinherit you, which our founders thought important enough to preserve and eventually

codify. The current statutory scheme is located in NCGS § 29-30.

This statute creates an election upon the death of one’s spouse and is one of the three inheritance options for a surviving spouse. As a widower or

widow, if you do not like your testate share under your spouse’s will, this statute gives you an option to take an intestate share, an elective share or, the statutory dower or curtsey. This is the right to take a life estate in one-third of value of all the real estate of which your spouse was seised and possessed of an estate of inheritance (fee simple) at any time during marriage except that real estate to which the surviving spouse:

In This Issue: Conveyance of Dower... 1-3

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Investors Trust Company: Capps v Blondeau

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1. Waived these rights by joining in a deed or conveyance;

2. Released or quit claimed this interest in accordance with NCGS 52-10,

3. Is not required by law to join in the conveyance or release in order to bar it, or

4. Not entitled

(Continued on page 2)

“One could argue that it is not unlike a riddle...”

Conveyance of Dower and Curtsey and Warranties in Title by Drew Foley, Esq. dfoley@invtitle.com Click here for Drew’s bio.

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It is a very narrow right, but one that could be potentially valuable to a widow or widower under the right circumstances. A well-drafted prenuptial, postnuptial, separation, or free trader agreement can waive marital rights and should specifically address them in order to specifically waive them. NCGS § 52-10 is essentially the enabling statute for these contractual waivers of marital rights.

Most conveyances or waivers of marital rights occur in deeds and deeds of trust. It is the usual reason for the spouse joining in on any conveyances of real property when it is owned only in one spouse’s name. A spouse would of course need to sign when the ownership interest held is as tenant by the entirety, as no interest would be conveyed unless both spouses sign; unless the conveyance is to create an entirety ownership or vest entireties property into one spouse, pursuant to

NCGS § 39-13.3.

Most drafting attorneys add the spouse’s name to a general warranty deed or to a warranted conveyance to a trustee on a deed of trust. Sometimes drafting attorneys specifically address what the party is conveying, not only for clarity purposes, but to avoid becoming liable on the warranties. NCGS § 39-7 specifically provides for such a waiver in a conveyance of title, by the spouses execution and proper acknowledgment. But would that action in itself provide protection from liability on the warranties? Or would it prevent a spouse from enforcing a covenant, or from being sued for estoppel?

In Maples v. Hortoni, the wife joined husband in execution of a deed solely for the purpose of conveying her inchoate right of dow-er. The husband had created personal cove-nants in those deeds; wife subsequently inherited all his re-maining real property including a restricted lot. Wife tried but could not enforce the covenant as an heir, because a per-sonal covenant terminates at death. Her only way to argue that she had the right to enforce the covenant, was to claim that she acquired that right when

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she joined in the deed.

The court stated that “a married woman who joins her husband in the execution of a deed merely to release her inchoate right of dower, conveys nothing and is not bound by the covenants in such deed.”ii “She has no interest but the potential right of dower . . . and cannot be presumed to have entered into all the particulars of a contract which she has so remote and indirect interest.”iii If the spouse could not enforce a covenant it should follow that the spouse could not be sued on the warranties.

In Wellons v. Hawkinsiv, a widow was being sued on the warranties in the deed in which she signed, only to waive her marital interest. Her husband had passed shortly after they

conveyed title to this land to another, who recorded before the plaintiff. The purchaser, having lost the race to the courthouse, was seeking to get his money back from the widow. He argued that she received a benefit

from the conveyance and was bound by the warranties. The court stated that she was not a “grantor of the premises,” and she did not incur any obligations by representations or covenants in the deed.v

(Continued on page 3)

“Most conveyances or

waivers of marital rights occur in deeds and deeds of trust.”

Conveyance of Dower... continued from page 1

Thomasville, NC, is commonly referred to as the "Chair Town" or "Chair City", in reference to a 30 foot landmark replica of a Duncan Phyfe armchair that rests in the middle of the city. The original "Big Chair" was constructed in 1922 by the Thomasville Chair Company (now Thomasville Furniture Industries) out of lumber and Swiss steer hide to reflect the city's prominent furniture industry. This chair, however, was scrapped in 1936 after 15 years of exposure to the weather. In 1951, a larger concrete version of the chair was erected with the collaboration of local businesses and civic organizations and still remains today. The Big Chair gained national attention in 1960 when then Presidential Candidate Lyndon B. Johnson greeted supporters on the monument during a campaign whistle stop.

If she could be bound on the warranties, it would have to be by separate specific contractual language in the deed or by direct evidence tending to prove such an agreement. There was no evidence of any such contracts. It would take more then a signature to have liability on the warranties, but could a signing spouse lose protection of the Connor Act by her release of marital interests?

In Schiller v. Scott,vi the wife signed one deed of trust, only to release her marital interest, and two days later the husband executed a deed of trust in the wife’s favor. Her deed of trust was for consideration, husband had “borrowed” money from her, and she took this deed of trust back as collateral. She recorded her deed of trust before the plaintiff and thus beat the plaintiff to the courthouse. The plaintiff argued that she was a party to the first signed deed of trust and, as such, an unregistered deed is valid as between the parties.vii

The court stated that she signed merely to release her marital interest and did not incur liability thereon. She was not a party to the deed of trust and thus not bound by the covenants. She had paid adequate consideration, and because “. . . knowledge of a prior unrecorded conveyance is not a matter creating estoppel,”viii there was no liability under the warranties. She had a valid lien on the property with priority.

There seems to be ample authority in NC that when a spouse joins in a general warranty deed, or a deed of trust to convey a marital interest, that

spouse is merely waiving their marital interest, not conveying title. The spouse is not liable on the warranties, and can not enforce covenants in the deed. The spouse is not bound by the warranties as the conveyance is deemed a release under the law and case law. Therefore, the need for specific language qualifying that the conveyance is only to release marital rights is not necessary, but it does not hurt anything either and would be considered careful drafting.

Marriage these days is undergoing changes in some states and sooner or later a same sex married couple will be buying or selling real property in your office. Is there a marital interest or right to dower in such a non-traditional marriage in North Carolina? What about a common law marriage? No, not yet as to both. Should the purported spouse sign the deed to waive any marital interest if any? Right now there is no interest to waive. If, in an abundance of caution, the spouse joined in the deed, there should be language inserted that qualified the conveyance of that spouse only to waive a marital interest, if any. i239 N.C. 394, 80 S.E.2d 38 (1954). iiId. at 399-400, 41. iiiId. at 400, 43 iv46 N.C.App.290, 264 S.E.2d 788 (1980). vId. at 291, 789. vi82 N.C.App. 90, 345 S.E.2d 444 (1986).

viiId. at 7, 93. viiiId at 12, 447.

Electronic Forms

NC Ethics Handbook Update

The NC Real Property Ethics Handbook housed on Investors Title’s website has been revised to reflect recent ethics opinion updates. Please refer to highlighted topics in the handbook for changes.

Visit nc.invtitle.com | Resource Center | Ethics Handbook or click here.

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Need a form? Visit http://nc.invtitle.com/resource/forms

for an index of available forms. Forms available include:

Affidavit of Satisfaction*

NCLTA Construction-related affidavits (Forms 1-3)*

Corrective Affidavit*

Notice Regarding Future Advances (Lender)*

Notice Regarding Future Advances (Borrower)*

Request to Terminate an Equity Line*

Final Title Opinion After Commitment*

Final Title Opinion Without Commitment*

Notification of Intent to File Satisfaction*

Preliminary Title (Form 100)*

Subordination Agreement

...and many more

*fillable version available

How to Prepare the HUD-1 in ProForm

This free course is now available on Investors Title’s NC On-Demand portal (nc.invtitle.com/ondemand). This course reviews procedures for preparing a HUD-1 settlement statement in ProForm (see course outline to the right).

Click here to access the portal.

A comprehensive on-line help system is available for each program in SoftPro. The information in this system can be accessed a couple of ways and provides instruction on more than four hundred different topics. For new users the online help feature can provide valuable information to assist with navigating the various screens involved in the HUD-1 preparation. For advanced users the online help feature can provide insight into the various fields of the HUD-1 and instruction on how each one is to be used.

To access online help, choose Help/Help Topics from the menu bar

Click on the Contents tab to search the table of contents for help topics. In the Contents tab topics are grouped together in books.

Click on the Index tab to search help topics alphabetically. In the Index tab you can type in a keyword to find all topics that match the word(s) you entered.

Click on the Search tab to use the search engine to find a topic by typing in any word.

Once you have found the topic you want, you can print a copy by clicking on the Print button on the Help toolbar. The Back button will take you back to the last topic viewed.

Another way to access the online help is to press F1 in any field in ProForm. This will bring up the help topic related to that specific field and will provide detailed instruction on the proper use of the field you are in.

Softpro: Online Help By Gina Webster

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Judy Medford Email: jmedford@invtitle.com

Judy W. Medford is the Marketing Manager for the western region of North Carolina for

Investors Title Insurance Company, including the Asheville, Boone, Hendersonville and Waynesville markets. She joined the Asheville branch of Investors Title Insurance Company in June 1993. Judy is a native of Buncombe County, North Carolina. She attended the University of North Carolina at Greensboro where she received a Bachelor’s degree in Marketing. Judy resides in Canton with her husband and two children.

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For more information, contact Ben Foreman at 877.327.9110 or bforeman@invtrust.com

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Over 200 years of combined experience from trusted investment and trust professionals who will work with you and your clients.

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disputes to an arbitration panel. But after moving the client agreements into a digital format, the firm destroyed the original contracts, except for each signature page. The firm had similar new accounts forms that it submitted to the court, but there were inconsistencies between those documents and the page numbers on the existing signature pages. The trial court acknowledged that relying on electronically stored copies “is not necessarily inappropriate,” but that, in this case, the firm’s “record keeping…was sloppy and fragmented at best.” Accordingly, the trial court found that no arbitration agreement between the parties existed, thereby allowing the case to move forward—without arbitration. The appellate court agreed, and affirmed.

--Capps v. Blondeau, No. COA 10-1077, N.C. Ct. App. 11/15/11

The above article is for informational purposes only and does not constitute legal advice.

Capps V. Blondeau

When a contract that the parties allegedly signed cannot be produced, courts are free to determine that no agreement existed. The North Carolina Court of Appeals issued that holding in a case that developed when Martha Capps, through her son as guardian, filed suit against her investment adviser and the adviser’s employer, Morgan Keegan. In a 2009 criminal proceeding, the adviser pleaded guilty to defrauding Capps of $1.78 million. Capps, who suffered from dementia, had filed suit two years earlier—in October 2007—alleging, inter alia, breach of various fiduciary duties, fraud and deceptive trade practices. Morgan Keegan sought to dismiss the complaint, arguing that Capps had signed the firm’s new accounts form, which required the parties to submit any

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