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Lea v. Dudley
Citations: 202 S.E.2d 799; 20 N.C. App. 702; 1974 N.C. App. LEXIS 2528Docket: 731SC738
Court: Court of Appeals of North Carolina; February 20, 1974; North Carolina; State Appellate Court
The Court of Appeals of North Carolina addressed the case of Lois G. Lea and Frank D. Cummings v. Garland (Garfield) Walter Dudley et al. regarding the authority of a Virginia court to determine rights to real property in North Carolina. The court reaffirmed that North Carolina courts cannot adjudicate the title of real property located in another state, rendering any Virginia decree attempting to do so void. However, a court in the state of incorporation can issue orders regarding the execution of deeds to property in another state, as long as all necessary parties are present. This order is treated as in personam, since the Virginia court lacked in rem jurisdiction over North Carolina property. The court determined that the Virginia decree is res judicata for the parties involved, negating the need to relitigate asset rights between the corporation and its shareholders in North Carolina. The plaintiffs were recognized as successors to the corporation with rights to its assets, and the court chose to honor the Virginia decree out of comity, accepting that the plaintiffs stand in the corporation's position. Despite the trial court's decision to grant a directed verdict for the defendants, the Appeals Court found this erroneous, as the plaintiffs presented evidence of the corporation's ownership of the land as of June 30, 1914, and documentation regarding conveyances related to the property. The court indicated that the plaintiffs had established a prima facie case of title under existing legal precedents, referencing the common source doctrine and the Marketable Title Act. The case was reversed, with both Judge Brock and Judge Parker concurring.