              IN THE SUPREME COURT OF NORTH CAROLINA
                                  No. 197PA13

                             Filed 19 December 2014

MICHAEL A. FALK, as Trustee of the Trust dated 10-26-1989 having the Tax ID
Number XX-XXXXXXX (a/k/a “The Charlotte Falk Irrevocable Trust”)
             v.
FANNIE MAE (a/k/a FEDERAL NATIONAL MORTGAGE ASSOCIATION);
GLASSRATNER MANAGEMENT & REALTY ADVISORS, LLC; IDELL
FLOURNEY; SONYA PETIT; LIBA MEIERE; SHAWNEQUA DODSON;
ADOLFO ZARATE; TISHAUN WHITEHEAD; and JOHN DOES #1 - #160,
BEING THE UNIDENTIFIED LESSEES OF THE APARTMENT UNITS AT
THE PROPERTY KNOWN AS “RIDGEWOOD APARTMENTS”
___________________________________________________________________________

FANNIE MAE (a/k/a FEDERAL NATIONAL MORTGAGE ASSOCIATION),
             Third-Party Plaintiff
             v.
MICHAEL A. FALK, as Trustee of the Trust dated 10-26-1989 having the Tax ID
Number XX-XXXXXXX (a/k/a “The Charlotte Falk Irrevocable Trust”) and
QUICKSILVER, LLC,
               Third-Party Defendants



      On discretionary review pursuant to N.C.G.S. § 7A-31 and on appeal of right

of a constitutional question pursuant to N.C.G.S. § 7A-30(1) to review a unanimous

decision of the Court of Appeals, ___ N.C. App. ___, 738 S.E.2d 404 (2013), reversing

and remanding an order entered on 9 March 2012 by Judge Lindsay R. Davis, Jr. in

Superior Court, Guilford County. Heard in the Supreme Court on 6 October 2014.


      Rossabi Black Slaughter, P.A., by Gavin J. Reardon and Amiel J. Rossabi, for
      plaintiff/third-party defendant-appellee Michael A. Falk and third-party
      defendant-appellee Quicksilver, LLC.
                                FALK V. FANNIE MAE

                                    Opinion of the Court



       Horack, Talley, Pharr & Lowndes, P.A., by Zipporah B. Edwards and Robert
       B. McNeill; and Carruthers & Roth, P.A., by Rachel S. Decker and J. Patrick
       Haywood, for defendant/third-party plaintiff-appellant Fannie Mae and
       defendant-appellant GlassRatner Management and Realty Advisors, LLC.


       HUNTER, Justice.


       The case before us involves a dispute between Michael Falk, Trustee of the

Charlotte Falk Irrevocable Trust (Trust), and the Federal National Mortgage

Association (Fannie Mae), concerning which party’s mortgage lien on the Ridgewood

Apartments, located in Guilford County, has priority status. The solution to the

dispute involves application of our State’s “life of lien” statute, N.C.G.S. § 45-37(b).1


       Subsection 45-37(b) establishes a conclusive presumption that the conditions

of prior liens are satisfied after fifteen years from the later of either of two dates:

the date on which the instrument requires performance, or the date of maturity of

the last installment of debt (maturity date). Because in Smith v. Davis, 228 N.C.

172, 45 S.E.2d 51 (1947), this Court established that the 1923 version of this statute

did not apply the presumption to lienholders who acquired and recorded their liens

before the expiration of senior mortgage indebtedness, the Court of Appeals applied

that interpretation to the current version of the statute. We hold this application

was erroneous because the unique legislative language in the 1923 Act was not

       1N.C.G.S. § 45-37(b) (2013) applies to security instruments recorded and subject to
the conclusive presumption provided by that statute before 1 October 2011. Security
instruments recorded after that date are subject to the “life of lien” requirements of
N.C.G.S. § 45-36.24 (2013).

                                            -2-
                              FALK V. FANNIE MAE

                                 Opinion of the Court



present in subsequent revisions of the life of lien statute. We conclude therefore

that the General Assembly did not intend to continue this limitation and that the

limitation did apply to the transactions in this case. N.C.G.S. § 45-37(b) authorizes

a senior lienholder to extend the “life of the lien” by filing an affidavit with the

register of deeds containing the information required by the statute. We hold that,

absent the filing of such an affidavit, N.C.G.S. § 45-37(b) allows a court to

conclusively presume that prior liens are satisfied irrespective of whether a

subsequent lienholder obtained its interest before or after expiration of the fifteen

year period from the maturity date. Accordingly, we reverse the decision of the

Court of Appeals.


       Ridgewood Apartments (the property) consists of a number of tracts

containing apartments for rent. In 1992 Michael Falk and his son Harry Falk, as

shareholder-directors of Quicksilver Corporation, purchased the property for

$5,200,000.   The Falks subsequently converted Quicksilver Corporation into

Quicksilver, LLC (Quicksilver) and became the sole member-managers.           On 27

October 1994, Quicksilver acquired the property by deed and on the following day,

28 October, secured the payment with a promissory note (Trust Note) in the amount

of $600,000 and a deed of trust (Trust Deed) “to evidence a debt incurred for the

purchase of [the property]” in 1992. The Trust Note established a 14% per annum

interest rate in the event of default. The Trust Deed was recorded in Guilford

County on 30 December 1994.

                                         -3-
                                  FALK V. FANNIE MAE

                                     Opinion of the Court



       In December 1994, Michael Falk issued an oral demand on behalf of the

Trust to Quicksilver for partial payments on the loan.2 The Trust contends that

Quicksilver’s failure to make payments placed Quicksilver in default, thus

triggering the 14% default interest rate as specified in the Trust Note. Despite

several partial payments to the Trust in later years, the Trust contends Quicksilver

never cured the default, and the Trust Note has accrued interest at the default rate

since 1995.


       In 1999 Wachovia Bank, N.A. (Wachovia) loaned funds to Quicksilver to

make improvements to the property. To fulfill a condition Wachovia imposed on its

loan to Quicksilver, Michael Falk and a Co-Trustee signed an agreement

subordinating the Trust’s interest in the property to Wachovia. This subordination

agreement was recorded on 15 March 2000. Wachovia secured its loan through a

Deed of Trust, Assignment of Rents, and Security Agreement and Financing

Statement (Wachovia Deed) encumbering the property. The Wachovia Deed was

recorded in Guilford County on 7 July 1999.


       To obtain a better interest rate, Quicksilver refinanced the Wachovia loan

with funds from Lend Lease Mortgage Capital, L.P. (Lend Lease). To secure this

loan, on 14 May 2001, Quicksilver executed and recorded a Multifamily Note

secured by a Multifamily Deed of Trust, Assignment of Rents, and Security

       2 Unless otherwise noted, all references to Michael Falk or to the Trust’s activities
will be to Michael Falk’s activities as Trustee of the Trust.

                                              -4-
                              FALK V. FANNIE MAE

                                 Opinion of the Court



Agreement encumbering the property. Although the original deed of trust to the

Trust was still of record, no subordination agreement was signed for this

transaction.   The Wachovia Note and Deed of Trust were satisfied of record.

Subsequently, Lend Lease sold and assigned its Note and Deed of Trust to Fannie

Mae (hereinafter the FNMA Note and FNMA Deed).


       Quicksilver subsequently defaulted on the FNMA Note and Fannie Mae

foreclosed on the property in 2011.    Fannie Mae was the highest bidder at the

foreclosure sale and received a Trustee’s Deed for the property dated 2 August 2011.

Following Fannie Mae’s foreclosure, Mr. Falk’s counsel sent a letter to Fannie Mae

stating that the Trust held a superior lien on the property and demanding

immediate payment of $3,525,977.05 to cover the principal and interest owing

under the Trust Note.


      After Fannie Mae refused to pay the amount demanded, the Trust filed a

verified complaint in Superior Court, Guilford County, against Fannie Mae and

others seeking both a declaratory judgment that the Trust Deed was a “valid and

enforceable lien” and an injunction to prevent Fannie Mae from collecting rents

from residents of the property. In a separate action, the Trust sought to foreclose

upon the property under its Trust Deed.        After a foreclosure hearing before an

assistant clerk of superior court, the assistant clerk filed findings of fact and an

order permitting the Trust to proceed with foreclosure on the property.


                                         -5-
                              FALK V. FANNIE MAE

                                 Opinion of the Court



      Fannie Mae appealed the foreclosure order and findings of fact to the

superior court. Fannie Mae also filed an answer to the Trust’s verified complaint, a

counterclaim and third-party complaint, and motions seeking a temporary

restraining order and preliminary injunction to stop the foreclosure action. The

superior court granted Fannie Mae’s motion for a temporary restraining order and

scheduled a hearing on all other matters for January 2012. Before the hearing

date, Fannie Mae and Mr. Falk filed cross motions for summary judgment.


      The matter was heard during the 17 January 2012 civil session of Superior

Court, Guilford County. At the hearing, the Trust argued that the Trust Deed was

valid and enforceable and entitled it to foreclose upon the property because of

Quicksilver’s default under the Trust Note. Fannie Mae argued, inter alia, that the

Trust’s lien had expired by operation of law and, in the alternative, that the FNMA

Deed was superior to the Trust Deed “pursuant to subrogation.” The trial court

granted Fannie Mae’s motion for summary judgment, ruling that the version of

N.C.G.S. § 45-37(b) in effect when the Trust Note matured on 28 October 1994

operated to terminate the Trust’s lien on the property no later than 28 October

2009. See N.C.G.S. § 45-37(b) (1991). This termination of the Trust’s lien enabled

Fannie Mae to foreclose upon the property in 2011 without having the transaction

encumbered by a senior lien. The Trust appealed.




                                         -6-
                                FALK V. FANNIE MAE

                                    Opinion of the Court



      At the Court of Appeals the Trust argued, inter alia, that the trial court erred

by granting Fannie Mae’s motion for summary judgment because N.C.G.S. § 45-

37(b)’s conclusive presumption that prior liens expire after fifteen years is only

available to a subsequent creditor who acquires an interest in the property after

that fifteen year period has expired. Fannie Mae’s brief before the Court of Appeals

conceded this point. The Court of Appeals analyzed the applicability of N.C.G.S. §

45-37(b) (2011) and concluded that Fannie Mae could not avail itself of the statute’s

conclusive presumption.3 The court cited this Court’s opinion in Smith v. Davis, 228

N.C. 172, 45 S.E.2d 51, for the proposition that subsection 45-37(b)’s conclusive

presumption is only available to creditors who rely on it when contracting for their

interest in the property. Falk v. Fannie Mae, ___ N.C. App. ___, ___, 738 S.E.2d

404, 408 (2013) (citing Smith, 228 N.C. at 180, 45 S.E.2d at 57). The court then

concluded that the trial court erred by giving Fannie Mae the benefit of subsection

45-37(b)’s conclusive presumption when the mortgage giant acquired its interest in

the property on 14 May 2001, only six and a half years after the Trust Deed was

recorded on 30 December 1994. Id at ___, 738 S.E.2d at 408.


      The Court of Appeals then considered two additional grounds on which it

could possibly affirm the trial court’s order: (1) whether our State’s “new” life of lien

statute, N.C.G.S. § 45-36.24(b), operates to terminate the Trust’s lien to the benefit


      3 The applicable version of N.C.G.S. 45-37(b) was effective 1 October 2011. N.C.G.S.
§ 45-37(b) has not been amended since 2011.

                                            -7-
                               FALK V. FANNIE MAE

                                   Opinion of the Court



of Fannie Mae, and (2) whether equitable subrogation entitles Fannie Mae to take

the status of senior lienholder.


      On the first issue, the court determined that if subsection 45-36.24(b)—which

has an effective date of 1 October 2011—were retroactively applied to the Trust

Note and Deed, the Trust’s lien would terminate on 28 October 2009. The court

then concluded that such a retrospective application would be unconstitutional.

Specifically, the court determined that retroactive application of subsection 45-

36.24(b) to the Trust Deed would impair the Trust’s vested rights in the property in

violation of one or more of these provisions: Article I, Section 19 of the North

Carolina Constitution, Article I, Section 10 of the United States Constitution, and

Amendment XIV, Section 1 to the United States Constitution.          Id. at ___, 738

S.E.2d at 410.


      The Court of Appeals also rejected Fannie Mae’s argument that the doctrine

of equitable subrogation entitled it to senior lienholder status. The court concluded

that under this Court’s precedent in Peek v. Wachovia Bank & Trust Co., 242 N.C.

1, 86 S.E.2d 745 (1955), a creditor could only benefit from equitable subrogation if it

was “excusably ignorant” of an intervening lien. Falk, ___ N.C. App. at ___, 738

S.E.2d at 411 (citing Peek, 242 N.C. at 15, 86 S.E.2d at 755). In this case Fannie

Mae had record notice of the Trust’s lien on the property and therefore could not

claim to be excusably ignorant for purposes of equitable subrogation. Id at ___, 738


                                           -8-
                                 FALK V. FANNIE MAE

                                     Opinion of the Court



S.E. 2d at 411. For this and the foregoing reasons, the Court of Appeals reversed

the trial court order and remanded for further proceedings.


       Fannie Mae4 sought discretionary review, which we allowed; we also retained

Fannie Mae’s notice of appeal based upon a constitutional question. In our order

allowing review, we directed the parties to address the applicability of N.C.G.S. §

45-37(b) (1991) and N.C.G.S. § 45-37(b) (2011) because the trial court’s order

granting summary judgment to Fannie Mae applied section 45-37(b) (1991) to

support its ruling.


       Summary judgment is appropriate when “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that any party is entitled

to a judgment as a matter of law.” N.C.G.S. § 1A-1, Rule 56(c) (2013). We review de

novo an order granting summary judgment. Howerton v. Arai Helmet, Ltd., 358

N.C. 440, 470, 597 S.E.2d 674, 693 (2004) (citation omitted).


       Since 1923 our State has limited the life of security liens in order to reduce

the number of unsatisfied deeds of trust and other encumbrances hampering the

marketability of property.      In their current forms, our “life of lien” statutes—


       4 GlassRatner Management & Realty Advisors, LLC—Fannie Mae’s agent for the
collection of rents on the property—and various lessees of the apartment units in
Ridgewood Apartments are also parties to this action. For simplicity, we will refer only to
Fannie Mae.

                                             -9-
                              FALK V. FANNIE MAE

                                 Opinion of the Court



N.C.G.S. §§ 45-37(b) and 45-36.24 (2013)—impose a fifteen year period on the life of

any lien on real property that was not extended through the filing of an affidavit or

other instrument. After this period, these statutes allow a subsequent creditor of

the grantor to transfer the subject property free of the prior lienholder’s

encumbrances.


       In the present case the Trust executed and recorded the Trust Deed on 30

December 1994 to secure repayment of an earlier loan.        Considered under our

state’s “race recording” statute alone, the Trust’s act of recording its deed

established its superior interest in the property relative to the FNMA Deed, which

was recorded on 14 May 2001. Falk, ___ N.C. App. at ___, 738 S.E.2d at 408; see

N.C.G.S. §§ 47-18, -20 (2013). The issue before the Court is whether the Trust’s

failure to file an affidavit extending the life of its lien before Fannie Mae’s

foreclosure upon the property in 2011 undermined its security interest in the

property.


       This issue presents two questions: (1) Whether the Trust Note and the Trust

Deed, executed in 1994, continued to impose a valid lien on the property in 2011

when Fannie Mae initiated foreclosure; and (2) Whether Fannie Mae, which

acquired its interest in the property less than seven years after the Trust Deed was

executed and recorded, could benefit from the statutorily imposed expiration of the

Trust’s lien.


                                        -10-
                              FALK V. FANNIE MAE

                                  Opinion of the Court



      The Court of Appeals considered two statutes under which the Trust Deed

could have expired. The court first considered N.C.G.S. § 45-37(b), our State’s “old”

life of lien statute which, in an earlier version, was in effect at the time the Trust

Deed was executed. The court also considered retroactive application of the “new”

life of lien statute, N.C.G.S. § 45-36.24, which applies to all security instruments

whenever recorded, except, inter alia, those “conclusively presumed to have been

fully paid and performed pursuant to . . . [subsection] 45-37(b) [before] October 1,

2011.” N.C.G.S. § 45-37(b).


      We begin by considering subsection 45-37(b).       It is a settled principle of

constitutional law that “any law affecting the validity, construction and

enforcement of a contract at the time of its making becomes a part of the contract as

fully as if incorporated therein.” Adair v. Orrell’s Mut. Burial Ass’n, Inc., 284 N.C.

534, 538, 201 S.E.2d 905, 908 (citations omitted), appeal dismissed, 417 U.S. 927

(1974). As a general matter, therefore, courts must apply the law that is in effect

when a contract is formed in any future dispute over the construction of that

contract. Consistent with this principle, the trial court applied the then-current

version of subsection 45-37(b) (codified at N.C.G.S. § 45-37(b) (1991)) to determine

whether the Trust Deed was valid and enforceable after Fannie Mae’s foreclosure in

2011. The 1991 version of N.C.G.S. § 45-37(b) was effective from 1 January 1992

until 1 October 2011, and was thus part of the “law of the contract” when the Trust

Note and Trust Deed were executed in 1994.

                                         -11-
                               FALK V. FANNIE MAE

                                  Opinion of the Court



      It is also, however, “a generally accepted principle of statutory construction

that there is no constitutional limitation upon legislative power to enact retroactive

laws which do not impair the obligation of contracts or disturb vested rights.”

Piedmont Mem’l Hosp. v. Guilford Cnty., 221 N.C. 308, 311, 20 S.E.2d 332, 334

(1942) (citations omitted). When the General Assembly rewrote subsection 45-37(b)

in 2011, it made no substantive changes to the 1991 version of the statute. See Act

of June 18, 2011, ch. 312, sec. 12, 2011 N.C. Sess. Laws 1212, 1229-30. Other than

containing minor editorial revisions, N.C.G.S. § 45-37(b) (2011) merely established

that the statute would apply “only to security instruments . . . that were

conclusively presumed pursuant to this subsection to have been fully paid and

performed prior to October 2011” and that a new life of lien statute, N.C.G.S. § 45-

36.24 (2011), would apply to security instruments recorded after that date. It also

required that creditors file affidavits or a separate instrument postponing the date

of lien expiration on or before 1 October 2011.


      Subsection 45-37(b) is “retroactive” in the limited sense that it applies to “any

security instrument recorded before October 1, 2011.” Because the current version

of subsection 45-37(b) does not include any changes that would “impair the

obligation of contracts or disturb vested rights” in relation to the security

instruments at issue in this case, id. at 311, 20 S.E.2d at 334, we conclude that the

Court of Appeals’ application of that statute to the Trust Deed was proper. This is

the version of the statute that we apply here.

                                         -12-
                        FALK V. FANNIE MAE

                            Opinion of the Court



Subsection 45-37(b) states, in relevant part:

             It shall be conclusively presumed that the
      conditions of any security instrument recorded before
      October 1, 2011, securing the payment of money or
      securing the performance of any other obligation or
      obligations have been complied with or the debts secured
      thereby paid or obligations performed, as against
      creditors or purchasers for valuable consideration from
      the mortgagor or grantor, from and after the expiration of
      15 years from whichever of the following occurs last:
             (1) The date when the conditions of the security
             instrument were required by its terms to have been
             performed, or
             (2) The date of maturity of the last installment of
             debt or interest secured thereby;
      provided that on or before October 1, 2011, and before the
      lien has expired pursuant to this subsection, the holder of
      the indebtedness secured by the security instrument or
      party secured by any provision thereof may file an
      affidavit with the register of deeds which affidavit shall
      specifically state:
             (1) The amount of debt unpaid, which is secured by
             the security instrument; or
             (2) In what respect any other condition thereof
             shall not have been complied with; or
             may record a separate instrument signed by the
             secured creditor and witnessed by the register of
             deeds stating:
             (1) Any payments that have been made on the
             indebtedness or other obligation secured by the
             security instrument including the date and amount
             of payments and
             (2) The amount still due or obligations not
             performed under the security instrument.
      The effect of the filing of the affidavit or the recording of a
      separate instrument made as herein provided shall be to
      postpone the effective date of the conclusive presumption
      of satisfaction to a date 15 years from the filing of the
      affidavit or from the recording of the separate instrument.



                                   -13-
                               FALK V. FANNIE MAE

                                   Opinion of the Court



      In interpreting this statute, we are guided by our obligation to give effect to

the plain meaning of its terms. “‘When the language of a statute is clear and

without ambiguity, it is the duty of this Court to give effect to the plain meaning of

the statute, and judicial construction of legislative intent is not required. However,

when the language of a statute is ambiguous, this Court will determine the purpose

of the statute and the intent of the legislature in its enactment.’” N.C. Dep’t of Corr.

v. N.C. Med. Bd., 363 N.C. 189, 201, 675 S.E.2d 641, 649 (2009) (citations omitted).


      By its plain terms, subsection 45-37(b) establishes a conclusive presumption

that, as against subsequent creditors or purchasers for value from the grantor, the

terms of a deed of trust have been satisfied from and after the expiration of fifteen

years from the latter of “(1) [t]he date when the conditions of the security

instrument were required by its terms to have been performed, or (2) [t]he date of

maturity of the last installment of debt or interest secured thereby.” A lienholder

may file an affidavit or record a separate instrument with the register of deeds

containing the required information and thus postpone expiration of its lien beyond

the fifteen year period; however, if the lienholder does not file such an additional

instrument, this statute directs that a senior lienholder will no longer be able to

assert his lien against the interests of a subsequent creditor after fifteen years have

expired.




                                          -14-
                               FALK V. FANNIE MAE

                                   Opinion of the Court



      Here the Trust does not contend that it filed an affidavit or other instrument

with the Guilford County Register of Deeds to extend its lien on the property.

Therefore, the only question we must resolve is the date on which subsection 45-

37(b)’s fifteen year expiration period began in relation to the Trust’s lien.


      Our State has long recognized that “a promissory note, payable on demand, is

a present debt . . . and the statute [of limitations] begins to run from the date of it.”

Caldwell v. Rodman, 50 N.C. (5 Jones) 139, 140 (1857) (citation and quotation

marks omitted).     The trial court noted that this rule “has clear application in

determining when a claim for breach of the obligation to pay according to the

instrument accrues for statute of limitations purposes, but no reason exists why it

should not apply as well where the issue is when a lien expires.” We agree.


      Here the Trust Note was payable on demand. Accordingly, the Trust Note

matured on the date of its execution, 28 October 1994. For the purposes of N.C.G.S.

§ 45-37(b), therefore, the Trust Note—and the Trust Deed that was executed to

secure repayment under the note—expired on 28 October 2009, fifteen years after

the date of the Note’s execution. This expiration prevented the Trust from being

able to assert its interest in the property “against creditors or purchasers for

valuable consideration from the mortgagor or grantor” after that date. N.C.G.S. §

45-37(b) (2011).




                                          -15-
                                FALK V. FANNIE MAE

                                   Opinion of the Court



      The remaining question is whether Fannie Mae qualifies as a creditor or

purchaser for value who can claim the benefit of subsection 45-37(b)’s conclusive

presumption. By its plain terms, subsection 45-37(b) does not limit the creditors or

purchasers for value from the mortgagor who may claim the benefit of the

conclusive presumption in relation to prior liens. The statute says nothing about

when a subsequent creditor must obtain its interest from the grantor. The only

time limitation imposed by the statute concerns when the conclusive presumption

can be claimed at all: “from and after the expiration of 15 years.” Id.


      Giving effect to the plain terms of this statute, therefore, we hold that the

Trust Deed expired on 28 October 2009 because the Trust did not file the required

documentation to extend the life of its security interest. We hold further that

Fannie Mae, as a qualifying creditor who took its interest in the property from the

mortgagor Quicksilver, could benefit from subsection 45-37(b)’s conclusive

presumption irrespective of the fact that its interest was recorded and assigned

before expiration of the statute’s fifteen year period.


      The Court of Appeals arrived at a different conclusion. That court cited our

opinion in Smith to argue that “[i]n light of the primary purpose of the statute,”

subsection 45-37(b)’s conclusive presumption “arises only in favor of creditors and

purchasers for valuable consideration who rely on the presumption when

contracting.” Falk, ___ N.C. App. at ___, 738 S.E. 2d at 408 (citing Smith, 228 N.C.


                                          -16-
                                 FALK V. FANNIE MAE

                                    Opinion of the Court



at 180, 45 S.E.2d at 57). Because Fannie Mae acquired the FMNA Deed less than

seven years after the Trust Deed was recorded, the court reasoned that Fannie Mae

could not have relied on the statutory presumption because it had not yet arisen.

Id. at ___, 738 S.E.2d at 408.


      In Smith this Court addressed a situation in which a bank acquired a deed of

trust on property within fifteen years of an earlier lien. When the junior lienholder

foreclosed after the fifteen year period and attempted to transfer the property free

of the earlier encumbrance, the lower courts found the prior lien valid and

enforceable. The Court interpreted N.C.G.S. § 45-37(5) (1943),5 the predecessor

statute to subsection 45-37(b), and concluded the presumption was only available to

creditors who loaned funds to the mortgagor after the fifteen years had expired.

Smith, 228 N.C. at 178-79, 45 S.E.2d at 56-57.


      The Court’s interpretation of the statute in Smith was not based on the

statutory language itself, but rather on the language of the caption appended to the

General Assembly’s original enactment in 1923: “An Act to Facilitate the

Examination of Titles and to Create a Presumption of Payment of Instruments

Securing the Payment of Money After Fifteen Years from the Date of the Maturity

of the Debts Secured Thereby.” Id. at 178, 45 S.E.2d at 56 (quoting Act of Mar. 6,

1923, ch. 192, sec. 1, 1923 N.C. Pub. [Sess.] Laws 508, 508 (codified at section 2594

      5 N.C.G.S. § 45-37(5) was recodified in 1969 to the current numbering format of
subsection 45-37(b).

                                           -17-
                               FALK V. FANNIE MAE

                                   Opinion of the Court



of the Consolidated Statutes of North Carolina (1924) (amended 1935) (recodified at

N.C.G.S. § 45-37 (1943))).     The Court looked to the caption of the original Act

because it believed the statute was ambiguous regarding the creditors the General

Assembly intended to benefit by creating the conclusive presumption on the life of

liens. Id. at 179-80, 45 S.E.2d at 57. The Court interpreted the caption’s use of the

verb “to facilitate” to render the statute’s provisions “prospective” in the sense of

making future transactions easier by removing the obstacle of “old and unsatisfied

mortgages.” Id. at 180, 45 S.E.2d at 57. The Court in Smith held that the General

Assembly’s intention was to protect only parties “who extend credit or purchase for

a valuable consideration ‘from and after’ the expiration of the fifteen year period.”

Id.


         The Court’s interpretation of the statute in Smith was short-lived. In 1951

the General Assembly rejected that interpretation by enacting an amendment to

section 45-37 that permitted subsequent creditors to avail themselves of the

conclusive presumption that prior liens expire after fifteen years regardless of when

they extended credit. See Act of Mar. 20, 1951, ch. 292, sec. 1, 1951 N.C. Sess. Laws

243.     When this amendment to the statute was codified, subsection 45-37(5)

included the statement that the conclusive presumption would protect subsequent

creditors “irrespective of whether the credit was extended or the purchase was made

before or after the expiration of said fifteen years.” Id.; N.C.G.S. § 45-37(5) (Supp.

1965).

                                          -18-
                               FALK V. FANNIE MAE

                                   Opinion of the Court



      The 1951 amendment to the statute explicitly contradicted the Smith

interpretation of the statute. The change remained in place until 1969, when the

General Assembly acted (in the words of the new session law’s caption) “to recodify

and simplify the law concerning discharge of record of mortgages, deeds of trust and

other instruments.” Act of Jun. 9, 1969, ch. 746, 1969 N.C. Sess. Laws 762, 762.

The 1969 amendment reformatted the statute into its current form (subsection 45-

37(b)) and eliminated the clause inserted in 1951 stating “irrespective of whether

the credit was extended or the purchase was made before or after the expiration of

said fifteen years.” Id., sec. 1, at 764-65; see N.C.G.S. § 45-37(b) (Supp. 1969).

With only very minor changes, the law codified in 1969 remains today, resulting in

the statute that we have reproduced above.


      We find the language in the version of subsection 45-37(b) that has existed

since 1969 unambiguous with respect to which creditors may avail themselves of

the conclusive presumption bearing on the expiration of prior liens. The statute

makes the presumption effective in relation to “creditors or purchasers for valuable

consideration from the mortgagor or grantor.”             N.C.G.S. § 45-37(b).      The

presumption is categorical—it imposes no limitation on when a creditor must obtain

its interest in the property to be able to avail itself of the statute’s protection after

the expiration of the fifteen year period.




                                             -19-
                              FALK V. FANNIE MAE

                                  Opinion of the Court



      In its brief before this Court, the Trust argues that when the 1969 General

Assembly eliminated the language inserted in 1951, it effectively reenacted the

Smith decision’s understanding of the statutory language over the objections of an

earlier legislature. We reject this argument. The Court in Smith found the statute

ambiguous regarding which creditors could benefit from the presumption. For this

reason, the Court looked outside the statute to supply a meaning that it did not find

in the statutory language itself.     Accordingly, if the 1969 General Assembly

intended to enact the Smith decision’s interpretation of language the Court found

ambiguous, the legislature would have introduced a clear statement of the rule

rather than allowing the original, purportedly ambiguous language to stand.


      Because the language of the statute is unambiguous, we need not construe

the possible legislative intent behind it. N. C. Med. Bd., 363 N.C. at 201, 675 S.E.2d

at 649. Even if we look to evidence of legislative intent, however, we find nothing in

the history of the statute’s evolution since 1951 that suggests the legislature’s

intent to follow this Court’s decision in Smith by limiting the benefit of the statute

to creditors acquiring their interest after the fifteen year period. When the General

Assembly revised the statute in 1969 and eliminated the language explicitly making

the presumption applicable to subsequent creditors irrespective of when they

acquired their interest, it announced its intention as one of “simplify[ing]” the

statute. See Ch. 746, sec. 1, 1969 N.C. Sess. Laws at 762. If the General Assembly

intended to do more than clarify and streamline the statutory language, it could

                                         -20-
                               FALK V. FANNIE MAE

                                  Opinion of the Court



have inserted new terms. If it intended to enact the Smith decision’s limitation, it

could simply have said the conclusive presumption was available only to creditors

who rely on it when contracting for their interest.


      We hold that N.C.G.S. § 45-37(b) allows creditors or purchasers for value

from a grantor to benefit from the conclusive presumption that prior liens expire

after fifteen years irrespective of when those creditors obtain their interest.

Accordingly, in this case the statute acted to terminate the Trust Deed and

permitted Fannie Mae to foreclose on the property unencumbered. The Court of

Appeals erred in overturning the trial court’s order granting summary judgment for

Fannie Mae on this basis. Because we find a proper interpretation of subsection 45-

37(b) dispositive of the controversy before us, we need not reach the other issues

addressed before the Court of Appeals. Accordingly, we reverse the decision of the

Court of Appeals.


      REVERSED.




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