The opinion of the court was delivered by: Orr, Justice.
On discretionary review pursuant to N.C.G.S. § 7A-31, prior to a determination by the Court of Appeals, of an order entered on 7 February 1997 by Patti, J., in Superior Court, Gaston County, granting plaintiff a right-of-way over defendant Humphries' property. Heard in the Supreme Court 19 November 1997.
This case arises out of a condemnation action instituted by plaintiff, North Carolina Department of Transportation (DOT), against defendants Charles and Loretta Humphries on 8 May 1995 as part of DOT's project to widen North Carolina Highway 150. DOT is claiming an existing right-of-way, seventy-five feet from the centerline of the highway, pursuant to an unrecorded right-of-way agreement.
Although defendants own three tracts of land along Highway 150, the only portion of defendants' property at issue in the present case is tract 2. Defendants purchased tract 2 on 22 July 1969 and were bona fide purchasers for value. According to the description of the property contained in the chain of title, the tract 2 property line in question is located approximately thirty feet from the centerline of N.C. Highway 150 and runs with the western edge of the right-of-way for U.S. Highway 150. Defendants contend that under N.C.G.S. § 47-27, DOT was required to record the right-of-way agreement in order to prevail over a bona fide purchaser for value. We agree.
In 1951-1952, the State Highway and Public Works Commission, now the DOT, acquired a right-of-way in Gaston County for the construction of N.C. Highway 150. The right-of-way agreement, which DOT relies on, was obtained by DOT on 20 March 1952 from one of defendants' predecessors in title, James and Mary Black. The right-of-way agreement between DOT and the Blacks was never recorded in the Gaston County Register of Deeds Office, but was kept on file in the office of the right-of-way branch of the Department of Transportation in Raleigh, North Carolina. None of the deeds in defendants' chain of title to tract 2 refer to the right-of-way agreement between the Blacks and DOT, and nothing in the record references the right-of-way agreement.
In the present case, the trial court made a finding of fact that DOT "did not maintain any of the area on defendants' property beyond 30 feet from the centerline of N.C. 150." In fact, the trial court noted that defendants have placed improvements within the claimed right-of-way without any objection by DOT. The nearest sign which references the claimed right-of-way is located more than one-eighth of a mile, but less than one-fourth of a mile, from the tract 2 property. This sign states, "NOTICE - RIGHT-OF-WAY OF THIS HIGHWAY INDICATED BY MARKERS. ALL ENCROACHMENTS PROHIBITED. S.H. & P.W.C." However, the sign does not include the width of any claimed right-of-way. Finally, the seventy- five-foot right-of-way claimed by DOT is within approximately one foot of defendants' home.
In the present case, DOT instituted a condemnation action against defendants on 8 May 1995 claiming an existing seventy-five-foot-of- centerline right-of-way over their property. Defendants then filed an answer to the complaint denying the validity of the right-of-way claimed by DOT. On 7 February 1997, the trial court entered an order granting DOT "a right of way across defendants' subject tract 75 feet in width from the centerline of N.C. 150." In its order, the trial court concluded that "by virtue of N.C.G.S. § 47-27, DOT was not required to record the March 20, 1952 Right-of-Way Agreement."
The issue presented to us by this appeal is whether the trial court erred in concluding that DOT had a valid seventy-five-foot-of-centerline right-of-way, as set forth in the right-of-way agreement executed by defendants' predecessors in interest but never recorded. DOT contends that the Court of Appeals' holding in Department of Transp. v. Auten, 106 N.C. App. 489, 417 S.E.2d 299 (1992), and this Court's holding in Kaperonis v. N.C. State Highway Comm'n, 260 N.C. 587, 133 S.E.2d 464 (1963), control the outcome in the present case.
In Auten, the defendant challenged the trial court's ruling that prior to 1 July 1959, the DOT was not required to record right-of-way agreements. The defendant claimed that the Highway Commission did not have title to the land because the prior right-of-way had not been recorded. Auten, 106 N.C. App. at 490, 417 S.E.2d at 300. In a brief opinion, the Court of Appeals concluded, "We read Kaperonis to hold that G.S. 47-27 does not require the DOT to record deeds of easement or other agreements conveying interests in land executed prior to 1 July 1959." Id. at 491, 417 S.E.2d at 301.
However, this statement by the Court of Appeals misconstrues our holding in Kaperonis. In Kaperonis, we held that the State Highway Commission had a one-hundred-foot right-of-way arising out of an easement held by the State since 1929. Kaperonis, 260 N.C. at 600, 133 S.E.2d at 474. The right-of-way instrument itself was never recorded; however, the landowners had record notice of the right-of-way by virtue of a survey of the property which had been incorporated into a deed in the chain of title. This Court held
that when the plaintiffs' predecessors in title conveyed the premises involved herein, described by metes and bounds, and for a more particular description incorporated in said deeds by reference the blueprint of the survey of T.J. Orr, as set out herein, and added that "(s)o much of said property as lies within the bounds of the right of way of Wilkenson Boulevard is subject thereto"; that the right of way of 50 feet as shown on said plat was notice to the grantees in said deeds that the State Highway Commission claimed said 50-foot right of way across the land conveyed.
Id. at 598, 133 S.E.2d at 472. Thus, although we held that the defendant had a valid right-of-way, we did not rely on N.C.G.S. § 47-27. Instead, we focused on the fact that the plaintiffs had notice of the claimed right-of-way.
Further, in Browning v. N.C. State Highway Comm'n, 263 N.C. 130, 139 S.E.2d 227 (1964), this Court limited the holding in Kaperonis to its particular circumstances. In discussing Kaperonis, this Court stated:
The facts in this case are substantially different from those in the case of Kaperonis v. Highway Commission, 260 N.C. 587, 133 S.E.2d 464. In that case, the deed conveying the property from the predecessors in title to Kaperonis referred to a certain plat which showed an existing 50-foot right of way across the property conveyed, and the plat was made a part of the description. Moreover, the plat was introduced in evidence and identified as the plat referred to and incorporated in the deed. Furthermore, the predecessors in title to Kaperonis had signed a release of claim for damages in consideration of $850.00 paid to them by the Highway Commission, which release was signed upon completion of the project involved in 1929. In our opinion, the evidence in the Kaperonis case was sufficient to have established a right of way by prescription, had the Commission not theretofore purchased the right of way from his predecessors in title.
Browning, 263 N.C. at 134-35, 139 S.E.2d at 230. Thus, although the Kaperonis Court referenced the 1959 amendment to N.C.G.S. § 47-27, the Browning Court clarified that it ...