Does a “General Law” apply to you?

“Chapter 160A.
Cities and Towns.
Article 1.
Definitions and Statutory Construction.
§ 160A-1. Application and meaning of terms.
Unless otherwise specifically provided, or unless otherwise clearly required by the context, the words and phrases defined in this section shall have the meaning indicated when used in this Chapter.

(2) “City” means a municipal corporation organized under the laws of this State for the better government of the people within its jurisdiction…

(4) “General law” means an act of the General Assembly applying to all units of local government, to all cities, or to all cities within a class defined by population or other criteria, including a law that meets the foregoing standards but contains a clause or section exempting from its effect one or more cities or all cities in one or more counties.”

General laws apply to cities, which are municipal corporation. A corporation is not a geographic area. Therefore, it is misleading to say that a law applies “throughout the city” or to imply that a city is piece of land.

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More on Revoking a Deed of Trust

Further proof that your deed of trust is a conveyance of a future interest in your land to a person not in esse (relevant to the previous post):

Ҥ 161-22. Index of registered instruments.

(a) Except as otherwise provided by statute, the register of deeds shall provide and keep in the register’s office full and complete alphabetical indexes of the names of the parties to all liens, grants, deeds, mortgages, bonds, and other instruments required or authorized to be registered, and the indexes shall state in full the names of all parties, whether grantors, grantees, vendors, vendees, obligors, or obligees. The full names of parties shall be entered in the indexes in accordance with the minimum indexing standards adopted pursuant to

(d) Deeds of trust may be indexed in the names of the grantor and beneficiary only.”

So, because the conveyance is to a trustee that is undetermined when the deed of trust is executed, only you (grantor) and lender (beneficiary) are to be named in the index when recorded.

If registering the deed of trust vested the title in the trustee, he/she/it would be named.

Why a Deed of Trust can be Revoked.

You have the right to revoke your deed of trust. It is the writing that evidences the agreement to allow the lender a security interest in your property.

This is insurance for the lender, in a sense; you have already signed a promissory note stating that you will pay X amount to the lender. All of the other things you pledge in the deed of trust are icing on the cake. Revoking the promise to perform all of those things mentioned in the deed of trust results in NO actual loss; it simply makes it less likely that the lender will have to shell out any cash or that the value of the property will decrease. You agreed to pay them X amount, and you are paying X amount in installments plus interest. That is the fair value– not X amount plus interest plus all the value included in paying the insurance, maintaining the house and property, etc. That added value should belong to you as the owner.

Even after you sign the deed of trust, you STILL hold legal title to the property. The deed of trust really only vests the power of sale in the “trustee”, and only upon your default. Thus, it is a “contingent interest”. It is not certain to ever vest in the beneficiary, but your freedom of ownership is limited by that deed of trust. As long as it is in effect, you have agreed that the trustee will have power of sale if you fall behind on your payments and that the power of sale, once vested in the trustee, is irrevocable.

However… it is not yet vested. That power is merely a future possibility. Until that time, the deed of trust has not truly taken effect; the power of sale still remains with you, so that contingent interest, to be given to whomever is the trustee at the time, has not yet become real.

With all of that in mind, read the following:

“Chapter 39.

Conveyances.

Article 1.

Construction and Sufficiency.

§ 39-6. Revocation of deeds of future interests made to persons not in esse.

The grantor in any voluntary conveyance in which some future interest in real estate is conveyed or limited to a person not in esse may, at any time before he comes into being, revoke by deed such interest so conveyed or limited. This deed of revocation shall be registered as other deeds; and the grantor of like interest for a valuable consideration may, with the joinder of the person from whom the consideration moved, revoke said interest in like manner. The grantor, maker or trustor who has heretofore created or may hereafter create a voluntary trust estate in real or personal property for the use and benefit of himself or of any other person or persons in esse with a future contingent interest to some person or persons not in esse or not determined until the happening of a future event may at any time, prior to the happening of the contingency vesting the future estates, revoke the grant of the interest to such person or persons not in esse or not determined by a proper instrument to that effect; and the grantor of like interest for a valuable consideration may, with the joinder of the person from whom the consideration moved, revoke said interest in like manner: Provided, that in the event the instrument creating such estate has been recorded, then the deed of revocation of such estate shall be likewise recorded before it becomes effective: Provided, further, that this section shall not apply to any instrument hereafter executed creating such a future contingent interest when said instrument shall expressly state in effect that the grantor, maker, or trustor may not revoke such interest: Provided, further, that this section shall not apply to any instrument heretofore executed whether or not such instrument contains express provisions that it is irrevocable unless the grantor, maker, or trustor shall within six months after the effective date of this proviso either revoke such future interest, or file with the trustee an instrument stating or declaring that it is his intention to retain the power to revoke under this section: Provided, further, that in the event the instrument creating such estate has been recorded, then the revocation or declaration shall likewise be recorded before it becomes effective.”
Ҥ 39-6.1. Validation of deeds of revocation of conveyances of future interests to persons not in esse.

All deeds or instruments heretofore executed, revoking any conveyance of future interest made to persons not in esse, are hereby validated insofar as any such deed of revocation may be in conflict with the provisions of G.S. 39-6.

All such deeds of revocation heretofore executed are hereby validated and no such deed of revocation shall be held to be invalid by reason of not having been executed within the six-month period prescribed in the third proviso of G.S. 39-6. (1947, c. 62.)”

That term “not in esse” really threw me at first. It sounds very much like it refers to someone not yet born. Perhaps it simply means that a legal fiction does not really exist. However, they clarify in due course when they say “…to some person or persons not in esse or not determined until the happening of a future event may at any time, prior to the happening of the contingency vesting the future estates, revoke the grant of the interest to such person or persons not in esse or not determined by a proper instrument to that effect;…”. The trustee is undoubtedly that person… and upon the issuance of the original deed of trust, you had no idea who might be the trustee in place if you defaulted years later. “Prior to the happening of the contingency vesting the future estates” means before default. As long as the deed of trust is not in full effect, at can be revoked.

Now, they hit us with a slew of mumbo-jumbo. This section deals with whether the deed is irrevocable.

“All such deeds of revocation heretofore executed are hereby validated and no such deed of revocation shall be held to be invalid by reason of not having been executed within the six-month period prescribed in the third proviso of G.S. 39-6.”

Your deed of revocation is valid regardless of when you issued it.

Essentially, the last part of § 39-6 says

“This right of revocation does not apply if the deed states that it is irrevocable. Ummm… unless the trustor says he wants to retain the right of revocation; either way, it has to be done within 6 months of this law being passed. Okay, scratch that…

Ҥ 39-6.1. Validation of deeds of revocation of conveyances of future interests to persons not in esse.

All deeds or instruments heretofore executed, revoking any conveyance of future interest made to persons not in esse, are hereby validated insofar as any such deed of revocation may be in conflict with the provisions of G.S. 39-6.

All such deeds of revocation heretofore executed are hereby validated and no such deed of revocation shall be held to be invalid by reason of not having been executed within the six-month period prescribed in the third proviso of G.S. 39-6. (1947, c. 62.)”

So, there is no time limit on revoking the deed of trust. If you have a right, it doesn’t disappear after 6 months. So that’s great– we can sign our rights away, but it is just as easy to get them back. But why do they recognize the deed of trust with power of sale as harming our rights?

A deed of trust that could not be avoided would be a perpetuity.

“PERPETUITY
A future limitation, whether executory or by way of remainder, and of either real or personal property, which is not to vest until after the expiration of or will not necessarily vest within the period fixed and prescribed by law for the creation of future estates and interests, and which is not destructible by the persons for the time being entitled to the property subject to the future limitation, except with the concur- rence of the individual interested under that limitation. Lewis, Perp. 104; 52 Law Lib. 139. Any limitation tending to take the subject of it out of commerce for a longer period than a life or lives in being, and twenty-one years beyond, and, in case of a posthumous child, a few months more, allowing for the term of gestation. Rand. Perp. 48. Such a limitation of property as renders it unalienable beyond the period allowed by law.”

…And?

“NORTH CAROLINA STATE CONSTITUTION
ARTICLE I

DECLARATION OF RIGHTS

Sec. 34. Perpetuities and monopolies.

Perpetuities and monopolies are contrary to the genius of a free state and shall not be allowed.”

The what, the how, and the why.