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DARLING INTERNATIONAL, INC. v. CARTER et al.
S13A1745.
SUPREME COURT OF GEORGIA
294 Ga. 455; 754 S.E.2d 347; 2014 Ga. LEXIS 101; 2014 Fulton County D. Rep. 106
January 27, 2014, Decided
PRIOR HISTORY: Title to land. Bacon Superior Court. Before Judge DeVane.
DISPOSITION: [***1] Judgment reversed in part and vacated in part.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiffs, the heirs of a grantor of a 95-acre parcel, filed a petition to quiet title and for
ejectment against defendants, later grantees and a record owner of 7.63 acres of the parcel. The parties stipulated to the
undisputed material facts and each party filed a motion for summary judgment. The trial court entered judgment for the
heirs. The record owner appealed.
OVERVIEW: The 95-acre parcel was taken by the county via eminent domain in 1973. The lake project for which the
land was taken was abandoned; in 1985, the county granted a half interest to the city. In 2003, the county and city
executed quit claim deeds conveying the 7.63 acres to the county development authority, which conveyed it to the first
grantee. In 2005 and 2007, the first grantee sold to the second grantee and record owner. In 2010, O.C.G.A. §
36-9-3(g)(3)(B) was amended to grant the heirs of the original grantors the right to repurchase land such as that which
was condemned for the lake project. The city and county quitclaimed their interests to the heirs. The heirs contended
that the county's failure to comply with O.C.G.A. § 36-9-2 by recording the order on the county minutes when it
conveyed its interest to the development authority rendered the title void. The record owner argued, and the court
agreed, that it was a bona fide purchaser for value and without notice of this irregularity. The county's ownership was
not sufficient to excite inquiry under O.C.G.A. § 23-1-17. The 2003 conveyance was not a re-taking and thus was not
governed by the requirements of O.C.G.A. § 36-61-9.
OUTCOME: The court reversed the grant of summary judgment to the heirs and vacated the decree establishing their
Page 1
title.
CORE TERMS: conveyance, deed, heirs, notice, bona fide purchaser, lake, condemnation, acre, eminent domain,
development plan, chain, public use, minutes, entity, purchaser, grantee, parcel, convey, void, inquire, invalid, public
purpose, summary judgment, redevelopment, condemned, undivided, subsequent purchaser, failure to comply, original
owners, condemned property
LexisNexis(R) Headnotes
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] Pursuant to O.C.G.A. § 23-1-20, a bona fide purchaser for value without notice of an equity will not be
interfered with by equity.
Real Property Law > Eminent Domain Proceedings > Title Acquired
[HN2] Failure to use the lands for the purpose for which they were condemned does not cause title to revert to the
original owners.
Governments > Local Governments > Property
Real Property Law > Purchase & Sale > General Overview
[HN3] There are no exceptions set forth in O.C.G.A. § 36-9-2 to the requirement that authorization for the conveyance
of county-owned property must be duly entered on the minutes of the proper county authority.
Real Property Law > Deeds > Enforceability
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN4] Even a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a
forged deed, or those holding under such a grantee, because the grantee has no title to convey.
Governments > Local Governments > Property
Real Property Law > Deeds > Enforceability
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] In the case of a conveyance of county-owed property that was not properly recorded in the minutes as required
by O.C.G.A. § 36-9-2, the deed to the immediate grantee may be voidable in that the county or the immediate grantee
may seek to invalidate the conveyance; but as to a subsequent bona fide purchaser without notice of the failure to
comply with the statute, the deed is not void.
Estate, Gift & Trust Law > Conservators & Guardians > General Overview
Family Law > Guardians > Duties & Rights
Real Property Law > Deeds > Execution Formalities
[HN6] Guardianship presents a special situation in which the person executing the title has no interest to convey and the
execution is valid and passes title only if there has been an appointment by the probate court. In such a case, it has long
been held that the purchaser is bound, at his peril, to examine the validity of the appointment.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN7] Any circumstance which would place a man of ordinary prudence fully upon his guard, and induce serious
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294 Ga. 455, *; 754 S.E.2d 347, **;
2014 Ga. LEXIS 101, ***1; 2014 Fulton County D. Rep. 106
inquiry, is sufficient to constitute notice of a prior unrecorded deed.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN8] See O.C.G.A. § 23-1-17.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN9] Circumstances that have been deemed sufficient to incite a duty to inquire into facts outside the recorded deed
records, or at least raise an issue with respect to the purchaser's duty to inquire, include facts showing the purchaser
had been informed of the existence of prior unrecorded deeds; evidence of open and notorious adverse possession of
the property that should have placed the purchaser on notice of another's interest in the property; and evidence sufficient
to put a mortgagee on notice of a fraudulent scheme. But the existence, within the chain of title, of a conveyance by a
county is not a circumstance that requires a subsequent purchaser to inquire into whether the county complied with
the requirements of O.C.G.A. § 36-9-2 to enter an order on its minutes authorizing disposal of the real property, and
failure to inquire does not defeat the subsequent purchaser's status as a bona fide purchaser without notice.
Real Property Law > Deeds > Enforceability
Real Property Law > Deeds > Execution Formalities
[HN10] A mere misnomer of a corporation in a written instrument is not material or vital in its consequences, if the
identity of the corporation intended is clear or can be ascertained by proof.
Real Property Law > Eminent Domain Proceedings > Procedure
Real Property Law > Zoning & Land Use > Local Planning
[HN11] Pursuant to O.C.G.A. § 36-61-9(c), with respect to property that a municipality or county seeks to acquire in
accordance with the Urban Redevelopment Law, unless the property is to be acquired for the purpose of devoting it to a
public use, it may be acquired through the exercise of the power of eminent domain only after the condemning entity
has adopted an urban redevelopment plan authorizing the exercise of eminent domain by the agency to acquire the
property, the owner of the real property to be acquired has been notified of the planned rehabilitation of the property as
set forth in the plan, and the owner has been offered the opportunity to develop the property in accordance with the plan.
Real Property Law > Eminent Domain Proceedings > Constitutional Limits & Rights > Public Use
Real Property Law > Eminent Domain Proceedings > Title Acquired
[HN12] Where property is not ultimately used for the purpose for which it was originally condemned, it may be devoted
to another proper public use.
Real Property Law > Eminent Domain Proceedings > Procedure
Real Property Law > Zoning & Land Use > Local Planning
[HN13] The amendment to O.C.G.A. § 36-61-9(c) in 1971, requiring a condemning governmental entity to offer the
owner of the property to be acquired the opportunity to develop the property in accordance with an adopted urban
redevelopment plan, was enacted as a remedy to the previous evil of the absolute power granted to counties and
municipalities to take private property for any public or even non-public purpose so long as the taking was to effectuate
an adopted urban redevelopment plan. But by its terms, this requirement applies to the initial acquisition.
Real Property Law > Eminent Domain Proceedings > Constitutional Limits & Rights > Public Use
[HN14] Certain amendments to O.C.G.A. § 22-1-1, known as the Landowner's Bill of Rights and Private Property
Protection Act, exempted from the definition of "public use" the public benefit of economic development with respect
to authority for exercising the power of eminent domain. O.C.G.A. § 22-1-1(9)(B).
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294 Ga. 455, *; 754 S.E.2d 347, **;
2014 Ga. LEXIS 101, ***1; 2014 Fulton County D. Rep. 106
Real Property Law > Eminent Domain Proceedings > Constitutional Limits & Rights > General Overview
[HN15] A governmental entity's disposition of property acquired by eminent domain to another private entity does not
violate the Fifth Amendment prohibition against taking private property for public use without just compensation when
the disposition is made in furtherance of an economic development plan that serves a public purpose.
Real Property Law > Eminent Domain Proceedings > Constitutional Limits & Rights > General Overview
Real Property Law > Zoning & Land Use > Local Planning
[HN16] Former Ga. Const. art. IX, § II, para. VII, read in part: The General Assembly may authorize any county,
municipality, or housing authority to undertake and carry out community redevelopment, which may include the sale or
other disposition of property acquired by eminent domain to private enterprise for private uses. The amendment which
eliminated this provision and substituted the requirement that eminent domain shall not be used for redevelopment
purposes by any entity, except for public use, as defined by general law, was approved by the voters at the general
election held on November 7, 2006.
HEADNOTES
Georgia Advance Headnotes
(1) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. When a county conveyed property
but failed to record the conveyance in the minutes as required by OCGA § 36-9-2, the deed to the immediate grantee
may be voidable in that the county or the immediate grantee may seek to invalidate the conveyance; but as to a
subsequent bona fide purchaser without notice of the failure to comply with the statute, the deed was not void.
(2) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. The existence within the chain of
title of a conveyance by a county is not a circumstance under OCGA § 23-1-17 that requires a subsequent purchaser to
inquire into whether the county complied with the requirements of OCGA § 36-9-2 to enter an order on its minutes
authorizing disposal of the real property; a failure to inquire does not defeat the subsequent purchaser's status as a
bona fide purchaser without notice.
(3) Real & Personal Property Law. Eminent Domain Proceedings. Even if an original 1973 condemnation
proceeding was conducted pursuant to the Urban Redevelopment Law and OCGA § 36-61-9 was applicable, a county's
2003 conveyance of the previously condemned property was not a re-taking by a municipality or county and thus the
transaction was not governed by the requirements of OCGA § 36-61-9.
COUNSEL: Hunter, Maclean, Exley & Dunn, Robert B. Lovett, Heather N. Hammonds, for appellant.
Smith, Ramay & Bennett, Ken W. Smith, for appellees.
JUDGES: BENHAM, Justice. All the Justices concur, except Hunstein and Nahmias, JJ., who concur in judgment only
as to Division 2.
OPINION BY: BENHAM
OPINION
[*455] [**349] BENHAM, Justice.
This case involves a dispute over title to a 7.63 acre parcel of land located in Bacon County. The parcel was
originally part of a 95.125 acre parcel owned by H.S. Carter, now deceased, that was taken by Bacon County via
eminent domain proceedings commenced in 1973. [*456] As a result of the condemnation proceedings, Bacon County
acquired a total of 2522.3 acres for the purpose of creating a public recreation project known as Lake Alma and the
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294 Ga. 455, *; 754 S.E.2d 347, **;
2014 Ga. LEXIS 101, ***1; 2014 Fulton County D. Rep. 106
95.125 Carter parcel was just one of the parcels condemned for this purpose. The record shows that the proposed Lake
Alma was part of a larger urban development project that received funds from the Federal Model Cities Program so that
the City of Alma and Bacon County could execute a development plan that included, among other things, an industrial
park, a waste water treatment plant, and improvement of the local airport, in addition to construction of Lake Alma. The
other projects were completed but, due to protracted litigation and other reasons, the Lake Alma project [***2] was
abandoned and never constructed. In the meantime, in 1985, the county granted an undivided one-half interest in the
Lake Alma tract to the City of Alma. After the project was abandoned, at the request of the city and county, the General
Assembly passed an amendment to OCGA § 36-9-3, effective July 1, 1992, that permitted counties to sell back to the
original owners land that had been acquired for creation or development of a lake, such as the Lake Alma project, but
the legislation failed to provide for repurchase of land by the heirs of the original owners. See Ga. L. 1992, p. 1348, § 1.
By that time, H.S. Carter was deceased and the 95.125 acre parcel originally owned by him was apparently one of the
only parcels [**350] condemned for construction of Lake Alma that was not repurchased by the original owner.
The chain of title to the 7.63 acres at issue in this appeal reflects the following conveyances: On December 31,
2003, the county and city each executed quit claim deeds purporting to convey the 7.63 acres to the Bacon County
Development Authority and on that same day the Development Authority executed a warranty deed for the property to
Southeastern Maintenance and Construction, Inc. [***3] In 2005, Southeastern Maintenance granted an easement over
a portion of the property to appellant Darling International, Inc. Also in 2005, Southeastern Maintenance executed a
warranty deed purporting to convey 3.048 acres of the disputed property to Darling and in 2007 it executed a warranty
deed conveying the remainder of the 7.63 acres to Darling.
On July 1, 2010, OCGA § 36-9-3 was amended to grant the heirs of the original landowners the right to repurchase
land such as that which was condemned for Lake Alma (OCGA § 36-9-3 (g) (3) (B)). See Ga. L. 2010, p. 746, § 1/HB
703. Shortly thereafter, certain heirs of H.S. Carter sought to repurchase Mr. Carter's original 95.125 acre parcel. On
December 21, 2010, the City of Alma executed a quit claim deed to Bacon County conveying its undivided interest in
the 95.125 acres and, that same day, Bacon County executed a quit claim deed [*457] conveying all of its undivided
interest in the property to the H.S. Carter heirs who are the appellees herein. The quit claim deed states that Bacon
County intends "to convey to Grantees only all properties which it obtained from their father Hoke Carter by
condemnation ... Less & Except any portion of said [***4] properties which have been previously legitimately
conveyed by the Grantor." The Carter heirs then filed a petition to quiet title and for ejectment against Darling and
Southeastern Maintenance with respect to the 7.63 acres. The parties stipulated to the undisputed material facts and each
party filed a motion for summary judgment. Darling asserted it was entitled to summary judgment with respect to the
Carter heirs' quiet title action and their claim for ejection because, as a result of the county's previous conveyance of the
disputed property to the Development Authority and the subsequent chain of conveyances by which Darling ultimately
obtained title, the Carter heirs do not have title to that property. The Carter heirs asserted they were entitled to summary
judgment, and that Darling's motion should be denied, because the previous conveyances are not valid. The Carter heirs
argued that the previous conveyance to the Development Authority was invalid as a result of the county's failure to
follow the requirements of OCGA § 36-9-2 to enter an order on its minutes authorizing disposal of the real property.
They further argued that the conveyance of the previously condemned property [***5] to Southeastern Maintenance
was invalid because it amounted to a legally impermissible sale of condemned property to private developers for private
use and was not a transfer for a proper alternative public use.
1
Darling argued that these previous conveyances are
legally valid. Further, Darling asserted it was entitled to judgment in its favor because it was a bona fide purchaser of
the property without knowledge of the Carter heirs' interest in the property.
2
1 The conveyance from Bacon County to the Bacon County Development Authority and the subsequent
conveyance to Southeastern Maintenance and Construction, Inc. occurred on the same day. The Carter heirs
assert, and Darling appears to concede, that Bacon County utilized the Bacon County Development Authority as
a "straw man" to convey the property to Southeastern Maintenance for purported economic development
purposes.
2 Although the attorney representing the Carter heirs states in a supplemental brief that the issue of Darling's
Page 5
294 Ga. 455, *456; 754 S.E.2d 347, **349;
2014 Ga. LEXIS 101, ***1; 2014 Fulton County D. Rep. 106
status as a bona fide purchaser was first raised on appeal and was "never presented to the trial court for
determination," the record reflects this issue was raised and supported by argument and citations to [***6] legal
authority in Darling's brief responding to the Carter heirs' cross-motion for summary judgment.
Without addressing Darling's bona fide purchaser argument, the trial court entered judgment in favor of the Carter
heirs along with a decree that title to the property vests in them and is superior to Darling's claim of title. The court
found that the county's 2003 [*458] conveyance to the Development Authority [**351] was invalid and did not serve
to pass title because the county failed to follow the procedures required by OCGA § 36-9-2 to record on its minutes the
authorization to convey the property, which deficiency was never corrected by ratification. Further, the court found that
the subsequent attempt to transfer the property to Southeastern Maintenance was invalid because neither the county nor
the city ever formulated an economic development plan that encompassed an alternative public use of the property.
1. (a) The first issue raised on appeal is whether, despite Bacon County's failure to comply with the requirements of
OCGA § 36-9-2 when it conveyed its undivided one-half interest in the property to the Development Authority, Darling
is a bona fide purchaser for value and without notice [***7] of this irregularity so that its title is superior to that of the
Carter heirs. [HN1] Pursuant to OCGA § 23-1-20, "[a] bona fide purchaser for value without notice of an equity will
not be interfered with by equity." At the time Darling purchased the property for value, no other outstanding interest
was reflected in the recorded chain of title. At the time of the 2003 conveyance of the property to Southeastern
Maintenance, the 2010 amendment to OCGA § 36-9-3 (g), permitting disposition to the heirs of the original owner of
property that had been condemned for construction of a recreational lake but which was no longer needed for such a
purpose, had not yet been passed. See Ga. L. 2010, p. 746, § 1/HB 703. [HN2] "[F]ailure to use the lands for the
purpose for which they were condemned does not cause title to revert to the original owners." Galloway v. Bd. of
Commrs. of Banks County, 246 Ga. 472, 473 (271 SE2d 784) (1980), citing Sadtler v. Atlanta, 236 Ga. 396 (223 SE2d
819) (1976). Accordingly, Darling asserts the Carter heirs' interests did not arise until 2010 and thus were nonexistent at
the times of Darling's purchases in 2005 and 2007 and that it was an impossibility for Darling to have notice [***8] of
an interest that did not yet exist.
First, relying upon Head v. Lee, 203 Ga. 191, 201 (4) (45 SE2d 666) (1947), the Carter heirs assert that because
Bacon County failed either to record authority for the sale to the Development Authority on its minutes as required by
OCGA § 36-9-2, or to ratify the sale at any time before the 2010 conveyance to them, the purported 2003 conveyance to
the Development Authority did not pass title and the Development Authority's title is void. In West v. Fulton County,
267 Ga. 456, 457 (1) (479 SE2d 722) (1997), this Court noted [HN3] "[t]here are no exceptions set forth in OCGA §
36-9-2 to the requirement that authorization for the conveyance of county-owned property must be duly entered on the
minutes of the proper county authority." But in West, it was the county that sought to void the mistaken conveyance
[*459] of county-owned property in a tax sale because the property, having been owned by the county, was not subject
to taxation and should not have been the subject of levy and sale by the tax commissioner. And in neither Head nor
West was the issue of the purchaser's status as a bona fide purchaser without notice raised or considered by this
Court.
In asserting [***9] the title conveyed to the Development Authority was void, the Carter heirs analogize the
conveyance to a forged deed which, this Court has held, is a nullity that does not pass good title even to a subsequent
bona fide purchaser without notice. See Brock v. Yale Mtg. Corp., 287 Ga. 849 (700 SE2d 583) (2010) [HN4]
("[E]ven a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a
forged deed, or those holding under such a grantee, because the grantee has no title to convey.") But the Carter heirs cite
no authority for the proposition that county-owned property conveyed via a properly executed deed, where the order
directing disposal of the property was simply not recorded on the minutes, constitutes a void conveyance that would not
pass title to a subsequent bona fide purchaser for value without notice. As applied to the facts of this case, we decline
to adopt such a rule. Unlike the circumstances present in the case of a forged deed, here the county possessed title to its
undivided one-half interest in the property and no issue was raised regarding the authority of the individual who
executed the deed to act on behalf of the county. We [***10] also reject the attempted analogy to cases [**352]
involving a deed executed by a mentally incompetent person. Those cases have held that such a deed is not void but
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2014 Ga. LEXIS 101, ***5; 2014 Fulton County D. Rep. 106
voidable by the incompetent person or his heirs even as against a bona fide purchaser for value without notice of such
incompetence. See, e.g., Sewell v. Anderson, 197 Ga. 623, 624 hn. 8 (30 SE2d 102) (1944); Thornton v. Carpenter, 222
Ga. App. 809, 813 (2) (d) (476 SE2d 92) (1996). (1) [HN5] In the case of a conveyance of county-owed property that
was not properly recorded in the minutes as required by OCGA § 36-9-2, the deed to the immediate grantee may be
voidable in that the county or the immediate grantee may seek to invalidate the conveyance (compare West v. Fulton
County, supra); but as to a subsequent bona fide purchaser without notice of the failure to comply with the statute, the
deed is not void.
(b) Second, even if the previous conveyance to the Development Authority is not void, the Carter heirs assert
Darling does not qualify as a bona fide purchaser without notice. They argue the issue is not whether Darling had
notice of their claim but whether it had notice of any legal impediment to its acquiring title as against the world.
[***11] According to the Carter heirs, once Darling was placed on notice that a government entity was a predecessor in
title it was under a duty to determine whether the requirements of OCGA § 36-9-2 were met [*460] and, having failed
to do so, Darling was placed on constructive notice of the defect in the chain of title. No legal authority, however, is
cited for this proposition. Instead, the Carter heirs seek to draw an analogy to the duty incumbent upon a purchaser to
confirm the validity of a guardian's appointment when the chain of title contains a deed executed by one who purports to
act in the capacity of legal guardian of another. See Chase Manhattan Mtg. Corp. v. Shelton, 290 Ga. 544, 547-548 (2)
(722 SE2d 743) (2012). But [HN6] guardianship presents a special situation in which the person executing the title has
no interest to convey and the execution is valid and passes title only if there has been an appointment by the probate
court. See Dickey v. Sweeney, 16 Ga. App. 559 (85 SE 766) (1915). In such a case, it has long been held that the
purchaser is "bound, at his peril" to examine the validity of the appointment. See Dooley v. Bell, 87 Ga. 74, 77 (13 SE
284) (1891). As noted above, no [***12] issue has been raised with respect to the authority of the individual who
executed the deed conveying the property to the Development Authority to act on behalf of and bind the county.
Compare Deutsche Bank Nat. Trust Co. v. JP Morgan Chase Bank, N.A., 307 Ga. App. 307, 309 (1) (704 SE2d 823)
(2010) (a warranty deed was valid on its face because it appeared to be duly executed by an officer of a corporation with
authority to act and thus there was no reason to put a good faith purchaser on notice to inquire further into its
validity). Unlike a conveyance by a guardian, Bacon County owned the property in its own name and did not purport to
convey the property on behalf of any other person or entity.
[HN7] "Any circumstance which would place a man of ordinary prudence fully upon his guard, and induce serious
inquiry, is sufficient to constitute notice of a prior unrecorded deed." (Citations and punctuation omitted.) Montgomery
v. Barrow, 286 Ga. 896, 897 (1) (692 SE2d 351) (2010) (an issue of fact was created as to whether the purchaser was a
bona fide purchaser without notice of prior unrecorded deeds where a representative of the corporation that purchased
the property admitted he had been [***13] told unrecorded deeds to the property existed). See also OCGA § 23-1-17
[HN8] ("Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is
afterwards found that such inquiry might have led. Ignorance of a fact due to negligence shall be equivalent to
knowledge in fixing the rights of parties.") In this case, however, it is not an unrecorded deed but a fact wholly outside
the chain of title that the Carter heirs claim should have placed Darling on notice and created a duty to conduct an
inquiry into it. [HN9] Circumstances that have been deemed sufficient to incite a duty to inquire into facts outside the
recorded deed records, or at least raise an issue with respect to the purchaser's duty to inquire, include facts showing
the purchaser had [*461] been informed of the existence of prior unrecorded deeds (see Montgomery, id.); evidence of
open and notorious adverse possession of the property that should have placed the purchaser on notice of another's
interest [**353] in the property (see, e.g., Dyal v. McLean, 188 Ga. 229 (3 SE2d 571) (1939)); and evidence sufficient
to put a mortgagee on notice of a fraudulent scheme (see Collins v. Freeman, 226 Ga. 610, 611-612 (3) (176 SE2d 704)
(1970)). [***14] But we decline to hold that (2) the existence, within the chain of title, of a conveyance by a county is a
circumstance that requires a subsequent purchaser to inquire into whether the county complied with the requirements
of OCGA § 36-9-2 to enter an order on its minutes authorizing disposal of the real property, and that failure to inquire
defeats the subsequent purchaser's status as a bona fide purchaser without notice.
3
Consequently, the trial court
erred in concluding that the Carter heirs' title is superior to that of Darling's as a result of Bacon County's failure to
comply with the requirements of OCGA § 36-9-2 with respect to its 2003 conveyance of its interest in the property to
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2014 Ga. LEXIS 101, ***10; 2014 Fulton County D. Rep. 106
the Bacon County Development Authority.
4
3 Further, we reject the Carter heirs' assertion that title did not pass on the second of the two conveyances of
title to Darling because the grantor does not appear in the chain of title. The title dated August 1, 2007 in
Darling's favor shows "Southeast Maintenance and Construction, Inc." as the grantor instead of Southeastern
Maintenance and Construction, Inc., which was the true previous owner of the property. [HN10] "[A] mere
misnomer of a corporation in a written [***15] instrument is not material or vital in its consequences, if the
identity of the corporation intended is clear or can be ascertained by proof." (Citations and punctuation omitted.)
Deutsche Bank Nat. Trust Co., supra, 307 Ga. App. at 310 (1) (a); see also Hawkins v. Turner, 166 Ga. App. 50,
51-52 (1) (303 SE2d 164) (1983).
4 Further, we note that even if the County's failure to comply with the requirements of OCGA § 36-9-2 was
sufficient to invalidate its quitclaim deed to the Development Authority or defeat the subsequent purchaser's
status as a bona fide purchaser without notice of a defect in the chain of title, this would not have served to
invalidate the City of Alma's conveyance of its undivided one-half interest in the property since this statute
applies only to disposal of property owned by a county.
2. The trial court also erred in finding the 2003 conveyance to Southeastern Maintenance was invalid as a result of
the governing authorities' failure to formulate a new economic development plan. The 1973 condemnation petition
reflects condemnation of the subject property was sought to acquire fee simple title for the purpose of using it for a
public lake, park, and recreation area. [***16] While the petition states only that it was filed pursuant to what is now
OCGA § 22-2-100 et seq., the Special Master provisions for eminent domain proceedings, the parties stipulated to the
fact that the Lake Alma project was part of a development plan formulated by the City of Alma for the purpose of
utilizing funds awarded under the federal Model Cities [*462] Program to combat the effects of blighted neighborhoods
in participating cities. Construction of Lake Alma was one of four projects included in the development plan. The other
projects were improvement of an industrial park, upgrade of water and sewage treatment facilities, and improvement of
the airport. Regardless of what condemnation law the proceedings were predicated upon, no one disputes that the 1973
condemnation was for a proper public purpose. Nevertheless, the trial court found that the 2003 transfer of title to
Southeastern Maintenance, a private developer, thirty years after the initial condemnation, was invalid because neither
Bacon County nor the City of Alma ever formulated a new economic development plan that encompassed an alternative
use of the condemned property. We find no authority for the proposition that, at [***17] the time of the conveyance
involved in this case, a governing authority was required to reformulate a new development plan for an alternative
public use of condemned property once its original use was abandoned.
[HN11] Pursuant to OCGA § 36-61-9 (c), with respect to property that a municipality or county seeks to acquire in
accordance with the Urban Redevelopment Law, "[u]nless the property is to be acquired for the purpose of devoting it to
a public use," it may be acquired through the exercise of the power of eminent domain only after the condemning entity
has adopted an urban redevelopment plan authorizing the exercise of eminent domain by the agency to acquire the
property, the owner of the real property to be acquired has been notified of the planned rehabilitation of the property as
set forth in the plan, and the owner has been offered the opportunity to develop the property in accordance [**354]
with the plan. In this case, the property was not expressly acquired pursuant to the Urban Redevelopment Law, OCGA §
36-61-1 et seq., but in any event the parties do not dispute it was properly acquired through eminent domain
proceedings and that the Lake Alma project was part of a development plan.
(3) Even [***18] assuming the original condemnation proceeding was conducted pursuant to the Urban
Redevelopment Law and that OCGA § 36-61-9 was applicable to it, the 2003 conveyance was not a re-taking by a
municipality or county and thus the transaction was not governed by the requirements of OCGA § 36-61-9. By its terms,
the statute applies to the original taking of property by eminent domain. The 2003 conveyance was, instead, a
re-purposing of the property from that involved in the original taking. [HN12] "[W]here property is not ultimately used
for the purpose for which it was originally condemned, it may be devoted to another proper public use." Galloway,
supra, 246 Ga. at 473. The deed to Southeastern Maintenance incorporates an agreement whereby it agreed to construct
improvements on the property that were deemed to be in the public interest [*463] and "to foster and develop new
Page 8
294 Ga. 455, *461; 754 S.E.2d 347, **353;
2014 Ga. LEXIS 101, ***14; 2014 Fulton County D. Rep. 106
industry and employment opportunities for the citizens of Alma and Bacon County." At the time of the conveyance to
Southeastern Maintenance, such a conveyance was constitutionally permissible. See Talley v. Housing Auth. of
Columbus, 279 Ga. App. 94 (2) (630 SE2d 550) (2006) (affirming summary judgment to a housing authority [***19]
sued by the original owner of property that had been acquired by condemnation but later sold to a private citizen
without any requirement for public use after the original public purpose for the condemnation was abandoned). In 2003
the Georgia Constitution had not yet been amended, in response to public concern over the holding of the United States
Supreme Court in Kelo v. City of New London, 545 U. S. 469 (125 SCt 2655, 162 LE2d 439) (2005),
5
to withdraw the
previous constitutionally granted authority for the sale or disposition of property, acquired by a governmental entity by
eminent domain, to private entities for private use.
6
[HN13] The amendment to OCGA § 36-61-9 (c) in 1971 (Ga. L.
1971, p. 445, §§ 1, 2), requiring the condemning governmental entity to offer the owner of the property to be acquired
the opportunity to develop the property in accordance with an adopted urban redevelopment plan, was enacted as a
remedy to the previous "evil" of the absolute power granted to counties and municipalities to take private property for
any public or even non-public purpose so long as the taking was to effectuate an adopted urban redevelopment plan. See
McCord v. Housing Auth. of City of Atlanta, 246 Ga. 547, 550 (I) (272 SE2d 247) (1980). [***20] But by its terms, this
requirement applies to the initial acquisition. Likewise, at the time of the conveyance to Southeastern Maintenance, the
General Assembly had not yet enacted [HN14] certain amendments to OCGA § 22-1-1, known as the Landowner's Bill
of Rights and Private Property Protection Act, which exempted, from the definition of "public use," the public benefit of
economic development with respect to authority for exercising the power of eminent [*464] domain. See OCGA §
22-1-1 (9) (B), effective April 4, 2006 (Ga. L. 2006, p. 39, § 3/HB 1313).
5 In Kelo, the Supreme Court held that [HN15] a governmental entity's disposition of property acquired by
eminent domain to another private entity did not violate the Fifth Amendment prohibition against taking private
property for public use without just compensation when the disposition was made in furtherance of an economic
development plan that serves a public purpose.
6 At the time of the conveyance to Southeastern Maintenance, [HN16] Art. IX, § II, Par. VII of the Georgia
Constitution of 1983 read, in pertinent part: "The General Assembly may authorize any county, municipality, or
housing authority to undertake and carry out [***21] community redevelopment, which may include the sale or
other disposition of property acquired by eminent domain to private enterprise for private uses." The amendment
which eliminated this provision and substituted the requirement that "eminent domain shall not be used for
redevelopment purposes by any entity, except for public use, as defined by general law" (see Ga. L. 2006, p.
1111, § 1), was approved by the voters at the general election held on November 7, 2006.
The 2003 disposition of the property in dispute in this case is not governed by these 2006 changes to the law
governing eminent domain. We conclude that at the [**355] time of the 2003 conveyance to Southeastern
Maintenance, the City of Alma and Bacon County were not required to formulate an economic development plan for an
alternative use of the property originally acquired by condemnation thirty years earlier. See Talley, supra. Further, the
conveyance in this case was made for what appears to have been a proper public purpose at that time. We reject the
Carter heirs' assertion that it was a one-to-one transfer of property interests for a private and not a public purpose which
violates the Fifth Amendment.
7
Consequently, we reverse [***22] the trial court's holding that the 2003 conveyance to
Southeastern Maintenance was invalid.
7 Because the original condemnation was for a proper public purpose, this case is not analogous to those cases
involving exercise of eminent domain for the purpose of one-to-one transfers of private property which the
Supreme Court in Kelo stated are properly viewed "with a skeptical eye." See Kelo, supra, 545 U. S. at 487, n.
17.
For these reasons, the trial court's order granting summary judgment to the Carter heirs is reversed and the decree
establishing title is vacated.
Judgment reversed in part and vacated in part. All the Justices concur, except Hunstein and Nahmias, JJ., who
concur in judgment only as to Division 2.
Page 9
294 Ga. 455, *463; 754 S.E.2d 347, **354;
2014 Ga. LEXIS 101, ***18; 2014 Fulton County D. Rep. 106
7 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
SEIGNIOUS v. METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY.
COTTER et al. v. METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY
Nos. 40108, 40229
Supreme Court of Georgia
252 Ga. 69; 311 S.E.2d 808; 1984 Ga. LEXIS 581
January 25, 1984, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied February 9, 1984.
PRIOR HISTORY: Title to land. Fulton Superior Court. Before Judge Williams.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant alleged property owners sought review of an adoption by the Fulton Superior
Court (Georgia) of a finding by the special master in favor of appellee city in an action of title to land.
OVERVIEW: The city brought an action for title to land that was contested by numerous parties including the alleged
property owners. The matter was referred to a special master who found in favor of the city. The lower court adopted
the finding and ruled in favor of the city. The alleged property owners appealed. The court determined that although
land had been deeded to some of the property owners by the State had made it clear that a portion of the property
belonged to the state and that because of the easement created there was an exception to the more general rule that a
grantor of land could not obtain land by adverse possession from a grantee. The court found that as to one of the deeds
in question the terms were clear as to the property line that divided land that belong to the alleged property owner and
that belonged to the State. The court determined that the State owed a portion of the land and that the rest was owned by
the city, but that one of the allege property owners retained interest in the land in question. The court affirmed the prior
ruling.
OUTCOME: The court affirmed the prior ruling in favor of the city in an action for title to land.
Page 10
CORE TERMS: heir, deed, tract, conveyed, settlement, grantor, parcel, railroad, strip, adverse possession, notice, feet,
lot owners, disputed, plat, claim of right, fee simple, prescription, ownership, grantee, track, deeded, air rights,
reversionary interest, adversely, northern, railroad purposes, present controversy, fee interest, way of necessity
LexisNexis(R) Headnotes
Civil Procedure > Judicial Officers > Masters > General Overview
Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN1] In an action to quiet title brought under O.C.G.A. § 23-3-60 et seq., the findings of the Special Master and
adopted by the trial court will be upheld unless clearly erroneous.
Real Property Law > Estates > Present Estates > Fee Simple Estates
Real Property Law > Limited Use Rights > Easements > Creation > Easement by Necessity
[HN2] Once the necessity of an easement ceases, a way of necessity also ceases. O.C.G.A. § 44-9-5.
Real Property Law > Limited Use Rights > Easements > General Overview
[HN3] Title by prescription is the right to property which a possessor acquires by reason of the continuance of his
possession for a period of time fixed by law. O.C.G.A. § 44-5-160. The State may obtain title to property by
prescription. O.C.G.A. § 44-5-161 (a) defines the possession which is the foundation of prescriptive title as: (1) the right
of the possessor and not of another; (2) not originating in fraud; (3) public, continuous, exclusive, uninterrupted and
peaceable; (4) accompanied by a claim of right.
Real Property Law > Limited Use Rights > Easements > General Overview
[HN4] The key to a resolution of an apparent conflict between the general principle that possession constitutes notice of
the rights or title of the occupant, O.C.G.A. § 44-5-169, and the rule that a grantor may not adversely possess against
his grantee is the notice which starts the running of the prescription. Where a grantor in possession takes some
additional step which gives unequivocal notice that he is claiming property as his own, the prescriptive period begins to
run.
COUNSEL: Sibley & Sibley, Jack N. Sibley, for appellant (case no. 40108).
Thomas C. Kendrick-Holmes, for appellants (case no. 40229).
Kutak, Rock & Huie, Robert A. Boas, Michael T. Nations, Thomas C. Kendrick-Holmes, James C. Rehberg, Susan
Yandle Middleton, Sibley & Sibley, Jack N. Sibley, Michael J. Bowers, Attorney General, Daniel M. Formby, Assistant
Attorney General, for appellees.
JUDGES: Clarke, Justice. All the Justices concur.
OPINION BY: CLARKE
OPINION
[*69] [**810] This appeal concerns the title to a small parcel of land which is a part of the tract which formed the
very nucleus of Atlanta at the time of its birth. The seeds of this controversy were sown at the beginning of Atlanta, but
Page 11
252 Ga. 69, *; 311 S.E.2d 808, **;
1984 Ga. LEXIS 581, ***1
the current litigation began more recently when Seignious filed a suit claiming title to land situated in an area which has
been called Meat Row Strip. As the suit progressed, other parties were joined and the title to additional parcels became
involved. The parties claiming title to various portions of the subject land are the heirs of Samuel [***2] Mitchell, the
Metropolitan Atlanta Rapid Transit Authority, the City of Atlanta, and the State of Georgia. Among the issues the trial
court faced were the construction of an 1842 deed from Mitchell to the State, the construction of an 1870 settlement
agreement and deeds between the heirs of Mitchell and the State, whether the State can acquire title by prescription, and
under what conditions a grantor may prescribe.
The trial court referred the case to a Special Master who found MARTA to be the owner of three of the parcels in
question; the City of Atlanta to be the owner of one parcel; and the State of Georgia was found to be the owner of air
rights over the land held by MARTA. The trial court's judgment adopted the Special Master's report and we affirm.
In 1842 Samuel Mitchell deeded to the State certain property in Atlanta known as "State Square." This property
was located between Alabama Street on the south, Decatur Street on the north, Pryor Street on [**811] the west and
Loyd Street (now Central Avenue) on the east. The property was deeded to the State for the building of a terminus for
the Western & Atlantic Railroad.
Some years later the heirs of Samuel Mitchell brought [***3] suit [*70] against the State for the return of the
property, arguing that it had never been used for railroad purposes. The parties arrived at a settlement, and in 1870
there was an exchange of deeds which gave the Mitchell heirs certain property fronting on Alabama Street and which
gave the State whatever interest the heirs might have in the remaining portion of State Square.
The basis of the controversy which spawned the 1870 settlement was the claim that the 1842 deed provided that the
land revert to the grantor if not used for railroad purposes. In Samuel Mitchell Estate v. Western & Atlantic Railroad,
167 Ga. 728 (146 SE 556)(1928), we found that the 1842 deed, properly construed, conveyed a fee-simple title to the
property of the State. This decision lays to rest the controversy of the reversionary interest, but even if it did not, the
reference point for the present controversy is the 1870 settlement rather than the 1842 deed.
Part of the land received by the Mitchell heirs in 1870 was divided into subdivision lots and sold. Another portion
of the property was conveyed to the City of Atlanta. The lessee of the state-owned Western & Atlantic Railroad in 1873
built [***4] a side track south of the main tracks on the portion retained by the State. This track remained until 1964.
While engaged in controversy with the State, the Mitchell heirs were also involved in a dispute with the City of
Atlanta over the southern portion of State Square and an area adjoining State Square to the west. In a separate
settlement with the City of Atlanta the Mitchell heirs conveyed to the City a portion of the property received in their
settlement with the state. This property known as the City subdivision, was ultimately sold to the Metropolitan Atlanta
Rapid Transit Authority (MARTA) in 1975 and 1976.
MARTA eventually became owner of all the lots in the City subdivision and in the Mitchell heirs subdivision
except for the interest reserved by R. C. Seignious, one of the plaintiffs here, in his deed to MARTA. In 1979 the State
deeded to MARTA all its interest in the area known as "Meat Row Strip," retaining air rights and space support.
The parties to this suit claim all or part of Meat Row Strip. This area is described by the Special Master as
including all of parcels 2, 3, and 4, as well as a strip south of parcel 4, and a triangular piece of property extending
[***5] into Pryor Street (also referred to as Tracts A, B, C, and D in the Special Master's report). All references to
parcels, tracts, lots, and lines in this opinion are as indicated on the diagram designated Appendix A.
Seignious owned lots 38 and 39 of the Mitchell heirs subdivision. In 1976 he conveyed his property to MARTA
with a reservation in the [*71] deed as to all of his right, title and interest in Meat Row Strip. He now claims
ownership in fee simple of that part of the strip directly behind his lots together with a right of ingress and egress in the
rest.
Page 12
252 Ga. 69, *69; 311 S.E.2d 808, **810;
1984 Ga. LEXIS 581, ***1
The Mitchell heirs claim fee simple title to the disputed area (1) because of an alleged reversionary interest in the
original 1842 deed; (2) because the 1870 deed to the Mitchell heirs from the State included the disputed area and the
deed from the Mitchell heirs to the subdivision lot owners excluded it; and (3) the Mitchell heirs insist that their 1870
deed to the City of Atlanta excludes the City subdivision and City tract.
MARTA asserts (1) the reference in the 1870 deeds between the Mitchell heirs and the State to the 77/132 line was
a mutual mistake and that the parties always intended that the southern line [***6] of the State's property be the
70/113.5 line; and (2) the State acquired the disputed area by adverse possession and subsequently conveyed it to
MARTA.
[**812] The State of Georgia asserts that (1) it obtained title to the disputed area by virtue of the 1842 deed and
never relinquished it; (2) it has title by adverse possession or dedication; and (3) the portion of Meat Row Strip claimed
by Seignious was never deeded to him or his predecessors in title and that he has no claim to it by adverse possession.
The question of title to Tracts A, C, and D was referred to a Special Master. He concluded that title to tracts A, B,
and C are vested in MARTA with air rights retained by the State of Georgia and that title to tract D is vested in the City
of Atlanta. Before turning to the findings of the Special Master, we note that [HN1] in an action to quiet title brought
under O.C.G.A. § 23-3-60 et seq. (Code Ann. § 37-1411 et seq.), the findings of the Special Master and adopted by the
trial court will be upheld unless clearly erroneous. Williams v. Mathis, 237 Ga. 305 (227 SE2d 378)(1976).
1. The area which is at the heart of the present controversy is Tract A as shown on the diagram [***7] marked
Appendix A. The Special Master found, and we agree, that the metes and bounds descriptions in the 1870 deeds
between the State and the Mitchell heirs show the dividing line between the State and Mitchell properties as a line
running from a point on Loyd Street (Central Avenue) 77 feet north of Alabama Street westerly to a point on Pryor
Street 132 feet north of Alabama (the 77/132 line). Although there are plats showing a line beginning on Loyd 70 feet
north of Alabama and one plat shows it running westerly to a point on Pryor 113.5 feet north of Alabama (the 70/113.5
line) as the boundary, the description in the deeds is clear and unambiguous and needs no construction as to the intent of
the parties. Therefore, we find that the dividing line between the State [*72] and Mitchell heir properties is the 77/132
line as claimed by the Mitchell heirs.
As noted above, almost immediately following the settlement with the State the Mitchell heirs subdivided the
property obtained. The subdivision deeds were made pursuant to a recorded plat of the subdivision which shows the
northern boundary of 70/113.5. This plat was recorded six days after the date of the deeds between the [***8] State
and the Mitchell heirs. Further, the metes and bounds descriptions found in the deeds are consistent with the plat. The
Special Master found, and we agree, that there was no mutual mistake between the parties as to the property and that the
deeds from the Mitchell heirs to the subdivision lot owners cannot be construed to include Tract A. The Special Master
concluded that the State, the Mitchell heirs, and the subdivision lot owners all accepted the 70/113.5 line as the
subdivision's northern boundary.
Since the subdivision lot owners had no claim to the area identified as Tract A, it is also clear that R. C. Seignious
has no claim to a fee interest in any portion of that property. The Special Master found that Seignious' claim that he had
title to any portion of Tract A by adverse possession must fail because testimony showed that he and other subdivision
lot owners used the area only intermittently. We agree. Since Seignious never had any fee simple ownership in any
part of Tract A, and since Seignious has sold his fee interest in the subdivision lots to MARTA, the reservation in his
deed for ingress and egress over Tract A or Tract B is meaningless. [HN2] Once the necessity [***9] ceases, a way of
necessity also ceases. O.C.G.A. § 44-9-5 (Code Ann. § 85-1402). From this it is clear that a way of necessity cannot
exist in a vacuum or be retained by one having no property to be served by the way.
The question which remains as to Tract A is whether it continues to be the property of the Mitchell heirs or whether
it belongs to the State by virtue of adverse possession and has now passed to MARTA.
Page 13
252 Ga. 69, *71; 311 S.E.2d 808, **811;
1984 Ga. LEXIS 581, ***5
[HN3] "Title by prescription is the right to property which a possessor acquires by reason of the continuance of his
possession for a period of time fixed by law." O.C.G.A. § 44-5-160 (Code Ann. § 85-401). The State may obtain title to
property by prescription. [**813] Dept. of Transp. v. Howard, 245 Ga. 96 (263 SE2d 135) (1980). O.C.G.A. §
44-5-161 (a) (Code Ann. § 85-402) defines the possession which is the foundation of prescriptive title as: (1) the right
of the possessor and not of another; (2) not originating in fraud; (3) public, continuous, exclusive, uninterrupted and
peaceable; (4) accompanied by a claim of right. These elements are present in this case. The maintenance of railroad
tracks in the disputed area from 1873-1964 by the State or its [*73] [***10] lessee satisfies the requirement of
possession which is public, continuous, exclusive, uninterrupted and peaceable. The State's claim of right to this
property is evidenced by its inclusion in an 1890 inventory of the property of the Western & Atlantic Railroad made by
a Special Commission of the State of Georgia. The State is the owner of the Western & Atlantic Railroad. O.C.G.A. §
50-16-100 (Code Ann. § 91-201). References to the State's ownership of this property are also found in the minutes of a
meeting of the Western and Atlantic Railroad Commission for June 30, 1916, and in the official State valuation maps
for that year. Further, the property was included in that leased by the State to the Nashville, Chattanooga & St. Louis
Railway in 1919 and in that leased by the State to the Dixie Terminal Building Company in 1930. Evidence at trial
showed that the State has treated the property as its own and that its ownership is widely known. The Mitchell heirs
insist that the State's use of Tract A was permissive rather than adverse. However, a claim of right negates
permissiveness. Ewing v. Tanner, 184 Ga. 773 (193 SE 243) (1937).
The Mitchell heirs further insist that the [***11] State cannot adversely possess this property against them because
a grantor may not adversely possess against a grantee. This is true where the grantor simply remains in possession
after a conveyance. In Malette v. Wright, 120 Ga. 735, 742 (48 SE 229) (1904), for example, we held that: "The
execution of the deed and placing it upon the public records was a solemn publication to the world that the grantor had
conveyed to the grantee the land therein described, and the grantor would be estopped from insisting that one who dealt
with his grantee on the faith of the deed must take notice of his possession so as to make inquiry whether or not his
deed really spoke the truth." However, in Kent v. Simpson, 142 Ga. 49 (82 SE 440) (1914), we found that the rule that
possession constitutes notice applies to possession of a grantor after making a grant and that cases in apparent conflict
stand on their own facts. In particular, we refused to extend Malette v. Wright beyond its facts, which concerned the
effect of a mistake in a deed upon an innocent purchaser.
[HN4] The key to a resolution of an apparent conflict between the general principle that possession constitutes
notice of the [***12] rights or title of the occupant, O.C.G.A. § 44-5-169 (Code Ann. § 85-408), and the rule that a
grantor may not adversely possess against his grantee is the notice which starts the running of the prescription. Where
a grantor in possession takes some additional step which gives unequivocal notice that he is claiming property as his
own, the prescriptive period begins to run. Pindar, Georgia Real Estate Law, § 12-21 (2d Ed. 1979). Cf. Gauker v.
Eubanks, 230 Ga. 893 (199 SE2d [*74] 771)(1973). In this case, the state's actions in listing this property in its
inventory combined with the other actions listed above which indicate a claim of right gave sufficient notice to
authorize the Special Master to find that the State had claimed fee simple title for more than twenty years and had
acquired title by adverse possession.
2. Title to Tract C
1
was conveyed to the City of Atlanta in a 1870 settlement with the Mitchell heirs. At the same
time that the Mitchell heirs were engaged in a controversy with the State over the 1842 [**814] deed from Samuel
Mitchell, they were also battling with the City of Atlanta over the southern portion of State Square and the land
adjoining [***13] State Square on the west. In the subsequent settlement the City released any interest it might have in
the area the Mitchell heirs planned to subdivide and the heirs conveyed to the City the western 100 feet of State Square
on Alabama Street, extending north 132 feet from the corner of Pryor and Alabama. The City sold the property
identified in Appendix A as "City Subdivision" and retained title to the northern portion identified as Tract C. Tract C
was conveyed to the State in 1928 and included in the conveyance to MARTA in 1979. The argument of the Mitchell
heirs that the deed was vague, indefinite and void or that it excepted Tract C is without merit.
1 As the Special Master notes, neither Seignious nor the Mitchell heirs made any serious claim to Tract B.
Page 14
252 Ga. 69, *72; 311 S.E.2d 808, **812;
1984 Ga. LEXIS 581, ***9
3. Tract D is claimed by the Mitchell heirs because of a reversionary interest arising under an 1846 deed from
Samuel Mitchell to the Macon and Western Railroad. The Special Master has concluded that the Mitchell heirs
conveyed any interest they might [***14] have had in this parcel to the City in 1870. We agree. We are unable to
agree with the State's contention that by resolution of the General Assembly in 1925 (Ga. L. 1925, p. 1596) the State
acquired title to this tract. Title remains in the City of Atlanta.
Judgment affirmed.
[*75] [**815] Appendix A
[SEEILLUSTRATION IN ORIGINAL]
Page 15
252 Ga. 69, *74; 311 S.E.2d 808, **814;
1984 Ga. LEXIS 581, ***13
8 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
RANDY BACOTE v. BOBBY J. WYCKOFF et al.
No. 40211
Supreme Court of Georgia
251 Ga. 862; 310 S.E.2d 520; 1984 Ga. LEXIS 548
January 5, 1984, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied January 18, 1984.
PRIOR HISTORY: Title to land. Fulton Superior Court. Before Judge Knight, Senior Judge.
DISPOSITION: Judgment affirmed in part and reversed in part.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant attorney challenged an order of the Superior Court of Fulton County
(Georgia), which awarded appellees, former wife and children, damages in their action alleging that there was a
conspiracy between the attorney and the wife's former husband to defraud them out of their interest in real property. The
attorney's warranty deed from the former husband was set aside.
OVERVIEW: The former wife had exclusive occupancy of the marital domicile. She received notice that the property
would be foreclosed. The attorney extended a loan to the former husband, who executed a warranty deed to the attorney.
The attorney filed a dispossessory action against the former wife and children. They filed an action against the attorney
alleging that he conspired with the former husband. The trial court awarded the former wife and children damages and
vested title to the property in them. The court reversed the damages award and affirmed the order setting aside the
attorney's warranty deed. It held that there was insufficient evidence of fraud to support the imposition of damages
against the attorney. The former wife acknowledged that no action, or inaction, taken by her, was in reliance on any
representations made by the attorney. Once the attorney found the former wife and children in actual, open, visible,
exclusive, and unambiguous possession of the property, he had an affirmative duty to inquire into their rights in the
premises. As a consequence of his failure to do so, he could not prevail.
Page 16
OUTCOME: The court reversed the order awarding the former wife and children damages in their action alleging that
there was a conspiracy between the attorney and the former husband and affirmed the order setting aside the attorney's
warranty deed.
CORE TERMS: notice, deed, foreclosure, warranty deed, minor children, former husband, dispossessory, mortgages,
monthly, repaid, mortgage payments, conspiracy, divorced, execute, decree, black people, lis pendens, unambiguous,
equitable, inquire, helping, visible, save, jury's verdict, null and void, final decree, final judgment, note secured,
insufficient evidence, settlement
LexisNexis(R) Headnotes
Torts > Business Torts > Fraud & Misrepresentation > General Overview
[HN1] To recover in tort for fraud, a plaintiff must prove five essential elements: (1) that the defendant made
representations, (2) that at the time he knew they were false, (3) that he made them with the intention and purpose of
deceiving the plaintiff, (4) that the plaintiff relied on the representations, and (5) that the plaintiff sustained the alleged
loss and damage as the proximate result of their having been made.
Real Property Law > Adverse Possession > General Overview
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] Possession of land shall constitute notice of the rights or title of the occupant. Ga. Code Ann. § 44-5-169. In
order for the possession to have the effect of notice, it must be actual, open, visible, exclusive, and unambiguous. He
who takes with notice of an equity takes subject to that equity. Ga. Code Ann. § 23-1-16. Notice sufficient to excite
attention and put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry
might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge in fixing the rights of the
parties. Ga. Code Ann. § 23-1-17.
COUNSEL: Lawson, Washington & Thornton, George O. Lawson, Jr., for appellant.
Randy Bacote, pro se.
Kyle Yancey, for appellees.
JUDGES: Gregory, Justice. All the Justices concur, except Weltner, J., disqualified.
OPINION BY: GREGORY
OPINION
[*862] [**521] Appellant, Randy Bacote, appeals the judgment of the Superior Court of Fulton County, based
upon a jury's verdict, awarding damages to appellees, Bobby Jean Wyckoff and her minor children, and declaring null
and void a conveyance of real property from James Wyckoff, appellees' former husband and father, to appellant.
Bobby Jean and James Wyckoff were divorced in December 1978. The settlement agreement between the parties,
which was incorporated into and made a part of their final decree, awarded custody of the parties' minor children to
Mrs. Wyckoff. The agreement further provided "Plaintiff [wife] to have exclusive occupancy of the marital domicile at
1769 Timothy Drive, S. W., [*863] Atlanta, Fulton County, Georgia. Defendant [husband] [***2] to execute the
necessary warranty deed to said property to the children involved within this settlement within 10 days." James
Wyckoff never executed "the necessary warranty deed" to his children in spite of several unsuccessful petitions seeking
Page 17
251 Ga. 862, *; 310 S.E.2d 520, **;
1984 Ga. LEXIS 548, ***1
to have him held in contempt for his failure.
The parties stipulated the value of the property during the time in question was $ 49,000. This property was subject
to a $ 26,000 note secured by a deed to secure debt held by Charter Mortgage Company and a $ 700 note secured by a
second deed to secure debt held by C & S Mortgage Company. While the decree was silent as to who was to pay the
two notes on the property, Mrs. Wyckoff made the note payments after the final decree was entered.
[**522] During October 1980, Mrs. Wyckoff received a notice of foreclosure informing her that due to default,
the Timothy Drive property would be foreclosed on the first Tuesday in November 1980. Appellant Bacote, an
attorney, saw the foreclosure advertisement in the Fulton Daily Report, and went to the residence to inquire about the
property. Bacote talked to Mrs. Wyckoff, who was occupying the premises with the parties' minor children. Mrs.
Wyckoff [***3] testified Bacote told her he was in the business of helping poor black people save their houses from
foreclosure and asked to see Mr. Wyckoff. She told him that Mr. Wyckoff did not live there, that she knew where he
lived but did not know his address, and gave him his telephone number. According to Bacote, he gave Mrs. Wyckoff
his business card, told her that he had seen the property advertised, asked if they planned to buy the property back, and
told her he was interested in buying the property. Bacote testified that Mrs. Wyckoff told him that he would have to see
her husband about that. Bacote admitted he made no inquiry about whether the parties were divorced or what claim she
had in the property. Mrs. Wyckoff also admitted she did not volunteer this information. It is undisputed that appellant
never saw nor discussed the Timothy Drive property with appellees again until after he claimed some interest in the
property.
After the discussion with Mrs. Wyckoff, and after contacting Mr. Wyckoff's former attorney, appellant was
contacted by Mr. Wyckoff and a loan or sale of the property was discussed. A second meeting was held three days
before the foreclosure which resulted in [***4] appellant extending a loan to Mr. Wyckoff in the amount of $ 2,029 to
stop the foreclosure. At that time, Mr. Wyckoff executed a deed to secure debt, a contract of sale and a power of
attorney in favor of appellant. The agreement between the two was substantially as follows: Appellant was to extend
the initial loan in the amount of $ 2,029 to Mr. Wyckoff for the purpose of abating the foreclosure; Mr. [*864]
Wyckoff to execute a deed to secure debt in the amount of $ 1,000; the total loan was to be repaid within 90 days; and
that an extension of 90 days would be granted to Mr. Wyckoff if he repaid at least $ 1,000 within the initial 90-day
period and execute a warranty deed to appellant to be held in escrow during the extension period. The parties also
agreed that appellant would make monthly advances to Mr. Wyckoff in the amount of and for the purpose of keeping
the mortgage payments current. These amounts were to be added to the underlying obligation. The amount of the
monthly mortgage payments on the property was approximately $ 367. Appellant advanced this amount to Mr.
Wyckoff monthly from November 1980 through April 1981. The total amount loaned by appellant was approximately
[***5] $ 4,297. Mr. Wyckoff paid both mortgages during the months in question. No payments were made by
appellee during this period although she continued to occupy the premises.
After making the initial loan, appellant checked the deed records in Fulton County and found record title to the
premises in the name of James Wyckoff. Appellant admitted he made no further search of the public records
concerning this property. A further search would have revealed the following documents: (a) a Lis Pendens filed April
19, 1979 purporting to give notice that the Wyckoffs were divorced and that the final judgment entered affected title to
the Timothy Drive property;
1
(b) the final judgment and decree in the Wyckoff's divorce which granted appellees an
equitable interest in the marital domicile; and (c) a fi. fa. representing unpaid child support entered on the general
execution docket in favor of appellees against James Wyckoff.
1 The doctrine of lis pendens is not applicable to a sale after the proceeding in question has finally been passed
upon, Cook v. Hendricks, 146 Ga. 63 (90 SE 383) (1916), and a reasonable time thereafter. Land Development
Corp. v. Union Trust Co., 180 Ga. 785 (180 SE 836) (1935).
[***6] In January 1981, Mr. Wyckoff repaid $ 1,000 of the loan and received an extension [**523] of 90 days to
repay the balance. Mr. Wyckoff also executed a warranty deed conveying the Timothy Drive property to appellant,
Page 18
251 Ga. 862, *863; 310 S.E.2d 520, **521;
1984 Ga. LEXIS 548, ***2
with this deed being held in escrow for 90 days. Mr. Wyckoff and appellant had agreed that if the loan was not repaid
at the end of the 90-day period, the deed would be recorded and the property would belong to appellant. The balance of
the loan was not paid and appellant recorded his deed.
After recording the warranty deed, appellant sought to have appellees removed from the property by filing a
dispossessory proceeding in the State Court of Fulton County in the name of James [*865] Wyckoff and Randy
Bacote, agent and successor-in-title. Pending the outcome of this dispossessory proceeding, appellee were ordered to
pay both mortgage payments into the registry of the court. This proceeding resulted in a judgment for appellees.
On or about June 9, 1981, appellant filed a second dispossessory action in his own name alleging appellees failed to
make the monthly payments as they became due. In response, appellees obtained an order in superior court enjoining
[***7] the state court action and allowing appellees to pay the mortgages into the registry of the court. Mrs. Wyckoff
then filed this present Petition in Equity, individually and as next friend of the minor children, alleging there was a
conspiracy between appellant and her former husband to defraud her and the minor children out of their interest in the
Timothy Drive property. At the conclusion of trial, the jury found in favor of James Wyckoff, absolving him of any
liability. The jury also found in favor of appellees in the amount of $ 5,000 actual damages, $ 10,000 punitive damages
and $ 10,000 expenses of litigation against appellant, and that the deed from James Wyckoff to appellant be declared
null and void. The trial court entered judgment in accordance with the verdict and further decreed that title to the
Timothy Drive property be vested in appellees in accordance with the divorce decree. Appellant brings this appeal from
a denial of his motion for new trial.
1. Appellant contends there was insufficient evidence of fraud to support the imposition of damages against him.
We agree and reverse that portion of the judgment awarding appellees damages based upon fraud.
The basis [***8] of appellees' claim was that the execution of the warranty deed and the subsequent dispossessory
proceedings were all a part of a conspiracy between appellant and her former husband to cheat and defraud appellees
out of their interest in the property so they could appropriate the equity to themselves. The jury's verdict, exonerating
James Wyckoff, negated the conspiracy theory, so any damages awarded against appellant, were awarded on the theory
of appellant's fraud.
[HN1] To recover in tort for fraud, the plaintiff must prove five essential elements: (1) that the defendant made
representations; (2) that at the time he knew they were false; (3) that he made them with the intention and purpose of
deceiving the plaintiff; (4) that the plaintiff relied on the representations; and (5) that the plaintiff sustained the alleged
loss and damage as the proximate result of their having been made. Martin Burks Chevrolet v. McMichen, 136 Ga.
App. 845, 847 (222 SE2d 633) (1975); Eckerd's Columbia, Inc. v. Moore, 155 Ga. App. 4, 5 (270 SE2d 249) (1980).
Appellee's own testimony demonstrates that no fraud was perpetrated upon her in [*866] this action by either of the
defendants. Appellee [***9] testified she did not communicate with her former husband prior to this litigation.
Appellee further testified the only contact she had with appellant was during his initial visit to the property. At that time
the only representation made by appellant was that he was in the business of helping poor black people save their
houses from foreclosure. Appellee further acknowledged that no action, or inaction, taken by her, was in reliance on any
representations made by appellant.
2. Appellant also contends there was insufficient evidence to warrant the trial court's setting-aside his warranty
deed from James Wyckoff. Appellant argues he is a bona fide purchaser for value without [**524] notice of an
equity because at the time he made the loan to James Wyckoff, he had no notice of appellee's interest in the property.
We disagree.
[HN2] "Possession of land shall constitute notice of the rights or title of the occupant." O.C.G.A. § 44-5-169 (Code
Ann. § 85-408). In order for the possession to have the effect of notice, it must be actual, open, visible, exclusive, and
unambiguous. McDonald v. Dabney, 161 Ga. 711 (132 SE 547) (1929). "He who takes with notice of an equity takes
subject [***10] to that equity." O.C.G.A. § 23-1-16 (Code Ann. § 37-115). "Notice sufficient to excite attention and
Page 19
251 Ga. 862, *864; 310 S.E.2d 520, **523;
1984 Ga. LEXIS 548, ***6
put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry might have led.
Ignorance of a fact, due to negligence, shall be equivalent to knowledge in fixing the rights of the parties." O.C.G.A. §
23-1-17 (Code Ann. § 37-116).
The foregoing equitable principles demonstrate that once appellant found appellees in actual, open, visible,
exclusive, and unambiguous possession of the property, he had an affirmative duty to inquire of Mrs. Wyckoff
concerning appellees' rights in the premises and as a consequence of his failure to do so, he may not now prevail.
Yancey v. Harris, 234 Ga. 320 (216 SE2d 83) (1975). Appellant's loss here is not traceable to appellees' actions, but to
his own failure to perform his statutory duty to inform himself through inquiry as to the true state of the title.
Judgment affirmed in part and reversed in part.
Page 20
251 Ga. 862, *866; 310 S.E.2d 520, **524;
1984 Ga. LEXIS 548, ***10
9 of 176 DOCUMENTS
Positive
As of: Aug 04, 2014
YANCEY v. HARRIS et al.
No. 29674
Supreme Court of Georgia
234 Ga. 320; 216 S.E.2d 83; 1975 Ga. LEXIS 1121
March 11, 1975, Argued
April 30, 1975, Decided
PRIOR HISTORY: [***1] Equitable complaint. DeKalb Superior Court. Before Judge Dean.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff homeowner appealed the decision of the Superior Court of DeKalb County
(Georgia), which directed a verdict in favor of defendants, a lender and his assignee, after the homeowner's son-in-law,
who held legal title to the property, defaulted on his loan payments. The homeowner argued that she held an equitable
interest in the realty and that the lender and assignee did not meet their duty to inquire about her interest.
OVERVIEW: A homeowner who relied on her son-in-law's credit rating to purchase her house allowed record title to
the property to stand in his name. After the son-in-law used the property as collateral for a loan and defaulted on his
payments, the lender and his assignee filed a foreclosure action. The homeowner filed an action for a declaration that
she was the true beneficial owner of the property. The superior court directed a verdict in favor of the lender and his
assignee. On appeal, the court explained that, under Ga. Code Ann. § 85-408 and Ga. Civ. Code § 4528 (1910), when
record title stood in one person's name and another person had open and exclusive possession of it, that possession put
prospective purchasers on notice of an equitable title. The lender and the assignee had a duty to ask the homeowner
about the nature of her interest. Although the son-in-law had misrepresented her interest, there was no allegation that the
homeowner had been negligent or dishonest, such that she was estopped from claiming her equitable interest. Nor was
there any evidence that the lender and assignee met their duty of inquiry. The court reversed.
OUTCOME: The court found that the homeowner's open possession of the property imposed a duty of inquiry on the
lender and his assignee and that they did not meet this duty. The court reversed the directed verdict.
Page 21
CORE TERMS: deed, notice, son-in-law, purchaser, secret, lender, mother-in-law, equitable, homeowner, estoppel,
cestui que trust, holder, assignee, estopped, tenant, realty, constructive notice, beneficiary, ownership, occupant,
grantee, rule of law, resulting trust, bona fide purchaser, constructive, contributed, unrecorded, asserting, mortgage,
supplied
LexisNexis(R) Headnotes
Contracts Law > Types of Contracts > Bona Fide Purchasers
Estate, Gift & Trust Law > Trusts > Trustees > General Overview
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] A plaintiff, who claims to have purchased the property from another person, and who is seeking to dispossess the
person with a beneficial interest, is not a bona fide purchaser for value without notice of whatever equitable title the
tenant-beneficiary had in the property. Possession of land is notice of whatever right or title the occupant has. Ga. Civ.
Code § 4528 (1910).
Civil Procedure > Equity > General Overview
Real Property Law > Landlord & Tenant > Tenant's Remedies & Rights > General Overview
Real Property Law > Ownership & Transfer > Equitable Interests
[HN2] He who takes with notice of an equity takes subject to that equity. Ga. Civ. Code § 4529 (1910). Notice
sufficient to excite attention and put a party on inquiry is notice of everything to which it is afterwards found such
inquiry might have led. Ignorance of a fact, due to negligence, is equivalent to knowledge, in fixing the rights of the
parties. § 4530. A purchaser therefore is put on notice of all the right, title, and interest of a tenant in possession. The
rule is not different where the tenant in possession is a cestui que trust. Actual possession by the cestui que trust is
constructive notice to a purchaser as to the occupant's equitable title.
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
Real Property Law > Trusts > Holding Trusts
[HN3] When a trustee attempts to transfer the trust realty to a purchaser in violation of the rights of a beneficiary in
possession, the purchaser takes with notice of the equitable title, and the purchaser will not succeed in an attempt to
eject the beneficiary.
Real Property Law > Ownership & Transfer > Equitable Interests
[HN4] In all but a few jurisdictions, a purchaser of land has constructive notice of all facts affecting the title of which he
would have learned by an inspection of the premises. It is, therefore, the general rule that, if land is in possession of any
one other than the vendor, a purchaser takes title subject to all existing rights and equities of the person in possession.
Civil Procedure > Pleading & Practice > Pleadings > Heightened Pleading Requirements > General Overview
[HN5] Estoppel must be specially pleaded, according to Ga. Code Ann. § 81A-108(c).
Contracts Law > Defenses > Equitable Estoppel > General Overview
Torts > Negligence > Gross Negligence
[HN6] In order for an equitable estoppel to arise, there must generally be some intended deception in the conduct or
declarations of the party to be estopped, or such gross negligence as to amount to constructive fraud, by which another
Page 22
234 Ga. 320, *; 216 S.E.2d 83, **;
1975 Ga. LEXIS 1121, ***1
has been misled to his injury. Ga. Code Ann. § 38-116.
Contracts Law > Defenses > Equitable Estoppel > General Overview
[HN7] The party who claims the benefit of estoppel must have acted in good faith and reasonable diligence; otherwise
no equity will arise in his favor.
Contracts Law > Defenses > Equitable Estoppel > General Overview
Real Property Law > Ownership & Transfer > Equitable Interests
[HN8] Ga. Code Ann. § 85-408 establishes a flat rule that one is not estopped to claim land by the mere act of allowing
legal title to stand in the name of another.
Civil Procedure > Trials > Judgment as Matter of Law > General Overview
Real Property Law > Ownership & Transfer > Equitable Interests
[HN9] To operate as notice, the possession must be open, visible, exclusive, and unambiguous, not liable to be
misconstrued or misunderstood. It must not be mixed or ambiguous possession.
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Real Property Law > Ownership & Transfer > Equitable Interests
[HN10] When the occupation by one is not exclusive, but in connection with another, with respect to whom there exists
a relationship sufficient to account for the situation, and the circumstances do not suggest an inconsistent claim, then
such a possession will not give notice of a right by an unrecorded grant. If, of two occupants, one has the record title, a
purchaser has the right to assume that the other has no title.
Real Property Law > Ownership & Transfer > Equitable Interests
[HN11] When there is no joint occupation of the land involved and the purchasers of the land must rely solely on a
claimed familial relation between the one in possession and the record title owner, the law does not support them.
COUNSEL: Nicholas N. Sears, for appellant.
Seigel, Grude & Amato, Alvin N. Seigel, for appellees.
JUDGES: Hall, Justice. All the Justices concur, except Gunter, Jordan and Ingram, JJ., who dissent.
OPINION BY: HALL
OPINION
[*320] [**83] This appeal presents a contest between, on one side, a homeowner who allowed record title to her
residential property to stand in the name of her son-in-law because [*321] his income or credit rating was thought
necessary to satisfy the mortgage lender at the time of purchase, and, on the other side, an attorney who loaned money
to the son-in-law on the strength of his record title taking a security deed to the property, and the assignee of the
attorney to whom he sold the son-in-law's note and security deed, all of which was done without homeowner's
knowledge. The son-in-law defaulted on payments, and the assignee threatened foreclosure. The homeowner then
brought suit asking that the court decree that the [**84] property held by the son-in-law was impressed with a resulting
trust in her favor, and that the security deed was null and void.
[***2] At trial the homeowner presented evidence which was more than adequate to show that she was the true
beneficial owner of the property; that at all times pertinent hereto she had been in open and exclusive possession of it
Page 23
234 Ga. 320, *; 216 S.E.2d 83, **;
1975 Ga. LEXIS 1121, ***1
under a claim of title; that the son-in-law did not live on the property with her; that the attorney, prior to making the
loan to the son-in-law, visited the property and ascertained that she was the mother-in-law of Mr. Harris, her son-in-law,
but that he said nothing to suggest to her that the son-in-law was encumbering the property; that he never asked her
under what claim she held the property; and that the assignee similarly never inquired of her. It appeared that the
son-in-law had represented to the attorney that the homeowner rented the property from him. The evidence showed
without conflict that the homeowner was unaware of her son-in-law's attempt to encumber the land until after the
security deed was given to Siegel and transferred to Zimmerman. At the close of her case, the court directed that a
verdict be entered as prayed for against the son-in-law; and that a verdict be entered for the attorney Siegel and the
assignee Zimmerman (hereinafter, "the [***3] defendants") to the effect that the security deed was a valid
encumbrance on the property. The only appeal is by the homeowner from the directed verdict for defendants. We agree
with her contentions and reverse.
Homeowner's argument here, based on Code § 85-408, is that although record title stands in another's name her
open, exclusive possession of the property is [*322] notice to all the world of whatever her right or title may be, and
that Siegel and Zimmerman had a duty to inquire of her concerning her right, and as a consequence of their failure to
do so they may not now prevail. This argument is based upon very old principles of law set forth in, for example,
Broadwell v. Maxwell, 30 Ga. App. 738, 747 (119 SE 344), in which property was impressed with a parol trust: [HN1]
"The plaintiff Maxwell, who claims to have purchased the property from Smith [trustee], and who is seeking to
dispossess the tenant [beneficiary], is not a bona fide purchaser for value without notice of whatever equitable title the
defendant [tenant-beneficiary] had in the property. 'Possession of land is notice of whatever right or title the occupant
has.' Civil Code (1910), § 4528. [HN2] 'He [***4] who takes with notice of an equity takes subject to that equity.'
Civil Code (1910), § 4529. 'Notice sufficient to excite attention and put a party on inquiry is notice of everything to
which it is afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, is equivalent to
knowledge, in fixing the rights of the parties.' Civil Code (1910), § 4530. A purchaser therefore is put on notice of all
the right, title, and interest of a tenant in possession. The rule is not different where the tenant in possession is a cestui
que trust. Actual possession by the cestui que trust is constructive notice to a purchaser as to the occupant's equitable
title. [Cits.]" (Emphasis supplied.)
The superior court ruled that the son-in-law held the land as trustee under a resulting trust for her benefit. This
ruling has not been appealed. The law is clear that [HN3] where a trustee attempts to transfer the trust realty to a
purchaser in violation of the rights of a beneficiary in possession, the purchaser takes with notice of the equitable title,
and the purchaser will not succeed in an attempt to eject the beneficiary. Bank of Arlington v. Sasser, 182 Ga. 474 (185
[***5] SE 826). Cf. Chapman v. Faughnan, 183 Ga. 114, 115 (187 SE 634) (beneficiary in possession may enjoin
trespass by purchasers from her trustee).
This result is compatible with generally applied legal principles. [HN4] "In all but a few jurisdictions, a purchaser
of land has constructive notice of all facts affecting [*323] the title of which he would have learned by an inspection of
the premises. It is, therefore, [**85] the general rule that, if land is in possession of any one other than the vendor, a
purchaser takes title subject to all existing rights and equities of the person in possession." 2 Patton on Titles 603, § 674
(2d Ed. 1957).
It is true that Mrs. Yancey, by allowing title to the property to stand in another's name, contributed to a confusing
situation. However, this does not undercut her right to prevail in this lawsuit. We note with reference to concepts of
estoppel that [HN5] estoppel must be specially pleaded (Code Ann. § 81A-108 (c)), and none of the three defendants
here pleaded estoppel in his answer to Mrs. Yancey's complaint. Nonetheless, assuming estoppel had been an issue, we
find that the classical elements giving rise to an estoppel, including either [***6] intentional deception or gross
negligence, are not present here in Mrs. Yancey's actions: [HN6] "In order for an equitable estoppel to arise, there must
generally be some intended deception in the conduct or declarations of the party to be estopped, or such gross
negligence as to amount to constructive fraud, by which another has been misled to his injury." Code § 38-116.
Moreover, Siegel and Zimmerman, who exercised no diligence in their own behalf to discover her interest, have not
positioned themselves to claim estoppel against her: [HN7] "'. . . the party who claims the benefit of estoppel . . . must
Page 24
234 Ga. 320, *321; 216 S.E.2d 83, **84;
1975 Ga. LEXIS 1121, ***2
have acted in good faith and reasonable diligence; otherwise no equity will arise in his favor.' 2 Pomeroy's Equity
Jurisprudence (4 Ed.), § 813." Johnson v. Ellis, 172 Ga. 435 (5) (158 SE 39). (Emphasis supplied.)
In summary, there is no rule of law in Georgia, statutory or otherwise, which denies to Mrs. Yancey the right to
hold and enforce equitable title to this land while she allows legal title to stand in the name of another. However, there
is a rule of law, Code § 85-408, which required of defendants here that they ask her the source of her claim to the land
in light of her [***7] flagrant, sole possession of it. Their loss here is not traceable to her actions, but to their own
failure to perform their statutory duty to inform themselves through inquiry as to the true state of the title. Had they
inquired and had Mrs. Yancey misrepresented anything to them, then questions of [*324] estoppel might conceivably
arise. But there was no inquiry made of her; no misrepresentation; and no notice to her of her son-in-law's actions until
it was too late to prevent his giving the deed. She is not estopped to assert her claim. [HN8] Code § 85-408 establishes
a flat rule that one is not estopped to claim land by the mere act of allowing legal title to stand in the name of another.
The sole argument of defendants, on which they must stand or fall, is that the general rule homeowner relies on
does not apply where there is a familial or other relationship between the record owner and the possessor sufficient to
suggest that the possessor holds the land at the permission of the other and not inconsistently with the other's title.
The directed verdict for defendants is reversed because the rule of law on which their case is founded does not exist
in Georgia. The law might [***8] support their position if the son-in-law resided on the property with the homeowner,
but he does not. [HN9] "To operate as notice, the possession must be open, visible, exclusive, and unambiguous, not
liable to be misconstrued or misunderstood. It must not be mixed or ambiguous possession. So it has been held that
possession of land by the grantee, holding under an unrecorded deed, together with the grantor, is not constructive
notice of the unrecorded deed to a subsequent purchaser. Wells v. American Mortgage Co., 109 Ala. 430 (20 S 136).
Where a widow contributed a part of the purchase-money of a farm, and her brother, who contributed the remainder,
took title thereto in his own name without her knowledge, it was held that the fact that she lived on the farm with him
did not give notice of her resulting trust to a purchaser from him. Harris v. McIntyre, 118 Ill. 275 (8 NE 182). The
correct rule is that [HN10] when the occupation by one is not exclusive, but in connection with another, [**86] with
respect to whom there exists a relationship sufficient to account for the situation, and the circumstances do not suggest
an inconsistent claim, then such a possession will [***9] not give notice of a right by an unrecorded grant . . . If, of
two occupants, one has the record title, a purchaser has the right to assume that the other has no title. [Cits.]" McDonald
v. Dabney, 161 Ga. 711, 725 (132 SE 547). [*325] (Emphasis supplied.) Accord, Manning v. Manning, 135 Ga. 597
(3) (69 SE 1126); Goodwynne v. Bellerby, 116 Ga. 901 (5) (43 SE 275).
However, [HN11] where, as here, there is no joint occupation of the land involved and defendants must rely solely
on a claimed familial relation between the one in possession and the record title owner, the law does not support them.
In Hall v. Turner, 198 Ga. 763 (32 SE2d 829), the possession of a father and mother was held sufficient to put a
purchaser upon inquiry where the son, to whom the father and mother had deeded the property under an agreement
that they might remain in possession for their lifetimes, attempted to sell without a reservation of their rights. To the
same effect is Waddell v. City of Atlanta, 121 Ga. App. 94 (172 SE2d 862), wherein the possession of a wife and
children under an award of temporary alimony was sufficient to give notice to a prospective purchaser from the
husband. [***10] Also, in Lewis v. Lewis, 210 Ga. 330 (80 SE2d 312), "[t]he actual possession of the home place by
the wife and children was sufficient to put Graham [the husband's attorney who was paid with a deed to the premises]
on inquiry as to the claim under which she held possession. Code § 85-408 . . ." Id. at 334-335.
The trial court erred in directing a verdict for the son-in-law's grantee, Siegel. Zimmerman, as a remote grantee,
stands in no better position (Coffey Enterprises Realty &c. Co. v. Holmes, 233 Ga. 937; Chandler v. Ga. Chemical
Works, 182 Ga. 419 (1b) (185 SE 787, 105 ALR 837)), and the direction of a verdict for him was also error.
Judgment reversed.
DISSENT BY: GUNTER; INGRAM
Page 25
234 Ga. 320, *323; 216 S.E.2d 83, **85;
1975 Ga. LEXIS 1121, ***6
DISSENT
Gunter, Justice, dissenting.
The appellant here, Mrs. Yancey, brought an action in the trial court against Edward Harris, her son-in-law, which
sought to have the title to realty adjudged to be in [*326] her rather than Harris, the then record title holder. Mrs.
Yancey also joined Siegel and Zimmerman as additional defendants, because Harris had executed and delivered a
security deed to the realty to Siegel who had assigned the security deed to Zimmerman. She sought [***11] to have the
security deed declared null and void "on account of the notice of petitioner's rights in said property imputed to
defendants Siegel and Zimmerman by Ga. Code Ann. Sec. 85-408."
The trial judge, after the completion of Mrs. Yancey's evidence to the jury, directed a verdict in favor of Siegel and
Zimmerman, directed a verdict against Harris, and his judgment ordered Harris to execute and deliver a quitclaim deed
to Mrs. Yancey conveying all of Harris' right, title and interest in and to the realty. Mrs. Yancey has appealed,
contending that the trial judge erroneously directed a verdict in favor of Siegel and Zimmerman.
The evidence showed that the property was purchased in 1966 from Daniel K. Bennett who executed and delivered
a warranty deed to Edward Harris that was properly recorded. The warranty deed to Harris was subject to a first-lien
security deed to a lending institution.
Mrs. Yancey's testimony was to the effect that though title had been taken in the name of Harris, she and her
husband, now deceased, had made all of the payments on the property including the original down payment and the
monthly payments to the first-lien holder. She contended that Harris [***12] merely held the legal title to the property,
that the equitable title was in her and [**87] her husband until her husband's death, that since her husband's death the
equitable title was totally in her, and that Harris had no legal right to execute and deliver a security deed creating a
second lien on her property. She further contended that she and her husband had been in possession of the property
since 1966 when it was purchased from Bennett and that her possession was sufficient to give her priority of title over
the second-lien security deed made to Siegel and now held by Zimmerman.
Siegel's testimony was to the effect that he had made a loan to Harris that was secured by the second-lien [*327]
security deed based on Harris' record title plus the fact that Harris had told him that his mother-in-law occupied the
property and paid rent. He testified that he had inspected the property, knew that Mrs. Yancey occupied it, but that he
did not ask her by what authority she was occupying the property.
Mrs. Yancey's entire case is based on a statutory provision which says: "Possession of land is notice of whatever
right or title the occupant has." Code Ann. § 85-408.
However, [***13] Mrs. Yancey's claimed equitable title is dependent solely upon a deed from Bennett to Harris
executed, delivered and recorded in 1966. At the time the Yanceys allegedly purchased the property from Bennett, they
permitted the record title to be placed in the name of Harris, their son-in-law. Mrs. Yancey is in the position of claiming
her title under the deed from Bennett to Harris and at the same time denying the title of Harris and Harris' grantee in a
security deed. Where third parties who do not have actual notice are involved, I do not understand that one can claim
title under a deed and at the same time deny its terms, namely, that the Bennett deed in this case conveyed title to
Harris.
I think Mrs. Yancey was estopped to deny the second-lien interest acquired by Siegel and Zimmerman from her
son-in-law; under the facts of this case, Mrs. Yancey and her deceased husband had, by allowing title to have been
placed in Harris, created a legal situation whereby Harris could encumber the property; and Mrs. Yancey's possession in
these circumstances was not notice to a purchaser from Harris that she claimed title and that Harris had no title to the
property.
There was no evidence [***14] that Siegel or Zimmerman had any "actual notice" of Mrs. Yancey's claim of title;
Page 26
234 Ga. 320, *325; 216 S.E.2d 83, **86;
1975 Ga. LEXIS 1121, ***10
and Mrs. Yancey's possession, under the circumstances of this case, did not establish constructive notice that would
defeat the second-lien encumbrance created by Harris.
In the case of Parker v. Barnesville Savings Bank, 107 Ga. 650, 656 (34 SE 365) (1899), a wife asserted title to
land purchased with her funds where the legal title had been taken in the name of her husband. This court said: "In no
event would he in any sense become part owner of [*328] the land or be in a position, as against her, to deny a
resulting trust as to all lands purchased with her money. But the same rule cannot be extended to a bona fide
purchaser from the husband, who had no notice of the equity of Mrs. Parker . . . This doctrine proceeds upon the idea
that the equity of the innocent purchaser is superior to that of the cestui que trust, who stands silently by and permits
such purchaser to act to his prejudice, or who is guilty of laches in not sooner asserting a mere secret equity. It follows
that as soon as a purchaser from the husband acquires his legal rights, the cestui que trust loses all claim to the [***15]
property so purchased; and such purchaser cannot be compelled to litigate with, or in any way recognize, the cestui que
trust as having any rights or interests in the premises. Indeed, the only footing the latter has, after a sale, is the limited
privilege of showing that the purchaser was not acting bona fide, but had notice of and therefore bought subject to the
secret equity. A petition for relief on any other ground is not maintainable; for, after a bona fide sale, the holder of the
secret equity is effectually cut off from asserting any claim whatsoever . . . A mortgagee who in good faith parts with
[**88] his money, in ignorance that a person other than the holder of the legal title has a secret equity in the mortgaged
property, stands precisely in the attitude of a bona fide purchaser and is entitled to the same protection . . . In the
present case, when the bank, without notice, acquired its mortgages (and no notice to it is charged in the petition), the
wife was completely cut off from asserting, as against it, her secret equitable claim of ownership. As owner, she has no
footing in court, unless she can show that the bank had notice of and took subject to her equity."
[***16] It is true that in that case, possession of the land was not asserted as "notice" to the mortgagee. But, in
my view, that would not prevent the principle asserted in that case from being applied in the case at bar. Mrs. Yancey's
"secret equity" is claimed under a deed to Harris which did not disclose the fact of his trusteeship, or the existence of
her "secret equity." She and her deceased husband participated in the execution and delivery of the deed to Harris to the
extent that they permitted the title to be [*329] taken in his name and recorded in the public deed records, thereby
displaying to the world Harris' ownership even though they simultaneously went into possession of the property.
Under such circumstances, I do not believe that possession by Mrs. Yancey was notice, actual or constructive, of her
"secret equity" as against a transferee for value from Harris, the record title holder.
I think the evidence demanded the verdict in favor of Siegel and Zimmerman, and I would affirm the judgment
below.
I respectfully dissent.
Ingram, Justice, dissenting.
Under the facts of this case, a mother-in-law permitted record title to real property to be placed in her son-in-law's
[***17] name "because his income or credit rating was thought necessary [by the mother-in-law] to satisfy the
mortgage lender at the time of purchase . . ." She now wants to urge a secret equity in the property against the lender's
assignee because the loan was not paid by her son-in-law. The majority hold that the mother-in-law's possession was
enough to put the lender on notice of her secret equity. In my opinion, this scrambles, rather than balances, the real
equities in the case.
I believe the correct result would be that the lender and his assignee are insulated, by the doctrine of equitable
estoppel, from the mother-in-law's claim. Under these facts, the mother-in-law was bound to know a lender would be
extending credit to her son-in-law on the faith of his record ownership of the property as opposed to hers which
apparently she concealed until after the loan was made and a default occurred. Meanwhile, the mother-in-law stood by
and did nothing to assert the existence of the secret equity which she now claims. I would direct her claim to her
son-in-law who failed to pay the loan, rather than to the lender who had no actual or constructive notice of the secret
Page 27
234 Ga. 320, *327; 216 S.E.2d 83, **87;
1975 Ga. LEXIS 1121, ***14
equity claimed by [***18] the mother-in-law.
The majority place the burden on the lender to discover the mother-in-law's secret equity arising solely from her
possession. The son-in-law told the lender his mother-in-law was living on the land without charge as [*330] his
tenant. The effect of the majority decision is that one who loans money on real estate cannot rely on record title and the
representations made to it by the record title borrower, explaining possession of his property by someone within his
family circle as his tenant. The lender must now go upon the land to be encumbered to ascertain if any third party is in
possession, even a member of the borrower's family. If so, the lender must obtain a quitclaim deed or at least an
affidavit from the family member in possession that he or she has no secret equity in the property. Otherwise, the loan
deed may be set aside and canceled at the behest of the holder of the secret equity. I do not think this is a correct
equitable result.
[**89] It is significant to me that this mother-in-law had ample opportunity to tell the attorney representing the
lender of her equity in the property before the loan was closed but she did not do so. I believe [***19] her silence, in
these circumstances, was misleading and that she had a duty to reveal her claimed ownership at that time. Having failed
to do so, I would hold that she is now estopped in equity to set aside the loan deed her son-in-law made on the property.
Code § 37-109. I agree that, ordinarily, possession is sufficient notice of whatever title, if any, the possessor may have,
but, under the facts of this case, it is not strong enough to overcome the inequity to the lender and his bona fide
transferee for value of being misled by these intrafamily dealings. The interest of the lender and his transferee in this
case should be superior to that of the cestui que trust, who stood silently by and permitted the lender to act to its
prejudice when she had an opportunity to assert her interest. Equity must blush because of its unwarranted intrusion
here. See Code § 37-111. Therefore, I dissent to the majority opinion and regret the effect it will have on the real estate
practice of law in this state.
Page 28
234 Ga. 320, *329; 216 S.E.2d 83, **88;
1975 Ga. LEXIS 1121, ***17
10 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
PERIMETER DEVELOPMENT CORPORATION et al. v. HAYNES et al.
No. 29824
Supreme Court of Georgia
234 Ga. 437; 216 S.E.2d 581; 1975 Ga. LEXIS 1154
April 16, 1975, Argued
April 29, 1975, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied May 20, 1975.
PRIOR HISTORY: Cancellation, etc. Gwinnett Superior Court. Before Judge Pittard.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff innocent purchaser challenged the order of the Gwinnett Superior Court
(Georgia), denying the innocent purchaser's motion for summary judgment on defendant landowners' action to set
aside conveyances involving a tract of land.
OVERVIEW: The landowners brought an action to set aside conveyances involving a tract of land that they possessed.
The land was allegedly conveyed to defendant individuals who sold the land to the innocent purchaser. The trial court
granted summary judgment to the individuals, but the court had earlier reversed that ruling because there was a question
as to whether the transaction between the landowners and the individuals had been a loan or a sale. The trial court then
denied the innocent purchaser's motion for summary judgment. The court affirmed the judgment and held that,
because the landowners were in possession of the property, the innocent purchaser was obligated to have inquired
into the nature of their possession or to have risked a court declaring its contract void. The court also rejected the
innocent purchaser's contention that the landowners were estopped from claiming the land based on a deed and
expired rental agreement in the public record. The court noted that, in order for equitable estoppel to have arisen, there
had to have been an intended deception by the landowners.
Page 29
OUTCOME: The court affirmed the trial court's denial of summary judgment to the innocent purchaser on the
landowners' action to set aside the conveyance of the property.
CORE TERMS: deed, warranty deed, grantee, summary judgment, notice, realty, conveyed, grantor, lending
institution, transferee, equitable, estopped, cancellation, conveyance, occupant, actual notice, estoppel, convey, remote,
recorded, evidence of fraud, prima facie, present case, public record, vendor, record showed, new principle, present
appeal, equitable interest, innocent purchasers
LexisNexis(R) Headnotes
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN1] Possession of land is notice of whatever right or title the occupant has. Ga. Code Ann. § 85-408 (1933).
Contracts Law > Types of Contracts > Rights of Possessors
Real Property Law > Deeds > Enforceability
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN2] Possession retained by the vendor, after an absolute sale of real or personal property, is prima facie evidence of
fraud, which may be explained, and after the possession is proven, the burden of explaining it rests upon those who
claim under the sale.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN3] The onus of explanation, after possession is proven, is upon the grantee. So it can be seen that from very early
times deeds and assignments of property, where the grantor remained in possession, were said to be affected with an
infirmity that prevented them from being conclusive. The possession calls for inquiry as to the right or title of the
occupant and opens the transaction to investigation. In such circumstances the grantee assumes the risk of a court
declaring his contract void in the absence of a satisfactory showing that the transaction was bona fide.
Real Property Law > Deeds > General Overview
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN4] A deed absolute in form may be shown to have been made to secure a debt, where the maker remains in
possession of the land. Actual possession is notice to the world of the right or title of the occupant.
Real Property Law > Financing > Mortgages & Other Security Instruments > General Overview
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
Real Property Law > Title Quality > Marketable Title > Remedies
[HN5] Where the owner of land executes a deed of the character mentioned in the first note, and remains in possession
of the land, and the grantee conveys the land to another who has no actual notice of the undisclosed agreement that the
deed should operate as a security for debt, and who has made no inquiry of the occupant, the latter may pay or tender
the amount of the debt to the first grantee and maintain an equitable action against the first grantee and the remote
grantee for cancellation of both deeds as clouds upon his title, and to have the title decreed to be in him.
Contracts Law > Defenses > Equitable Estoppel > General Overview
Torts > Negligence > Gross Negligence
[HN6] Ga. Code Ann. § 38-116 provides: In order for an equitable estoppel to arise, there must generally be some
Page 30
234 Ga. 437, *; 216 S.E.2d 581, **;
1975 Ga. LEXIS 1154, ***1
intended deception in the conduct or declarations of the party to be estopped, or such gross negligence as to amount to
constructive fraud, by which another has been misled to his injury. Since the whole doctrine of estoppel is a creature of
equity and governed by equitable principles, it necessarily follows that the party who claims the benefit of an estoppel
must not only have been free from fraud in the transaction, but must have acted in good faith and reasonable diligence;
otherwise no equity will arise in his favor.
COUNSEL: Webb, Fowler & Tanner, W. Howard Fowler, J. L. Edmondson, for appellants.
Gershon, Ruden, Pindar & Olin, George A. Pindar, Harris & Martin, Robert B. Harris, Nancy Pat Phillips, for
appellees.
JUDGES: Undercofler, Presiding Justice. All the Justices concur, except Gunter, Jordan and Ingram, JJ., who dissent.
OPINION BY: UNDERCOFLER
OPINION
[*437] [**581] Laurie and Guylene Haynes filed an action to set aside several conveyances involving the same
tract of land. The property was conveyed to Jack A. Blackwell and J. Allen Poole on April 3, 1972. Blackwell and
Poole on January 2, 1973, sold the land to Perimeter Development Corporation which gave the Gwinnett County Bank a
deed to secure debt. The trial court granted a summary judgment to the defendants Blackwell and Poole and denied the
complainants' summary judgment. This court reversed the grant of summary judgment and held: [**582] "5. The trial
court in granting the motion for summary judgment recognized that the evidence of the plaintiffs presented a question of
fact as to [***2] whether the transaction was a loan or a sale, but then held that such testimony could not overcome the
terms of the written instruments. Under the evidence adduced a fact question was presented as to whether the
transaction was a sale or a loan. The plaintiffs never gave up possession of the premises, the third party who later
purchased such land from Blackwell and Poole made no inquiry as to their interest in such land, and a fact question
remained for the trier of fact as to the true nature of the transaction." Haynes v. Blackwell, 232 Ga. 430 (207 SE2d 66).
When the remittitur was filed in the trial court, Perimeter and the Bank filed three affidavits and moved for a
summary judgment for the first time. The affidavits denied any actual notice of any loan between the Haynes and
Blackwell and Poole. The motion for summary judgment was denied and the appeal is from this judgment which was
certified for immediate review. Held:
1. The appellants contend that since the record showed that the Haynes were in possession of the property under an
expired lease agreement, they were relieved [*438] from inquiring into the nature of their possession. There is no
merit in [***3] this contention.
In Chandler v. Ga. Chemical Works, 182 Ga. 419, 424 (185 SE 787) this court said: [HN1] "'Possession of land is
notice of whatever right or title the occupant has.' Code of 1933, § 85-408. In reference to this section it was said in
Hadaway v. Smedley, 119 Ga. 264, 268 (46 SE 96): 'If it had been a new principle announced for the first time in that
Code (of 1895), it might not have applied to some of the transactions in this case; but it is not a new principle and has
always been the law in this State, as will be seen by reference to the opinion of Bleckley, C. J., in Broome v. Davis, 87
Ga. 587 (13 SE 749), from which this section of the Code was taken.' The principle is also found in Peck v. Land, 2 Ga.
1 (2) (46 AD 368), the second headnote of which is: 'The possession of property, real or personal, remaining with the
vendor after an absolute deed of conveyance, is an evidence of fraud.' (Italics ours.) In Fleming v. Townsend, 6 Ga. 103
(50 AD 318), it was held: [HN2] 'Possession retained by the vendor, after an absolute sale of real or personal property, is
prima facie evidence of fraud, which may be explained, and after the possession is proven, [***4] the burthen of
explaining it rests upon those who claim under the sale.' In that case Judge Nisbet approved the holding of the lower
court that 'The possession in the vendor was, under that Statute (27 Elizabeth), and also by the principles of the
Common Law, independent of it, prima facie evidence of fraud.' While this case does not involve the question of
Page 31
234 Ga. 437, *; 216 S.E.2d 581, **;
1975 Ga. LEXIS 1154, ***1
defrauding creditors, yet the fundamental principles of notice implied from possession is at the core. The badge of
fraud is there prima facie, and required one claiming under the grantee to determine by inquiry whether the badge was
real or apparent. 'The burthen of explaining it rests upon those who claim under the sale.' Or as was said in Fleming v.
Townsend, supra: [HN3] 'The onus of explanation, after possession is proven, is upon the grantee.' So it can be seen
that from very early times deeds and assignments of property, where the grantor remained in possession, were said to
be affected with an infirmity that prevented them from being conclusive. The possession called for inquiry as to the
right or title of the occupant in the present case, and opened the transaction [*439] to investigation. In such
circumstances [***5] the grantee assumed the risk of a court declaring his contract void, in the absence of a satisfactory
showing that the transaction was bona fide. In Berry v. Williams, 141 Ga. 642 (81 SE 881), it was held: '1. [HN4] A
deed absolute in form may be shown to have been made to secure a debt, where the maker remains in possession of the
land. Mercer v. Morgan, 136 Ga. 632 (71 SE 1075). 2. Actual possession is [**583] notice to the world of the right
or title of the occupant. Mercer v. Morgan, supra; Bridger v. Exchange Bank, 126 Ga. 821 (56 SE 97, 8 LRA (NS) 463,
115 ASR 118); Austin v. Southern Home &c. Asso., 122 Ga. 439 (50 SE 382). 3. [HN5] Where the owner of land
executes a deed of the character mentioned in the first note, and remains in possession of the land, and the grantee
conveys the land to another who has no actual notice of the undisclosed agreement that the deed should operate as a
security for debt, and who has made no inquiry of the occupant, the latter may pay or tender the amount of the debt to
the first grantee and maintain an equitable action against the first grantee and the remote grantee for cancellation of both
deeds as clouds upon his title, and [***6] to have the title decreed to be in him.' It will be noted that in that case there
was 'actual possession' by the grantor. No other facts or circumstances are shown which would demand an inquiry,
except the single fact of possession. We have undertaken to show such facts in the present case as an additional reason
for a reversal of the judgment. See, to the same effect as in the last mentioned case: Cogan v. Christie, 48 Ga. 585;
Franklin v. Newsom, 53 Ga. 580; Broome v. Davis, 87 Ga. 584, 587, supra; Kent v. Simpson, 142 Ga. 49 (82 SE 440);
Summerour v. Summerour, 148 Ga. 499 (97 SE 71); Waller v. Dunn, 151 Ga. 181 (106 SE 93); Sims v. Sims, 162 Ga.
523 (134 SE 308).
"It is contended by the defendant, however, that the present case is not controlled by the foregoing cases, but is
controlled by a line of decisions beginning with Jay v. Whelchel, 78 Ga. 786 (3 SE 906), and including Malette v.
Wright, 120 Ga. 735 (48 SE 229); Peabody v. Fletcher, 150 Ga. 468, 479 (104 SE 448); Johnson v. Hume, 163 Ga. 867
(137 SE 56); Rimes v. Floyd, 168 Ga. 426, 428 (148 SE 86). We think it will be found that the case of Jay v. Whelchel,
[*440] [***7] supra, and the cases following and based upon it, stand upon their special facts. If not, the older cases
upon which section 85-408, supra, is founded must prevail. In Bridger v. Exchange Bank, 126 Ga. 821, 826 (56 SE 97,
8 LRA (NS) 463, 115 ASR 118), it was stated, as to the Malette case: 'The decision never intended to abrogate the
general rule, but merely held that the facts of that case did not fall within it.' The two lines of cases have led to some
very close decisions. It is worth while to note that Chief Justice Bleckley wrote the decisions in both Jay v. Whelchel
and Broome v. Davis, from which latter the Code provision was taken. There is no conflict between the two decisions."
2. The appellants contend further that because the Haynes knew that the warranty deed and rental agreement were
placed on the public record and knew that they would mislead innocent purchasers for value, they are estopped to
attempt to set aside the conveyances even though they remained in possession of the land. There is no merit in this
contention.
[HN6] Code § 38-116 provides: "In order for an equitable estoppel to arise, there must generally be some intended
deception in the conduct [***8] or declarations of the party to be estopped, or such gross negligence as to amount to
constructive fraud, by which another has been misled to his injury." Jones v. Tri-State Elec. Coop., 212 Ga. 577 (94
SE2d 497); Tybrisa Co. v. Tybeeland, Inc., 220 Ga. 442 (139 SE2d 302).
"'Since the whole doctrine [of estoppel] is a creature of equity and governed by equitable principles, it necessarily
follows that the party who claims the benefit of an estoppel must not only have been free from fraud in the transaction,
but must have acted in good faith and reasonable diligence; otherwise no equity will arise in his favor.' 2 Pomeroy's
Equity Jurisprudence (4 Ed.), § 813." Johnson v. Ellis, 172 Ga. 435 (5) (158 SE 39). Estoppels are not favored. Code §
38-114; Parker v. Crosby, 150 Ga. 1 (102 SE 446); Cobb County Rural Elec. Mem. Corp. v. Bd. of Lights &c., 211 Ga.
Page 32
234 Ga. 437, *438; 216 S.E.2d 581, **582;
1975 Ga. LEXIS 1154, ***4
535, 539 (87 SE2d 80); Travelodge Corp. v. [**584] Carwen Realty Co., 223 Ga. 821, 823 (1) (158 SE2d 378);
Yancey v. Harris, 234 Ga. 320.
3. Under the evidence adduced a fact question is presented as to whether the transaction was a sale or [*441] a
loan.
Judgment affirmed.
DISSENT BY: [***9] GUNTER; INGRAM
DISSENT
Gunter, Justice, dissenting.
When this case was here before I dissented. See Haynes v. Blackwell, 232 Ga. 430 (207 SE2d 66) (1974). The
basis of my dissent there was that the record showed that the Haynes had conveyed the realty by warranty deed to
Blackwell and Poole, Blackwell and Poole had conveyed the realty by warranty deed to Perimeter, and Perimeter had
conveyed the realty by security deed to a lending institution. The action by the Haynes sought to set aside all three
deeds, and they were not entitled to cancellation of the deeds if Perimeter and the lending institution were transferees
for value without actual notice of the "secret equity" claimed by the Haynes in the realty.
On the basis of that record, I thought that the only claim the Haynes could possibly have was one for damages for
breach of contract against Blackwell and Poole, their immediate grantees in a recorded warranty deed that was claimed
by the Haynes not to be, in fact, a valid warranty deed.
The Haynes had conveyed the realty in question to Blackwell and Poole by warranty deed that was recorded.
Blackwell and Poole thereafter conveyed the realty by warranty deed to Perimeter, [***10] and Perimeter thereafter
conveyed the realty by security deed to the lending institution. At the time the Haynes filed their complaint for the
cancellation of all three deeds, they alleged that they had remained in possession of the realty since the [*442]
execution and delivery of their purported warranty deed to Blackwell and Poole. Their contention was that they had the
right to seek cancellation with respect to their immediate grantee, and that because of their possession of the realty, the
two remote grantees were charged with notice of their claimed equitable interest in the realty.
It was my view then, and it is my view now, that the Haynes were estopped from procuring cancellation of the three
deeds, because the two remote grantees, Perimeter and the lending institution, were transferees for value without actual
notice of the "secret equity" claimed by the Haynes.
Retained possession of realty by a grantor in a recorded warranty deed does not constitute notice to a remote
transferee for value of any equitable title retained by the grantor-possessor. Such possession constitutes notice of
possessory rights under a lease or other possible agreement, but it does not constitute [***11] notice of retained
equitable title.
Code § 85-408 provides: Possession of land is notice, not only of whatever title the occupant has, but of whatever
right he may have in the property. In Malette v. Wright, 120 Ga. 735, 741 (48 SE 229) (1904), this court said: "The
provisions of the Civil Code, § 3931 [now Code Ann. § 85-408], can have no application to the case of a party who is
endeavoring to avail himself of such possession in the face of his own warranty deed, spread on the record, as against an
innocent purchaser for value and without notice. Such a possession remaining with the grantor and never surrendered
is to be deemed to be held under his grantee, and is not adverse to his title. Jay v. Whelchel, 78 Ga. 789 . . . The
execution of the deed and placing it upon the public records was a solemn publication to the world that the grantor had
conveyed to the grantee the land therein described, and the grantor would be estopped from insisting that one who dealt
with his grantee on the faith of the deed must take notice of his possession so as to make inquiry whether or not his
deed really spoke the truth."
Page 33
234 Ga. 437, *440; 216 S.E.2d 581, **583;
1975 Ga. LEXIS 1154, ***
[**585] Code § 29-111 provides: "The maker of a deed [***12] cannot subsequently claim adversely to his deed
under a title acquired since the making thereof. He is estopped from [*443] denying his right to sell and convey." This
rule is right, and it should be enforced in all real estate transactions. A grantor cannot convey his realty by warranty
deed, properly recorded in the public records, and retain possession and then claim, as against a transferee for value, that
he really didn't convey the realty in the first place. I think he is estopped from prevailing in court on the basis of any
such contention.
The record in the instant appeal shows clearly that Perimeter and the lending institution were transferees for value
without notice of any equitable title allegedly retained by the Haynes when they conveyed their property to Blackwell
and Poole by warranty deed. I therefore think that Perimeter and the lending institution were entitled to summary
judgment in their favor, and I would reverse the judgment below.
I respectfully dissent.
Ingram, Justice, dissenting.
I joined the earlier opinion of the court in this case reported in 232 Ga. 430 (207 SE2d 66), but cannot agree that the
present appeal has been correctly decided in the [***13] majority opinion.
The first appeal was from the grant of a summary judgment to defendants Blackwell and Poole and a denial of a
summary judgment to plaintiffs Haynes. The order of the trial court, reviewed in that appeal, expressly provided that
the trial judge did not consider the consequences of a subsequent transfer of the land in question from Blackwell and
Poole to Perimeter Development Corporation or the later conveyance of the land by security deed from Perimeter to the
Gwinnett County Bank. Neither Perimeter nor the bank had filed any motions for summary judgment at that time.
We reversed the grant of summary judgment in favor of Poole and Blackwell, holding that an issue of fact remained
as to whether the first conveyance on April 3, 1972, from the Haynes (the plaintiffs) to Blackwell and Poole, was a sale
or a loan. The rights of Perimeter and the bank were not in issue in the first appeal. However, there is some language in
this court's opinion in the first appeal which indicates that Perimeter and the bank took the [*444] land subject to any
equity that the plaintiffs Haynes could present since the Haynes had remained in possession of the land after conveying
[***14] it to Blackwell and Poole and no actual inquiry had been made of them as to any interest they might still claim
in the land.
Upon the return of the case to the trial court following the first appeal, Perimeter and the bank moved for the first
time for summary judgment and supported their motions by showing a complete absence of notice of any loan, real or
otherwise, between the plaintiffs (Haynes) and Blackwell and Poole, to whom the plaintiffs transferred the land on April
3, 1972, by warranty deed.
Nevertheless, the trial court denied the motions for summary judgment filed by Perimeter and the bank because of
the dicta in this court's opinion in the first appeal. I would reverse the judgment in the present appeal because I believe
it is erroneous and the issue presented was not decided in the first appeal. In my opinion, the question presented is
controlled by the principles stated in Malette v. Wright, 120 Ga. 735, 741 (48 SE 229), and an application of the
provisions of Code § 37-111. The record in this appeal makes it quite clear to me that Perimeter and the bank are
transferees for value without actual or constructive notice of any equitable interest which the plaintiffs [***15] Haynes
now claim they retained when they conveyed this property by warranty deed to Blackwell and Poole on April 3, 1972.
Thus, under my view, the law requires that Perimeter and the bank be granted summary judgments in their favor.
Page 34
234 Ga. 437, *442; 216 S.E.2d 581, **584;
1975 Ga. LEXIS 1154, ***11
12 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
DAVIS v. LEACH et al.
No. 26665
Supreme Court of Georgia
228 Ga. 139; 184 S.E.2d 454; 1971 Ga. LEXIS 486
September 13, 1971, Argued
October 7, 1971, Decided
PRIOR HISTORY: [***1] Alimony. Walton Superior Court. Before Judge Barrow.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendant purchaser excepted to a judgment of the Walton Superior Court (Georgia),
which granted the motion to add the purchaser as an additional party of plaintiff wife, separated from defendant
husband, who had sold a property to the purchaser, to her alimony suit seeking to have the property set aside as
permanent alimony. The court certified the order for immediate review.
OVERVIEW: The wife and the husband were separated and the wife was living on a property that belonged to the
husband. The husband subsequently sold the property to the purchaser, and the wife, who had been unaware of the sale,
successfully added the purchaser as a party defendant to her alimony suit. The wife contended that her suit for alimony
and notice of lis pendens were superior to the warranty deed given by because the notice of lis pendens was filed before
the warranty deed was recorded, even though the wife had filed her suit two days after the conveyance. The court
disagreed. The suit filed by the wife was not for divorce but was for alimony alone. Hence, she could not claim a benefit
from Ga. Code Ann. § 30-112. The parties also stipulated in the trial court that the purchaser was a good faith
purchaser and that he was not involved in a conspiracy to deprive the wife of any interest she might have had in the
property. The court also held that under Ga. Code Ann. § 85-408, possession of land was notice of whatever right the
occupant had. Thus, had the purchaser asked he would have learned that the title to the property was wholly in the
husband and that the wife had no title to it.
Page 35
OUTCOME: The court reversed the judgment of the trial court making the purchaser of the land a party.
CORE TERMS: alimony, warranty deed, divorce, notice of lis pendens, clerk, deeds, real property, recorded, real
estate, recordation
LexisNexis(R) Headnotes
Civil Procedure > Remedies > Lis Pendens > Notices
Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures
Family Law > Marital Termination & Spousal Support > Spousal Support > General Overview
[HN1] Ga. Code Ann. § 30-112 provides: After suit for divorce has been filed, no transfer by the husband of the
property, except bona fide in payment of preexisting debts, shall pass title so as to avoid the vesting thereof according to
the final verdict of the jury in the cause: Provided, however, that the title to real property shall not be affected by the
filing of a suit for divorce unless there shall have been filed in the office of the clerk of the superior court where such
real property is situated, and recorded by such clerk in a book kept by him for that purpose, a notice of lis pendens as
provided for by Ga. Code Ann. § 67-2801. 1950 Ga. Laws 365, 366. The code section does not apply to suits for
alimony alone but applies to cases where a divorce proceeding is pending.
Real Property Law > Ownership & Transfer > General Overview
[HN2] Ga. Code Ann. § 85-408 provides: Possession of land is notice of whatever right or title the occupant has.
COUNSEL: Pollock, Sorrells & Hearn, William R. Childers, Jr., George J. Hearn, III, for appellant.
C. Thomas Allgood, Jr., Preston & Benton, William L. Preston, Allen & Dingus, Robert W. Allen, for appellees.
JUDGES: Undercofler, Justice. All the Justices concur.
OPINION BY: UNDERCOFLER
OPINION
[*139] [**455] Lewis Allen Leach owned certain real estate in Walton County, Georgia, on which he and his
wife lived for many years before their separation. After their separation, Mrs. Leach continued to reside on the
property.
In February, 1971, Mr. Leach listed the property for sale with a real estate company. Fred Davis, Jr., desired to
purchase the property and on February 22, 1971, signed a contract agreeing to buy it for $ 9,000. Davis obtained a
[*140] loan from a lending institution in the amount of $ 7,000 as partial payment for the property. On February 24,
1971, Mr. Leach executed and delivered a warranty deed to Davis and received two notes and two security deeds in the
amounts of $ 7,000 and $ 2,000. The deeds were left with the closing attorney for the purpose of recordation.
On [***2] February 26, 1971, two days after the conveyance of the property, Mrs. Leach filed a petition seeking to
have the property set aside as permanent alimony and a lis pendens was filed.
On March 26, 1971, the warranty deed and security deeds were filed for record in the office of the Clerk of the
Walton Superior Court.
After Mrs. Leach discovered that her husband no longer owned this property, she filed a motion to add Davis as an
Page 36
228 Ga. 139, *; 184 S.E.2d 454, **;
1971 Ga. LEXIS 486, ***1
additional party to her alimony suit on the ground that his warranty deed from Mr. Leach was filed for record
subsequent to her suit for alimony and her notice of lis pendens. Davis was made a party defendant by the trial court and
the exception is to that judgment. The order was certified for immediate review by this court. Held:
1. Mrs. Leach contends that her suit for alimony and notice of lis pendens were superior to the warranty deed given
by Mr. Leach to Davis because the notice of lis pendens was filed before the warranty deed was recorded. We do not
agree.
[HN1] Code Ann. § 30-112 provides: "After suit for divorce has been filed, no transfer by the husband of the
property, except bona fide in payment of preexisting debts, shall pass title [***3] so as to avoid the vesting thereof
according to the final verdict of the jury in the cause: Provided, however, that the title to real property shall not be
affected by the filing of a suit for divorce unless there shall have been filed in the office of the clerk of the superior
court where such real property is situated, and recorded by such clerk in a book kept by him for that purpose, a notice of
lis pendens as provided for by section 67-2801." Ga. L. 1950, pp. 365, 366.
[*141] In Chandler v. Chandler, 161 Ga. 350 (130 SE 685), we held that this Code section did not apply to suits
for alimony alone but applied to cases where a divorce proceeding was pending. The suit filed by the wife in this case
was not for divorce but was for alimony alone. Hence, she can claim no benefit from this statute.
2. The parties stipulated in the trial court that Davis was a good faith purchaser for value, that he paid the fair
market value for the property, and that he participated in an "arms-length transaction." They also stipulated that he was
not involved in a conspiracy to deprive the wife of any interest she might have had in the property.
The wife, however, contends that if [***4] Davis had inquired as to her possession of the property at the time his
warranty deed was filed for recordation, he would have learned of her alimony suit and the fact that she had asked the
court to award her this property as permanent alimony.
[**456] [HN2] Code § 85-408 provides: "Possession of land is notice of whatever right or title the occupant has."
If Davis had made inquiry of the wife, he would have learned only that the title to the property was wholly in her
husband and that she had no title to it.
Waddell v. City of Atlanta, 121 Ga. App. 94, 96 (172 SE2d 862) is distinguishable from this case because it
involved possession under an award for temporary alimony made in a divorce suit.
Under these circumstances and for the reason stated in Division 1, this contention of the wife is without merit.
Compare Roach v. Roach, 212 Ga. 40, 42 (90 SE2d 423).
The trial court erred in making Davis an additional party and should have granted his motion to be dismissed as
such.
Judgment reversed.
Page 37
228 Ga. 139, *140; 184 S.E.2d 454, **455;
1971 Ga. LEXIS 486, ***2
13 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
WHITTON v. WHITTON et al.
No. 22007
Supreme Court of Georgia
218 Ga. 845; 131 S.E.2d 189; 1963 Ga. LEXIS 346
April 8, 1963, Argued
May 9, 1963, Decided
PRIOR HISTORY: [***1] Ejectment. Muscogee Superior Court. Before Judge Davis.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant sought review of a denial by the Muscogee Superior Court (Georgia) of
appellant's motion for either directed verdict or a judgment notwithstanding the verdict in her suit to claim real property.
OVERVIEW: Appellees' father had their mother sign property over to him. The property was later conveyed by the
parents to their two minor children. The father then deserted the family. The father conveyed the property to appellant.
Appellant sought to eject the appellees form the property. The lower court denied the appellant's motion for either
directed verdict or judgment notwithstanding the verdict. The court determined that there was ample evidence to
support appellees' ownership of the property under several theories. Under Ga. Code Ann. § 48-106 appellees' exclusive
possession of the property without payment of rent to their father implied a gift of the property to them. The deed from
appellees' mother to their father was void and appellees had title by adverse possession. The court affirmed the prior
ruling.
OUTCOME: The court affirmed the prior denial of appellant's motion for either directed verdict or judgment
notwithstanding the verdict.
CORE TERMS: deed, exclusive possession, deceased, new trial, notice, gift, transferee, overruling, indorsee, assignee,
convey, special demurrer, assigned, good faith, general grounds, adverse possession, cancellation, continuance, grantee,
Page 38
color, warranty deed, possessor, general demurrer, sufficient to support, bona fide purchaser, disclaimer, ejectment,
objected, conveyed, duress
LexisNexis(R) Headnotes
Evidence > Testimony > General Overview
[HN1] Ga. Code Ann. § 38-1603 (1) which provides in part : Where any suit shall be instituted by an indorsee, assignee,
or transferee of a deceased person, the opposite party shall not be admitted to testify in his own favor against the
deceased person as to transactions or communications with such deceased person. This Code section should be strictly
construed. The words indorsee, assignee, or transferee refer to an immediate indorsee, assignee, or transferee.
Civil Procedure > Trials > Jury Trials > Jury Instructions > General Overview
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Adverse Possession > Procedure
[HN2] In order for the purchaser under a deed to be protected from the ripening of a prescriptive title or to avoid
cancellation of a deed for fraud, he must be a bona fide purchaser for value without notice; that is, the purchaser must
have paid a valuable consideration for the property, in good faith and without notice of any fraud in the chain of title, or
without notice of any adverse claim by anyone in possession of the premises. Adverse possession of land is notice of
whatever facts would be developed by inquiry of the person in possession.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Affirmative Defenses > Laches
Governments > Legislation > Statutes of Limitations > Time Limitations
[HN3] Neither laches nor the statute of limitations will run against one in peaceable possession of property under a
claim of ownership for delay in resorting to a court of equity to establish his rights.
Estate, Gift & Trust Law > Estates Created by Trusts & Wills > Estates in Fee
Estate, Gift & Trust Law > Personal Gifts > Procedures > Presumptions
Evidence > Inferences & Presumptions > Presumptions > Rebuttal of Presumptions
[HN4] Ga. Code Ann. § 48-106 provides that: The exclusive possession by a child of lands belonging originally to the
father, without payment of rent, for the space of seven years, shall create conclusive presumption of a gift, and convey
title to the child, unless there shall be evidence of a loan, or of a claim of dominion by the father acknowledged by the
child, or a disclaimer of title by the child.
HEADNOTES
1. The failure of the record to show that the movant satisfied all of the statutory requisites for a continuance based
on surprise requires an affirmance of the trial court's refusal to grant the motion.
2. Defendants' amendment to their plea of general issue set out all the elements of a valid defense and thus was not
subject to general demurrer. Neither was the amendment subject to special demurrer on the ground that the defenses set
out were duplicitous and contradictory.
3. The plaintiff not being an immediate indorsee, assignee, or transferee of the deceased, it was not error to permit
the defendant Ruby Whitton to testify concerning the circumstances surrounding her transfer to the deceased of the
property which is the subject of this suit.
4. (a) In view of other portions of the trial judge's charge, the portion objected to in special ground 6 of the
Page 39
218 Ga. 845, *; 131 S.E.2d 189, **;
1963 Ga. LEXIS 346, ***1
amended motion for new trial was not subject to the objections interposed.
(b) The portion of the charge objected to in special ground 7 of the amended motion was adjusted to the evidence
and was thus not subject to challenge on that [***2] point.
(c) Special grounds 4 and 5 are treated as abandoned.
5. The evidence was sufficient to support the verdict in favor of defendants and thus the trial judge did not err in
refusing to grant the plaintiff's motions for directed verdict, judgment n.o.v. and for a new trial on the general grounds.
COUNSEL: Grover C. Willis, Jr., for plaintiff in error.
Foley, Chappell, Young, Hollis & Schloth, Richard Young Bradley, contra.
JUDGES: Almand, Justice. All the Justices concur.
OPINION BY: ALMAND
OPINION
[*846] [**190] Mrs. Gertrude E. Whitton, holder of a warranty deed from the executrix of the deceased former
husband of Ruby I. Whitton, filed an action of ejectment in the fictitious form against Ruby I. Whitton and her sons,
George M. Whitton and Robert W. Whitton. The defendants responded by a plea of not guilty.
The case proceeded to trial and after the jury had been sworn the defendants offered [**191] an amendment which
admitted record title to the real estate to be in the plaintiff. The amendment further alleged that were it not for the
matters specially thereinafter pleaded the plaintiff would be the true and lawful owner of the property in question.
The amendment [***3] alleged: that Ruby Whitton on January 14, 1946 executed a gift deed purporting to convey
the property in dispute to John L. Whitton predecessor in title of the plaintiff; that the deed was recorded on January 17,
1946; that the deed was procured by the duress, coercion and undue influence of John Whitton then the husband of
Ruby Whitton; that Ruby Whitton and John Whitton separated in the summer of 1946 but later reconciled their
differences and on September 12, 1946, entered into a reconciliation agreement whereby they agreed to convey the
property in dispute to their minor children, George and Robert, now defendants in ejectment; that Ruby and John
thereafter considered and acknowleged the property to be owned by their two sons and occupied the property under and
in the right of their two sons until March 26, 1947, at which time John Whitton deserted his wife and children.
The amendment further alleged that the defendant sons have [*847] been in continuous and exclusive possession
of the land in dispute since the date of the reconciliation agreement; that pursuant to the reconciliation agreement Ruby
Whitton executed and delivered to her sons on November 9, 1947, a warranty [***4] deed to the premises and that the
two sons have held under that warranty deed for seven years.
Upon the tendering of the amendment the plaintiff moved the court to continue the case because she had been
surprised. The court denied the plaintiff's motion for a continuance and allowed the amendment. The plaintiff's request
for time in which to file demurrers was allowed. General and special demurrers were filed and overruled except for one
special demurrer which was sustained which required the defendants to further amend by attaching to their plea a copy
of the alleged warranty deed from Ruby Whitton to her two sons. The jury returned a verdict in favor of the defendants
and title was decreed in George and Robert Whitton.
Plaintiff excepts to the denial of her motion for a continuance and to the overruling of her demurrers. Plaintiff
further excepts to the overruling of her motion for a new trial and to the overruling of her motion for a judgment
notwithstanding the verdict.
Page 40
218 Ga. 845, *; 131 S.E.2d 189, **;
1963 Ga. LEXIS 346, ***1
1. Error is assigned on the refusal of the trial court to grant the plaintiff's motion for a continuance after the
defendants filed their amendment to their plea of general issue. The record does not disclose [***5] that either the
plaintiff under oath or her counsel in her place stated that the motion was not urged for purposes of delay as is required
by Code § 81-1409. In the absence of such a statement an order refusing to continue the case will not be reversed. See
Gregory v. Ross, 214 Ga. 306 (104 SE2d 452), and cases therein cited.
2. Error is assigned on the overruling of the plaintiff's general and special demurrers to the defendants' amendment
to their answer. In this amendment the defendants asserted their title to the premises as being superior to the record title
of the plaintiff on three grounds: (1) In 1946 the defendant Ruby Whitton executed without consideration a deed to the
premises to her husband John L. Whitton as a result of fraud and duress [*848] on the part of her husband; her husband
died in 1954 and by will devised all of his property to Opel Whitton who subsequently conveyed the property to the
plaintiff; (2 & 3) in 1946 the defendant Ruby Whitton and her husband agreed in writing to convey the premises to their
two children George and Robert Whitton; the mother then executed a warranty deed to the two children; the two
children were in the sole and [***6] exclusive possession of the premises for more than seven years prior to the death
of the father and [**192] therefore the two sons held title to the premises by reason of (a) seven years' exclusive
possession under a gift from their father and (b) prescriptive title by reason of seven years' adverse possession under
color of title.
The issue here being who had legal title to the premises and the defendants admitting that prima facie the plaintiff
had a record title to the premises, the defendants could assert one or more reasons why the plaintiff's record title was not
valid against the claims of the defendants, any one of which, proved by a preponderance of the evidence, would defeat
the plaintiff's asserted title. As to the defense of fraud which would render the plaintiff's title void, see Widincamp v.
Widincamp, 135 Ga. 644 (70 SE 566), and Bourquin v. Bourquin, 110 Ga. 440 (35 SE 710). The allegations of the
amendment are sufficient to allege exclusive possession of the two sons for seven years and create the presumption of a
gift from the father to the two sons under Code § 48-106. See Holt v. Anderson, 98 Ga. 220 (25 SE 496). The allegation
as to adverse [***7] possession for more than seven years by the children under color of title was sufficient to
withstand a general demurrer. Code §§ 85-401, 85-402, 85-407; Veal v. Robinson, 70 Ga. 809. It was not error to
overrule the general demurrer to the amendment nor was it error to overrule the special demurrers on the ground that the
three defenses were duplicitous and contradictory. Code § 81-310.
3. We now come to the plaintiff's assignment of error on the admission of testimony over her timely objection. The
trial court permitted Ruby Whitton to testify concerning the circumstances under which she executed the deed to the
property in question to John Whitton on January 14, 1946. Plaintiff's objection was based on [HN1] Code § 38-1603 (1)
which provides in [*849] pertinent part as follows: "Where any suit shall be instituted . . . by an indorsee, assignee, or
transferee . . . of a deceased person, the opposite party shall not be admitted to testify in his own favor against the . . .
deceased person as to transactions or communications with such . . . deceased person . . ." It is plaintiff's contention that
she is an "indorsee, assignee, or transferee" of John Whitton, [***8] deceased, and that Ruby Whitton, an "opposite
party," should not be permitted to testify concerning the transaction involving the deed to John Whitton. This court has
held that this Code section should be strictly construed. Eley v. Reese, 171 Ga. 212, 213 (155 SE 24). Counsel for
plaintiff in error direct their argument to the question of whether or not plaintiff is an "indorsee, assignee, or transferee"
of the deceased. The question must be decided adversely to the contentions of the plaintiff in error. This court has said
that the words "indorsee, assignee, or transferee" refer to an immediate "indorsee, assignee, or transferee." Castleberry
v. Parrish, 135 Ga. 527 (5) (69 SE 817), and Lankford v. Holton, 187 Ga. 94, 100 (200 SE 243). In Purvis v. Raste, 144
Ga. 16 (3a) (85 SE 1012), this court held that "where a plaintiff alleged that he made a deed conveying land to another,
who had conveyed it to a third person, who had in turn conveyed it to still another person, and the plaintiff attacked
these deeds and sought to recover the land from the last grantee and to have the deed made to her canceled, but did not
make the first grantee, or any legal representative [***9] of him, a party, and did not make the second grantee a party,
although he prayed the cancellation of the first deed, this did not render the plaintiff an incompetent witness to testify as
to transactions between him and the first grantee." That case is controlling here. The trial judge was correct in admitting
the testimony.
Page 41
218 Ga. 845, *847; 131 S.E.2d 189, **191;
1963 Ga. LEXIS 346, ***4
4. This leaves for consideration special grounds 4, 5, 6 and 7 of the amended motion for new trial.
Ground 6 of the amended motion assigns error on the trial court's charge that in order for the plaintiff as a bona
fide purchaser to be protected from the claim of the defendants George and Robert Whitton [**193] the jury must
find that all of the following elements exist: First, that the plaintiff purchased the property [*850] for a valuable
consideration; second, that she bought the property in good faith and; third, that she had no notice of the claim of the
two sons. The trial court then charged the law on annulling a deed because of fraud. It is asserted that the charge is
erroneous because (a) it shifted or placed the burden of proof upon the plaintiff after the defendants had assumed this
burden and (b) it authorized the cancellation of a deed [***10] after the five-year statute had run.
Immediately preceding the portion of the charge upon which error is assigned the court charged the jury as follows:
[HN2] "In order for the purchaser under a deed to be protected from the ripening of a prescriptive title or to avoid
cancellation of a deed for fraud, he must be a bona fide purchaser for value without notice; that is, the purchaser must
have paid a valuable consideration for the property, in good faith and without notice of any fraud in the chain of title, or
without notice of any adverse claim by anyone in possession of the premises.
"Adverse possession of land is notice of whatever facts would be developed by inquiry of the person in
possession.
"Applied to the present case, this means that, if you find that Mrs. Ruby Whitton and George and Robert Whitton,
or any of them, were in actual open possession of the property at the time Mrs. Opel Whitton claimed to acquire the
title thereto, and that inquiry from the person in possession would have informed her that the possessor claimed that the
title was in George and Robert Whitton, then she would be presumed to have notice or not. The same principle applies
to Mrs. Gertrude Whitton as [***11] of the time of her alleged acquisition of the title.
"I charge you in regard to the defense of adverse possession relied upon by the defendants as to the question of
whether or not the possessors were in possession in good faith. If at the time the prescriptive title began to run, the
possessors were in good faith then the requirement of good faith has been met. It matters not that the possessors might
have later become acquainted with the fact that they had made a mistake as the law in regard to their color of title; this
would not defeat prescription."
[*851] No error is assigned on this portion of the charge. In light of the above quoted charge, the charge objected
to is not subject to the objections interposed. Though the defense admitted the plaintiff prima facie had record title to
the premises, when they introduced evidence that would authorize a finding that a deed from Ruby Whitton to John
Whitton was void because of fraud and duress or that the defendant sons had been in possession of the premises under
color of title for more than seven years the plaintiff could not prevail unless she showed she was a bona fide purchaser
for a valuable consideration without notice [***12] of the claim of the two sons. Under the evidence the charge stated
a correct principle of law. Nor was the charge erroneous in that it permitted the cancellation of a deed after the
five-year statute of limitation had run. [HN3] "Neither laches nor the statute of limitations will run against one in
peaceable possession of property under a claim of ownership for delay in resorting to a court of equity to establish his
rights." Sutton v. McMillan, 213 Ga. 90, 96 (97 SE2d 139).
Error is assigned in special ground 7 on the court's charge that by express statute the exclusive possession by a
child of lands belonging originally to the father without the payment of rent for the space of seven years shall create a
presumption of a gift and convey the title to the child unless there shall be evidence of a lease or a claim of dominion by
the father acknowledged by the child or a disclaimer of title by the child. It is contended that this charge is unsupported
by the evidence. There was evidence that the father, more than seven years prior to his death, had given the property to
his two sons and that [**194] they had exclusive possession of the premises during this period. There was [***13] no
evidence of a loan or a claim of dominion by the father or a disclaimer of title by the two sons.
Grounds 4 and 5 not being argued will be treated as abandoned.
Page 42
218 Ga. 845, *849; 131 S.E.2d 189, **192;
1963 Ga. LEXIS 346, ***9
5. We come now to the assignment of error on the overruling of plaintiff's motion for judgment n.o.v. and the
denial of her motion for a new trial on the general grounds. We think the evidence was sufficient to support the verdict.
Defendants sought to defend against plaintiff's suit in ejectment on three alternative [*852] legal theories: (1) the deed
from Ruby Whitton to John Whitton was void; (2) title by adverse possession in George and Robert Whitton; (3) the
conclusive presumption of gift provided for in Code § 48-106. Evidence sufficient to support any one of these theories
would defeat plaintiff's motion for a new trial on the general grounds. Let us then deal with the third theory since there
is no question as to whether evidence might have been adduced in support of it without any special plea. The evidence
was conflicting. It was sufficient to show that on September 12, 1946, John Whitton agreed in writing to convey the
property which is the subject of this suit to his two sons who are defendants [***14] here; on March 16, 1947, John
Whitton deserted his wife and two sons; the defendant sons have been in continuous and exclusive possession of the
land in dispute since September 12, 1946. On July 2, 1954, John Whitton died. [HN4] Code § 48-106 provides that:
"The exclusive possession by a child of lands belonging originally to the father, without payment of rent, for the space
of seven years, shall create conclusive presumption of a gift, and convey title to the child, unless there shall be evidence
of a loan, or of a claim of dominion by the father acknowledged by the child, or a disclaimer of title by the child." The
evidence as outlined above is clearly sufficient to sustain the presumption of Code § 48-106. The fact that the father
returned and stayed in the house for a few weeks during the seven-year period does not require a different result. There
was testimony to sustain the conclusion that he returned as a guest. It is clear that if the possession of the child is
exclusive the statute is satisfied even though the father lives in the house for a much longer period of time than was the
case here. See Holloway v. Hoard, 140 Ga. 380, 385 (78 SE 928). It is [***15] also established that the possession
under Code § 48-106 may begin during minority. Holt v. Anderson, 98 Ga. 220 (25 SE 496). The evidence being
sufficient to sustain the presumption of gift under Code § 48-106 the trial judge did not err in overruling plaintiff's
motion for a new trial on the general grounds.
From what has been said above it is obvious that the trial judge did not err in refusing to grant a directed verdict or
a judgment notwithstanding the verdict.
Judgment affirmed.
Page 43
218 Ga. 845, *851; 131 S.E.2d 189, **194;
1963 Ga. LEXIS 346, ***13
14 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
HENSON et al. v. BRIDGES et al., Trustees
No. 21599
Supreme Court of Georgia
218 Ga. 6; 126 S.E.2d 226; 1962 Ga. LEXIS 415
April 10, 1962, Argued
May 16, 1962, Decided
PRIOR HISTORY: [***1] Injunction. Douglas Superior Court. Before Judge Foster.
James Bridges, Earl Mozley and James Bridges, Jr., as Trustees of the Andrews Chapel A. M. E. Church, brought
this action against J. M. Henson and Mrs. Ella Turner Henson in the Douglas Superior Court, seeking to enjoin and
restrain the defendants from interfering with their possession and enjoyment of a certain described parcel of land
amounting to two acres, and that the plaintiffs' right in such land be decreed good and sufficient title.
When this case was previously before this court on general demurrer ( Bridges v. Henson, 216 Ga. 423, 116 SE2d
570), we held that the petition was sufficient to show adverse possession for a period of over 20 years, thereby acquiring
title by prescription, and that the defendants' purported acts in relation to that land encompassed a wrongful interference
with the plaintiffs' rights; therefore grounds for equitable relief were set out.
The defendants in their answer, besides denying the material allegations of the petition, offered the further defense
that they were bona fide purchasers of the land. They set out their deed from a Mrs. Esther S. Brooks (also known as
Mrs. A. B. Aubry) [***2] dated November 27, 1957, by which they purchased 21 acres, more or less, in Land Lot 134
of the 1st District of Douglas County. In their muniments of title, extending back some 59 years, which chain of title
was attached as exhibits, were two deeds dated 1944 and 1950, which passed the larger portion out of which the land
deeded to the Hensons (1957) was carved "except 2 acres used by Andrew's Chapel Church."
The case came on to be tried before a jury in Douglas Superior Court and at the close of the evidence from both
sides, the pertinent portions of which will be stated hereinafter, the trial judge directed a verdict in favor of the
plaintiffs. From this judgment the defendants filed their motion for new trial on the general grounds and, by subsequent
amendment, on the ground that the court erred by directing a verdict in that there were issues of fact which should have
been submitted to the jury.
Page 44
The trial judge denied the motion for new trial on January 9, 1961. The defendants assign error on the denial of
their motion for the reasons stated therein.
The evidence adduced on the trial was substantially as follows:
The plaintiffs' witnesses testified that the church had been [***3] in existence and in possession of the land in
question from approximately 1915 until 1945, when the church building had been destroyed by fire; that the land had
been originally given to the church around 1915 by one of the grantors in the defendants' chain of title, and that
afterwards they had occupied and used the land openly and notoriously under such claim of right until the destruction of
the building; that the land had not been used for church purposes from 1945, when the building burned, until 1959,
when the pastor and some members of the congregation went upon the land to clear it for rebuilding purposes; that
during the period from 1945 to 1959 the church had never disbanded or dissolved but continued to function, holding
services in another church building; that the defendants had ordered the members of the church to leave the disputed
parcel of land on two separate occasions, once at gun point; that the defendants had prosecuted the pastor and one of the
members of the church for trespass and had placed a fence about the land, thereby obstructing ingress to or egress from
said land.
The defendants admitted ordering the church members off the land, the prosecution for trespass [***4] and the
erection of the fence. They claimed the right to do so under a chain of title (contaning the before-mentioned 1944 and
1950 deeds), which was duly introduced into evidence. The only attempt to rebut the plaintiffs' title obtained by
adverse possession for more than 20 years was that of one witness, who stated that he passed by the land occasionally
during the years 1928-1934, and that the church building was in a dilapidated condition, and he never saw a church
gathering or meeting there. However, he further stated: "If they had services there I didn't know it. They could have
had without my knowing it."
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff church trustees filed an action against defendant landowners in the Superior
Court of Douglas County (Georgia), seeking to enjoin and restrain the landowners from interfering with the church
trustees' possession and enjoyment of a two-acre parcel of land. The church trustees sought a decree of good and
sufficient title to the land. The trial court directed a verdict in the church owners' favor. The landowners appealed.
OVERVIEW: The church trustees alleged that the church had been in possession of the land in question for 30 years
and alleged that the land had been originally given to the church by one of the grantors in the landowners' chain of title.
The landowners ordered the church members off the land, prosecuted a trespass action, and erected a fence. The trial
court granted the church trustees their requested relief and denied the landowners' motion for a new trial. The court
affirmed the trial court's judgment. When the landowners pleaded two deeds, they divested themselves of an essential
ingredient prerequisite to the status of a bona fide purchaser, notice. It became incumbent upon them to show diligent
inquiry such as would be pursued by prudent men or that such diligent inquiry would not have uncovered either the
rights under which the church claimed the land or that such two-acre parcel did constitute a portion of the land
excluded from the acreage described in their deed. A review of the record showed no inquiry by the landowners, or
attempt to explain why such inquiry would have been futile. Thus, it was presumed that due inquiry would have
disclosed the existent facts.
OUTCOME: The court affirmed the trial court's judgment.
CORE TERMS: notice, deed, bona fide purchaser, church, diligent inquiry, purchaser, chain, wrongful acts, prima
facie case, prescription, muniments, adverse possession, undisputed, duration, adduced, entitle
Page 45
218 Ga. 6, *; 126 S.E.2d 226, **;
1962 Ga. LEXIS 415, ***2
LexisNexis(R) Headnotes
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] The law requires that, in order that one qualify for the status of a bona fide purchaser for value and without
notice, he must have paid the purchase price before receiving any notice of prior conflicting claims or rights. O.G.C.A.
§ 37-116 provides that notice sufficient to excite attention and put a party on inquiry shall be notice of everything to
which it is afterwards found such inquiry might have led. Further, one claiming title to lands is chargeable with notice
of every matter which appears in his deed, and of any matters which appear on the face of any deed, decree, or other
instrument forming an essential link in the chain of instruments through which he deraigns title, and of whatever matters
he would have learned by any inquiry which the recitals of those instruments made it his duty to pursue.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] Since a purchaser is conclusively charged with notice of what appears in the deed or muniments of his grantor's
chain of title, regardless of whether the purchaser has actually seen or read it or has any knowledge of its contents, the
facts disclosed in the deeds in a defendant's chain of title are sufficient to put the purchasers on inquiry, and they, in
law, have notice of what a proper inquiry would have revealed.
HEADNOTES
1. Where, by allegations of their petition and by undisputed evidence adduced during the trial, the plaintiffs
established title by prescription through adverse possession of over 20 years' duration, and wrongful acts by the
defendants in regard to that title, they made out a prima facie case which would entitle them to a judgment.
2. In order to rely on the defense of a bona fide purchaser, the defendants must take without notice. Where their
own muniments of title revealed a defect which would put them on inquiry, the defendants were [***5] charged with
notice of everything diligent inquiry might have disclosed.
COUNSEL: Dann Winn, Eugene B. Brown, for plaintiffs in error.
Otis L. Davis, contra.
JUDGES: Quillian, Justice. All the Justices concur.
OPINION BY: QUILLIAN
OPINION
[*8] [**228] 1. Once this court decided that the petition in the instant case set out a cause of action for injunctive
relief, such ruling became the law of the case. Thereafter, the plaintiffs proved the averments of their petition by
overwhelming evidence, showing title by prescription through adverse possession of over 20 years' duration, and that
the defendants had acted in the manner set forth by the allegations of the petition. The sole testimony which attempted
to contradict the plaintiffs' evidence as to prescriptive title was merely that the witness had seen no church meetings in
the building. This did not amount to a denial of the church's exclusive, open, and notorious possession of the land for
church purposes or that no meetings [*9] or services commensurate with such occupation were not held. Moreover,
the defendants did not deny, but admitted, the alleged wrongful acts as enumerated by witnesses for the plaintiffs.
Hence, [***6] there being no contradictory proof tending to negate the allegations as laid and the evidence as adduced,
the plaintiffs established a prima facie case, which would entitle them to a judgment.
Page 46
218 Ga. 6, *; 126 S.E.2d 226, **;
1962 Ga. LEXIS 415, ***4
2. Here the defendants set out a defense which, if proved, would defeat any valid holder of title by contending they
were bona fide purchasers. [HN1] The law requires that, in order that one qualify for the status of a bona fide
purchaser for value and without notice, he must have paid the purchase price before receiving any notice of prior
conflicting claims or rights. Carter v. Pinckard, 68 Ga. 817 (1); Mackey v. Bowles, 98 Ga. 730, 733, 734 (25 SE 834);
Gleaton v. Wright, 149 Ga. 220 (1) (100 SE 72); Ross v. Rambo, 195 Ga. 100, 113 (23 SE2d 687).
Code § 37-116 provides that notice sufficient to excite attention and put a party on inquiry shall be notice of
everything to which it is afterwards found such inquiry might have led. Further, one claiming title to lands is
chargeable with notice of every matter which appears in his deed, and of any matters which appear on the face of any
deed, decree, or other instrument forming an essential link in the chain of instruments through [***7] which he
deraigns title, and of whatever matters he would have learned by any inquiry which the recitals of those instruments
made it his duty to pursue. 92 CJS 241, § 330; Harper v. Durden, 177 Ga. 216, 227 (170 SE 45, 89 ALR 625); Hancock
v. Gumm, 151 Ga. 667 (107 SE 872, 16 ALR 1003); Carmichael v. C. & S. Bank, 162 Ga. 735, 736 (3) (134 SE 771).
Hence, when the defendants plead the 1944 and 1950 deeds, hereinbefore referred to, they divested themselves of
an essential ingredient prerequisite to the status of a bona fide purchaser, i.e., notice, and it became incumbent on
them to show diligent inquiry such as would be pursued by prudent men or that such diligent inquiry would not have
uncovered either the rights under which the church claimed the land or that such two-acre parcel did constitute a
portion of the land excluded from the acreage described in their deed. Dyal v. McLean, 188 Ga. 229, 231 [*10] (3
SE2d 571); Bell v. Bell, 178 Ga. 225 (5) (172 SE 566); Calhoun v. Ozburn, 186 Ga. 569, 572 (198 SE 706). See also
Hall v. Turner, 198 Ga. 763, 769 (32 SE2d 829). A thorough review of the record evinces no inquiry whatsoever by the
defendants, [***8] or attempt to explain why such inquiry would have been futile. Thus it will be presumed that due
inquiry would have disclosed the existent facts. Parker v. Gortatowsky, 127 Ga. 560, 563 (56 SE 846); Austin v.
Southern Home Bldg. &c. Assn., 122 Ga. 439 (50 SE 382).
[HN2] Since a purchaser is conclusively charged with notice of what appears in the [**229] deed or muniments of
his grantor's chain of title, regardless of whether the purchaser has actually seen or read it or has any knowledge of its
contents ( Harper v. Durden, 177 Ga. 216, 227, supra, and cases cited), the facts disclosed in the two deeds in the
defendants' chain of title were sufficient to put the purchasers on inquiry, and they, in law, had notice of what a
proper inquiry would have revealed. 55 Am. Jur. 1083, § 708; Jordan v. Pollock, 14 Ga. 145, 157; Gordon v. Irvine,
105 Ga. 144, 150 (31 SE 151); Georgia R. Bank &c. Co. v. Liberty Nat. Bank &c. Co., 180 Ga. 4, 17 (177 SE 803);
Toms v. Knighton, 199 Ga. 858, 862 (36 SE2d 315).
The defendants having failed to perfect their defense as bona fide purchasers for value and without notice, and the
plaintiffs having established their title by [***9] prescription and the undisputed fact of the wrongful acts on the part of
the defendants as to that title, constituting a prima facie case, the trial judge did not err in directing a verdict for the
plaintiffs.
Judgment affirmed.
Page 47
218 Ga. 6, *9; 126 S.E.2d 226, **228;
1962 Ga. LEXIS 415, ***6
15 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
WILLIAMSON v. FLOYD COUNTY WILDLIFE ASSOCIATION, INC., et al.
No. 20797
Supreme Court of Georgia
215 Ga. 789; 113 S.E.2d 626; 1960 Ga. LEXIS 341
February 8, 1960, Argued
March 16, 1960, Decided
PRIOR HISTORY: [***1] Ejectment. Floyd Superior Court. Before Judge Davis from Lookout Mountain Circuit.
November 25, 1959.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: In plaintiff claimant's ejectment action, defendant possessor appealed a judgment of the
Floyd Superior Court (Georgia), which directed the jury to return a verdict in favor of the claimant to the premises in
dispute.
OVERVIEW: The court found that possession of land was notice of whatever right or title the occupant may have, and
that a deed absolute in form could be shown by parol evidence to have been made to secure a debt where the maker
remained in possession of the land. The court further found that the evidence that the possessor was unable to read or
write and thought he was signing a mortgage and timber deed to secure a debt with the right to cut timber to pay off the
indebtedness, that the debt was not due and did not mature for 20 years, and was bearing interest, was sufficient to make
a question for a jury. The court also found that the evidence was sufficient to go to a jury as to whether or not the
amount of timber cut by the claimant was equal to the possessor's indebtedness and interest due thereon. The court
concluded that the trial court erred in granting the motion to direct the verdict against the possessor.
OUTCOME: The court reversed the trial court's judgment.
CORE TERMS: deed, indebtedness, grantee, occupant, pulpwood, cut timber, timber, vague, notice, absolute deed,
Page 48
bearing interest, indefinite, equitable, directing, mortgage, load
LexisNexis(R) Headnotes
Contracts Law > Types of Contracts > Bona Fide Purchasers
Evidence > Documentary Evidence > Parol Evidence
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] O.C.G.A. § 85-408 states that possession of land is notice of whatever right or title the occupant may have, and
a deed absolute in form may be shown by parol evidence to have been made to secure a debt where the maker remains
in possession of the land. The occupant may assert his equity against the grantee and a bona fide purchaser of the
land from the grantee who has no actual notice of the occupant's equity and who makes no inquiry of the occupant.
COUNSEL: Vaughn Terrell, Mitchell, Clark, Pate & Anderson, Greeley H. Ellis, Jr., for plaintiff in error.
Parker, Clary & Kent, Jack Kent, Jr., contra.
JUDGES: Duckworth, Chief Justice. All the Justices concur.
OPINION BY: DUCKWORTH
OPINION
[*789] [**627] This case is one in ejectment, in which an equitable plea was filed, alleging that the absolute deed
upon which the petitioner, Floyd County Wildlife Association, relies for title was in fact a deed to secure debt, which
had not matured and under which the grantees had the right to enter and cut timber to pay off the indebtedness; that the
Floyd County Wildlife Association has entered and cut pulpwood sufficient to pay the indebtedness in full with interest;
and the defendant prayed for a decree of fee-simple title in the land in controversy, free and clear of any lien or cloud on
the title created by the deed to secure debt and any subsequent deed or deeds given by the grantees in the alleged deed to
secure debt. At the trial, upon the presentation and admission in evidence of certain deeds [***2] showing title out of
the defendant and into the plaintiffs, it was stipulated that a prima facie case had been made. Thereafter, the defendant
presented evidence that he could not read and thought he executed a mortgage and timber deed; that the absolute deed
was in fact a deed to secure a debt of either $ 1,850 or $ 1,950, bearing interest at 6%, maturing in 20 years, but with the
right of the grantees to cut timber if the grantor did not pay off the indebtedness; that he had endeavored to pay off part
[*790] of the indebtedness without success; and that the Floyd County Wildlife Association had entered and cut
pulpwood on the property in the amount of from two or three loads a day from every day to every other day in the week
for about a year, each load containing anywhere from two to four units; that a unit of pulpwood is worth $ 7.50 on the
stump; and that from 150 to 200 units had been hauled out. The deed in question was a warranty deed, dated October
31, 1950, reciting a consideration of $ 1,950, and recorded November 2, 1950, in the Floyd County records. After the
defense rested its case, the plaintiffs made a motion for a directed verdict, and after argument thereon, [***3] the court
directed the jury to return a verdict in favor of the plaintiff to the premises in dispute, and judgment was entered
accordingly. The exception is to the order directing the verdict. Held:
1. Code § 85-408 states that [HN1] possession of land is notice of whatever right or title the occupant may have,
and a deed absolute in form may be shown by parol evidence to have been made to secure a debt where the maker
remains in possession of the land. Luke v. Crumley, 214 Ga. 638, 643 (106 S. E. 2d 776); Sims v. Sims, 162 Ga. 523 (1)
(134 S. E. 308); Hand v. Matthews, 153 Ga. 75 (1) (111 S. E. 408); Askew v. Thompson, 129 Ga. 325 (2), 328 (58 S. E.
854); Jay v. Whelchel, 78 Ga. 786 (3) (3 S. E. 906). And the occupant may assert his equity against the grantee and a
bona fide purchaser of the land from the grantee who has no actual notice of the occupant's equity and who makes no
Page 49
215 Ga. 789, *; 113 S.E.2d 626, **;
1960 Ga. LEXIS 341, ***1
inquiry of the occupant. Code § 37-115; Ray v. Etheridge, 195 Ga. 787 (2) (25 S. E. 2d 570); Chandler v. Georgia
Chemical Works, 182 Ga. 419 (1) (185 S. E. 787, 105 A. L. R. 837); Simpson v. Ray, 180 Ga. 395 (178 S. E. 726); Berry
[***4] v. Williams, 141 Ga. 642 (81 S. E. 881).
2. While the defendants in error argue strenuously in their brief that the evidence was vague and indefinite, and not
clear, unequivocal, and decisive as required under Code Ch. 37-2, showing the mistake or fraud committed, and as
required by the burden of proof under Code § 38-103, nevertheless, the evidence that the defendant was unable to read
or write and thought he was signing a mortgage and timber deed to secure a debt with the right to cut timber to pay off
the indebtedness, that the debt was not due and did not mature for [**628] 20 years, [*791] and was bearing interest
at 6%, was sufficient to make a question for a jury, and the court erred in directing the verdict. Even though the
evidence as to the value and amount of the pulpwood allegedly cut might be so vague and indefinite that the jury could
not determine whether or not the indebtedness had been paid in full with interest, as alleged in the equitable plea, it still
would have been error to have directed the verdict although the evidence might not have proven every allegation of the
plea. However, although admittedly vague, as stated by counsel for the plaintiff [***5] in error in their brief, this
evidence would be sufficient to go to a jury as to whether or not the amount of the timber cut was equal to the
indebtedness and interest due thereon. It follows that the court erred in granting the motion to direct the verdict against
the defendant.
Judgment reversed.
Page 50
215 Ga. 789, *790; 113 S.E.2d 626, **627;
1960 Ga. LEXIS 341, ***3
16 of 176 DOCUMENTS
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MATHIS v. HOLCOMB et al.
No. 20595
Supreme Court of Georgia
215 Ga. 488; 111 S.E.2d 50; 1959 Ga. LEXIS 521
September 15, 1959, Argued
October 13, 1959, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied November 4, 1959.
PRIOR HISTORY: Injunction. Rabun Superior Court. Before Judge Frankum. June 9, 1959.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendant appealed the judgment of the Rabun Superior Court (Georgia), which
permanently enjoined defendant from building any fence that would interfere with plaintiffs' use of a private way. In
their petition, plaintiffs relied on prescriptive title to the alleged private way. The evidence established an easement
running with the land. The trial court denied defendant's motions for judgment notwithstanding the verdict and a new
trial.
OVERVIEW: The person who sold plaintiffs' predecessor in title the land also owned and occupied the house and land
belonging to defendant. The original owner gave the predecessor in title permission to build the private way. The
predecessor in title built it at his own expense and used and kept it in repair while he occupied plaintiffs' house. The
court affirmed the judgment. The court held that the predecessor in title private way became an easement running with
the land when he expended money to improve the parol license, Ga. Code Ann. § 85-1404. The court found that the
easement passed with the dominant estate to each of his successors in title, including plaintiffs, because: (1) there was
no evidence of abandonment or forfeiture by non-user; and (2) the location of plaintiffs' house and the use of the private
way by its occupants were sufficient to put defendant upon inquiry as to what rights plaintiffs had in the private way.
The court held that even though the evidence establishing the easement running with the land could have been rejected
Page 51
as not conforming to the allegations in the pleadings, it was sufficient to uphold the verdict because it was admitted
without objection.
OUTCOME: The court affirmed the judgment permanently enjoining defendant from constructing any fence that
would interfere with plaintiffs' use of the private way.
CORE TERMS: easement, private way, occupied, non-user, abandonment, proprietor, forfeiture, purchaser,
successors, license, notice, parol, public road, incurred expense, cause of action, constructive, prescriptive, expenditure,
revocable, accessory, servitude, licensee, servient, tenement, grantee, conform, repair, built, extending
LexisNexis(R) Headnotes
Real Property Law > Limited Use Rights > Licenses
Real Property Law > Purchase & Sale > Contracts of Sale > Enforceability > Failure of Consideration
[HN1] A parol license is primarily revocable at any time, if its revocation does no harm to the person to whom it has
been granted; but is not revocable when the licensee has executed it and in so doing has incurred expense. In such case
it becomes an easement running with the land. Ga. Code Ann. § 85-1404. If the enjoyment of the parol license must be
preceded necessarily by the expenditure of money, and the grantee incurred expense in executing it, it becomes an
agreement for a valuable consideration, and the licensee a purchaser for value.
Evidence > Inferences & Presumptions > General Overview
Real Property Law > Adverse Possession > General Overview
Real Property Law > Limited Use Rights > Easements > Termination of Easements
[HN2] An easement running with the land passes with the dominant estate to each of the grantee's successor in title
unless it be proved that the easement was forfeited or abandoned or that the successors in title to the person who granted
the easement to the grantee took title to the servient estate with no notice, actual or constructive, of the existence of the
easement. It is true that to entitle the different possessions to be tacked so as to make out a prescriptive title to land, it is
necessary to show succession in the possessions. But an easement running with the land is an accessory to a tenement
and passes with it to a subsequent owner, both as against the proprietor of the servient land who granted the license, and
against each successive proprietor. So that if the present owner of the dominant heritage can show that a former
proprietor of the one which bears the servitude, granted the right to the easement, either by deed or by parol, which
became irrevocable by reason of expenditures and improvements under it, and whereby such easement attaches as an
appurtenant or accessory to the dominant tenement, he is not bound to connect his title or possession with that of the
grantee of such easement. Such proof would charge the plaintiff's land with the servitude, as also it would establish it as
a right attached to the land of defendant.
Evidence > Inferences & Presumptions > General Overview
Real Property Law > Limited Use Rights > Easements > Termination of Easements
[HN3] The right to an easement may be lost by abandonment or forfeiture by non-user; but the forfeiture will not be
incurred unless the non-user be for a period sufficient to raise the presumption of a release or abandonment.
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Limited Use Rights > General Overview
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN4] While it is the general rule that a bona fide purchaser of land without actual or constructive notice of the
existence of an easement takes the title free of such a burden, and one buying land may ordinarily assume that there is
Page 52
215 Ga. 488, *; 111 S.E.2d 50, **;
1959 Ga. LEXIS 521, ***1
no easement except such as may be shown of record or by open and visible indication on the land itself, yet a purchaser
will be charged with notice of an easement where an inspection of the premises would have readily revealed such
physical facts as would have put him upon inquiry in the exercise of ordinary diligence.
Civil Procedure > Appeals > Standards of Review > Substantial Evidence > General Overview
Evidence > Procedural Considerations > Objections & Offers of Proof > Objections
[HN5] Where evidence is admitted without objection, although it could have been rejected as not conforming to the
allegations as laid, if it relates to the cause of action declared on it will be sufficient to uphold a verdict.
COUNSEL: Hammond Johnson, Jr., for plaintiff in error.
John G. Davis, contra.
JUDGES: Mobley, Justice. All the Justices concur.
OPINION BY: MOBLEY
OPINION
[*488] [**51] The plaintiffs filed their petition in the Superior Court of Rabun County in 1956, seeking to enjoin
the defendant from interfering with their use of an alleged private way, extending along the northern boundary of their
property in Tiger, and extending from the Clayton-Tallulah Falls public road to a house owned and occupied by the
defendant. On the trial of the case, after the introduction of evidence by both parties, the defendant moved for a
directed verdict. This motion was denied, and the case proceeded to a verdict and judgment permanently enjoining the
defendant from the construction of any fence which would interfere with the use of the private way by the plaintiffs.
The exception is to the judgment denying the defendant's motions for a judgment notwithstanding the verdict and for a
new trial. Held:
1. The evidence showed that Jess Hopkins bought [***2] from Emory Blalock the land and built thereon the house
now owned by the plaintiffs; that Blalock, who owned and occupied the house now owned and occupied by the
defendant, gave Hopkins permission to build the alleged private way in question; that Hopkins built it at his own
expense; and that Hopkins continued to use the alleged private way and to keep it in repair during the six or eight years
he occupied the house now owned by the plaintiffs. [HN1] "A parol license is primarily revocable at any time, if its
revocation does no harm to the person to whom it has been granted; but is not revocable when the licensee has executed
it and in so doing has incurred expense. In such case it becomes an easement running with the land." Code § 85-1404.
"If the enjoyment of the parol license must be preceded necessarily by the expenditure of money, and the grantee
incurred expense in executing it, it becomes an agreement [*489] for a valuable consideration, and the licensee a
purchaser for value." Woodruff v. Bowers, 165 Ga. 408 (1) (140 S. E. 844). See also Mayor &c. of Macon v. Franklin,
12 Ga. 239, 243; Brantley v. Perry, 120 Ga. 760 (48 S. E. 332); Cherokee Mills [***3] v. Standard Cotton Mills, 138
Ga. 856 (76 S. E. 273); and Dickey v. Yarbrough, 186 Ga. 120 (197 S. E. 234). Hopkins obtained an easement running
with the land. [HN2] Such easement passed with the dominant estate to each of his successors in title, including the
plaintiffs, unless it be proved that the easement was forfeited or abandoned or that the successors [**52] in title to
Emory Blalock, who granted the easement to Hopkins, took title to the servient estate with no notice, actual or
constructive, of the existence of the easement. "It is true that to entitle the different possessions to be tacked so as to
make out a prescriptive title to land, it is necessary to show succession in the possessions. But an easement, such as the
one referred to, is an accessory to a tenement, and passes with it to a subsequent owner, both as against the proprietor of
the servient land who granted the license, and against each successive proprietor . . . So that if the present owner of the
dominant heritage can show that a former proprietor of the one which bears the servitude, granted the right to the
easement, either by deed or by parol, which became irrevocable by reason of expenditures [***4] and improvements
under it, and whereby such easement attaches as an appurtenant or accessory to the dominant tenement, he is not bound
Page 53
215 Ga. 488, *; 111 S.E.2d 50, **;
1959 Ga. LEXIS 521, ***1
to connect his title or possession with that of the grantee of such easement. Such proof would charge the plaintiff's land
with the servitude, as also it would establish it as a right attached to the land of defendant . . . [HN3] The right to an
easement may be lost by abandonment or forfeiture by non-user; but the forfeiture will not be incurred unless the
non-user be for a period sufficient to raise the presumption of a release or abandonment . . ." Winham v. McGuire, 51
Ga. 578, 581 (2) (3). In this case, there is no evidence of abandonment or forfeiture by non-user. The evidence shows
that the way was used and kept in repair by Hopkins and his successors in title, including the plaintiffs, down to the time
this suit was instituted. Even though there was evidence that the plaintiffs' house was not at all times occupied by the
owners or their tenants, when the house was occupied the way was used; and the owners did not abandon or forfeit their
easement [*490] through non-user simply by living elsewhere during a part of the year. [HN4] "While [***5] it is the
general rule that a bona fide purchaser of land without actual or constructive notice of the existence of an easement
takes the title free of such a burden, and one buying land may ordinarily assume that there is no easement except such as
may be shown of record or by open and visible indication on the land itself, yet a purchaser will be charged with notice
of an easement where an inspection of the premises would have readily revealed such physical facts as would have put
him upon inquiry in the exercise of ordinary diligence." Calhoun v. Ozburn, 186 Ga. 569, 572 (5) (198 S. E. 706). See
also Rome Gas-Light Co. v. Meyerhardt, 61 Ga. 287 (1). The evidence shows that the house now owned and occupied
by the plaintiffs is located at the corner of the Clayton-Tallulah Falls public road and the alleged private way in question
and that the entrance to the back yard at this house is on the alleged private way, and is used as a means of ingress and
egress to the rear of the house. These facts are sufficient to have put the defendant upon inquiry as to what rights the
owners of the house had in the road.
2. [HN5] "Where evidence is admitted without objection, although [***6] it could have been rejected as not
conforming to the allegations as laid, if it relates to the cause of action declared on it will be sufficient to uphold a
verdict. In such cases our courts have repeatedly held that a party waives his objections to the pleadings by allowing
such evidence to go to the jury without objection; the reason for this just rule in such a case evidently being that, had
objection been made, the party tendering such evidence might have amended his pleadings so as to conform thereto.
One of the principal functions of amendments is to conserve this right." Columbia Fire Ins. Co. of Dayton, Ohio, v.
Tatum, 46 Ga. App. 475, 476 (4) (167 S. E. 911). See also Haiman & Bro. v. Moses, 39 Ga. 708 (3). Accordingly,
where, as here, the plaintiffs in their petition rely on prescriptive title to the alleged private way, but on the trial of the
case evidence establishing an easement running with the land in [**53] Hopkins, a predecessor in title of the plaintiffs,
was admitted without objection, the petition could have been amended to make the pleadings conform to the evidence.
Since the evidence related to the cause of action declared on, it is sufficient [***7] to support the verdict.
Judgment affirmed.
Page 54
215 Ga. 488, *489; 111 S.E.2d 50, **52;
1959 Ga. LEXIS 521, ***4
17 of 176 DOCUMENTS
Positive
As of: Aug 04, 2014
DENSON et al. v. DENSON et al.
No. 19981
Supreme Court of Georgia
214 Ga. 8; 102 S.E.2d 605; 1958 Ga. LEXIS 322
February 10, 1958, Argued
March 7, 1958, Decided
PRIOR HISTORY: [***1] Equitable petition. Dougherty Superior Court. Before Judge Crow. December 7, 1957.
The instant case involves an attempt to engraft upon two quitclaim deeds executed in 1940 and 1942, each of which
recited a good consideration, an implied trust, which it is alleged arose because the grantee in the quitclaim deeds
obtained said deeds fraudulently by making oral promises, which he did not intend to keep at the time of making, that
he would hold the property for the grantors, look after it, pay the taxes, and would not dispose of it in his lifetime, and
that the plaintiffs would get their shares when he died. It is alleged that the grantee in the deeds, in violation of his
agreement, has conveyed and is conveying away a substantial portion of the alleged trust property. General and special
demurrers to the petition were sustained and the petition was dismissed. The exception here is to that judgment.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant sons sought review of an order of the Superior Court of Dougherty County
(Georgia) sustaining general and special demurrers filed by appellee father in response to the sons' equitable petition by
which they sought to engraft an implied trust upon two quitclaim deeds executed by the sons in favor of the father in
1940 and 1942 based on the sons' claim that the father breached a promise to hold the land in trust for them.
OVERVIEW: Claiming that they quitclaimed the land to the father based on his promise that he would hold it in trust
for them and convey it to them when he died, the sons claimed that the father obtained the deeds fraudulently, that he
was conveying substantial parts of the land to others, and that the sons were entitled to engraft an implied trust thereon.
After the father's demurrers were sustained, the sons appealed. The court affirmed. While noting a disagreement as to
Page 55
the terms of the applicable statute of limitations, the court held that whether it was seven years or 10 years, the sons'
claims were nonetheless barred. That is because the father's conduct in conveying certain of the property away more
than 14 years prior to the filing of suit was sufficient to put the sons on notice that the father was claiming and using the
property as his own. Because the sons' failure to discover the facts was due entirely to their own lack of diligence, and
because they failed to allege a sufficient reason for their failure to exercise any degree of diligence, their claim was
barred by the statute of limitations. That being so, the judgment sustaining the general demurrer was properly affirmed.
OUTCOME: The court affirmed the judgment of the superior court sustaining a general demurrer filed by the father to
the sons' equitable petition which sought to imply a trust.
CORE TERMS: statute of limitations, notice, subsisting, discover, conveyed, recorded, deed, implied trusts, adverse
claim, reasonably prudent person, sufficient to put, exercise reasonable diligence, diligence, treating, years prior
LexisNexis(R) Headnotes
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Governments > Legislation > Statutes of Limitations > Time Limitations
[HN1] Resulting or implied trusts are governed by a statute of limitations which provides a statutory period of either ten
years or seven years.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Estate, Gift & Trust Law > Trusts > Trustees > Duties & Powers > Standards of Care
[HN2] When the trustee in an implied trust recognizes the trust, and treats it as subsisting within seven years next
preceding the institution of an action to enforce it, such suit is not barred by the statute of limitations. However, when
there has been notice of an adverse claim by the trustee or such change of circumstances as is calculated to put a
reasonably prudent person on notice that the trust is no longer recognized as subsisting, or something to indicate to a
reasonably prudent person that the relation of trustee and cestui que trust has ceased, the statute of limitations will
commence to run.
Civil Procedure > Pleading & Practice > Pleadings > Rule Application & Interpretation
[HN3] A petition is to be construed most strongly against the pleader thereof.
Governments > Legislation > Statutes of Limitations > General Overview
Real Property Law > Estates > General Overview
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN4] Actual possession of real property puts the world on inquiry as to the right under which the occupant holds.
Governments > Legislation > Statutes of Limitations > Equitable Estoppel
Governments > Legislation > Statutes of Limitations > Tolling
Torts > Business Torts > Fraud & Misrepresentation > General Overview
[HN5] A party must exercise reasonable diligence to discover a fraud and cannot stand by and close his eyes to all
means of information.
Page 56
214 Ga. 8, *; 102 S.E.2d 605, **;
1958 Ga. LEXIS 322, ***1
SYLLABUS
The general demurrer to the petition in this case was properly sustained for the reason the petition showed on its
face that the claim of the plaintiffs in error was barred by the statute of limitations.
COUNSEL: Lippitt & Lippitt, for plaintiffs [***2] in error.
W. H. Burt, Burt & Burt, contra.
JUDGES: Wyatt, Presiding Justice. All the Justices concur.
OPINION BY: WYATT
OPINION
[*9] [**606] 1. The first question presented in this case is whether or not the claim of the plaintiffs, if any they
have, is barred by the statute of limitations. [HN1] Resulting or implied trusts are within the statute of limitations.
Garner v. Lankford, 147 Ga. 235 (93 S. E. 411); Grant v. Hart, 192 Ga. 153 (14 S. E. 2d 860); Citizens & Southern Nat.
Bank v. Ellis, 171 Ga. 717 (156 S. E. 603); O'Neal v. O'Neal, 176 Ga. 418 (168 S. E. 262); Wallace v. Mize, 153 Ga.
374 (112 S. E. 724). While there appears to be some conflict in the authorities as to whether the statutory period is ten
years (Garner v. Lankford, supra) or seven years (Wallace v. Mize, supra), if either period is applicable to the facts
alleged in the instant case, the plaintiffs are barred by the statute of limitations because the elapsed time is greater than
the longest statutory period appearing in the abovecited cases. Therefore, the sole question for decision in this case on
the statute of limitations is whether or not the plaintiffs [***3] allege any reason why the statute has not run against
their claim.
[*10] They allege, for the purpose of tolling the statute of limitations, that their father, the grantee in the deeds,
treated the trust as subsisting and that they did not discover that he had conveyed any of the property until about two
weeks before they brought this suit, when one of the plaintiffs examined the records in the office of the Clerk of the
Superior Court of Dougherty County and found the recorded conveyances. However, in the same paragraph in which it
is alleged that the father was treating the trust as subsisting, it is alleged that in 1943, more than fourteen years prior to
the bringing of this suit, the father, in violation of his agreement, conveyed a portion of the property to Mrs. Edith
Wilkerson Williams, and that the deed was duly recorded in 1943.
"In this State, [HN2] when the trustee in an implied trust recognizes the trust, and treats it as subsisting within
seven years next preceding the institution of an action to enforce it, such suit is not barred by the statute of limitations."
Wallace v. Mize, 153 Ga. 374, supra, headnote 3. However, when there has been notice of an adverse [***4] claim by
the trustee or such change of circumstances as is calculated to put a reasonably prudent person on notice that the trust
is no longer recognized as subsisting, or something to indicate to a reasonably prudent person that the relation of
trustee and cestui que trust has ceased, the statute of limitations will commence to run. Garner v. Lankford, 147 Ga.
235, supra; Citizens & Southern Nat. Bank v. Ellis, 171 Ga. 717, supra.
Applying these rules to the facts in the instant case, whatever might have been the situation prior to 1943, in 1943
at the latest there was in existence sufficient information to charge the plaintiffs with notice of the adverse claim of their
father. The deed to Mrs. Williams was recorded in 1943. This is constructive notice, and the plaintiffs are charged with
notice, that the father was dealing with the property as his own. Also, construing [HN3] the petition most strongly
against the pleader, since it is not alleged to the contrary, it is presumed that Mrs. Williams went into possession of the
property in 1943. [HN4] "Actual possession of real property puts the world on inquiry as to the right under which the
occupant [**607] holds." [***5] Parker v. Gortatowsky, 127 Ga. 560 (1) (56 S. E. 846). These facts were certainly
sufficient to put the [*11] plaintiffs on notice as to the claim of their father and start the statute of limitations to run,
and they are barred unless they alleged a sufficient excuse for their failure to learn of the existing facts as set out above.
Page 57
214 Ga. 8, *; 102 S.E.2d 605, **;
1958 Ga. LEXIS 322, ***1
Petitioners do not allege that there was any fraud practiced upon them by their father which prevented them from
discovering that he had conveyed away a portion of the alleged trust property and was treating the property as his own.
They do allege that a confidential relation existed between them and their father, and that they trusted him to do what he
said. If it be admitted that such a relationship existed, even in the absence of any further allegations as to how the
relationship arose except from their relationship as parent and children (See however, Crawford v. Crawford, 134 Ga.
114, 67 S.E. 673, 28 L.R.A. (NS) 353, 19 Ann. Cas. 932), the plaintiffs having means of ascertaining the existence of
facts upon which their right is predicated, must exercise reasonable diligence to discover these facts before they can
avoid the effects [***6] of the statute of limitations. Bennett v. Bird, infra. [HN5] A party must exercise reasonable
diligence to discover a fraud and can not stand by and "close his eyes to all means of information and many years
thereafter claim the privilege of making an election." Bennett v. Bird, 139 Ga. 25 (76 S. E. 568). See also Frost v.
Arnaud, 144 Ga. 26 (85 S. E. 1028), Marler v. Simmons, 81 Ga. 611 (8 S. E. 190), and Sutton v. Dye, 60 Ga. 449.
So, in the instant case, whether or not the father recognized the trust as subsisting prior to 1943, in 1943, more than
fourteen years prior to the institution of this suit, his conduct was sufficient to put the plaintiffs on notice that he was
then claiming the property as his own, and their failure to discover the facts was due entirely to their own lack of
diligence, and no sufficient reason being alleged to excuse their failure to exercise any degree of diligence, their claim is
barred by the statute of limitations. It was, therefore, not error to sustain the general demurrer to and dismiss the
petition.
2. The rulings above made having completely disposed of the case, it will not be necessary to rule on any other
[***7] questions argued in this court.
Judgment affirmed.
Page 58
214 Ga. 8, *11; 102 S.E.2d 605, **607;
1958 Ga. LEXIS 322, ***5
18 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
LEWIS v. LEWIS et al.
No. 18420
Supreme Court of Georgia
210 Ga. 330; 80 S.E.2d 312; 1954 Ga. LEXIS 325
January 11, 1954, Submitted
February 9, 1954, Decided
PRIOR HISTORY: [***1] Cancellation. Before Judge McClure. Walker Superior Court. September 2, 1953.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff wife appealed the judgment of the Walker Superior Court (Georgia), which
granted a nonsuit in an action by the wife to cancel a deed from defendant husband to defendant, the husband's attorney,
to a house and lot and to restrain the attorney from instituting any proceedings to evict her from the premises.
OVERVIEW: A divorce case between the wife and the husband was pending when he executed a deed to the attorney
for the family home and lot. The wife sought to cancel the deed and to restrain the attorney from evicting her. The trial
court granted a nonsuit and the wife appealed. The court reversed, finding that the issue as to whether the husband
executed the deed with the intention and purpose of delaying or defeating the wife in the collection of support for
herself and the children was for determination by a jury. The court also found that the issue of whether the attorney
knew or had reasonable ground to suspect the alleged fraudulent intention of the husband likewise was one for the jury
and that even though the deed was made upon a valuable consideration, if the jury believed that the attorney had
knowledge that it was made by the husband with intent to defraud the wife's claim for support, or had reasonable ground
to suspect it, the jury would be authorized to cancel the deed. The court noted that the support awarded was not only
money to be paid in monthly installments, but included the subject matter of the deed.
OUTCOME: The court reversed the trial court's judgment of nonsuit against the wife.
Page 59
CORE TERMS: deed, alimony, divorce, home place, conveyance, valuable consideration, collection, conveyed,
nonsuit, grantee, decree, reasonable suspicion, reasonable ground, fraudulent, instalments, defeating, defraud, grantor,
notice, divorce action, divorce proceedings, final decree, sufficient to raise, bona fide, real estate, subject matter,
monthly, cancel, divorce suit, hindering
LexisNexis(R) Headnotes
Civil Procedure > Pretrial Judgments > Nonsuits > General Overview
Real Property Law > Deeds > General Overview
Real Property Law > Purchase & Sale > Contracts of Sale > General Overview
[HN1] Ga. Code Ann. § 28-201(2) provides that where a conveyance of real estate is made with intention to delay or
defraud creditors, and such intention is known to the grantee, such conveyance shall be null and void against creditors
and others, but a bona fide transaction on a valuable consideration, and without notice or ground for reasonable
suspicion, shall be valid.
Civil Procedure > Trials > Jury Trials > Province of Court & Jury
Family Law > Marital Termination & Spousal Support > Spousal Support > Enforcement > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN2] The question as to whether a deed was executed by the grantor with intention to delay or defraud his wife in the
collection of alimony and such intention was known to the grantee, or whether the transaction was a bona fide one upon
a valuable consideration and without notice or ground for reasonable suspicion, is ordinarily one for determination by a
jury.
Family Law > Marital Duties & Rights > Duty of Support
Legal Ethics > Professional Conduct > Illegal Conduct
Real Property Law > Deeds > Enforceability
[HN3] The fact that a conveyance of property was one from a client to his attorney does not of itself show that the
transaction was fraudulent, but such transaction is subject to a more careful scrutiny than one between strangers. The
existence of such relationship may be considered by the jury on the question of fraud and lack of good faith.
Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > General Overview
Family Law > Marital Termination & Spousal Support > Spousal Support > Obligations > Periodic Support
Real Property Law > Deeds > General Overview
[HN4] Where a married man by deed conveys to another person certain described real estate, and such conveyance is
made for the purpose of defeating creditors of the grantor, and this is known to the grantee, and the wife of the grantor
subsequently brings divorce proceedings against him and obtains a decree of divorce and an award as permanent
alimony, a part of the alimony being one of the lots conveyed by the deed above referred to, the wife can maintain an
equitable suit against the husband and the grantee in the deed, to have canceled and set aside the deed which conveyed
the lot and the building thereon awarded to her as alimony; and there is no such privity between the husband and the
wife as would prevent her bringing the suit.
HEADNOTES
1. There was no error in refusing to admit in evidence the pleadings in the divorce case between the plaintiff and
the defendant Lewis, the verdict and final decree having been admitted.
Page 60
210 Ga. 330, *; 80 S.E.2d 312, **;
1954 Ga. LEXIS 325, ***1
2. The evidence as to whether the defendant Lewis had executed a deed to the defendant Graham, his attorney at
law, conveying the property occupied by the plaintiff and the children, for the purpose of hindering, delaying, or
defrauding her in the collection of alimony for the support of herself and the children, and as to whether the defendant
Graham knew or had reasonable ground to suspect such intention, was sufficient to raise an issue for determination by
the jury, and it was error for the court to grant a nonsuit.
COUNSEL: Frank M. Gleason, Gleason & Painter, for plaintiff in error.
Fariss & Fariss, Dietzen, Graham & Dietzen, contra.
JUDGES: Almand, Justice. All the Justices concur.
OPINION BY: ALMAND
OPINION
[*331] [**313] Winona Williams Lewis filed her petition against John Leslie Lewis and Raymond Graham,
wherein she sought to cancel a deed from Lewis to Graham to a [***2] house and lot, and to restrain Graham from
instituting any proceedings to evict her from the premises. It was alleged: On June 17, 1952, she instituted a suit in
Walker Superior Court against Lewis, in which she sought a divorce and alimony for the support of herself and minor
children, which case was still pending. After said petition was filed, she learned that her husband on May 29, 1952, had
executed a purported deed to the defendant Graham, an attorney at law, reciting as consideration the sum of $ 500 as
attorney's fee, a note for $ 700, and the assumption of a loan [**314] against the property. At the time the deed was
executed the plaintiff and her husband were living in a state of separation, and he executed said deed for the purpose of
defeating her claim for alimony; Raymond Graham was a party to this scheme, and knew when he took said deed that it
was the purpose of the husband to defeat, hinder, and delay the plaintiff in the collection of alimony, and the making of
said deed rendered the husband insolvent.
The defendants filed a joint answer, in which they admitted the pendency of the divorce and alimony suit and the
execution of the deed, but denied all allegations [***3] that the deed was executed to hinder, defeat, or delay the
plaintiff's claim, but alleged that the transaction was bona fide and was based upon a valuable consideration. On the
trial, at the conclusion of the plaintiff's evidence the court granted a nonsuit. By direct bill of exceptions the plaintiff
assigns error on this judgment, and on certain rulings made during the trial.
1. At the time of the trial, the plaintiff had obtained a final [*332] verdict and decree in the divorce and alimony
case, and copies of the verdict and decree were admitted in evidence. The plaintiff tendered in evidence the petition, an
amendment thereto, and the answer of the husband, in the divorce proceedings. The objections of the defendants to the
admission of these documents were sustained, and error is assigned on this ruling. This ruling was not erroneous. The
defendants in their answer admitted the allegations of the petition as to the filing and pendency of the divorce suit.
There were no allegations in these pleadings which were admitted by the defendant Lewis that were relevant to the
issues of fraudulent intent of the husband, or as to knowledge of Graham of the husband's intent at [***4] the time the
deed was executed.
2. The sole question remaining is: Did the court err in granting a nonsuit? The petition stated a cause of action
under [HN1] Code § 28-201 (2), which provides that, where a conveyance of real estate is made with intention to delay
or defraud creditors, and such intention is known to the grantee, such conveyance shall be null and void against
creditors and others, but that a bona fide transaction on a valuable consideration, and without notice or ground for
reasonable suspicion, shall be valid. The deed here involved having been executed while the husband and wife were
living separate and apart, her claim for support of herself and children gave her the status of a creditor, and entitled her
to bring an action to set the deed aside. Stephens v. Stephens, 168 Ga. 630 (148 S. E. 522); McGahee v. McGahee, 204
Ga. 91 (48 S. E. 2d 675). [HN2] The question as to whether the deed was executed by the grantor with intention to
Page 61
210 Ga. 330, *; 80 S.E.2d 312, **;
1954 Ga. LEXIS 325, ***1
delay or defraud his wife in the collection of alimony and such intention was known to the grantee, or whether the
transaction was a bona fide one upon a valuable consideration and without notice or ground for reasonable suspicion,
[***5] is ordinarily one for determination by a jury. Lane v. Newton, 145 Ga. 810 (89 S. E. 1083); Fields v.
Marchman, 179 Ga. 613 (176 S. E. 635); Blevins v. Pittman, 189 Ga. 789 (6) (7 S. E. 2d 662).
The brief of evidence discloses the following facts: At the time of the separation on April 14, 1952, the husband left
the wife and children in possession of the home place, the subject matter of the deed, which he at that time owned. A
few days thereafter he employed Graham, an attorney at law, to represent [*333] him in any action for divorce by him
or his wife, paying him $ 10 as a retainer. A fee of $ 500 was agreed on between the parties for services to be rendered
by Graham in bringing a divorce action against the wife. The husband told Graham he had no money, and would have
to pay him in property. They agreed that for a consideration of $ 1,200, $ 500 of which would represent payment of the
divorce suit fee, and a purchase-money note of $ 700, and the assumption of a loan against the property, the husband
would deed the home place to Graham. The deed was executed according to the terms of this agreement on May 28,
1952, and was recorded on the following [***6] day. The deed recites that the [**315] original principal amount of
the loan note as of September 21, 1946, was $ 4,100, but there was no evidence as to the exact amount which was due
on May 28, 1952. At the time the deed was executed, the husband told Graham that he had separated from his family,
and that his wife and children were living in the property described in the deed. Graham did not go out and look at the
property, and had never seen it, but valued the husband's equity on information given him by the husband. Graham
testified that, at the time the deed was made, he knew that Lewis had a wife and two children, and that "As to the
question of whether I, as a lawyer, am familiar with the liability of the husband to support his children, well, I don't
know, we lawyers disagree on lots of things, I have my own ideas about it. As a lawyer, actively engaged in the
practice, I do not know of any rule of law that exempts a husband from supporting his children, and as to any rule that
exempts a husband from providing a home for his children to live in, no, I think it would include that too. I think the
law in this State is that a man is under an obligation to reasonably support [***7] and maintain his wife and children
during the time of coverture." The note for $ 700 was paid by Graham the day after it was executed, though not due
until a year after its execution. Lewis testified that he told his wife on June 16, 1952, that he had sold the property.
This was denied by the wife, who testified that the first knowledge she had that the property had been conveyed to
Graham was on July 17, 1952. The effect of this conveyance was to leave the husband without any property in Walker
County, and at the time of the trial he owned no real estate. The plaintiff [*334] filed her action for divorce and
alimony on June 17, 1952. The jury by its verdict on July 24, 1953, awarded the plaintiff all the household goods and
kitchen furniture in the home place on the Hogan Road, and awarded the plaintiff and the children "the use and
possession of said house on the Hogan Road until the plaintiff remarries. In the event the plaintiff remarries, then the
children are granted the use, possession, and income from said house on the Hogan Road until the youngest child is
eighteen (18) years of age or self-supporting." They also awarded the sum of $ 20 per month for the support [***8] of
the wife and $ 45 per month to each child. It appeared without dispute that the father had paid all alimony accruing
under the divorce decree up to the time of the trial of the instant case.
As to whether the husband executed the deed with the intention and purpose of delaying, hindering, or defeating the
plaintiff in the collection of alimony for the support of herself and the children -- under all the evidence and
circumstances appearing in this case this issue was for determination by the jury and not the court.
As to whether the defendant Graham knew or had reasonable ground to suspect the alleged fraudulent intention of
the husband -- this issue likewise was one for the jury. The execution of the deed grew out of the confidential
relationship of attorney and client. [HN3] The fact that the conveyance was one from a client to his attorney does not of
itself show that the transaction was fraudulent, but such transaction was subject to a more careful scrutiny than one
between strangers. The existence of such relationship may be considered by the jury on the question of fraud and lack
of good faith. See Stubinger v. Frey, 116 Ga. 396 (42 S. E. 713); Summers v. Taylor, [***9] 80 Ky. 429. Graham, as
an attorney at law, knew that the husband was under a legal duty to support his wife and children, that a divorce action
between the parties was imminent, and that, if the jury awarded alimony, they would have the right to award the home
place or its possession as a part of the alimony for the support of the wife and children. He also knew that the wife and
Page 62
210 Ga. 330, *332; 80 S.E.2d 312, **314;
1954 Ga. LEXIS 325, ***4
children had possession of the home place, but made no effort to ascertain from her what claim or right she might assert
to the property. The actual possession of the home place by the wife and children was [*335] sufficient to put
Graham on inquiry as to the claim under which she held possession. Code § 85-408; Mercer v. Morgan, 136 Ga. 632
(2) (71 S. E. 1075); Yancey v. Montgomery, 173 Ga. 178 (2) (159 S. E. 571); Dyal v. McLean, 188 Ga. 229 (1, 2) (3 S.
E. 2d 571). [**316] Graham took the deed without making an examination of the premises or making an independent
examination of the value of the husband's equity. All of these facts and circumstances were for the jury to consider on
the question of whether he took with notice of the husband's intention, or whether they [***10] were sufficient to raise
a reasonable suspicion in his mind as to the intention of the husband. Even though the deed was made upon a valuable
consideration, if the jury believed that Graham had knowledge that it was made by the husband with intent to delay or
defraud the wife's claim for alimony, or had reasonable ground to suspect it, they would be authorized to cancel the
deed. Conley v. Buck, 100 Ga. 187 (28 S. E. 97); Sullivan v. Ginsberg, 180 Ga. 840 (1a) (181 S. E. 163); Dickson v.
Citizens Bank & Trust Co., 184 Ga. 398 (2) (191 S. E. 379).
It is contended that the evidence was without dispute that, at the time of the trial, all of the alimony instalments then
due had been paid, and therefore the plaintiff was not in a position to ask for cancellation of the deed. If all the alimony
awarded had been a sum of money to be paid in monthly instalments, the defendant's contention, under the ruling in
Wallace v. Wallace, 189 Ga. 220 (5 S. E. 2d 580), would be meritorious; but the alimony awarded in the present case
was not only money to be paid in monthly instalments, but included the award of possession of real property, the subject
matter of the [***11] deed from the husband to Graham; and under the ruling in Bowen v. Bowen, 182 Ga. 299 (1) (185
S. E. 312), the deed would be subject to be set aside on petition of the mother to protect the interest of herself and the
children in the property awarded in the final decree. In that case it was held (at p. 301): [HN4] "Where a married man
by deed conveyed to another person certain described real estate, and such conveyance was made for the purpose of
defeating creditors of the grantor, and this was known to the grantee, and the wife of the grantor subsequently brought
divorce proceedings against him and obtained a decree of divorce and an award as permanent alimony, a part of the
alimony being one [*336] of the lots conveyed by the deed above referred to, the wife could maintain an equitable suit
against the husband and the grantee in the deed, to have canceled and set aside the deed which conveyed the lot and the
building thereon awarded to her as alimony; and there was no such privity between the husband and the wife as would
prevent her bringing this suit." See also Von Kamp v. Gary, 204 Ga. 875 (52 S. E. 2d 591).
It follows from what has been said that the court erred [***12] in granting a nonsuit.
Judgment reversed.
Page 63
210 Ga. 330, *334; 80 S.E.2d 312, **315;
1954 Ga. LEXIS 325, ***9
20 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
McDONALD v. TAYLOR et al.
No. 15395
Supreme Court of Georgia
200 Ga. 445; 37 S.E.2d 336; 1946 Ga. LEXIS 400
February 21, 1946, Decided
PRIOR HISTORY: [***1] Complaint for land. Before Judge Perryman. Taliaferro Superior Court. October 26,
1945.
H. McDonald filed a statutory petition in ejectment against R. B. Taylor, E. F. Taylor, and Mrs. E. F. Taylor,
alleging that the defendants are in possession of a tract of land in Taliaferro County, known as the Mrs. Ella Taylor
home place, containing 100 acres, more or less, "bounded on the north by the Georgia Railroad & Banking Company,
on the east by lands of Aubrey H. Lyle and the John Moore estate, on the south by lands of Mrs. R. W. Golucke and W.
W. Byrd, and on the west by lands of W. W. Byrd, in the 601st district G. M., to which your petitioner claims title;" that
the defendants have received rents and profits since January 1, 1943, of the value of $ 200; and that they refuse to
deliver possession of said land to the plaintiff or pay him the profits thereof. To his petition the plaintiff attached an
abstract of title which, as amended, shows a loan deed of Mrs. Ella Taylor to the Bank of Crawfordville, dated January
30, 1926; a loan deed from Mrs. Ella Taylor and E. F. Taylor to the Bank of Crawfordville, dated July 11, 1928; a
quitclaim deed and a transfer of the note and loan [***2] deed that was dated January 30, 1926, from Mrs. Ella Taylor
to the Bank of Crawfordville, the transfer being dated July 26, 1937, and made to H. McDonald; a quitclaim deed and a
transfer of the deed that was dated July 11, 1928, from Mrs. Ella Taylor and E. F. Taylor to the Bank of Crawfordville,
such transfer being dated July 26, 1937, and made to H. McDonald; and a deed from Mrs. Ella Taylor to H. McDonald,
under a power of sale contained in the loan deeds, and made by H. McDonald as attorney in fact.
The defendants, R. B. Taylor and E. F. Taylor, filed a disclaimer; and the defendant, Mrs. E. F. Taylor, filed a plea
and answer, in which she denied possession by the three defendants named in the ejectment petition, and contended that
she was in possession of the following land: "All that tract or parcel of land lying and being in the 601st District, G. M.
of Taliaferro County, Georgia, containing 30 acres, more or less, bounded north by State Highway No. 12, east by lands
formerly of Angeline Hale, now Mary A. Clark and Arkie Battle, south by lands formerly of C. Bergstrom, now R. W.
Golucke and lands formerly of T. N. Chapman, now Rem B. Edwards Estate, and west by private road [***3] leading
Page 64
north to paved highway separating this land from land of Miss Blanche Taylor;" and that the tract of land claimed by
her was included within the boundaries of the land described in the plaintiff's petition. She admitted that she had
refused to deliver possession of the tract of land described above, and alleged: That the tract of land described in her
answer is hers; that Mrs. Ella Taylor in August, 1907, executed and delivered to her a warranty deed, as described in a
copy attached; that immediately thereafter she began building a home on said tract of land and farming the same; that
she moved in said home in November, 1907, and resided there until it was destroyed by fire in July, 1924; that the
warranty deed from Mrs. Ella Taylor to the defendant was destroyed by the fire that burned the home; and that the
defendant has been in possession of said tract of land under said deed from August, 1907, until this date, and her
possession has been at all times adverse, open, visible, exclusive, unambiguous, uninterrupted, and peaceable. She
prayed that the copy of the deed attached to her petition be established in lieu of the destroyed original, and that she
have title decreed [***4] in her to the property described therein.
On the trial, the defendant, Mrs. E. F. Taylor, admitted a prima facie case for the plaintiff, H. McDonald, and
assumed the burden of proof.
The evidence for the defendant was, in brief, as follows: That she married E. F. Taylor, son of Mrs. Ella Taylor, in
1907. Shortly thereafter Mrs. Ella Taylor gave her a deed to the lands described in her answer. Her husband made
application to "the bank" for a loan to be used in building a home, and Mr. Holden, president of the bank, on learning
from her husband that the defendant owned the property, required the defendant to sign the loan papers. The defendant
and her husband completed the building of a home on said lands in November, 1907, moved into the same, and lived
there until July, 1924, when the house was destroyed by fire. The deed given to the defendant by her mother-in-law was
burned in the fire, said deed never having been recorded. After the house burned, the defendant and her husband moved
back into the home of Mrs. Ella Taylor, where they have since resided. The defendant stated that she continued in
possession of the lands, conveyed to her, after the home was destroyed, in that [***5] she farmed the same through her
husband. The evidence of E. F. Taylor, husband of the defendant, on the question of cultivation or possession by the
defendant was in part as follows: "After the house burned down, we moved back across the road to my mother's house
and continued to farm the place and take care of it as prior to that time, and returned all of it for taxes as my mother's
property . . . We all cultivated the place as one farm during the time our house was there." The husband of the
defendant further testified that his mother signed the deed to the bank in 1926, and that both he and his mother signed
the deed to the bank in 1928. Both deeds called for 100 acres, more or less, but it was not disputed that the boundaries
in both of said deeds included the 30-acre tract claimed by the defendant, although the husband did state that neither he
nor his mother knew where the boundaries were, the same being copied by Mr. Holden from certain crop mortgages.
The evidence for the plaintiff, H. McDonald, showed transfers to him of the notes and two deeds from Mrs. Ella
Taylor to the Bank of Crawfordville in July, 1937, and a foreclosure under a power of sale and purchase by the [***6]
plaintiff in June, 1938, as outlined by the abstract of title attached to his petition; and further, that he had no notice of
the claim of the defendant to the 30-acre tract until after he had procured title to the same.
The jury returned a verdict for the defendant, Mrs. E. F. Taylor. The plaintiff filed a motion for new trial on the
general grounds, and later amended his motion by adding two special grounds, the first amounting to the same
contentions as in the original motion, that the verdict was contrary to the evidence and without evidence to support it.
The second special ground contends that the court should have given in charge to the jury § 96-205 of the Code. The
motion for new trial was overruled, and the plaintiff excepted on each of the grounds set out therein.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff claimant appealed an order of the Superior Court of Taliaferro County
(Georgia), which entered a judgment for defendant grantee in the claimant's action in ejectment.
Page 65
200 Ga. 445, *; 37 S.E.2d 336, **;
1946 Ga. LEXIS 400, ***3
OVERVIEW: A grantor executed promissory notes and a loan deed to a bank. The grantor executed a deed describing
the same land to the grantee. The grantee moved onto the land and constructed a house. The house burned down and the
grantee moved elsewhere. The grantee claimed that she continued to farm the land. The bank transferred the notes and
the loan deed to the claimant. The claimant obtained a judgment of foreclosure against the grantor. The claimant filed
an action in ejectment against the grantee. The trial court entered a judgment for the grantee. On appeal, the court
reversed the trial court's judgment. The court held that the deed from the grantor to the grantee was a voluntary
conveyance because it was made without valuable consideration. The court ruled that a voluntary conveyance was void
as to a subsequent bona fide purchaser for value without notice of the conveyance pursuant to Ga. Code Ann. §
96-205. The court determined that the grantee's farming of the land was not such actual, open, visible, exclusive, and
unambiguous possession as to give the claimant notice of the conveyance. Therefore, the court held that the grantee's
deed was void as to the claimant.
OUTCOME: The court reversed the trial court's judgment for the grantee in the claimant's action in ejectment.
CORE TERMS: deed, notice, voluntary conveyance, conveyance, tract, unrecorded, purchaser, grantor, grantee,
conveys, acres, farm, mother-in-law, foreclosure, unambiguous, destroyed, visible, holder, burned, constructive notice,
adverse possession, possession of land, bona fide purchasers, valuable consideration, transferred, foreclosed, cultivated,
acquire, void, prevail
LexisNexis(R) Headnotes
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] A voluntary conveyance is a conveyance without any valuable consideration. Every voluntary deed or
conveyance made by any person shall be void as against subsequent bona fide purchasers for value without notice of
such voluntary conveyance. Ga. Code Ann. § 96-205.
Real Property Law > Deeds > Property Descriptions
[HN2] A deed which describes the premises, giving the boundaries and estimating the area as containing a certain
number of acres, "more or less," conveys all the land embraced in the calls, although the acreage may exceed the
estimate.
Real Property Law > Deeds > Types > Bargain & Sale
Real Property Law > Deeds > Enforceability
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN3] If one with notice shall sell to one without notice, the latter shall be protected. Ga. Code Ann. § 37-114. Where
one makes a voluntary conveyance of land, and subsequently, for a valuable consideration, conveys the same land to
another who knows that the grantor has previously made the voluntary conveyance, and the grantee in the later deed
sells and conveys the land to another person who has no notice, such last grantee will be protected against the voluntary
deed. A holder of a security deed, executed in consideration of a loan made at the time by a grantee to a grantor, is
entitled to the same protection as the holder of a deed of bargain and sale.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
Real Property Law > Purchase & Sale > General Overview
[HN4] Knowledge chargeable to a party who is put on inquiry is not limited to such knowledge only as would be
gained from an examination of the public records. The protection which the registration law gives to one taking title to
Page 66
200 Ga. 445, *; 37 S.E.2d 336, **;
1946 Ga. LEXIS 400, ***6
lands upon the faith of the record title should not be destroyed except upon clear and satisfactory evidence showing a
clear equity in him who seeks to establish a right in hostility to the record title. Such possession must be actual, open,
visible, exclusive, and unambiguous. Prior possession of land is not notice to a purchaser. Possession of real property
which will charge a purchaser with notice is possession at the time the purchaser obtains his title.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] Possession of land is generally notice of whatever right or title the occupant has. Ga. Civ. Code § 4528 (current
version at Ga. Code Ann. § 85-408). To have this effect the possession must have some element in it indicative that the
occupancy is exclusive in its nature. Such possession must be open, visible, exclusive, and unambiguous, not liable to
be misconstrued or misunderstood. It must not be a mixed or ambiguous possession. Possession of land by a grantee,
holding under an unrecorded deed, together with a grantor, is not constructive notice of an unrecorded deed to a
subsequent purchaser.
HEADNOTES
1. Where a voluntary conveyance of land is made by one who subsequently for value conveys the same land to
another as security for a loan, such voluntary conveyance can not prevail as against one who acquires title under a
foreclosure of the loan deed, unless such title be acquired with actual notice of the voluntary deed, or constructive
notice by actual adverse possession [***7] of the lands by the holder of such voluntary deed.
2. Where, in an ejectment proceeding, the defendant claims title under an unrecorded voluntary deed, and the
plaintiff claims title under a subsequent conveyance by the grantor in the voluntary deed to another as security for a
loan, such conveyance being transferred to, foreclosed, and the property bought at the foreclosure sale by the plaintiff,
and where under the evidence the jury would be authorized to find that the plaintiff acquired title without notice of such
voluntary conveyance, it is reversible error, even in the absence of a request, for the trial judge to fail to give in charge
to the jury section 96-205 of the Code, as follows: "Every voluntary deed or conveyance made by any person shall be
void as against subsequent bona fide purchasers for value without notice of such voluntary conveyance."
COUNSEL: Osgood O. Williams and Miles W. Lewis, for plaintiff.
Earle Norman, for defendants.
JUDGES: Head, Justice. All the Justices concur.
OPINION BY: HEAD
OPINION
[*449] [**338] 1. [HN1] A voluntary conveyance is a conveyance without any valuable consideration. 2
Bouvier's Law Dictionary (3d Rev.), p. 3408. "Every voluntary [***8] deed or conveyance made by any person shall
be void as against subsequent bona fide purchasers for value without notice of such voluntary conveyance." Code, §
96-205. The evidence offered by the defendant, Mrs. E. F. Taylor (defendant in error in this court), demanded a finding
that the alleged conveyance to her from her mother-in-law, Mrs. [**339] Ella Taylor, was in fact (if made and
delivered as contended) a voluntary deed. The copy attached to her response recites love and affection and other
consideration; no other consideration was claimed or shown. The defendant said that she kept such unrecorded
voluntary deed in her trunk from 1907 until 1924, when the same was burned in the fire which destroyed her home.
No contention is made by the defendant that the boundaries in the deed made by her mother-in-law, Mrs. Ella
Taylor, to the Bank of Crawfordville do not include the 30 acres claimed by her. On the contrary, it is conceded that
such boundaries do include the 30-acre tract. [HN2] "A deed which describes the premises, giving the boundaries and
Page 67
200 Ga. 445, *; 37 S.E.2d 336, **;
1946 Ga. LEXIS 400, ***6
estimating the area as containing a certain number of acres, 'more or less,' conveys all the land embraced in the calls,
although [***9] the acreage may exceed the estimate." McElroy v. McElroy, 142 Ga. 37 (4) (82 S. E. 442). See also
Collinsville Granite Co. v. Phillips, 123 Ga. 841 (51 S. E. 666); Georgia & Florida Development Co. v. Buck, 134 Ga.
675 (2) (68 S. E. 514); Rawlings v. Cohen, 143 Ga. 726 (85 S. E. 851); Blaylock v. Hackel, 164 Ga. 257 (138 S. E. 333).
The plaintiff, H. McDonald (plaintiff in error in this court), contends that he had no notice of the claim of the
defendant until after he procured title to the property in question under the deeds made by Mrs. Ella Taylor to the Bank
of Crawfordville, and later transferred to, and foreclosed by the plaintiff. There is evidence that, at the time the
defendant and her husband were constructing a house on the 30-acre tract in 1907, her husband went to the bank to
procure a loan; that inquiry was made as to the title to the [*450] property; and that Mr. Holden, president of the bank,
upon learning that the defendant claimed title to the property, required that she sign the papers to the bank in connection
with the loan made. There is no evidence in the record that Mr. Holden ever communicated this information [***10] to
the plaintiff or to anyone.
[HN3] "If one with notice shall sell to one without notice, the latter shall be protected." Code, § 37-114; Wells v.
Blitch, 184 Ga. 616 (4) (192 S. E. 209). This court applied the above Code section to voluntary conveyances in West v.
Wright, 121 Ga. 470 (49 S. E. 285), where it was stated: "Where one makes a voluntary conveyance of land, and
subsequently, for a valuable consideration, conveys the same land to another who knows that the grantor has previously
made the voluntary conveyance, and the grantee in the later deed sells and conveys the land to another person who has
no notice, such last grantee will be protected against the voluntary deed."
In Scott v. Atlas Savings & Loan Assn., 114 Ga. 134 (39 S. E. 942), the court ruled that the holder of a security
deed, executed in consideration of a loan made at the time by the grantee to the grantor, is entitled to the same
protection as the holder of a deed of bargain and sale. If the plaintiff did in fact acquire his title under a proper transfer
and foreclosure of the security deeds from Mrs. Ella Taylor to the Bank of Crawfordville, without notice of the claim of
the defendant [***11] under her voluntary deed, the rule stated in West v. Wright, supra, would control and the plaintiff
will be protected against such voluntary deed.
The plaintiff, however, could not rely solely on the knowledge which he may have been able to gather from the
records at the courthouse. If, in fact, the defendant had been in such "adverse, open, visible, exclusive, unambiguous,
uninterrupted and peaceable possession" as to put the plaintiff on inquiry as to the defendant's interest, and the plaintiff
had failed or refused to make such inquiry, he would not now be heard to say that he did not have notice of her claim.
[HN4] "Knowledge chargeable to a party who is put on inquiry is not limited to such knowledge only as would be
gained from an examination of the public records." Dyal v. McLean, 188 Ga. 232 (3 S. E. 2d, 571). But there is another
rule of law of equal application to the facts in this case, which is that, "The protection which the registration law gives
to one [*451] taking title to lands upon the faith of the record title should not be destroyed except upon clear and
satisfactory evidence showing a clear equity in him who seeks to establish a right in hostility [***12] to the record title.
Such possession must be actual, open, visible, exclusive, and unambiguous." McDonald v. Dabney, 161 Ga. 714 (8-c,
d) (132 S. E. 547). And in such a case, "Prior possession of land is not notice to a purchaser. Possession of real property
which will charge a purchaser with notice is possession at the time the purchaser obtains his title." Wood v. Bowden,
182 Ga. 329 (6) (185 S. E. 516).
[**340] Does the evidence in this case show such possession by the defendant, after the date her house burned in
1924, and at the time the plaintiff acquired the security deeds made by Mrs. Ella Taylor to the Bank of Crawfordville in
1937, as to fully meet the requirement in such cases, so as to constitute notice of her claim? The only evidence by the
defendant on the question of her possession from the date her house was destroyed, and she moved back into the home
of her mother-in-law, was that she continued to farm the lands (the 30-acre tract) through her husband. The evidence of
the husband in this connection was in part as follows: "After the house burned down, we moved back across the road to
my mother's house and continued to farm the place and take [***13] care of it as prior to that time, and returned all of it
for taxes as my mother's property . . . We all cultivated the place as one farm during the time our house was there."
Page 68
200 Ga. 445, *449; 37 S.E.2d 336, **339;
1946 Ga. LEXIS 400, ***8
Under the evidence of the husband, during all of the time in which he and his wife resided on the 30-acre tract, the
family of Mrs. Ella Taylor, composed of several members besides the defendant and her husband, cultivated the 100
acres and the 30 acres as one farm. Under testimony by the same witness, this procedure was followed by the family in
the years after the burning of the house on the 30-acre tract in 1924. This evidence by the defendant and her husband
does not show continuous and adverse possession in the defendant. In Bell v. Bell, 178 Ga. 226 (172 S. E. 566), it was
held: [HN5] "Possession of land is generally notice of whatever right or title the occupant has. Civil Code, § 4528
[now 85-408]. To have this effect the possession must have some element in it indicative that the occupancy is
exclusive in its nature. Manning v. Manning, 135 Ga. 597 (3) (69 S. E. [*452] 1126). Such 'possession must be open,
visible, exclusive, and unambiguous, not liable to be misconstrued or [***14] misunderstood. It must not be a mixed
or ambiguous possession. So it has been held that possession of land by the grantee, holding under an unrecorded
deed, together with the grantor, is not constructive notice of the unrecorded deed to a subsequent purchaser.'
McDonald v. Dabney, supra." See also Durham v. Holeman, 30 Ga. 619; Walker v. Hughes, 90 Ga. 52 (15 S. E. 912);
Yundt v. Davison, 186 Ga. 179 (197 S. E. 248); Martin v. Clark, 190 Ga. 274 (9 S. E. 2d, 54).
The defendant having failed to meet the requirement of showing possession by her, as alleged in her answer, she is
not entitled to prevail.
2. Headnote 2 does not require elaboration.
Judgment reversed.
Page 69
200 Ga. 445, *451; 37 S.E.2d 336, **340;
1946 Ga. LEXIS 400, ***13
22 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
TOMS v. KNIGHTON
No. 15303
Supreme Court of Georgia
199 Ga. 858; 36 S.E.2d 315; 1945 Ga. LEXIS 330
November 13, 1945, Decided
PRIOR HISTORY: [***1] Petition for injunction. Before Judge Worrill. Quitman superior court. July 24, 1945.
Thomas Toms filed a petition against R. R. Knighton, which as amended alleged substantially the following: The
petitioner is the owner of all that part of land lot No. 284 which lies west of the west arm of Tobenannee Creek in the
8th land district of Quitman County, Georgia. He obtained title thereto by a warranty deed executed and delivered to
him by W. A. Cotton, dated March 14, 1935, by payment of the purchase-money and actual occupation and possession
of the premises from the date of said deed, and by deed from W. A. Cotton to the petitioner, dated April 10, 1944,
which deed describes in more detail the premises conveyed on March 14, 1935. The defendant owns lands adjoining
and adjacent to the said lands of the petitioner and lying east of the west fork of the said creek. The petitioner entered
into possession of his said land on March 14, 1935, cleared it, and has cultivated and worked it since that time,
exercising complete and absolute control over the same. The defendant is attempting to take possession of the land and
has already started cultivating a part of the same. In the [***2] early part of the year 1944 the defendant entered upon
the said lands and by threats and intimidation drove the petitioner's laborers and tenants, who were then engaged in
preparing the said land for the planting of crops thereon, from the said land, and himself proceeded to cultivate the same
and use and occupy it until he was restrained by order of court. The defendant is now attempting to build a wire fence
around the land and threatens to take it over. His acts amount to a trespass, and he threatens to continue such acts of
trespass and will do so unless the petitioner is granted relief. The petitioner does not have an adequate remedy at law,
as a suit would be necessary upon each act of trespass and this would result in a multiplicity of suits. The defendant is
asserting the right to use and occupy the said land and is attempting to exclude the petitioner from the use and
enjoyment of the same. He has by threats and intimidation forced the petitioner's laborers to leave the land and to cease
cultivating the same. He will continue to exclude the petitioner and his laborers and tenants from using the land, and
threatens himself to go upon the same from day to day, to plow [***3] up the same, to plant the same in crops, cultivate
the crops, and harvest them, thus committing continuous acts of trespass from day to day and from time to time, which
Page 70
acts will occasion a multiplicity of suits. The prayers were that the defendant, his agents, croppers, servants, and
employees be enjoined from going upon the land for any purpose whatever, from building any fence thereon, and from
interfering with the petitioner in any manner in his possession and cultivation of the land, and for process.
The defendant answered, denying the allegations of the original petition as to ownership and possession by the
petitioner, and alleging that he was in possession and had started cultivating the land when the suit was filed.
The evidence for the petitioner was substantially as follows: In 1935 he purchased from W. A. Cotton certain
described lands, together with that here involved consisting of 13 acres in the northwest portion of land lot 284,
described in the petition, and paid the purchase-price of $ 470. Through oversight the deed executed to him on March
14, 1935, and duly recorded on March 15, 1935, did not include the 13 acres in controversy. Nevertheless the petitioner
[***4] immediately went into possession and plowed the land, helped cut a ditch across the land and cut bushes, and
besides cultivating all the land that was not too wet, that is, cultivating four or five acres, and leaving a batch of timber,
he enclosed a pasture of three or four acres with a wire fence, the pasture being in the middle of the north part of the
tract. He cleared the land and tended it the same year he bought it, and put a fence around it the next year, and most of
the fence is still there. He continued to work the land until 1943, when the defendant ran from the land certain negro
hands of the petitioner whom he had sent to plow it. The defendant plowed the land in 1943, but by an injunction suit,
brought by the petitioner in 1944, was prevented from further trespassing at that time. Because of this litigation the land
was not cultivated in 1944, though the petitioner plowed up a small patch in that year. When he started to clearing the
land originally, he gave the defendant some wood from his acreage in lot No. 284 and it was hauled away by the
defendant. About two weeks before the present suit was instituted, the petitioner located in Florida, his grantor, who on
[***5] April 10, 1944, executed to the petitioner a deed, duly recorded on April 14, 1944, conveying the land in lot No.
284 which had been omitted by oversight from the deed of March 14, 1935.
Marion Toms, son of the petitioner, testified that in a conversation with the defendant in 1944 the latter stated to
him that he did not doubt that Thomas Toms had bought the land in controversy, but that it was not in the deed executed
to him on March 14, 1935.
The defendant claimed under the following chain of title: A deed dated July 9, 1937, from W. A. Cotton, the
petitioner's grantor, to Loren Gary, conveying certain lands including the 13-acre tract in lot 284, and duly recorded,
though the date is not shown by the record. A deed dated November 15, 1941, from Loren Gary to the defendant,
conveying the same lands described in the aforementioned deed to Loren Gary. This deed to the defendant was duly
recorded on February 14, 1942.
The defendant testified: "I bought that land from Dr. Gary on November 15, 1941. When I bought that land in lot
284, which lies in the northwest corner of the lot and west of Tobenannee Creek, it was not in the possession of Mr.
Toms. I made a crop on part of it [***6] in the year 1943. I think Mr. Toms cultivated it probably in 1942. Mr. Toms
was not in possession of it on November 15, 1941, when I bought it from Dr. Gary. Mr. Toms cultivated the land in
1942. It did not look like when I bought it in 1941 that anybody was cultivating it. When I went to look at it, all I saw
was lots of bushes and trees. I did not see any cleared land on lot No. 284. If Mr. Toms cultivated it in 1942, I guess
there was some cleared land on it. I did not see him clear it up in 1942. Q. If he cultivated it in 1942 and it was not
cleared up in 1942, there had to be some cleared land on there in 1941? A. It could have been cleared up the year
before, but it was not all cleared. I had to clear lots of bushes the year I worked it. I went all over it the year I bought it.
I did not see any fence on it in 1941. I don't remember seeing a ditch that the W. P. A. cut there. There is a ditch there
now. I could not say it is the ditch the W. P. A. cut. The only time that I know that Mr. Toms cultivated this land was
in 1942. I say he did not cultivate it in 1941. After November 15, 1941? Of course, I didn't have any cause to know
about it before that. I don't [***7] know whether there was a fence on it before November 15, 1941, that is, when I
bought the land. I did not go over there before November, 1941, to see if anybody was cultivating the land. It did not
look like anybody cultivated it in 1941 whenever I went there. I did not see anything to make me think it had been
cultivated. I could not say that he did not cultivate it in 1940. I was not interested in it at that time. I don't know
anything about this land until after I claim I bought it. After I bought this land I did not make a statement to Marion
Page 71
199 Ga. 858, *; 36 S.E.2d 315, **;
1945 Ga. LEXIS 330, ***3
Toms that I thought Mr. Toms had bought this land but it was not in the deed. I did not tell him anything about any
trade that I knew had occurred between Mr. Toms and Mr. Cotton. I talked with Marion Toms in 1944, but I had
worked the land, made a crop on it, and gathered it. When I went on the land in 1943, I did not see anybody. I did not
see any negroes working on that land. None of the land had been broke up on lot No. 284. I don't remember seeing any
negroes at all when I went over there in 1943 to start working the land. I waited until then to start working it because I
had just got to where I could work it. I think I [***8] looked at the record of the deed from Mr. Cotton to Mr. Toms in
1943. Then I started working the land. I did not get around to working this particular part of the Hill place until 1943, I
think. I did not get any wood from the land west of Tobenannee Creek in lot No. 284. I got some from off the hill up
there. I learned later it was on lot number 885, which is the land described in Mr. Toms' first deed. I got that wood
from Mr. Toms' place. I hauled it myself."
The jury returned a verdict for the defendant, and judgment was entered accordingly. The petitioner's motion for
new trial was overruled, and the exception here is to that judgment.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Petitioner landowner appealed the judgment of the Quitman Superior Court (Georgia),
which was entered on a jury verdict for defendant landowner. Petitioner's motion for new trial was overruled, and he
appealed that judgment. Petitioner's action had sought an injunction to restrain defendant from his occupancy and use of
a parcel of land claimed by both parties.
OVERVIEW: Petitioner purchased land that included the disputed parcel, but his deed failed to include the disputed
parcel in the description of the property conveyed. Defendant subsequently received a deed from the same grantor that
did include the disputed parcel. Petitioner sought to enjoin defendant's use of the disputed parcel, but the trial court
entered judgment for defendant. The court affirmed on appeal by petitioner. The court noted that if petitioner had taken
possession of the land that he was entitled to he would have had a perfect equity, notwithstanding the defect in the deed.
The evidence of petitioner's possession was inadequate, however. Although he had alleged that he fenced the property
when he first bought it, it was unclear if he had fenced the entire disputed parcel. Furthermore, it was not shown that the
fence still existed when defendant acquired his title. Petitioner could not establish constructive possession because he
did not have color of title under a deed.
OUTCOME: The court affirmed the trial court's judgment.
CORE TERMS: notice, tract, actual possession, deed, perfect, fence, actual occupancy, equitable, purchaser's, parol,
acres, full payment, actually occupied, matter of law, possession of lands, constructive possession, definiteness,
trespassing, possessor's, definite, occupant, grantor, purchase of land, rights of parties, actual occupation, actual notice,
majority opinion, purchase-price, purchase-money, enforceable
LexisNexis(R) Headnotes
Commercial Law (UCC) > Secured Transactions (Article 9) > Perfection > Methods > Possession
Real Property Law > Adverse Possession > General Overview
Real Property Law > Ownership & Transfer > Equitable Interests
[HN1] The purchase of land, full payment of the purchase-money, and possession, create a perfect equity, which is good
against the vendor, his heirs and those claiming under him with notice. A perfect equity is the equivalent of legal title.
Page 72
199 Ga. 858, *; 36 S.E.2d 315, **;
1945 Ga. LEXIS 330, ***7
Possession of land is notice of whatever right or title the occupant has. He who takes with notice of an equity takes
subject to that equity.
Real Property Law > Adverse Possession > General Overview
[HN2] The notice which the law in Georgia presumes from adverse possession is actual notice and not merely
constructive notice. Of course, the possession which would amount to notice is not simply possession at some time
prior to the acquisition of a deed by the contestant, but possession at the time such deed is obtained. Notice sufficient to
excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found such inquiry
might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the rights of parties.
O.C.G.A. § 37-116. The knowledge chargeable to a party after he is put on inquiry is not limited to such knowledge
only as would be gained by an examination of the public records. If no inquiry is made as to adverse possession, the
presumption is that inquiry would have developed the right or title under which the possessor held.
Real Property Law > Adverse Possession > General Overview
[HN3] Actual possession of lands is evidenced by enclosure, cultivation, or any use and occupation thereof which is so
notorious as to attract the attention of every adverse claimant, and so exclusive as to prevent actual occupation by
another. O.C.G.A. § 85-403.
Real Property Law > Adverse Possession > General Overview
[HN4] At common law only actual possession is recognized, and constructive possession, as evidenced by the Georgia
Code and the decisions of the court, and according to text writers, is applicable only where there is paper title. The
essential elements of constructive possession are: 1. A writing describing the tract and purporting to confer title thereto
upon the possessor, i. e., color of title. 2. Actual possession of some portion of the tract. 3. A claim of ownership, over
the portion not held in actual possession, as well as over that portion so held.
HEADNOTES
1. Where the petitioner purchased described lands under a parol agreement and paid the purchase-price in full,
obtaining a deed which by inadvertence of the grantor failed to include a 13-acre tract embraced in the parol purchase,
and immediately entered into possession, the perfect equity, equivalent to legal title, thus acquired by him was limited
to the portion of the 13 acres actually occupied.
2. Where such purchaser subsequently brought an action to restrain from trespassing upon the 13-acre tract [***9]
a named defendant who, prior to the time when the petitioner obtained a deed to the land in dispute, had acquired and
recorded a deed executed to him by the grantee of the petitioner's grantor, and the petitioner relied upon his own prior
pos session as notice to the defendant of his rights and title, but the evidence showed actual possession by him only of
portions of the tract, the extent of which actual occupancy was not made to appear with such definiteness as would have
enabled an enforceable verdict to have been rendered in his favor and a definite judgment thereon entered showing what
portions of the premises the defendant should be restrained from trespassing upon, the judgment entered in accordance
with the verdict in favor of the defendant must be affirmed.
COUNSEL: A. H. Gray, for plaintiff.
William Lowrey Stone, for defendant.
JUDGES: Duckworth, Justice. All the Justices concur. Bell, Chief Justice, concurring specially.
OPINION BY: DUCKWORTH
Page 73
199 Ga. 858, *; 36 S.E.2d 315, **;
1945 Ga. LEXIS 330, ***8
OPINION
[*862] [**318] [HN1] "The purchase of land, full payment of the purchase-money, and possession, create a
perfect equity, which is good against the vendor, his heirs and those claiming under him with notice." Sikes v. [***10]
Seckinger, 164 Ga. 96, 102 (137 S. E. 833). See also Grace v. Means, 129 Ga. 638 (59 S. E. 811); Lee v. Pearson, 138
Ga. 646 (5) (75 S. E. 1051); Wall v. L. & N. Railroad Co., 143 Ga. 417, 420 (1) (85 S. E. 325); Elrod v. Bagley, 154 Ga.
670 (115 S. E. 3). "A perfect equity is the equivalent of legal title." Bank of Arlington v. Sasser, 182 Ga. 474 (3) (185 S.
E. 826); Chapman v. Faughnan, 183 Ga. 114, 115 (3) (187 S. E. 634); Sikes v. Seckinger, supra. "Possession of land is
notice of whatever right or title the occupant has." Code, § 85-408; Baldwin v. Sherwood, 117 Ga. 827 (45 S. E. 216);
Dix v. Wilkinson, 149 Ga. 103 (2) (99 S. E. 437); McDonald v. Dobney, 161 Ga. 711 (8) (132 S. E. 547); Chandler v.
Georgia Chemical Works, 182 Ga. 419 (1-a) (185 S. E. 787, 105 A. L. R. 837); Hicks v. Hicks, 193 Ga. 382, 383 (18 S.
E. 2d, 763). "He who takes with notice of an equity takes subject to that equity." Code, § 37-115; Elrod v. Bagley,
supra. [HN2] The notice which the law in this State presumes from adverse possession is actual notice and not merely
constructive notice. Walker [***11] v. Neil, 117 Ga. 733, 748 (45 S. E. 387); Dyal v. McLean, 188 Ga. 229, 231 (3 S.
E. 2d, 571). Of course, the possession which would amount to notice is not simply possession at some time prior to the
acquisition [**319] of a deed by the contestant, but possession at the time such deed is obtained. Webster v. Black,
142 Ga. 806 (3) (83 S. E. 941); Wood v. Bowden, 182 Ga. 329 (6) (185 S. E. 516). "Notice sufficient to excite attention
and put a party on inquiry shall be notice of everything to which it is afterwards found such inquiry might have led.
Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the rights of parties." Code, § 37-116;
Walker v. Neil, [*863] supra; Georgia R. Bank &c. Co. v. Liberty Bank &c. Co., 180 Ga. 4 (4-c) (177 S. E. 803); Hall
v. Turner, 198 Ga. 763, 769 (32 S. E. 2d, 829). "The knowledge chargeable to a party after he is put on inquiry is not
limited to such knowledge only as would be gained by an examination of the public records." Dyal v. McLean, supra. If
no inquiry is made as to adverse possession, the presumption is that inquiry would have developed [***12] the right
or title under which the possessor held. Austin v. Southern Home Asso., 122 Ga. 439 (1) (50 S. E. 382); Parker v.
Gortatowsky, 127 Ga. 560, 563 (56 S. E. 846).
It is clear that under the evidence and authorities above mentioned the petitioner obtained a perfect equity,
equivalent to legal title, in and to some portions of the land in controversy as against the grantor, his heirs, and those
claiming under him with notice. The notice upon which the petitioner relies to defeat the claim of his adversary under a
subsequently recorded deed and alleged possession is that notice which is given by the petitioner's possession at the
time the defendant acquired his deed to the land in dispute. The evidence fails to show actual occupation of the entire
premises. [HN3] "Actual possession of lands is evidenced by inclosure, cultivation, or any use and occupation thereof
which is so notorious as to attract the attention of every adverse claimant, and so exclusive as to prevent actual
occupation by another." Code, § 85-403. The nearest approach to showing full possession or occupation is the
statement of the petitioner, after testifying that he put a part of the land [***13] in pasture and put a fence around it,
that "I put a fence around it the next year after I bought it." Assuming that he was referring to a fence around the entire
acreage, and not merely the pasture, his testimony does not assert that the fence was intact and complete on November
15, 1941, when the defendant acquired his deed. "Most" of the fence is still there. The fence is incomplete, but when it
ceased to be complete is not disclosed. For aught that appears it was not continuous on November 15, 1941. Therefore,
it can not be said that on that date a fence encircled the entire premises and the petitioner had possession of the whole,
and it is not claimed that it was aided by natural barriers. Will his possession in part, together with full payment of the
purchase-price, entitle the petitioner to a perfect equity in the entire 13 acres contracted for? The answer will depend
[*864] upon whether or not the actual possession will extend his possession to the full acreage. Since the petitioner
obviously did not occupy the entire premises on November 15, 1941, he could not successfully assert title to all of the
13 acres unless aided by what has become known as "constructive [***14] possession." But [HN4] at common law
only actual possession was recognized, and constructive possession, as evidenced by our Code and the decisions of this
court, and according to text writers, is applicable only where there is paper title. "The essential elements of constructive
possession are: 1. A writing describing the tract and purporting to confer title thereto upon the possessor, i. e., color of
title. 2. Actual possession of some portion of the tract. 3. A claim of ownership, over the portion not held in actual
possession, as well as over that portion so held." Powell on Actions for Land, § 307, and numerous cases there cited.
Page 74
199 Ga. 858, *; 36 S.E.2d 315, **;
1945 Ga. LEXIS 330, ***9
Admittedly the petitioner had, on November 15, 1941, when the defendant acquired his deed, no paper title to any part
of the land in dispute, and thus legally he would seem to be limited in his title to actual occupancy. The decisions we
have cited as to equitable title, by reason of a parol purchase, full payment, and possession, do not contain any specific
discussion as to the extent of possession by the holder of the equitable title, and the point does not seem to have been
raised. So far as is indicated by the decisions we have cited, actual possession [***15] may have been assumed by this
court. However, in Cook v. Long, 27 Ga. 280, this court did deal with the question as to the extent of possession of an
occupant possessio pedis under a parol purchase of land with money fully paid, and it was held that "one going into
possession of land, under a parol purchase, can hold only to the extent of his actual possession." That decision has never
been criticized or disapproved and is controlling [**320] here, and requires us to rule, as we do, that the petitioner's
right or title was limited to the portion of the premises actually occupied.
It becomes unnecessary to determine whether or not the evidence required a finding as a matter of law that the
defendant was put on notice of some actual possession by the petitioner, since such notice would not be sufficient to
entitle the petitioner to prevail as to the entire premises. The geographical actual possession of the petitioner was not
made to appear with such definiteness as would have enabled a verdict in his favor to have been rendered [*865] and
enforced; and if any affirmative relief were sought to be granted by the trial court, it could not be ascertained to what
extent [***16] the defendant should be restrained from trespassing. Hence, assuming but not deciding that by his
petition the complainant was charging trespass by the defendant, and not possession, at the time the action was brought,
the only verdict that could have been legally rendered under the evidence was one finding in favor of the defendant.
Accordingly, the judgment must be affirmed. Compare Tripp v. Fausett, 94 Ga. 330 (21 S. E. 572); Whitehead v. Pitts,
127 Ga. 774 (56 S. E. 1004); Ragan v. Carter, 145 Ga. 320 (1) (89 S. E. 206).
Judgment affirmed.
CONCUR BY: BELL
CONCUR
Bell, Chief Justice, concurring specially.
I am inclined to the view that the plaintiff would not acquire a perfect equity, equivalent to legal title, to the omitted
13-acre tract, under the facts summarized in the first headnote. It may be that the oral agreement would be merged in
the deed, and that any right or claim that the plaintiff might have with respect to the omitted tract would depend on
reformation. Carr v. Augusta Grocery Co., 183 Ga. 346 (188 S. E. 531); Kennedy v. Kennedy, 183 Ga. 432 (3) (188 S.
E. 722, 109 A. L. R. 1143); Taylor v. Board of Trustees of [***17] Glenlock Public School, 185 Ga. 61 (194 S. E.
169). If such reformation would be necessary, I do not think it could be said that the plaintiff had a perfect equitable title
to the omitted tract. Magid of Tallulah Inc. v. Beaver, 183 Ga. 485 (189 S. E. 43). However, if the plaintiff did have a
perfect equitable title to the omitted tract, as ruled by the majority, I think he would have it by reason of the full
payment of the purchase-money alone, and that actual possession would not be a prerequisite thereto. Code, § 37-802;
Grace v. Means, 129 Ga. 638, 644 (59 S. E. 811); May v. Sorrell, 153 Ga. 47 (3), 53 (111 S. E. 810); Long v. Godfrey,
198 Ga. 652 (32 S. E. 2d, 306).
What I have just said has reference solely to the question as to equitable title, and does not in any way concern the
question as to what would constitute notice to a purchaser. Nor do I mean to say that it would be necessary for one to
have a perfect equitable title before he would be entitled to the protection of a court of equity as against a subsequent
purchaser with notice. Code, § 37-115.
[*866] Now, with reference to the question of notice, I understand the majority [***18] to hold that possession of
land is notice only of the possessor's right or title as to land under actual occupancy; in other words, that such notice
would be limited as a matter of law to the portion of the premises actually occupied. I cannot agree with this view. The
court has seemingly applied the rule as to the kind of possession that may ripen into prescriptive title after 20 years.
Page 75
199 Ga. 858, *864; 36 S.E.2d 315, **319;
1945 Ga. LEXIS 330, ***14
Code, § 85-406. In such case, of course the prescription "will not extend beyond the possessio pedis." Tillman v.
Bomar, 134 Ga. 660 (5) (68 S. E. 504). It seems to me that the two rules are different, and that notice by possession
would not necessarily be thus limited. As to this particular question, the majority opinion appears to rely mainly upon
Cook v. Long, 27 Ga. 280, but in that case no question of notice to a purchaser was involved, the occupant claiming
merely to have acquired "statutory title" by actual occupancy or possession of the land in dispute. The question of
actual notice is one relating to the purchaser's state of mind, and is not necessarily controlled by the metes and bounds
of the land actually occupied. "Notice sufficient to excite attention and put a [***19] party on inquiry shall be notice
of everything to which it is afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, shall
be equivalent to knowledge, in fixing the rights of parties." Code, § 37-116. This principle must go hand in hand with
the rule stated in the Code, § 85-408, as to notice by possession, and applying both principles to the facts of this case, I
am of the opinion that the plaintiff's possession should not be limited as [**321] notice merely to the land held by him
under actual occupancy. A tract containing only thirteen acres is in dispute. The plaintiff claimed that this tract had
been purchased by him along with other lands, but that through oversight the deed that was made failed to include the
tract in question. The majority opinion goes on the theory that, although the plaintiff was in actual possession of
portions of such 13-acre tract at the time the defendant purchased it, the plaintiff must lose his case with respect to this
entire tract, merely because the extent of his actual occupancy was not made to appear with sufficient definiteness to
support an enforceable verdict and judgment.
It is my view that under Code, [***20] § 85-408, actual possession will [*867] constitute notice as a matter of
law, as to land actually occupied, while under section 37-116, the same possession may be found as matter of fact to
constitute notice as to additional land, depending on the particular facts and circumstances. Thus, in the instant case, if
the plaintiff was in actual possession of parts of the land in question at the time of the defendant's purchase, it seems to
me that even despite such lack of definite description, the jury would have been authorized, if not required, to find that
before purchasing this land the defendant should have inquired of the plaintiff as to his right or title to the parts of it
that he so held in actual possession, and that if such inquiry had been made, the defendant would thereby have
ascertained that the plaintiff claimed the entire tract in dispute, containing, as it did, only thirteen acres, in a single lot,
and its own boundaries being definite, to wit, original lot lines and a creek. Austin v. Southern Home Building &c.
Assn., 122 Ga. 439 (2) (50 S. E. 382); Parker v. Gortatowsky, 127 Ga. 560, 563 (56 S. E. 846); Terrell v. McLean, 130
Ga. [***21] 633 (4) (61 S. E. 485); 22 R. C. L. 722, § 486.
Nevertheless, the defendant contended and testified that the plaintiff was not in possession of any part of the tract at
the time he purchased it, and under the evidence as a whole it cannot be said that the verdict for the defendant was
unauthorized. Dix v. Wilkinson, 149 Ga. 103 (2) (99 S. E. 437); Webster v. Black, 142 Ga. 806 (3) (83 S. E. 941).
Accordingly, the court did not err in overruling the plaintiff's motion for a new trial, based solely on the general
grounds. For this reason, I concur in the judgment.
Page 76
199 Ga. 858, *866; 36 S.E.2d 315, **320;
1945 Ga. LEXIS 330, ***18
23 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
HALL, administrator, v. TURNER et al.
No. 15040
Supreme Court of Georgia
198 Ga. 763; 32 S.E.2d 829; 1945 Ga. LEXIS 233
January 6, 1945, Decided
PRIOR HISTORY: [***1] Claim for land. Before Judge Worrill. Early superior court. September 2, 1944.
W. A. Hall, as administrator of the estate of J. G. Edwards, deceased, made an application to the court of ordinary
of Early County, Georgia, to sell certain real estate of the estate for the purpose of paying debts of the intestate and
making distribution. Citation issued, and after publication as required by law the application to sell was granted.
Before the property was sold J. B. Turner and his wife, Mrs. J. B. Turner, filed a claim to described 50 acres of the land
to be sold. It was alleged that J. B. Turner, on February 22, 1930, while holding the legal title to the described 50 acres
of land and in actual possession of the same, conveyed it to his son, B. J. Turner, by deed which was duly recorded. On
January 1, 1928, J. B. Turner executed to Federal Land Bank of Columbia a security deed conveying the property as
security for a loan made by the bank to him. The only consideration for the deed from J. B. Turner to B. J. Turner was
an agreement by B. J. Turner that Mr. and Mrs. J. B. Turner should have the right to occupy the premises, live in the
dwelling house thereon, and use the said [***2] land and receive the rents, issues, and profits therefrom so long as they
or either of them should live, and that B. J. Turner would pay to the bank the outstanding loan. J. B. Turner and his wife
lived upon the said 50 acres at the time of the agreement, using the same as their own, and have continued so to do,
receiving their support and maintenance therefrom. On October 2, 1934, B. J. Turner conveyed the said land to his
sister, Bessie Turner, by deed duly recorded. At the time of this conveyance, Mr. and Mrs. J. B. Turner were occupying
the land and B. J. Turner fully advised Bessie Turner of the aforesaid agreement, and she agreed to carry out the same
and to assume and pay the balance of the loan due the Federal Land Bank of Columbia. She continued to execute this
agreement in all of its terms until her death in November, 1942. The said administrator on the estate of J. G. Edwards
bases his claim of right to sell the land upon the contention that his intestate was the sole heir at law of Bessie Turner.
Upon the facts above alleged the claimants assert that they are in equity and good conscience entitled to the possession,
use, and occupancy of the said 50 acres of land and [***3] the rents and profits therefrom so long as they or either of
them remain in life.
Page 77
The evidence on the trial of the claim was substantially as follows: B. J. Turner, son of Mr. and Mrs. J. B. Turner,
purchased the 50 acres of land in 1917 or 1918 from H. B. Paul for $ 1500 as a home for his parents, Mr. and Mrs. J. B.
Turner, title being taken in his name. Later he removed to Florida, and to enable a loan to be obtained on the property,
out of which to pay the balance of the purchase-price, he deeded it to his father, J. B. Turner, who obtained a loan from
Federal Land Bank of Columbia. On February 22, 1930, J. B. Turner conveyed the land by warranty deed to B. J.
Turner for a recited consideration of $ 1600, the deed containing no reservations, conditions, or exceptions. It was
agreed orally between the parties that J. B. Turner and his wife should have the right to occupy the premises so long as
they or either of them should live, to have the use of the same and the rents and profits therefrom. B. J. Turner testified
that the consideration named in the deed was only by way of recital, and that the real consideration was that above
named and the further obligation upon him to [***4] pay off the balance due on the loan from the bank. In October,
1934, B. J. Turner, for a consideration of $ 1500, conveyed the property to his sister, Bessie Turner; and he testified that
she knew about the agreement for their parents to enjoy the use of the property and receive the rents and profits
therefrom so long as they or either of them should live, and that she agreed to pay the balance due the bank. He testified
that his parents had been living on the land since 1917 or 1918; that J. B. Turner farmed the land as long as he was able,
and, after he got to where he could not work the whole place, he rented out part of it, and he and his wife continued to
live there. The deed to his sister, Bessie Turner, was made while she was living in Jacksonville, Florida, and about four
years later she married J. G. Edwards. She and her husband came to the home and made valuable improvements,
remodeled the house, dug a deep well, had the house wired for electricity, and furnished it quite nicely. They lived
there off and on, sometimes at Jacksonville and sometimes there. That was their home in Early County and they owned
the property. Mr. and Mrs. J. B. Turner were in the house at [***5] all times. They had a room there in the house. His
sister did not furnish the whole house, just furnished one room, he thought. Mr. and Mrs. Edwards put in an electric
stove and refrigerator, had a very beautiful kitchen, and Mr. and Mrs. Turner occupied a bedroom. The cooking was
done in the kitchen. There was just one kitchen. The eating was done in the dining room and there was just one. There
was a living room in the house and his parents used that, sat on the porch, drank water from the well, and ate fruit from
the trees around them. Mr. and Mrs. Edwards also lived in the house, slept in the beds, drank water from the well,
cooked on the cooking apparatus, and ate on the table. It was a joint occupancy. At the time he executed the deed to his
sister, his father and mother were living on the 50 acres and living there alone. After his sister bought the land, she and
her husband moved there and improved the land and returned it for taxes and paid the taxes.
W. A. Hall testified that, as administrator of the estate of J. G. Edwards, he went to the house where the Turners
lived and was assisted by them in taking inventory, omitting such items as they claimed belonged to [***6] them. He
rented the place for 1943 to a Mr. Whitehurst, son-in-law of Mrs. Turner, and Whitehurst paid the rent to him as
administrator. As to the year 1944, Mr. and Mrs. Turner filed their claim and said that if they lost their suit they would
pay him rent. Neither J. B. Turner nor Mrs. Turner told him under what conditions they were living on the place, and,
when he went there to make the inventory, they made no such claim as has since been made. They said they wanted to
buy the place. Both Mr. and Mrs. Edwards are dead. Mr. Edwards lived about two days after Mrs. Edwards died.
From the witness's investigation after the death of Mrs. Edwards, she did not owe any debts that he knew of. Mr.
Edwards owed about $ 1000. They had no children. They lived together on the place as husband and wife. The
witness found Mr. and Mrs. J. B. Turner living in the house when he went there to take charge. They were not the only
ones living there. There were several sons-in-law there then, but they are not there now. They farmed there in 1943.
In evidence were the deeds hereinbefore referred to; a plain warranty deed, without reservations or exceptions, from
J. B. Turner to B. J. Turner, [***7] dated February 22, 1930, duly recorded; and a plain warranty deed from B. J.
Turner to Bessie Turner, without reservations or exceptions, dated October 2, 1934, and duly recorded.
The jury returned a verdict in favor of the claimants. The defendant filed a motion for new trial and by amendment
added several special grounds. The court overruled the motion, and the exception here is to that judgment.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
Page 78
198 Ga. 763, *; 32 S.E.2d 829, **;
1945 Ga. LEXIS 233, ***3
PROCEDURAL POSTURE: Plaintiff in error administrator sought review of a decision from the trial court (Georgia),
which rendered judgment for defendant in error claimants, who filed a claim to the land after the court granted the
administrator's application to sell certain real estate of the estate for the purpose of paying debts of the intestate and
making distribution, and overruled the administrator's motion for new trial.
OVERVIEW: In consideration for the claimants conveying the property to their son, the son gave the claimants the
right to occupy the premises for life. The son later conveyed the property to his sister, who was advised of the
agreement and agreed to carry it out. After the court granted the administrator's application to sell the land, the
claimants filed a claim to the land to be sold. The administrator based his claim of right to sell the land upon the
contention that his intestate was the sister's sole heir at law. The court affirmed the judgment for the claimants, holding
that there was an implied resulting trust in favor of the claimants. The jury was authorized to find that the claimants
were at all times in adverse possession of the land under their bona fide claim of right. The sister was, at the time of her
purchase, charged with notice of the claim, and the jury was authorized to find that she was not an innocent purchaser.
The intestate, as the sister's sole heir at law, took the title to the land by inheritance, subject to the trust impressed by
law in favor of the claimants. The trial court did not err in overruling the motion for new trial.
OUTCOME: The court affirmed the judgment for the claimants.
CORE TERMS: claimant's, notice, deed, conveyed, grantor, intestate, administrator's, rent, incompetent, occupancy,
implied trust, grantee, parol, complains, movant, husband and wife, parol evidence, purchaser, occupant, jointly,
occupy, realty, heir, deceased person, inheritance, impressed, resulting trust, sufficient to put, innocent purchaser,
presumptively
LexisNexis(R) Headnotes
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Real Property Law > Trusts > Resulting Trusts
[HN1] In all cases where a trust is sought to be implied, the court may hear parol evidence of the nature of the
transaction, or the circumstances, or conduct of the parties, either to imply or rebut a trust. Ga. Code Ann. § 108-108. A
deed absolute in form may be shown by parol evidence to have been made in trust for the benefit of the grantor, where
the maker remains in possession of the land.
Contracts Law > Statutes of Frauds > General Overview
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
[HN2] While an express trust must be created by writing, and cannot be proved by parol, implied trusts may be
established by parol evidence, although the effect of such evidence is to alter or vary a written instrument, and although
the defendant sets up and insists upon the statute of frauds.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Real Property Law > Trusts > Resulting Trusts
[HN3] Trusts are implied -- 1. Whenever the legal title is in one person, but the beneficial interest, either from the
payment of the purchase-money or other circumstances, is either wholly or partially in another. Ga. Code Ann. §
108-106. An implied trust is sometimes more particularly a resulting trust. An implied trust is sometimes for the benefit
Page 79
198 Ga. 763, *; 32 S.E.2d 829, **;
1945 Ga. LEXIS 233, ***7
of the grantor, or his heirs, or heirs or next of kin of a testator, and is then a resulting trust. Ga. Code Ann. § 108-110.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN4] Possession of land is notice of whatever right or title the occupant has. Ga. Code Ann. § 85-408. Notice
sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found
such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the
rights of parties. Ga. Code Ann. § 37-116.
Real Property Law > Adverse Possession > Procedure
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] Adverse possession of land is notice of whatever facts in reference to the title would be developed by inquiry of
the person in possession, the presumption being that inquiry of him will disclose how, or under what right, he holds
possession, and therefore lead to the discovery of the real adverse holder, whether himself or another for whom he holds
possession. Possession by anybody adverse to the person offering to sell is sufficient to put the prospective purchaser
upon notice of whatever inquiry of the occupant of the premises will develop; and in the absence of such an inquiry,
the presumption is, that, had it been made, the right, title, or interest under which the possessor held would have been
discovered.
Criminal Law & Procedure > Witnesses > Presentation
Evidence > Competency > General Overview
[HN6] The interest of a witness in the result of a suit will not disqualify him, though his credibility will be a matter for
determination by the jury.
HEADNOTES
1. The evidence here showing that the land involved was deeded by the grantor to his son upon the sole agreement
that the grantee was to hold the record title subject to the rights of the grantor and his wife to use and occupy the land
and to receive the rents and profits therefrom while they or either of them should remain in life, an implied resulting
trust was thereby crcated in favor of the grantor and his wife, and the subsequent execution and delivery of an absolute
deed to his sister by the grantee, without an extress reservation of the rights of the grantor and his wife, was a fraud
upon them.
(a) Where such grantor and his wife remained in the exclusive possession of the land under such reserved right as
the consideration for the deed to the [***8] son, although the possession was in law presumptively the possession of
the husband, such possession was sufficient to put a purchaser upon inquiry as to how and why the husband held
possession, and since the evidence did not show that he had represented or done anything to indicate that the possession
was exclusively in him, such inquiry would presumably have led his remote grantee to a discovery that the
possession was really that of himself and his wife jointly under an equal claim of right; and, in the absence of an
investigation, she could not be said to be an innocent purchaser, and she took title to the land subject to the trust
impressed by law.
(b) The fourth headnote in neal v. perkerson, 61 Ga. 345, that, "Joint residence of husband and wife on realty does
not give notice of any claim of interest in it by the wife," is broader than the facts of the case and the opinion authorize,
the decision holding, properly construed, only that such joint residence upon realty does not give notice of a secret
equity of the wife therein to one dealing with the husband upon the representation and belief that the land belonged to
him.
(c) Where title to the land in question devolved by [***9] inheritance upon the husband of the remote grantee
charged with notice of the trust impressed by law in favor of the claimants, and the administrator of his estate applied
Page 80
198 Ga. 763, *; 32 S.E.2d 829, **;
1945 Ga. LEXIS 233, ***7
for and the ordinary granted permission to sell the land for the payment of the debts of the intestate and to make
distribution, and the husband and wife in possession interposed their claim in and to the land, the jury was authorized to
find under the law and the evidence in favor of the claimants, and the court did not err in overruling the general grounds
of the defendant's motion for new trial.
2. The interest of a witness in a suit does not disqualify him, though his credibility would be a matter for the jury's
determination.
3. The testimony of the witness not relating to any transactions with the defendant administrator's intestate, he was
not incompetent to testify as to transactions regarding the land involved prior to the time when the title thereto devolved
upon the intestate by inheritance.
4. The excerpt from the charge complained of, properly construed, was only a statement of the contentions of the
claimants, and was not error for any reason assigned.
5. Where the claimants relied upon an implied [***10] trust in connection with the execution and delivery of a
deed to land, the court did not err in stating to the jury a contention of the claimants, as expressed in their petition, that
they "say that they are in equity and good conscience entitled to the possession and occupancy of the said lands and the
rents and profits thereof so long as they or either of them remain in life."
6. The evidence demanding a finding as a matter of law in favor of the competency of a certain witness, and such
determination being for the court and not the jury, the submission to the jury of that question was not harmful error as
against the defendant, but was favorable to him.
COUNSEL: A. B. Conger, for plaintiff.
A. H. Gray, for defendants.
JUDGES: Duckworth, Justice. All the Justices concur.
OPINION BY: DUCKWORTH
OPINION
[*767] [**832] 1. The facts of the present case do not show an instance where land was conveyed to one who
entered into possession with the record title in his name, and where, as contended by the plaintiff in error, the terms of a
plain, unambiguous deed can not be varied or contradicted by parol evidence. Where, as here, an implied trust is sought
to be shown by such evidence [***11] against one who is not in possession, the provisions of the Code, § 38-501, that
"Parol contemporaneous evidence is inadmissible generally to contradict or vary the terms of a valid written
instrument," have no application. Guffin v. Kelly, 191 Ga. 880, 885 (14 S. E. 2d, 50). [HN1] "In all cases where a trust
is sought to be implied, the court may hear parol evidence of the nature of the transaction, or the circumstances, or
conduct of the parties, either to imply or rebut a trust." Code, § 108-108. "A deed absolute in form may be shown by
parol evidence to have been made in trust for the benefit of the grantor, where the maker remains in possession of the
land." Chandler v. Georgia Chemical Works, 182 Ga. 419 (185 S. E. 787, [*768] 105 A. L. R. 837). The claimants base
their right in and to the land sought to be sold by the defendant administrator upon an implied trust, showing by
testimony of their son, B. J. Turner, that when J. B. Turner conveyed the land to him, the consideration, although
expressed in the deed as $ 1500, was in fact the right of the grantor and his wife to use and occupy the property and
receive the rents and profits therefrom while they or [***12] either of them should remain in life. Since the deed did
not specifically make the payment of the $ 1500 an essential condition, but the named consideration was merely by way
of recital, this testimony was properly admissible without violating the parol evidence rule in the abovecited Code
section. Wellmaker v. Wheatley, 123 Ga. 201, 203 (2) (51 S. E. 436); Young v. Young, 150 Ga. 515, 517 (104 S. E. 149
Page 81
198 Ga. 763, *; 32 S.E.2d 829, **;
1945 Ga. LEXIS 233, ***9
). [HN2] "While an express trust must be created by writing, and cannot [**833] be proved by parol, implied trusts
may be established by parol evidence, although the effect of such evidence is to alter or vary a written instrument, and
although the defendant sets up and insists upon the statute of frauds." Jenkins v. Lane, 154 Ga. 454 (3 a) (115 S. E. 126).
See also Janson v. Jansen, 180 Ga. 318, 321 (178 S. E. 654); Sykes v. Reeves, 195 Ga. 587, 590 (24 S. E. 2d, 688).
[HN3] "Trusts are implied -- 1. Whenever the legal title is in one person, but the beneficial interest, either from the
payment of the purchase-money or other circumstances, is either wholly or partially in another." Code, § 108-106. An
implied trust is sometimes more particularly [***13] a resuslting trust. "An implied trust is sometimes for the benefit
of the grantor, or his heirs, or heirs or next of kin of a testator, and is then a resulting trust." § 108-110. Such in effect is
the trust here relied upon, since the right claimed was for the benefit of the grantor and his wife, to use and occupy the
land and receive the rents and profits therefrom while they or either of them should live. The agreement testified to
was, it is true, an express verbal one, but a trust arising under the circumstances named is not destroyed merely because
it can not be enforced as an express trust required to be in writing, and upon equitable principles will be enforced as an
implied resulting trust. Jackson v. Jackson, 150 Ga. 544, 549 (104 S. E. 236); McDonald v. Dabney, 161 Ga. 711, 731
(132 S. E. 547); Romano v. Finley, 172 Ga. 366 (157 S. E. 669); Hemphill v. Hemphill, 176 Ga. 585, 590 (168 S. E.
878); Allen v. Allen, 196 Ga. 736, 745 (27 S. E. 2d, 679).
[*769] The evidence being undisputed that the grantee, B. J. Turner, held the title subject to the rights claimed by
J. B. Turner, the grantor, and his wife, an implied resulting [***14] trust was thereby created in their favor. Hence, any
transfer of this title, held exclusively for the benefit of the claimants during their lives would, without providing in the
deed to another that the conveyance was subject to their rights, be a fraud upon them. B. J. Turner subsequently
conveyed the land by absolute deed to his sister, Bessie Turner, and the question arises whether or not she was bound by
the agreement made for the benefit of the parents, or was an innocent purchaser, and consequently the administrator's
intestate, whom she had married after the execution of the deed to her, held the title free from any right of the claimants.
B. J. Turner testified that when he conveyed to her for the recited consideration of $ 1500 and the further agreement on
her part that she would pay off an outstanding loan in favor of Federal Land Bank of Columbia, she knew about the
conditions under which the parents were living on the property, but this testimony was not tantamount to showing that
she had agreed to such use and enjoyment. Nevertheless, it is fundamental law that [HN4] "Possession of land is notice
of whatever right or title the occupant has" (Code, § 85-408); and that "Notice [***15] sufficient to excite attention
and put a party on inquiry shall be notice of everything to which it is afterwards found such inquiry might have led.
Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the rights of parties." Code, § 37-116.
These principles of law have been expounded in innumerable decisions of this court. The claimants were jointly in
actual possession of the land when B. J. Turner in October, 1934, conveyed to Bessie Turner, and they had been in such
possession since the land was purchased by B. J. Turner from H. B. Paul in 1917 or 1918, after which it was conveyed
to J. B. Turner, who on February 22, 1930, by duly recorded deed conveyed back to B. J. Turner. The right here
claimed is not only on behalf of J. B. Turner but also on behalf of his wife. While the title was in J. B. Turner when he
conveyed to B. J. Turner in 1930, and, presumptively as to a purchaser, the possession was in him alone as the husband,
such presumption is rebuttable. Code, § 85-408; Grantham v. Wester, 136 Ga. 17 (70 S. E. 790); Mercer v. Morgan,
136 Ga. 632 (2) (71 S. E. 1075). [*770] The possession of the husband himself was [***16] sufficient to put Bessie
Turner upon inquiry as to how and why he held possession. Such an inquiry might and doubtless would, since the
husband is not shown to have represented or done anything to indicate that the possession was exclusively in him, have
led her to the discovery that the possession, presumptively in him, was really that of himself and his wife jointly under a
claim of equal right. Walker v. Neil, 117 Ga. 733, 745 (45 S. E. 387). As stated in the Walker case: "While the rule, as
ordinarily stated, is that possession of land is notice of whatever title or interest therein the possessor has, we think that
the real principle applicable in such a case is broader [**834] than this. The principle upon which the rule is founded
is, that [HN5] adverse possession of land is notice of whatever facts in reference to the title would be developed by
inquiry of the person in possession, the presumption being that inquiry of him will disclose how, or under what right,
he holds possession, and therefore lead to the discovery of the real adverse holder, whether himself or another for whom
he holds possession. . . Possession by anybody adverse to the person offering to [***17] sell is sufficient to put the
prospective purchaser upon notice of whatever inquiry of the occupant of the premises will develop; and in the
absence of such an inquiry, the presumption is, that, had it been made, the right, title, or interest under which the
Page 82
198 Ga. 763, *768; 32 S.E.2d 829, **832;
1945 Ga. LEXIS 233, ***12
possessor held would have been discovered." In Neal v. Perkerson, 61 Ga. 345 (supra), it was stated in the 4th headnote
that "Joint residence of husband and wife on realty does not give notice of any claim of interest in it by the wife." This
headnote was, as stated in Austin v. Southern Home Assn., 122 Ga. 439, 447 (50 S. E. 382), written by the reporter of
the court, and, as shown by Mr. Justice Fish in Walker v. Neil, supra, was broader than the facts of the case authorized;
and "if considered apart from the case which was before the court, would sustain the contention of counsel in the
present case; but when considered in connection with the facts which were before the court, it will be found that the
decision in that case, properly construed, simply means that joint residence of husband and wife upon realty does not
give notice of a secret equity of the wife therein, to one dealing with the husband [***18] upon the representation and
belief that the land belongs to him." (Italics ours.) The facts of this case do not bring it within the general rule applicable
where one is in [*771] possession with the record title in his name and which, in McDonald v. Dabney, supra, is stated
as follows: "If, of two occupants, one has the record title, a purchaser has the right to assume that the other has no title."
Here the husband held no record title at the time Bessie Turner purchased from B. J. Turner, and he made no
representation as to exclusive rights in himself. Hence the wife was equally entitled to prosecute the claim to the use
and occupancy of the land jointly with the husband and to participate in the rents and profits therefrom.
But it is contended by the plaintiff in error that, under the testimony of B. J. Turner, the possession was joint with
that of the intestate and his wife, formerly Bessie Turner, and hence did not constitute sufficient notice of the claim of
the parents, since the possession must not only be open and visible but must be exclusive and unambiguous in nature.
There was no testimony as to such alleged mixed possession at the time B. J. Turner conveyed [***19] to his sister,
Bessie Turner, who subsequently married the intestate, J. G. Edwards. The evidence does show that after the execution
of the deed to her, and after her marriage to Edwards, they lived part of the time in Early County, Georgia, and part of
the time in Jacksonville, Florida, and that when in Early County they lived in the home with the claimants and made
valuable improvements therein. All ate in the same dining room, and cooking was done in the same kitchen. The
parents sat on the porch, used the living room, drank water from the well, slept in the house, and ate fruit from trees. It
was only after such a description of occupancy as to manner and time that the witness used the expression, "It was a
joint occupancy;" and certainly the jury was not required to interpret the expression as implying any occupancy by Mr.
and Mrs. Edwards at the time of the conveyance to her as Bessie Turner in October, 1934. Nor was the jury required to
construe the presence of Mr. and Mrs. Edwards in the home other than as a natural arrangement between relatives
without any contention on their part that such residence was intended as a contest to the adverse possession of Mr. and
Mrs. [***20] Turner as existing at the time of the conveyance by them to B. J. Turner and when he conveyed to Bessie
Turner. There is nothing in the evidence to indicate any disclaimer, during such residence as described, that Mr. and
Mrs. Turner were still the rightful occupants, and that the presence of Mr. and Mrs. Edwards was otherwise than
permissive. While it [*772] is shown that Mrs. Edwards returned the land for taxes and paid the taxes as the holder of
the record title, this evidenced merely the discharge of a duty that rested upon her. The administrator testified that in
1943 he rented the land to one Whitehurst, son-in-law of Mrs. Turner, who paid the rent to him; but it was not
affirmatively shown that Whitehurst ever occupied the premises, [**835] and the testimony of B. J. Turner was that J.
B. Turner farmed the land as long as he was able and then rented out part of it and he and his wife continued to live
there. They were still in possession when the defendant administrator went to the premises to make an inventory of the
personal property belonging to his intestate. He testified that they did not inform him under what conditions they were
there; but as it does not [***21] appear that he questioned their rights, their silence can not be said to defeat the bona
fides of their claim.
For the reasons above shown, the jury was authorized to find from the evidence that Mr. and Mrs. Turner were at
all times in adverse possession of the land under their bona fide claim of right, and that they did nothing to indicate any
disclaimer of such right in and to the premises. Under the authorities above cited, Bessie Edwards was, at the time of
her purchase, charged with notice of such claim, and the jury was authorized to find that she was not an innocent
purchaser; that J. G. Edwards, as her sole heir, took the title to the land by inheritance, subject to the trust impressed by
law in favor of the claimants. The verdict in favor of the claimants being authorized under the law and the evidence, the
court did not err in overruling the general grounds of the defendant's motion for new trial.
Page 83
198 Ga. 763, *770; 32 S.E.2d 829, **834;
1945 Ga. LEXIS 233, ***17
2. Special ground 1 complains that the court erred in permitting the witness B. J. Turner, over objection of the
movant, to testify on behalf of the claimants, it being contended that he was an incompetent witness for the reason that
he was interested in the result of the suit [***22] because of his obligation to the claimants. This contention is
obviously without merit, since [HN6] the interest of the witness would not disqualify him, though his credibility would
be a matter for determination by the jury.
3. Special ground 2 complains that the court erred in permitting the witness B. J. Turner, to testify over objection of
the movant that the recited consideration of $ 1500 in the deed from J. B. Turner to him was not the real consideration,
which real consideration [*773] was that J. B. Turner and his wife should have the right to use and occupy the land as
hereinbefore stated, it being contended: (1) that it related to an interest in or was concerning land and violated the
provisions of the Code, § 20-401 (4), that any contract for the sale of lands or any interest in or concerning them must
be in writing; (2) that the evidence sought to change and vary by parol testimony the terms of a written contract in
violation of the Code, § 38-501; (3) that the witness was a privy in estate and title had passed out of him and the
testimony could not, under the Code, § 38-407, be received; (4-a) that the witness was interested in the litigation
because of his obligation [***23] to the claimants; and (4-b) that the witness was incompetent to testify under the
Code, § 38-1603 (4), which provides that, "Where a person not a party, but a person interested in the result of the suit,
shall be offered as a witness, he shall not be competent to testify, if as a party to the cause he would for any cause be
incompetent," it being contended that, if a party to the cause, he would have been incompetent to testify under the Code,
§ 38-1603 (1), which provides that, "Where any suit shall be instituted or defended by . . the personal representative of a
deceased person, the opposite party shall not be admitted to testify in his own favor against the . . deceased person as to
transactions or communications with such . . deceased person whether such transactions or communications were had
by such . . deceased person with the party testifying or with any other person." The contentions designated as (1), (2),
(3), and (4-a) are disposed of, adversely to the movant, by what has been said in division 1 of the opinion. The
provisions of the Code sections cited under contention (4-b) have no application to the facts of the case. The testimony
of B. J. Turner, if it had been [***24] given as that of a party to the present litigation, would have had no relation to
any transaction with the administrator's intestate, J. G. Edwards. Edwards's interest in the property devolved upon him
only by inheritance as the sole heir at law of his wife, formerly Bessie Turner, and the transactions testified to by the
witness were only with J. B. Turner and Bessie Turner several years before she married Edwards. Obviously the
witness was not incompetent for any reason assigned.
4. Special ground 3 complains of a lengthy portion of the charge of the court, as not merely [**836] stating
contentions of the claimants [*774] but amounting to a statement of facts, which thus constituted an expression of
opinion by the court, and was misleading and confusing and an undue and unauthorized emphasis of the claimant's
contentions. Without setting forth the charge objected to, it is sufficient to say that it contained nothing but a recital of
contentions. The excerpt began by prefixing the first-named contention by the statement, "The plaintiff contends," and
thereafter each separate contention was preceded by the word "that." The context shows plainly that each statement was
[***25] that of a contention by the claimants, and it would be a strained construction to say that the jury would not so
understand it merely because the court did not continually repeat before the word "that" the words, "The plaintiff
contends." This ground of the motion is without merit.
5. Special ground 4 complains that the court erred in a portion of its charge in stating that the claimants "say that
they are in equity and good conscience entitled to the possession and occupancy of the said lands and the rents and
profits thereof so long as they or either of them remain in life;" it being contended that their claim was not so based, but
was based upon a definite parol agreement between the parties. The right of the claimants rests upon the trust
impressed by law upon equitable principles, and the claimants appropriately alleged in their petition in aid of their claim
that they "are in equity and good conscience entitled," etc. In fact, in using the language complained of, the court was
merely repeating almost verbatim the contentions of the claimants in paragraph 11 of their petition, and, of course, it
was not error to state such contentions.
6. Special ground 5 complains that the [***26] court, in a portion of its charge, submitted to the jury the question
whether or not the witness, B. J. Turner, was competent to testify. The question of his competency was, as urged by the
Page 84
198 Ga. 763, *772; 32 S.E.2d 829, **835;
1945 Ga. LEXIS 233, ***21
movant, a matter for determination by the court and not by the jury. Since, however, the court should have itself
decided as a matter of law that, as here-inbefore ruled, the witness was not incompetent even though interested in the
litigation, although his credibility would be for the jury's determination, the submission to the jury of the question of his
competency could not be said to be harmful to the movant, but was favorable to him.
Judgment affirmed.
Page 85
198 Ga. 763, *774; 32 S.E.2d 829, **836;
1945 Ga. LEXIS 233, ***26
27 of 176 DOCUMENTS
Positive
As of: Aug 04, 2014
DYAL v. McLEAN
No. 12712
Supreme Court of Georgia
188 Ga. 229; 3 S.E.2d 571; 1939 Ga. LEXIS 489
June 15, 1939, Decided
PRIOR HISTORY: [***1] Equitable petition. Before Judge Kent. Laurens superior court. December 22, 1938.
On January 15, 1935, F. L. Dyal filed a suit against Mrs. H. G. McLean, praying that she be enjoined from working
for turpentine purposes described timber; and for damages. Upon the trial the judge directed a verdict in favor of the
defendant. The plaintiff's motion for new trial, assigning error on the direction of the verdict, was overruled, and he
excepted.
The plaintiff alleged that during the year 1934 he was in possession of the timber on described tracts of land, under
leases from the owners, executed in 1928 and duly recorded, whereby he acquired the right to work the timber for
turpentine purposes until December 31, 1934; that during that year he procured and paid for extensions of said leases up
to December 31, 1935, of which extensions the defendant had both actual and constructive notice; and that under some
pretended claim the defendant is undertaking to cup the timber on some of said lands, and is threatening to operate for
turpentine purposes the timber on all of said tracts. The answer of the defendant alleged that she held lease contracts
from the owners of five of the six [***2] tracts of land described in the petition, whereby she acquired the turpentine
rights in the timber located on said tracts, beginning January 1, 1935; that the recorded lease contracts of the plaintiff by
their express terms expired December 31, 1934; that she had neither actual nor constructive notice of the extensions
claimed by the plaintiff; that in her negotiations for said leases she relied upon the records of Laurens County, and the
statements of grantors in her leases; that upon the expiration of Dyal's recorded leases, according to the terms thereof,
she took steps to enter upon the premises referred to, for the purpose of using the trees thereon for turpentine purposes
in accordance with the terms of her lease contracts, which action was taken in the utmost good faith, without notice of
any adverse claim on the part of the plaintiff.
On the hearing of the motion for new trial counsel agreed upon the following as the brief of evidence: "That the
plaintiff, F. L. Dyal, went into possession of the various tracts of land described in the petition, under leases which were
Page 86
recorded, all of the leases by their express terms expiring December 31, 1934. That the plaintiff, after [***3] record of
said leases and while in possession of the timber described in the leases and before the expiration thereof as stated in the
leases, obtained from the various owners an extension of said leases up to and including December 31, 1935, for which
extensions he duly paid the various common grantors of both plaintiff and defendant; that the extension agreements
obtained by F. L. Dyal were never recorded, and the only recorded leases were the original leases above referred to,
which under their terms expired December 31, 1934. That at the time plaintiff obtained said extensions he was in
possession of said timber, working the same, and was in possession of said timber at the time the defendant obtained her
timber leases. All of the timber leases of the defendant, Mrs. McLean, were obtained and recorded before the expiration
date of the recorded leases held by F. L. Dyal, to wit, December 31, 1934. That all of the leases obtained by the
defendant, Mrs. McLean, were to begin January 1, 1935, which was after the expiration of the leases held by F. L. Dyal
as recorded. The defendant had no notice, unless possession of Dyal was notice, at the time she obtained her leases, of
the [***4] fact that F. L. Dyal had obtained extension agreements extending the time of his leases."
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: In a suit seeking an injunction against defendant second lessee's use of disputed timber
and seeking damages for the use of that timber, plaintiff land possessor appealed the judgment of the Superior Court of
Laurens County (Georgia), which directed a verdict in favor of the second lessee and denied the possessor's motion for a
new trial.
OVERVIEW: The possessor had worked turpentine on several timber tracts for about six years, and the leases that
authorized such work were recorded. While he was in possession of the land, he received a one-year extension of the
lease, but the lease extension was not recorded. Prior to the expiration of the possessor's lease term, the second lessee
also obtained a lease from the timber owners, and she alleged, relying on the expiration date contained in the leases that
the possessor recorded, that she did not have notice of the extension granted to the possessor. The trial court directed a
verdict for the second lessee, and the court reversed. The court held that the occupancy by the possessor was notice of
his actual interest in the disputed timber tracts and that the second lessee was required to exercise due diligence in
inquiring about the possessor's interest in the timber. The court also ruled that the knowledge chargeable to the second
lessee was not merely knowledge that could be obtained from public records. Thus, there was a question of fact as to
who had the right to work the timber, and the possessor was entitled to a new trial.
OUTCOME: The court reversed.
CORE TERMS: notice, timber, leases, turpentine, recorded, original leases, public records, chargeable, occupant,
lessee, rights of parties, extension agreements, new trial, adverse possession, possession of land, unrecorded, overruling,
purchaser, directing, excite, fixing, gained, tenant, expire
LexisNexis(R) Headnotes
Real Property Law > Estates > General Overview
[HN1] See O.C.G.A. § 85-408.
Real Property Law > Estates > General Overview
[HN2] Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is
Page 87
188 Ga. 229, *; 3 S.E.2d 571, **;
1939 Ga. LEXIS 489, ***2
afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge,
in fixing the rights of parties. O.C.G.A. § 37-116.
Real Property Law > Adverse Possession > General Overview
[HN3] The notice which the law in Georgia presumes from adverse possession of land is actual, not constructive,
notice.
Real Property Law > Landlord & Tenant > Lease Agreements > Commercial Leases > General Overview
[HN4] Possession by a tenant is notice of the title of the landlord, as well as of the actual interest of the tenant and the
whole extent thereof.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] A purchaser of land is bound to exercise due diligence in the prosecution of all inquiries that may be suggested
by any fact brought to his knowledge, and in the discharge of such duty must make inquiry in pais as well as examine
the records.
Evidence > Inferences & Presumptions > General Overview
Real Property Law > Adverse Possession > Procedure
[HN6] Adverse possession of land is notice of whatever facts in reference to the title would be developed by inquiry of
the person in possession, the presumption being that inquiry of him will disclose how and under what right he holds
possession; and in the absence of such inquiry the presumption is that, had such inquiry been made, the right, title, or
interest under which the possessor held would have been discovered.
Civil Procedure > Trials > Jury Trials > Province of Court & Jury
Real Property Law > Adverse Possession > General Overview
[HN7] The working of timber for turpentine purposes is an act of such nature that it may amount to adverse possession,
and thus constitute notice of the turpentine worker's interest in property. Whether turpentine operations are so carried on
as to show adverse possession is generally a question of fact to be determined by a jury.
Contracts Law > Types of Contracts > Lease Agreements > General Overview
Real Property Law > Estates > General Overview
[HN8] Possession of land is notice, not only of whatever title the occupant has, but of whatever right he may have in
the property. O.C.G.A. § 85-408.
Civil Procedure > Trials > Judgment as Matter of Law > Directed Verdicts
Civil Procedure > Judgments > Relief From Judgment > Motions for New Trials
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN9] Knowledge chargeable to a party who is put on inquiry is not limited to such knowledge only as would be
gained from an examination of the public records.
HEADNOTES
1. Possession of land is notice of whatever right or title the occupant has. Notice sufficient to excite attention and
put a party on inquiry is notice of everything to which it is afterwards found such inquiry might have led. Ignorance
of a fact, due to negligence, is equivalent to knowledge, in fixing the rights of parties.
Page 88
188 Ga. 229, *; 3 S.E.2d 571, **;
1939 Ga. LEXIS 489, ***4
2. The knowledge chargeable to a party after he is put on inquiry is not limited to such knowledge only as would
be gained by an examination of the public records.
3. Where a lessee of timber for turpentine purposes, while in possession of the timber under recorded leases
expiring December 31, 1934, obtained and paid for extensions of such leases for one year, and after the purchase of
such extensions, which were not recorded, a third person acquired by purchase from the same lessors conflicting leases
on the same timber, to commence immediately after the expiration of the recorded leases of the first lessee, it could not
be said as a matter of law that such subsequent purchaser, in the absence of inquiry of the first lessee as to his [***5]
rights in the timber as evidenced by his possession and use of the same for turpentine purposes, did not take subject to
the interest of the latter under his unrecorded extensions.
4. Upon application of the foregoing rulings the evidence would have authorized a verdict for the plaintiff. The
court erred in directing the verdict in favor of the defendant, and in overruling the plaintiff's motion for new trial.
COUNSEL: R. Earl Camp, for plaintiff.
R. M. Daley, for defendant.
JUDGES: Bell, Justice. All the Justices concur.
OPINION BY: BELL
OPINION
[*231] [**573] [HN1] "Possession of land is notice of whatever right or title the occupant has." Code, § 85-408.
[HN2] "Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is
after-wards found such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to
knowledge, in fixing the rights of parties." § 37-116. [HN3] The notice which the law in this State presumes from
adverse possession of land is actual, not constructive, notice. Walker v. Neil, 117 Ga. 733, 748 (45 S. E. 387). [HN4]
Possession by a tenant is notice of the title of the landlord, as well as of [***6] the actual interest of the tenant and the
whole extent thereof. 1 Warvelle on Vendors, 332, § 272. [HN5] A purchaser is bound to exercise due diligence in the
prosecution of all inquiries that may be suggested by any fact brought to his knowledge, and in the discharge of such
duty must make inquiry in pais as well as examine the records. 1 Warvelle on Vendors, 327, § 267. [HN6] Adverse
possession of land is notice of whatever facts in reference to the title would be developed by inquiry of the person in
possession, the presumption being that inquiry of him will disclose how and under what right he holds possession;
and in the absence of such inquiry the presumption is that, had such inquiry been made, the right, title, or interest
under which the possessor held would have been discovered. Austin v. Southern Home Building & Loan Association,
122 Ga. 439 (50 S. E. 382). [HN7] The working of timber for [*232] turpentine purposes is an act of such nature that it
may amount to adverse possession, and thus constitute notice. Royall v. Lisle, 15 Ga. 545 (60 Am. D. 712); Flannery v.
Hightower, 97 Ga. 592 (3) (25 S. E. 371); Roberson v. Downing, 126 Ga. 175 (54 S. [***7] E. 1020); Booth v. Young,
149 Ga. 276, 278 (99 S. E. 886). Whether turpentine operations are so carried on as to show adverse possession is
generally a question of fact to be determined by a jury. Walker v. Steffes, 139 Ga. 520 (7) (77 S. E. 580); Brown v.
Wells, 161 Ga. 413 (2) (131 S. E. 159).
On application of the foregoing principles, the evidence in the present case would have authorized a finding that the
defendant, Mrs. McLean, was chargeable with notice of the unrecorded extension agreements under which the plaintiff,
Dyal, had acquired the right to work the timber for turpentine purposes for an additional year, although the original
leases under which he was then operating were to expire on December 31, 1934. It may be true that his actual
possession was then related to the original leases only, but at the time the defendant obtained her leases the combined
facts were that the plaintiff was in possession with the right to use the timber, not only for the remainder of the year
1934, but also for the year 1935; and it can not be said that a proper inquiry of the plaintiff would not have disclosed
Page 89
188 Ga. 229, *; 3 S.E.2d 571, **;
1939 Ga. LEXIS 489, ***4
all of these facts. [HN8] Possession of land is notice, not [***8] only of whatever title the occupant has, but of
whatever right he may have in the property. Code, § 85-408. The defendant is not relieved merely because from an
examination of the public records she might have learned that the recorded leases in favor of the plaintiff would,
according to their terms, expire on December 31, 1934. If this were not true, the plaintiff would have been in better
position if he had failed to record his original leases, as well as the extension agreements. In that event, personal
inquiry would doubtless have disclosed all of the facts, including the extension agreements; and manifestly the
plaintiff's right to claim notice from possession should not be circumscribed merely because he was diligent in having
his original leases recorded. [HN9] Knowledge chargeable to a party who is put on inquiry is not limited to such
knowledge only as would be gained from an examination of the public records. Bell v. Bell, 178 Ga. 225 (5), 227 (172
S. E. 566). Under the evidence a verdict for the plaintiff would have been authorized; and the court erred in [*233]
directing the verdict in favor of the defendant, and in overruling the plaintiff's motion [***9] for a new trial.
Judgment reversed.
Page 90
188 Ga. 229, *232; 3 S.E.2d 571, **573;
1939 Ga. LEXIS 489, ***7
33 of 176 DOCUMENTS
Positive
As of: Aug 04, 2014
CHANDLER v. GEORGIA CHEMICAL WORKS et al.
No. 11236.
SUPREME COURT OF GEORGIA
182 Ga. 419; 185 S.E. 787; 1936 Ga. LEXIS 376; 105 A.L.R. 837
April 17, 1936, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied May 18, 1936.
PRIOR HISTORY: Equitable petition. Before Judge Gaillard. Jackson superior court. November 23, 1935.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff landowner filed a petition with the Jackson Superior Court (Georgia) against
defendants, a chemical company and an individual, to cancel a warranty deed from the landowner to the individual and
a security deed from the individual to the chemical company. The chemical company filed a cross-petition. The
landowner appealed from a judgment by the superior court directing a verdict in favor of the chemical company.
OVERVIEW: The landowner alleged that the deed from him to the individual, a close business associate, was made for
the purpose of enabling the latter to obtain a 10-year loan for the benefit of the landowner, out of which a certain
amount due to the individual was to be paid, and that in violation of the trust the individual conveyed the property to the
chemical company. It was also alleged that the landowner received no benefit therefrom, and that the landowner had
been continuously in possession of the lands for a long period of years and still remained in possession. The chemical
company's cross-petition sought judgment for the indebtedness due to it on the security deed from the individual and
praying for a special lien on the lands in issue. The superior court directed a verdict against the landowner and found in
favor of the chemical company on its cross-petition against the individual and against the land in issue. The court held
that the trial court erred in not admitting in evidence, as against the chemical company, the bond for title from the
individual to the landowner. The court noted that there were sufficient facts to find that chemical company was required
Page 91
to make inquiry.
OUTCOME: The court reversed the judgment of the superior court.
CORE TERMS: deed, notice, grantor, warranty deed, indebtedness, grantee, recorded, occupant, present case,
conveyance, purchaser, cotton, conveyed, general rule, delivery, convey, bought, evidence of fraud, right of possession,
bona fide, actual possession, prima facie, continued possession, vice-president, vendor, encumbrances, confidence,
matter of law, undisputed evidence, absolute deed
LexisNexis(R) Headnotes
Real Property Law > Estates > General Overview
[HN1] Possession of land is notice of whatever right or title the occupant has. Ga. Code Ann. § 85-408.
Real Property Law > Deeds > Enforceability
Real Property Law > Estates > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN2] Possession retained by the vendor, after an absolute sale of real or personal property, is prima facie evidence of
fraud, which may be explained, and after the possession is proven, the burden of explaining it rests upon those who
claim under the sale.
Contracts Law > Defenses > Fraud & Misrepresentation > General Overview
Real Property Law > Purchase & Sale > General Overview
[HN3] The badge of fraud is there prima facie, and required one claiming under the grantee to determine by inquiry
whether the badge was real or apparent. The burden of explaining it rests upon those who claim under the sale. The onus
of explanation, after possession is proven, is upon the grantee.So it can be seen that from very early times deeds and
assignments of property, where the grantor remained in possession, are said to be affected with an infirmity that
prevented them from being conclusive. The possession calls for inquiry as to the right or title of the occupant, and
opens the transaction to investigation. In such circumstances the grantee assumes the risk of a court declaring his
contract void, in the absence of a satisfactory showing that the transaction is bona fide.
Real Property Law > Estates > General Overview
Real Property Law > Purchase & Sale > General Overview
[HN4] A deed absolute in form may be shown to have been made to secure a debt, where the maker remains in
possession of the land. Actual possession is notice to the world of the right or title of the occupant.
Real Property Law > Estates > General Overview
Real Property Law > Financing > Mortgages & Other Security Instruments > Redemption > Mortgagor's Right
Real Property Law > Purchase & Sale > General Overview
[HN5] Where an absolute deed intended as security is given or where a separate instrument of defeasance is taken and
not recorded, the continued possession of the grantor is constructive notice of the true character of his conveyance and
his consequent equity of redemption.
Real Property Law > Estates > General Overview
Real Property Law > Purchase & Sale > General Overview
Page 92
182 Ga. 419, *; 185 S.E. 787, **;
1936 Ga. LEXIS 376, ***1; 105 A.L.R. 837
[HN6] A solemn deed is the equivalent of an assertion by the party grantor that the title is in the grantee; its purpose is
to convey and show title, and he who thereby invests another with this universally recognized evidence of right ought
not, as against one who deals with that other upon the faith of such evidence, to be permitted to aver to the contrary to
his injury. This has been held true where the grantor remaining ill possession acquired his rights through a transaction
not contemporaneous with but subsequent to his conveyance.
Evidence > Documentary Evidence > Parol Evidence
Real Property Law > Deeds > Statutes of Frauds
[HN7] A deed or bill of sale, absolute on its face and accompanied with possession of the property, shall not be proved,
at the instance of the parties, by parol evidence to be a mortgage only, unless fraud in its procurement shall be the issue
to be tried. Ga. Code Ann. § 67-104.
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Purchase & Sale > General Overview
[HN8] Ga. Code Ann. § 37-114 provides: If one with notice shall sell to one without notice, the latter shall be protected;
or if one without notice shall sell to one with notice, the latter shall be protected, as otherwise a bona fide purchaser
might be deprived of selling his property for full value.
Real Property Law > Purchase & Sale > General Overview
[HN9] Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is
afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge,
in fixing the rights of parties. Ga. Code Ann. § 37-116.
SYLLABUS
A deed absolute in form may be shown by parol evidence to have been made in trust for the benefit of the grantor,
where the maker remains in possession of the land.
(a) Actual possession is notice to the world of the right or title of the occupant.
(b) Where the owner of land executed a deed absolute in form, and remained in possession of the land, and the
grantee conveyed the land to another person who had no actual notice of the undisclosed agreement that the deed was
made in trust, and who made no inquiry of grantor in possession, the grantor may maintain an equitable action
against the first grantee and the remote grantee, for cancellation of both deeds as clouds upon his title, and to have the
title decreed to be in him.
(c) Under the evidence the jury would be authorized to find that the remote grantee was put on inquiry as to the
right under which the petitioner retained possession of the land.
The bond for title executed to the petitioner before he conveyed to the first grantee was admissible in evidence
[***2] as against the remote grantee, as showing the right under which the petitioner held possession of the land in
controversy.
The court erred in directing the verdict, and in not granting a new trial.
COUNSEL: G. P. Martin and Pemberton & W. J. Cooley, for plaintiff.
Hamilton Phinizy, S. J. Smith, H. W. Dent, and Erwin, Erwin & Nix, for defendants.
JUDGES: Gilbert, Justice. All the Justices concur.
Page 93
182 Ga. 419, *; 185 S.E. 787, **;
1936 Ga. LEXIS 376, ***1; 105 A.L.R. 837
OPINION BY: GILBERT
OPINION
[*419] [**788] GILBERT, Justice.
Isaac Chandler filed his petition against Georgia Chemical Works and W. B. Burns, to cancel a warranty deed from
Chandler to Burns, dated March 22, 1922, and a security deed from Burns to Georgia Chemical Works, dated March 24,
1922, as clouds on the title of the petitioner to lands described in the petition. Georgia Chemical Works answered and
filed a crosspetition seeking judgment for the indebtedness due to it on the security deed from Burns, and praying for a
special lien on the lands in controversy. Burns died pending the litigation, after making no answer but filing a plea of
bankruptcy. C. T. Storey Jr., as administrator of his estate, was substituted in his stead as a party. It was alleged in the
petition, that the deed from [***3] Chandler to Burns was made for the purpose of enabling Burns to obtain a ten-year
loan for the benefit of Chandler, out of which a certain amount due to Burns was to be paid; and that in violation of the
trust Burns [*420] conveyed the property to Georgia Chemical Works. Chandler receiving no benefit therefrom; and
that Chandler has been continuously in possession of the lands for a long period of years, and still remains in
possession. Other allegations will be dealt with hereinafter. After hearing evidence the court directed a verdict against
the petitioner, and finding in favor of Georgia Chemical Works on its cross-petition against W. B. Burns and against the
land described in the security deed from Burns to Georgia Chemical Works for the full amount of $ 30,000, with
interest, to be a special lien on the land superior to any claim of the petitioner, but not to be a personal judgment against
W. B. Burns or his representative, Burns having been discharged in bankruptcy before the trial. A decree of the court
was thereupon entered. The petitioner filed a motion for new trial upon the general grounds, and by amendment added
special grounds that the court illegally refused to [***4] admit in evidence a certain bond for title executed by Burns to
Chandler under date of December 31, 1919, covering certain lands, which the petitioner alleges was material to show
the right under which he was in possession of the lands in controversy at the time the Georgia Chemical Works accepted
the security deed from W. B. Burns; and that the court erred in directing the verdict. The court overruled the motion,
and the petitioner excepted.
Isaac Chandler had resided on the lands in controversy for more than fifty years. Beginning in a small way, he had
been a successful farmer, and at a time when "boom" prices prevailed he bought additional farm lands and incurred a
large indebtedness. He had for years reposed implicit confidence in William B. Burns, a stockholder and officer of
Williford-Burns-Rice Inc., located at Commerce, Ga. That company "bought his cotton," and he "traded them with
them." For forty years he sold his cotton to Williford-Burns-Rice Inc. He dealt mostly' with "Willie Burns." If Burns
said, "Mr. Chandler, you sell your cotton to-day and turn this money over to me," if it was ten thousand dollars he
would do it. "He would just turn it over to him to do like he [***5] wanted to with it. . . That firm was the only one he
ever had any confidence in, and he did the biggest end of the business with Willie Burns." In 1919 or 1920 Chandler
delivered around 118 bales of cotton when the price ranged from 35 to 45 cents. So the evidence tends to show. Burns
had been born and reared on a neighboring farm, [*421] and Chandler had regarded him as a friend throughout the
years. For a long time Chandler, after harvesting his crop, would each year deliver iris cotton to Williford-Burns-Rice
Inc. He would just drive up and say: "Here is my cotton." So great was the confidence bestowed on Burns that Chandler
did not usually direct the sale as to time or price or disposition of the [**789] proceeds. His accounts ran from year to
year, almost without an accounting except at rare intervals. Chandler bought additional land from Burns in 1919, and
executed security deeds on December 31, 1919, and January 5, 1921, conveying the land in controversy to secure an
indebtedness of $ 36,336, and subsequently paid that sum down to less than $ 7000. Burns had become heavily in debt
to his company, Williford-Burns-Rice Inc., and the latter was indebted to Georgia Chemical [***6] Works of Augusta,
Ga., $ 28,755. Georgia Chemical Works began to press Williford-Burns-Rice Inc., and the pressure apparently was
severe. E. F. Jackson, vice-president of the Georgia Chemical Works, went to Commerce to attend a directors' meeting
of Williford-Burns-Rice Inc., and at that meeting he learned of Burns' heavy indebtedness to Williford-Burns-Rice Inc.
Georgia Chemical Works, the record indicates, wrote off $ 8755 from the amount due to it by Williford-Burns-Rice
Inc., or, what is the equivalent, it loaned to Burns $ 30,000, paying him $ 10,000, and crediting the indebtedness of
Page 94
182 Ga. 419, *; 185 S.E. 787, **;
1936 Ga. LEXIS 376, ***2; 105 A.L.R. 837
Williford-Burns-Rice Inc. with $ 20,000. The payment of $ 10,000 to Burns, and his assuming an indebtedness of $
20,000 due by Williford-Burns-Rice., in addition to the $ 10,000, was apparently a compromise by which $ 8755 was
forgiven Williford-Burns-Rice Inc., and their account was left in balance. The $ 30,000 loan and the $ 10,000 payment
to Burns were made for the purpose of securing the $ 28,755 indebtedness of Williford-Burns-Rice Inc., and the
security was Isaac Chandler's land on which he resided and still resides. Chandler owed nothing to
Williford-Burns-Rice Inc. He had executed security [***7] deeds to his friend Burns, who was assisting him in his
business transactions. These deeds were still outstanding when Burns, as alleged in the petition and not denied by him,
advised Chandler to execute to him a warranty deed conveying title to the property in controversy, for the purpose of
enabling Burns to obtain a ten-year loan for Chandler s benefit, out of which Chandler was to pay Burns the balance of
the purchase-price of the lands bought from Burns, less than $ 7000.
[*422] These transactions made Burns, as a matter of law, the agent of Chandler for the special purpose of
negotiating a loan for Chandler. It likewise made Burns a trustee to hold and control the title to the land for the sole
purpose above stated, and to receive the money for Chandler. Smith v. Harvey-Given Co., ante, 410 (185 S.E. 793). This
warranty deed was made on March 22, 1922, and two days later Burns conveyed the same property to Georgia
Chemical Works under the circumstances above stated, Chandler receiving no benefit therefrom. At that time Chandler,
according to the undisputed evidence, was old, feeble, and probably incapacitated to transact any business. If Burns was
entitled bona [***8] fide to an absolute conveyance from Chandler, with no reservation between them whereby
Chandler might, upon certain conditions, have a reconveyance made to him, the ordinary way in which the transaction
would have been handled would have been for Burns to have liquidated in whole or in part his indebtedness to
Williford-BurnsRice Inc. by a conveyance to them. It would seem that he would have been more concerned in squaring
his indebtedness directly with his corporation, and then letting that corporation deal with Georgia Chemical Works in a
settlement or adjustment of its debt to the latter. But in dealing with Williford-Burns-Riee Inc., he would not only be a
trustee and agent of Chandler, if we are to accept the contentions of the plaintiff as to the deed having been executed to
Burns in trust, but he would also be an agent and officer of Williford-Burns-Rice Inc. Consequently all information that
Burns had as to the trust relation with Chandler, if any, would be chargeable to Williford-Burns-Rice Inc. The question
is naturally suggested, whether those reasons caused Georgia Chemical Works to deal directly with Burns, who was not
their agent, as they claim, instead of letting the [***9] property go through Williford-Burns-Rice Inc. first. Was such
the reason for the arrangement whereby Burns was to assume the indebtedness of Williford-Burns-Riee Inc., except for
$ 8,755 which was forgiven, and was it the foundation for a possible apprehension that the proposed acquisition by
Burns from Chandler of the property in controversy was fraudulent? Did the acceptance of the deed from Burns, who
was not their agent, as they claim, put them in a better position defensively than if they had accepted a deed from
Williford-Burns-Riee Inc., as assignee of Burns, who was in fact interested in that company as a stockholder [*423]
and officer? These are questions pertinent in the inquiry as to bona fides. It appears that one deed executed to Burns by
Chandler was unacceptable to Georgia Chemical [**790] Works, and that a new one was prepared by its counsel for
reasons advanced as follows: Chandler had executed certain security deeds to Burns. They covered the same property
involved in the present case, but were given to secure the purchase of other property from Burns some time previously
for $ 36,336, all of which had been paid down to less than $ 7,000.
Georgia Chemical [***10] Works recognized that between the time of the execution of the security deeds and the
time of the execution of the warranty deed to Burns encumbrances might have been created upon the property, and
therefore it was thought desirable, apparently in the absence of any investigation of the title, to have Burns obtain from
Chandler a new deed in which it would be provided that the security deeds were not merged in the latter. In that event,
if the warranty deed proved worthless or in any way affected adversely, the security deeds on the same property would
still be good and have a priority, as recorded deeds, over the subsequent encumbrances, if any, upon the property. The
security deeds having been recorded, it might have been ascertained that, the same property being conveyed under the
warranty deed, Burns was amply protected as a creditor of Chandler in the sale of the other lands, independently of the
warranty deed, Chandler at the time owing Burns a balance of less than $ 7,000, and that amount not then being due.
Georgia Chemical Works, being charged with notice of the record of the security deeds to the same property as
conveyed by the warranty deed, were thereby constructively [***11] put in possession of knowledge of a very
Page 95
182 Ga. 419, *421; 185 S.E. 787, **789;
1936 Ga. LEXIS 376, ***6; 105 A.L.R. 837
impressive fact; and it would seem that the jury should have determined whether or not such fact put Georgia Chemical
Works upon inquiry. Would not that circumstance naturally arouse in Georgia Chemical Works some curiosity and
lead them to investigate why Chandler should do such a thing; and if the investigation had been made, would it not have
revealed that Chandler was creating only a trust relationship as to Burns by the execution and delivery of the warranty
deed? Is it not unusual that Burns did not also record the warranty deed, and that Georgia Chemical Works was
apparently not interested in having it recorded immediately to cut off another possible warranty [*424] deed that could
be recorded ahead of Burns' deed, and before Burns could convey to Georgia Chemical Works? They knew, as a matter
of law, that even if Burns had a warranty deed, it would lose priority over one executed subsequently but recorded prior
to his deed. It had been recognized that intermediate encumbrances might affect the first warranty deed prepared for
Chandler's signature. When the revised warranty deed was prepared by their attorney and executed by Chandler,
[***12] they were satisfied to have it recorded only when Burns' deed had been delivered to them, or, as expressed in
the deed from Burns to them, "to be recorded herewith." These are in substance the circumstances under which the
paper title to Chandler's land passed to his friend and agent, Burns, and from Burns to Georgia Chemical Works.
Knowledge of a fact may be inferred from circumstances, and we think that the circumstances here were such as to
require submission to the jury of the question of whether or not Georgia Chemical Works was possessed of sufficient
information, in connection with the fact of Chandler's possession of the land, which was admitted, to put them upon
inquiry as to the actual facts surrounding the execution and delivery of the deed from Chandler to Burns.
"[HN1] Possession of land is notice of whatever right or title the occupant has." Code of 1933, § 85-408. In
reference to this section it was said in Hadaway v. Smedley, 119 Ga. 264, 268 (46 S.E. 96): "If it had been a new
principle announced for the first time in that Code [of 1895], it might not have applied to some of the transactions in
this case; but it is not a new principle and has always been the [***13] law in this State, as will be seen by reference to
the opinion of Bleekley, C. J., in Broome v. Davis, 87 Ga. 584 [13 S.E. 749] from which this section of the Code was
taken." The principle is also found in Peck v. Land, 2 Ga. 1 (2) (46 Am. D. 368), the second headnote of which is: "The
possession of property, real or personal, remaining with the vendor after an absolute deed of conveyance, is an evidence
of fraud." (Italics ours.) In Fleming v. Townsend, 6 Ga. 103 (50 Am. D. 318), it was held: [HN2] "Possession retained
by the vendor, after an absolute sale of real or personal property, is prima facie evidence of fraud, which may be
explained, and after the possession is proven, the burthen of explaining it rests upon those who claim under the sale." In
that case Judge Nisbet approved the holding of the lower court that [*425] "The possession in [**791] the vendor
was, under that statute [27 Elizabeth], and also by the principles of the common law, independent of it, prima facie
evidence of fraud." While this case does not involve the question of defrauding creditors, yet the fundamental principles
of notice implied from possession is at [***14] the core. [HN3] The badge of fraud is there prima facie, and required
one claiming under the grantee to determine by inquiry whether the badge was real or apparent. "The burthen of
explaining it rests upon those who claim under the sale." Or, as was said in Fleming v. Townsend, supra: "The onus of
explanation, after possession is proven, is upon the grantee." So it can be seen that from very early times deeds and
assignments of property, where the grantor remained in possession, were said to be affected with an infirmity that
prevented them from being conclusive. The possession called for inquiry as to the right or title of the occupant in the
present case, and opened the transaction to investigation. In such circumstances the grantee assumed the risk of a court
declaring his contract void, in the absence of a satisfactory showing that the transaction was bona fide. In Berry v.
Williams, 141 Ga. 642 (81 S.E. 881), it was held: "1. [HN4] A deed absolute in form may be shown to have been made
to secure a debt, where the maker remains in possession of the land. Mercer v. Morgan, 136 Ga. 632 (71 S.E. 1075). 2.
Actual possession is notice to the world of the right or [***15] title of the occupant. Mercer v. Morgan, supra; Bridger
v. Exchange Bank, 126 Ga. 821 (56 S.E. 97, 8 L. R. A. (N. S.) 463, 115 Am. St. R. 118); Austin v. Southern Home &c.
Asso., 122 Ga. 439 (50 S.E. 382). 3. Where the owner of land executes a deed of the character mentioned in the first
note, and remains in possession of the land, and the grantee conveys the land to another who has no actual notice of the
undisclosed agreement that the deed should operate as a security for debt, and who has made no inquiry of the occupant,
the latter may pay or tender the amount of the debt to the first grantee and maintain an equitable action against the first
grantee and the remote grantee for cancellation of both deeds as clouds upon his title, and to have the title decreed to be
in him." It will be noted that in that case there was "actual possession" by the grantor. No other facts or circumstances
are shown which would demand an inquiry, except the single fact of possession. We have undertaken to show such
Page 96
182 Ga. 419, *423; 185 S.E. 787, **790;
1936 Ga. LEXIS 376, ***11; 105 A.L.R. 837
facts in the present case as an additional reason for a [*426] reversal of the judgment. See, to the same effect as in the
last mentioned case: Cogan v. [***16] Christie, 48 Ga. 585; Franklin v. Newsom, 53 Ga. 580; Broome v. Davis, 87
Ga. 584, 587, 13 S.E. 749 (supra); Kent v. Simpson, 142 Ga. 49 (82 S.E. 440); Summerour v. Summerour, 148 Ga. 499
(97 S.E. 71); Waller v. Dunn, 151 Ga. 181 (106 S.E. 93); Sims v. Sims, 162 Ga. 523 (134 S.E. 308).
It is contended by the defendant, however, that the present case is not controlled by the foregoing cases, but is
controlled by a line of decisions beginning with Jay v. Whelchel, 78 Ga. 786 (3 S.E. 906), and including Malette v.
Wright, 120 Ga. 735 (48 S.E. 229); Peabody v. Fletcher, 150 Ga. 468, 479 (104 S.E. 448); Johnson v. Hume, 163 Ga.
867 (137 S.E. 56); Rimes v. Floyd, 168 Ga. 426, 428 (148 S.E. 86). We think it will be found that the case of Jay v.
Whelchel, supra, and the cases following and based upon it, stand upon their special facts. If not, the older cases upon
which section 85-408 (supra) is founded must prevail. In Bridger v. Exchange Bank, 126 Ga. 821, 826 (56 S.E. 97, 8 L.
R. A. (N. S.) 463, 115 Am. St. R. 118), it was stated, as to the Malette case: "The decision never intended [***17] to
abrogate the general rule, but merely held that the facts of that case did not fall within it." The two lines of cases have
led to some very close decisions. It is worth while to note that Chief Justice Bleckley wrote the decisions in both Jay v.
Whelchel and Broome v. Davis, from which latter the Code provision was taken. There is no conflict between the two
decisions. The principles and lines of argument in the two classes of cases are well stated in 27 R. C. L. 727, 728, §§
491, 492: "The authorities are not in accord as to the effect of the continued possession by a grantor as notice of rights
inconsistent with his grant. A number of the authorities apply in such a case the general rule that possession is notice
of all the equitable and other rights of the possessor. The authorities sustaining this view say, that, by the terms of the
deed, the grantor has not the right of possession, and that his continuing possession gives notice that he has rights
reserved not expressed in the deed; that inasmuch as the records disclose [**792] no right of possession, it is but
reasonable to conclude that the continuing possession rests upon some right not disclosed by [***18] the records, and
that the reasonableness of such conclusion imposes upon persons about to deal with the land the duty to make inquiry.
There is no good reason, it has [*427] been said, for making a distinction between possession by a stranger to the
record title and possession by the grantor after delivery. of his deed. In either case the possession is a fact inconsistent
with the record title, and if possessor [possession] by the stranger is sufficient to make it obligatory upon a purchaser to
ascertain his right, possession by the grantor is a circumstance entitled to equal consideration. An absolute deed divests
the grantor of the right of possession, as well as of the legal title, and when he is found in possession after delivery of
his deed, it is a fact inconsistent with the legal effect of the deed, and is suggestive that he still retains some interest in
the premises. Under such circumstances, a purchaser has no right 'to give controlling prominence to the legal effect of
the deed,' in disregard of the other 'notorious antagonistic fact' that the grantor remains in possession just as if he had
not conveyed. To say that the grantor is estopped by his deed is begging the [***19] question; for, if his possession is
notice to third parties of his rights, there is no principle of estoppel that would prevent him from asserting against
purchasers or creditors any claim to the premises which he might assert against his grantee. This is especially true
where the grantor's possession has continued for a considerable length of time after his conveyance and is
accompanied with the usual acts of ownership. Thus it has been held that where a grantor who has given a warranty
deed continues in open and notorious possession of agricultural land at the time of the grant, and for a considerable
time thereafter during the cropping season, subsequent purchasers are put on notice and under obligation to make
inquiries as to his rights and equities in the land, unless he has, either expressly or by a recognized course of dealing,
held out his grantee as authorized to convey. In pursuance of the above view it is held that [HN5] where an absolute
deed intended as security is given or where a separate instrument of defeasance is taken and not recorded, the continued
possession of the grantor is constructive notice of the true character of his conveyance and his consequent equity of
redemption. [***20] . . Opposed to the view announced in the preceding paragraph, other cases take the view that a
purchaser is justified in relying on the ostensible title conferred by the deed, and the inference that the grantor's
possession is merely permissive and not in antagonism to his grant, and therefore that his continued possession is not
notice of other rights. For as has been [*428] said, [HN6] a solemn deed is the equivalent of an assertion by the party
grantor that the title is in the grantee; its purpose is to convey and show title, and he who thereby invests another with
this universally recognized evidence of right ought not, as against one who deals with that other upon the faith of such
evidence, to be permitted to aver to the contrary to his injury. This has been held true where the grantor remaining ill
possession acquired his rights through a transaction not contemporaneous with but subsequent to his conveyance. In
Page 97
182 Ga. 419, *425; 185 S.E. 787, **791;
1936 Ga. LEXIS 376, ***15; 105 A.L.R. 837
these jurisdictions, however, it seems that if the grantor's possession is continued for a considerable length of time, it
may then be such as to impart notice of rights inconsistent with his conveyance."
In several cases dealing with the principle that possession is [***21] notice, etc., the expression "actual
possession" is used. "Actual possession" does not necessarily imply title in the occupant. A tenant or even a "squatter"
may be an occupant. If "possession" such as would constitute notice is restricted to "actual possession," that would be
in strict accord with the Code, § 85-408. for by that section the notice is of whatever right the occupant has. That
construction would also be in accord with a number of decisions. The omission of the word "actual" in other cases and
in the Code must be attributed to the theory that the word "occupant" in the Code implies a restriction on the word
"possession." In the present case Chandler, the grantor of Burns, according to the undisputed evidence is and has
continuously been in actual possession. There has been no transfer whatever of possession. No inquiry was made as to
the apparent inconsistency of the grantor remaining in possession. There were sufficient facts shown by the evidence
to authorize the jury to find that Georgia Chemical Works was required to make inquiry. Chestnut v. Weekes, 180 Ga.
701 (180 S.E. 716), and all of the cases cited therein as authority for the judgment [**793] [***22] were deemed to
be exceptions to the general rule, and were "never intended to abrogate the general rule." In the present case the facts
bring it clearly within the general rule. [HN7] "A deed or bill of sale, absolute on its face and accompanied with
possession of the property, shall not be proved, at the instance of the parties, by parol evidence to be a mortgage only,
unless fraud in its procurement shall be the issue to be tried." Code of 1933, § 67-104. In the present case possession
was retained by the grantor. There can [*429] be no question as to the bad faith of Burns, and of the further fact that a
court of equity is compelled to grant the relief prayed as against him. It appears that after the petition was filed Burns
died, having failed to make any answer denying the allegations, or otherwise, leaving the same, as far as he was
concerned, wholly admitted, but filing a plea setting up that he was a bankrupt.
But it is insisted that Georgia Chemical Works is an innocent purchaser, and that one who takes without notice
from one who has notice is protected under [HN8] Code of 1933, § 37-114, which provides: "If one with notice shall
sell to one without notice, the latter shall be [***23] protected; or if one without notice shall sell to one with notice, the
latter shall be protected, as otherwise a bona fide purchaser might be deprived of selling his property for full value."
The facts of this case demand a finding, however, that Georgia Chemical Works was put upon inquiry. [HN9] "Notice
sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found
such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the
rights of parties." Code of 1933, § 37-116. Although Georgia Chemical Works had its attorney to examine the title
records of the land, E. F. Jackson, vice-president of the company, testified that he alone represented the company in the
transaction, and that no inquiry was made with respect to the occupancy of the land. Georgia Chemical Works took its
deed which had been prepared by its attorney after its vice-president had attended the directors' meeting of
Williford-Burns-Rice Inc., and had ascertained facts hereinbefore shown, and in the face of the further fact that the
possession of Chandler demanded that Georgia Chemical Works inquire into the right [***24] of his occupancy. For
these reasons the court erred in directing a verdict.
It follows that the court erred in not admitting in evidence, as against Georgia Chemical Works, the bond for title
from Burns to Isaac Chandler.
Because of what is shown above, the court erred in not granting a new trial.
Judgment reversed. All the Justices concur.
Page 98
182 Ga. 419, *428; 185 S.E. 787, **792;
1936 Ga. LEXIS 376, ***20; 105 A.L.R. 837
34 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
WOOD et al. v. BOWDEN.
No. 11240.
SUPREME COURT OF GEORGIA
182 Ga. 329; 185 S.E. 516; 1936 Ga. LEXIS 346
April 15, 1936, Decided
PRIOR HISTORY: [***1] Complaint for land. Before Judge Perryman. Warren superior court. December 14,
1935.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff devisees sought review of the denial of their motion for a new trial and a
directed verdict entered by the Warren County Superior Court (Georgia) in favor of defendant property purchaser in the
devisees' action to recover allegedly undivided interests in certain real property.
OVERVIEW: The testatrix's will named her husband as the executor and requested that he pay her debts as soon as
possible after her death, even if a sale of her property was required. The testatrix also devised her real and personal
property to her husband during his natural life with the remainder in the real estate to go to the devisees upon his death.
The purchaser claimed title under certain deeds made by the executor with respect to two sales allegedly made for the
purpose of paying the testatrix's debts. The devisees alleged that the sales of the real property to satisfy the testatrix's
debts were unnecessary and that the sales were an improper means of divesting the devisees of their remainder interest.
Upon review, the court affirmed. The court determined that, although the original grantee in the first sale was
representing the executor as attorney, no evidence indicated that the sale was not a bona fide transaction. Because no
evidence was presented that the purchaser had any actual knowledge of the executor's alleged schemes or that any facts
existed to put him on inquiry of the alleged invalidity of the deeds, the court found no basis for the case to be
submitted to the jury.
Page 99
OUTCOME: The court affirmed the judgment, which had been rendered in favor of the purchaser.
CORE TERMS: deed, executor's, testatrix, conveyed, grantee, acres, purpose of paying, power of sale, pursuance,
remainder interest, new trial, per acre, undivided, reciting, touching, recited, bidder
SYLLABUS
All property of a testator being assets to pay debts, it may, if necessary, be sold for that purpose, regardless of any
legacy or devise. Code of 1933, § 113-801, 113-802.
A will contained the following: "I wish my executor, as soon as possible after my death, to pay all my debts. If a
sale of property shall be necessary, I wish him to select for sale that which can be most advantageously used for that
purpose; and I authorize him to sell the same at public or private sale, as he may see fit." Under this provision no
application to the court of ordinary for leave to sell for the purpose of paying debts was necessary in order to exercise
the power of sale. Code of 1933, § 113-1717; Wolfe v. Hines, 93 Ga. 329 (2) (20 S.E. 322).
In the absence of anything to the contrary, the law presumes there are debts to be paid ( Morgan v. Woods, 69 Ga.
599, 601); and in order for a purchaser to be affected by a fraudulent exercise of a power of sale granted by a will, as
where a sale is made for the purported purpose of paying debts when a sale for that purpose [***2] is not necessary,
"either participation in the fraud or notice of it by the purchaser would have to appear." Wolfe v. Hines, supra; Smith v.
McIntyre, 95 F. 585, 592. Where a sale is advertised and made as being necessary to pay debts, the presumption referred
to is not overcome, as to an innocent purchaser, by the circumstance that the sale occurred about five years after the
death of the testator. As to this question the present case differs on its facts from the case of Satterfield v. Tate, 132 Ga.
256, 261 (64 S.E. 60).
Fraud between the executor and his immediate grantee will not affect subsequent purchasers for value who
derived title through the deed of the executor bona fide and without any notice of the alleged fraud. King v. Cabaniss,
81 Ga. 661 (3) (7 S.E. 620).
Even though deeds by an executor may have been made to nominal parties in pursuance of sales to himself
individually, and were otherwise fraudulent, a remote grantee claiming title under such deeds would not be charged
with notice of such irregularity and fraud merely because the recited considerations in such deeds were somewhat
inadequate and the grantees respectively conveyed [***3] the property to the individual who was executor, one after
five weeks and the other after a period of about two and a half years. Isom v. Nutting, 153 Ga. 682 (113 S.E. 197); 66
C. J. 1130, § 967.
"Prior possession of land is not notice to a purchaser. Possession of real property which will charge a purchaser
with notice is possession at the time the purchaser obtains his title." Webster v. Black, 142 Ga. 806 (3) (83 S.E. 941). At
the time the defendant purchased the land in question, possession was consistent with the deed to him.
Under the foregoing principles as applied to the instant suit for land, the evidence demanded the verdict as directed
by the court in favor of the defendant; and the result would not have been different if the additional evidence offered by
the plaintiffs had been admitted. The court did not err in refusing a new trial.
COUNSEL: Randall Evans Jr., for plaintiffs.
J. Richard Bowden, for defendant.
JUDGES: Bell, Justice. All the Justices concur.
OPINION BY: BELL
Page 100
182 Ga. 329, *; 185 S.E. 516, **;
1936 Ga. LEXIS 346, ***1
OPINION
[*330] [**517] BELL, Justice.
This was a suit to recover alleged undivided interests in 200 acres of land situated in Warren County. It was
brought by Mrs. C. H. Wood [***4] and eleven others who alleged that they and three additional persons, who were
not parties, were devisees under the will of Mrs. Sallie E. McGahee, who died in the year 1923, which gave to each of
them a one-fifteenth undivided remainder interest in the property. The will, duly probated on March 5, 1923, contained
the following: "Item 1. I wish my executor, as soon as possible after my death, to pay all my debts. If a sale of property
shall be necessary, I wish him to select for sale that which can be most advantageously used for that purpose; and I
authorize him to sell the same at public or private sale, as he may see fit. Item 2. I give to my beloved husband, T. J.
McGahee, the following property, to wit: all of my real and personal property now being in Warren County in said
State, during his natural life, and at his death the real estate to go back to my people." In item 4 T. J. McGahee was
named as the executor. He promptly qualified as such, and received letters testamentary from the ordinary. The
petitioners alleged they were twelve of the fifteen persons who constituted the "people" of the testatrix, to whom the
land should "go" on the death of T. J. McGahee, the life-tenant. [***5] The defendant, Paul A. Bowden, was a remote
grantee claiming under deeds made by the executor in pursuance of two sales purporting to have been made for the
purpose of paying debts of the testatrix. Upon the trial the court directed a verdict in favor of the defendant. A motion
for new trial was overruled, and the plaintiffs excepted. The facts stated above appeared without dispute from the
pleadings and the evidence. The other material evidence was as follows:
On May 7, 1923, the executor obtained from the ordinary an [*331] order to sell 100 acres of the land for the
purpose of paying the debts of the testatrix, and in pursuance of this order and after due advertisement he sold the 100
acres on November 6, 1923, to M. L. Felts, the highest and best bidder, for the recited consideration of $ 300. Felts
conveyed the property to J. T. McGahee individually [**518] on December 14, 1923, the deed reciting a consideration
of $ 350. On May 5, 1925, T. J. McGahee as executor advertised and sold the remaining 100 acres. This sale was made
in virtue of claimed authority under the will and without any order of the court of ordinary. In the deed of conveyance
W. Eugene English was named [***6] as grantee, and the consideration was stated as $ 400. W. Eugene English
conveyed the property to T. J. McGahee as an individual, by a deed dated November 18, 1927, and reciting a
consideration of $ 200. After thus obtaining deeds to the entire tract, T. J. McGahee, on November 18, 1927, conveyed
it to Mrs. Annie V. Cason to secure a loan of $ 600, the deed containing a power of sale. Mrs. Cason sold the property
under this power of sale on December 5, 1933, to satisfy the principal and an accumulation of interest. Paul A. Bowden,
the defendant, was the only bidder at this sale, and purchased the property for $ 400. There was some agreement
between him and Mrs. Cason that he would appear at the sale and protect her interest to the amount of $ 500, and in
view of this agreement he later paid to her $ 100 above the amount of his bid. Mrs. Cason, as attorney in fact for T. J.
McGahee, then executed to Bowden a deed conveying the property in question. All the previous deeds referred to were
duly recorded before the sale by Mrs. Cason to Bowden. T. J. McGahee remained in possession of the land continuously
from the death of his wife until after the sale by Mrs. Cason to Bowden under the [***7] power of sale contained in the
security deed. Soon thereafter he surrendered possession to Bowden. There was some evidence that the land was worth
as much as $ 10 per acre at the time it was sold by the executor, but there was other evidence that it was not worth more
than one or two dollars per acre. It seems that Felts, the grantee in the first deed made by the executor, was at that time
representing the executor as attorney, but there was no other evidence which tended to show that the sale was not a bona
fide transaction or that the consideration was not paid. Touching the other sale by the executor, W. Eugene English, the
grantee, testified that he had no [*332] recollection either of purchasing the property or of having later conveyed it to
T. J. McGahee as an individual, but that if he had sold it to McGahee at a loss, as indicated by the deeds, he believed
that he would have remembered it. He further testified that the deed which appeared to have been executed by him to
McGahee bore his genuine signature.
The plaintiffs contended that it was unnecessary to sell the land for the purpose of paying the debts of the testatrix,
because, if she left any debts, they amounted [***8] to a very small sum and could have been paid from personalty; that
the sales by the executor were in pursuance of a mere scheme to divest the remainder interest of the plaintiffs, and to
Page 101
182 Ga. 329, *; 185 S.E. 516, **;
1936 Ga. LEXIS 346, ***3
enable T. J. McGahee to acquire the fee-simple title instead of the life-estate bequeathed to him by the will; and that
Felts and English did not buy the land for themselves, but represented McGahee, thus aiding him to purchase the land at
sales by himself as executor. If the evidence was sufficient to sustain any of these contentions, there was no evidence of
actual knowledge thereof on the part of Bowden, the defendant; and if he is to be charged with such knowledge, the
implication arises only from the dates and recited considerations appearing in the deeds and in the deed records, and
from an alleged duty on his part to inquire into the condition of the estate to determine whether it was necessary to sell
the land to pay debts of the testatrix. The plaintiffs offered evidence for the purpose of showing that such necessity did
not exist, but the court excluded the evidence on the ground that it did not appear that Bowden had any notice of this
fact; and the rejection of this evidence is complained [***9] of in one of the grounds of the motion for a new trial. The
only other special assignment of error was on the direction of the verdict, on the ground that there were issues of fact
which should have been submitred to the jury. The court did not err in directing the verdict. There was no evidence
either that the defendant had any knowledge of the facts touching the alleged invalidity of the executor's deeds, or that
there was any fact of record or otherwise which should have put him on inquiry or as to which it was his duty to make
affirmative investigation. The applicable principles of law are stated in the headnotes, which do not require elaboration.
Judgment affirmed. All the Justices concur.
Page 102
182 Ga. 329, *332; 185 S.E. 516, **518;
1936 Ga. LEXIS 346, ***8
35 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
CHESTNUT v. WEEKES, administrator.
No. 10588.
SUPREME COURT OF GEORGIA
180 Ga. 701; 180 S.E. 716; 1935 Ga. LEXIS 534
June 13, 1935, Decided
PRIOR HISTORY: [***1] Equitable petition. Before Judge Davis. DeKalb superior court. October 26, 1934.
Sarah M. Gay filed a petition against W. A. Baird (alias Wendell Baird), Mrs. A. A. Baird, and D. O. Chestnut,
alleging that she was an old woman over 70 years of age; that since May 5, 1894, she had been in possession of certain
described land in DeKalb County, deeded to her by her late husband; that on December 3, 1930, she executed to Ernest
Lunsford a deed to secure a loan of $ 1500; that she has been an invalid, confined to her bed, since 1931; that Dr. W. A.
Baird was attending her; that she was in constant pain and suffering, and he administered some kind of drug or narcotic,
and the treatment had continued for some time previous to November, 1931; that Dr. Baird had been insisting that she
contract with him for a lump sum as his total charges for treating her, and on or about November 25, 1931, he procured
from her a security deed to the said property, reciting a consideration of $ 550, the amount he demanded for his
services, including doctor's bills, hospital bills, and nurse hire; that thereafter he procured a duplicate, stating that the
other had been lost, and subsequently caused her to [***2] sign a warranty deed to the property, representing to her that
it would be necessary for him to have it in order to sell the property and realize the money he was demanding, and that
he would turn over to petitioner the overplus; that after obtaining said warranty deed he ceased to attend her, took up all
medicines he had left with her, and has remained away from her and made no effort to treat her further; that she learned,
since signing the warranty deed, that it was made out to A. A. Baird, the wife of Dr. W. A. Baird, that A. A. Baird has
executed a warranty deed to said property to D. O. Chestnut, that the $ 1500 loan due Lunsford was paid off, that the
property was being advertised for sale, and that, because of the conveyances theretofore executed, no one would bid at
the sale; that all papers signed by petitioner are void and should be so decreed, because of the fact that at the time of
executing and delivering them she was under the complete domination of the said Baird, who had administered to her
some drug which created an irresistible desire for more of it, and thus her freedom of action and will power were
weakened; that Dr. Baird knew this, and brought about such condition [***3] with the intent and purpose of defrauding
her of her just rights; that she had no contractual relations with Mrs. A. A. Baird and did not know she was deeding the
Page 103
said property to her, and that Mrs. Baird was acting as the agent of her husband; that each of said conveyances is void
because of inadequate consideration, and is a cloud upon the title to said property, and should be so decreed; that D. O.
Chestnut knew, or in the exercise of ordinary care and prudence should have known, of the conditions under which said
warranty deed was procured from petitioner, and he is not an innocent purchaser for value; that the services rendered
her by Dr. Baird were of practically no value to her, and rendered her mentally helpless and physically helpless, that the
deed is void on account of inadequacy of consideration; that the land is reasonably worth, and was at the time of the
execution of said instruments, a minimum of $ 3500 and a maximum of $ 5000, the only outstanding claim against the
land being the $ 1500 loan before mentioned; that she was induced to sign all of the conveyances on account of the
conditions aforesaid and the continued influence of W. A. Baird and the weakened mental [***4] condition incident to
the medicine administered to her; and to allow her property to be taken from her under the circumstances would be
unlawful and inequitable; that she has never parted with possession of said land, in that her son is thereon as tenant, and
such possession has been open, notorious, and continuous; that she has no adequate remedy at law; and that said deeds
are iniquitous and a cloud on her title. She prayed that all of the deeds signed by her be decreed canceled as null and
void; that the deed to Chestnut be decreed null and void; that all of the defendants be restrained from proceeding with
the foreclosure and sale of said property under the first loan deed until the further order of the court and until the cloud
upon the title of said property can be removed; and for such further relief as to the court might seem proper.
D. O. Chestnut filed an answer in which he admitted that the property was deeded to petitioner on May 5, 1894,
that she executed the loan deed to Lunsford, and that Mrs. A. A. Baird executed to him a warranty deed as alleged. He
denied, or alleged that for want of sufficient information he could neither admit nor deny, the other allegations. [***5]
He alleged that on January 25, 1932, he agreed with Mrs. A. A. Baird to purchase the property for $ 900, free from all
liens except that in favor of Lunsford; that he thereupon placed the papers in the hands of the Atlanta Title and Trust
Company for examination, and that they found that Lunsford had already begun advertising the property for sale under
the power contained in his loan deed; that Chestnut thereupon furnished the money for them to pay off the indebtedness,
and had the loan deed transferred to them as trustee for him and duly recorded; that he immediately had the
advertisement discontinued, and was not making any effort to sell the property; that he did not know and had no reason
to know of the alleged conditions surrounding the execution of the deed by petitioner to Mrs. A. A. Baird; and that he is
an innocent purchaser for value. The petitioner having died, John Wesley Weekes, as administrator of her estate, was
substituted in her stead as petitioner. He filed an amendment alleging that there had been no legal delivery of the deed
executed to Mrs. Baird, but that said deed, if signed by Mrs. Gay, was signed while she was under the influence of some
strong drug and too [***6] weak to sit up; that she did not deliver said deed to any one; that her mind was insufficient,
on account of the drug previously administered by W. A. Baird, to know what she was doing, she being at the time
unconscious and irrational and incapable of knowing the conditions of said deed or realizing the act of signing the same;
that if she signed it, she did so through threats made by W. A. Baird that "he would go and let her die, and that he would
not give her anything more to ease her pain unless she would sign said deed," and, being in said condition and having no
mind, she did what she did at the instigation of him; that his mind and will were substituted for her will and act; and that
her act of signing any and all of the papers was under duress of said Baird and under her fears and his threats that he
would not give her any more drug and would let her die. Chestnut filed a demurrer to the amendment, on the grounds
that it sought to set up a new and distinct cause of action, and did not allege that he had any knowledge of the acts
referred to at the time he bought the property. The demurrer was overruled, and exceptions pendente lite were filed. A
verdict was rendered in favor [***7] of the petitioner. Chestnut moved for a new trial, and to a judgment overruling the
motion he excepted.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff, the administrator of a decedent's estate, filed a petition against defendant
individual, for a decree declaring a deed conveying the decedent's property null and void and to restrain the individual
Page 104
180 Ga. 701, *; 180 S.E. 716, **;
1935 Ga. LEXIS 534, ***3
from proceeding with foreclosure on the property. A jury in the DeKalb Superior Court (Georgia) entered a verdict for
the administrator. The trial court overruled the individual's motion for a new trial and the individual excepted.
OVERVIEW: The administrator allege that the decedent was fraudulently induced by her doctor to convey to him a
security deed and a warranty deed to her real property for the value of the services he provided. The administrator
alleged that the value of the property exceeded the value of the doctor's services and that the deeds were void because of
inadequate consideration. The deeds were conveyed to the individual, who began foreclosure on the property. The
administrator alleged that the individual knew of the circumstance under which the deeds were obtained from the
decedent and that the individual was not an innocent purchaser for value. On the individual's exceptions, the court
reversed. The court held that pursuant to the Code of 1933 § 85-408 (Georgia) the individual was not put on notice of
the circumstances under which the deed was obtained by the mere fact that the decedent's son was in possession of the
property as tenant. The court concluded that the individual was not required to under § 85-408 or the Code of 1933 §
37-116 (Georgia) to make inquiry of the tenant as to his title where the deed was duly recorded and showed that the
individual had conveyed the property.
OUTCOME: The court reversed the trial court's judgment.
CORE TERMS: deed, notice, tenant, insane person, voidable, insane, adjudication of insanity, bona fide purchaser,
adjudicated, grantee, void, lunatic, landlord, grantor, compos mentis, recorded, insanity, invalid, heir, deed conveying,
sufficient to put, present case, competent jurisdiction, absolutely void, mental incapacity, innocent purchaser, number of
cases, inconsistency, administered, ignorance
LexisNexis(R) Headnotes
Real Property Law > Deeds > Enforceability
Real Property Law > Deeds > Remedies > Cancellation & Rescission
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN1] See Code of 1933 § 85-408 (Georgia).
Contracts Law > Types of Contracts > Lease Agreements > Oral Agreements
Contracts Law > Types of Contracts > Oral Agreements
Real Property Law > Landlord & Tenant > Lease Agreements > Residential Leases
[HN2] Where a tenant in possession either owns or claims any interest or title to the land in himself, he is a tenant under
an oral contract the duration of which is not clearly shown, and he is a stranger to the title, under Code of 1933 § 85-408
(Georgia) such facts can not be held sufficient to put a purchaser of the land upon notice that a grantor's deed conveying
the land and duly recorded is invalid or voidable for any reason.
Real Property Law > Landlord & Tenant > Lease Agreements > Residential Leases
Real Property Law > Priorities & Recording > Bona Fide Purchasers
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN3] The possession of a tenant being the possession of the landlord, and the landlord having executed an absolute
deed conveying to another, and that deed being recorded, a purchaser is authorized to assume that, as a matter of law,
the possession of the tenant is held under a grantee and not adversely to the latter's title.
Real Property Law > Landlord & Tenant > Lease Agreements > Residential Leases
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
Page 105
180 Ga. 701, *; 180 S.E. 716, **;
1935 Ga. LEXIS 534, ***7
[HN4] See Code of 1933 § 37-116 (Georgia).
SYLLABUS
To the amendment offered by the petitioner the defendant Chestnut filed a demurrer on the grounds (a) that the
amendment sought to set up a new and distinct cause of action, and (b) that it did not allege that the defendant Chestnut
had notice of the alleged fraudulent acts in connection with the execution and delivery of the warranty deed. Held:
(a) The amendment did not add a new cause of action. "A single wrong may be composed of numerous elements
and shown by various facts." Ellison v. Georgia Railroad Co., 87 Ga. 691, 710, 13 S.E. 809; City of Columbus v.
Anglin, 120 Ga. 785, 792, 48 S.E. 318. The petition as amended declared only one wrong, that is, inducing the grantor
to execute a warranty deed by administering to her narcotics that destroyed her will power or her mental capacity.
(b) The court did not err in overruling ground (b) of the demurrer to the petition. The original petition charged that
"said deed and each of said conveyances were void and are void on account of inadequate consideration, and are a
[***8] cloud upon the title of said property, and should be decreed null and void. Your petitioner says that the said
Chestnut knew or should have known, in the exercise of ordinary care and prudence, of the conditions under which said
warranty deed signed by your petitioner was procured by the said W. A. Baird or A. A. Baird, and that the said D. O.
Chestnut is not an innocent purchaser for value." It was not necessary to repeat the same or incorporate similar
allegations in the amendment. The petition as amended alleged notice.
It is contended that the tenant of the plaintiff's intestate was in possession of the property, and that inquiry of such
tenant would have disclosed the facts alleged in the petition. Lack of notice is a defense to that part of the petition based
upon the contention that the deed was executed in consequence of fraud.
In order to authorize cancellation of a deed on the ground of fraud or duress, the petitioner can not merely rely upon
notice showing that the land was occupied by the tenant. Notice must be brought home to the purchaser if he has acted
bona fide. Payment of value is evidence of bona fides. To rebut this presumption the burden is upon the petitioner
[***9] to show that the purchaser had notice, without which the title of a bona fide purchaser will be protected. Code
of 1933, § 96-208; Johnson v. Leffler, 122 Ga. 670, 50 S.E. 488; Skinner v. Braswell, 126 Ga. 761, 55 S.E. 914;
Pendergrass v. New York Life Insurance Co., 163 Ga. 671, 137 S.E. 36; Thomas v. Couch, 171 Ga. 602, 156 S.E. 206.
The testimony by deposition of the petitioner was admissible in evidence against the defendant Baird, and against
the defendant Chestnut in support of that part of the petition based upon the contention that the deed was executed while
the petitioner was insane; but not against the defendant Chestnut in support of the allegations of fraud, unless it was also
shown that he had notice of the fraud. It not being shown by the evidence that the defendant Chestnut had notice of the
acts alleged as fraud upon the petitioner, the court erred in not instructing the jury that the testimony of the petitioner by
deposition was admitted as against the defendant Chestnut only on the contention that the deed was executed while the
petitioner was insane.
It not being shown that the defendant Chestnut had notice of petitioner's [***10] statement to her son that she did
not know anything about signing the deed, the court should have instructed the jury that such testimony should not be
considered against the defendant Chestnut on the question of whether the deed was executed because of any alleged
fraud.
The court erred in restricting the jury to the single question of the mental incapacity of the grantor, without at the
same time instructing the jury that they should not consider any evidence as to the alleged fraud in creating in the
petitioner an irresistible desire for narcotics, in consequence of which, it was alleged, she was induced to execute and
deliver the warranty deed. Without such additional instruction we can not say that the jury did not find that the grantor
executed and delivered the deed, not while she was mentally incompetent, but because of her irresistible craving for
drugs induced by the fraud of the alleged wrong-doer; and such a verdict could not be sustained unless the jury also
Page 106
180 Ga. 701, *; 180 S.E. 716, **;
1935 Ga. LEXIS 534, ***7
found, under a proper charge of the court, that the defendant Chestnut had notice.
The court erred in not granting a new trial.
COUNSEL: Tye, Thomson & Tye, for plaintiff in error.
Paul L. Lindsay, contra.
JUDGES: [***11] Gilbert, Justice. Presiding Justice Beck, Justices Atkinson and Gilbert concur in the foregoing
rulings. Chief Justice Russell dissents. Justices Bell and Hutcheson are disqualified.
OPINION BY: GILBERT
OPINION
[*705] [**719] GILBERT, Justice.
Headnotes 1, (a), and (b) need no elaboration.
It was shown by uncontradicted evidence that R. W. Gay was the son of Mrs. Sarah M. Gay, the grantor, and was
in possession of the land at the time Chestnut obtained his deed from Mrs. Baird. Because of that fact it is contended
that the possession of the tenant, R. W. Gay, was sufficient to put Chestnut upon inquiry, and that such inquiry would
have disclosed the facts alleged in the petition. It will now be considered whether or not notice constitutes a defense
under the facts of this case to that part of the suit seeking a cancellation of the deed because of fraud and duress, and, if
it does, what effect the above stated facts must have in the case. [HN1] "Possession of land is notice of whatever right
or title the occupant has." (Italics ours.) Code of 1933, § 85-408. It is not insisted that [HN2] the tenant in possession
either owned or claimed any interest or title to the land in himself. He [***12] was a tenant under an oral contract the
duration of which is not clearly shown. He was a stranger to the title. Under the Code section just quoted, those facts
can not be held sufficient to put Chestnut upon notice that Mrs. Gay's deed, conveying the land to Mrs. Baird and duly
recorded, was invalid or voidable for any reason. It appears that Chestnut did not make inquiry of the tenant; but if he
had inquired as to what title the occupant had, it would have resulted [*706] in the information that he did not claim
title of any kind except what is stated above. [HN3] The possession of the tenant being the possession of the landlord,
and the landlord having apparently executed an absolute deed conveying to another, and that deed being recorded,
Chestnut would be authorized to assume that, as a matter of law, the possession of the tenant was held under the
grantee, Mrs. Baird, and not adversely to the latter's title. Jay v. Whelchel, 78 Ga. 786, 3 S.E. 906; Malette v. Wright,
120 Ga. 735, 741, 48 S.E. 229; Johnson v. Hume, 163 Ga. 867, 137 S.E. 56; Rimes v. Floyd, 168 Ga. 426, 428, 148 S.E.
86. In Kent v. Simpson, 142 Ga. 49, 82 S.E. 440, it was [***13] said: "The case of Malette v. Wright, 120 Ga. 735, 48
S.E. 229, stands on its own special facts; and while certain broad language is used in the opinion, the decision will not
be so extended as to conflict with the general rule which is well established in this State, as above stated." A like
statement was made in Simpson v. Ray, 180 Ga. 395, 178 S.E. 726. Under the facts of the present case the judgment
here rendered does not require any extension of the principle laid down in the Malette case. Moreover, that case is in
harmony with the other cases cited above. Section 85-408, however, is not the only statute on the question of notice.
Section 37-116 provides: [HN4] "Notice sufficient to excite attention and put a party on inquiry shall be notice of
everything to which it is afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, shall be
equivalent to knowledge, in fixing the rights of parties." The question, therefore, is whether or not the possession of the
tenant was sufficient notice to Chestnut, under section 85-408 or section 37-116, or both, to require art investigation by
the latter, leading to the disclosure of the facts, as alleged [***14] in the petition, that Dr. Baird had administered drugs
to Mrs. Gay and thus by fraud had induced her to execute the deed to Mrs. Baird. There are two lines of authority on
this question. One line is that which is stated above, the Georgia rule. The other is that the possession of the tenant
would put Chestnut upon inquiry, not only of what right or title the tenant had, but of any other facts competent to
show that the title which he was about to purchase from Mrs. Baird was defective or invalid. The line of reasoning is,
Page 107
180 Ga. 701, *; 180 S.E. 716, **;
1935 Ga. LEXIS 534, ***
that, had Chestnut inquired of the tenant, R. W. Gay, as to the basis of his possession, he would have elicited
information [*707] that such possession was held under Mrs. Gay as landlord, and Chestnut, being aware that Mrs.
Gay had executed what purported to be an absolute deed to Mrs. Baird, and the same being of record, would detect an
inconsistency; that the tenant could not be holding under Mrs. Gay as landlord while there was an outstanding title on
record purporting to convey all of Mrs. Gay's interest to Mrs. Baird. According to this theory and under these
circumstances Chestnut would be put on notice of his duty to go further and clear up the apparent [***15]
inconsistency by learning the facts; such investigation would have taken him immediately to Mrs. Gay, and from her he
would have learned that she had either made no such deed as appeared of record, or that, if she had, it was not a valid
deed, for the reasons alleged in her petition. If we adopt the course of reasoning last stated, the logical [**720]
conclusion would be that Code sections 37-116 and 85-408 would apply to the facts of the present case, and that the
ignorance of Chestnut was due to negligence, and therefore that he was charged with notice of the defective title of Mrs.
Baird and could not acquire any indefeasible title to the property by means of the deed from Mrs. Baird. On this
question reference is made to 27 R. C. L. 726, § 490 et seq., and authorities cited in the notes; 20 R. C. L. 352, § 13; 66
C. J. 1164, 1172, §§ 1011, 1019 and cases cited in the notes. However, this State has adopted the rule first stated, as
found in Jay v. Whelchel, Malette v. Wright, Johnson v. Hume, and Rimes v. Floyd, supra. Under that rule Chestnut was
warranted in assuming, by reason of the recorded deed of Mrs. Gay to Mrs. Baird, that, as to these parties [***16] at
least, the tenant, R. W. Gay, was holding under Mrs. Baird, and that an inquiry of the tenant would have disclosed only
that he was a tenant and claimed no title to the land.
The remaining headnotes need not be elaborated.
Judgment reversed. Presiding Justice Beck, Justices Atkinson and Gilbert concur in the foregoing rulings. Chief
Justice Russell dissents. Justices Bell and Hutcheson are disqualified.
CONCUR BY: GILBERT
CONCUR
GILBERT, Justice, concurring specially. In addition to what is said above, I wish to record, for myself, the
following: The Code of 1933, § 20-206, provides: "The contract of an insane person, a lunatic or a person non compos
mentis, who has never been adjudicated to be insane, or a lunatic, or of unsound mind as prescribed [*708] by the
Code, is not absolutely void, but only voidable, except that a contract made by such person during a lucid interval is
valid without ratification. After the fact that such person is insane; a lunatic, or non compos mentis has been established
by a court of competent jurisdiction in this State, and the affairs of such person are vested in a guardian, the power of
such person to contract, even though restored to sanity, [***17] is entirely gone and such contracts are absolutely void,
until the guardianship is dissolved. One may recover for necessaries furnished an insane person, a lunatic, or person non
compos mentis upon the same proof as if furnished to infants." The statement in that section that the contract of an
insane person who has never been adjudicated to be insane is not void, but only voidable, was justified under previous
rulings of this court in Bunn v. Postell, 107 Ga. 490, 33 S.E. 707; Orr v. Equitable Mortgage Co., 107 Ga. 499, 33 S.E.
708; McClure Realty & Investment Co. v. Eubanks, 151 Ga. 763, 108 S.E. 204; Wynne v. Fisher, 156 Ga. 656, 659, 119
S.E. 605; Fields v. Union Central Life Insurance Co., 170 Ga. 239, 152 S.E. 237. Mrs. Gay was never adjudicated
insane. In fact, there is no suggestion that her mind was impaired other than by drugs administered to her. It is not
alleged that her mental incapacity continued even to the time of the trial. In about four months after she called in
another physician her deposition was taken, and at the trial it was placed in evidence in her behalf. Her deed is not void.
If the facts alleged in her petition be [***18] proved, her deed is voidable, and the title of the defendant Chestnut
should not be protected if he had notice. Is her deed voidable as against an innocent purchaser for value and without
notice? An exhaustive search of the decisions of this court discloses that the law on this subject should be clarified by a
review of all cases decided by this court on the subject that are conflicting or seemingly so. In Warren v. Federal Land
Bank, 157 Ga. 464, 122 S.E. 40, there had been an adjudication of insanity. Consequently the deed was void and no title
passed. In American Trust & Banking Co. v. Boone, 102 Ga. 202, 29 S.E. 182, 40 L.R.A. 250, 66 Am. St. R. 167), the
court treated the contract as void, the adjudication of insanity having been made in another State. In Bryan v. Walton, 14
Page 108
180 Ga. 701, *706; 180 S.E. 716, **719;
1935 Ga. LEXIS 534, ***14
Ga. 185, a guardian had been appointed, and of course the insane person could not act, and a bona fide purchaser for
value [*709] was not protected. In Brown v. Carmichael, 149 Ga. 548, 101 S.E. 124, the petitioner sought to set aside
a deed to another, then deceased, making the grantee's administrator and her husband parties, alleging certain facts as
showing insanity [***19] in the grantor, and praying that the husband, who had succeeded without written title to an
interest as an heir, be required to make a deed to the petitioner. The court sustained a general demurrer. This court
reversed that judgment, and, notwithstanding that there had been no adjudication of insanity, stated inadvertently in a
headnote that the deed of an insane person is "invalid." It had been previously [**721] held by full benches, and has
been consistently held since, that a deed by an insane person, not adjudicated insane, is not void but only voidable. See
cases supra. Consequently the first headnote in that case is not authority in the case of an insane grantor who has not
been adjudicated insane. In Gable v. Gable, 130 Ga. 689, 61 S.E. 595, the jury found for the plaintiff in a case where
there was conflicting evidence as to notice. In Taylor v. Warren, 175 Ga. 800, 166 S.E. 225, the suit was against the
surviving husband and other heirs of the grantee. In a number of cases this court has held that a contract of an insane
person may be avoided, but an examination of them discloses that in each case only the right of the immediate grantee
was involved. Some [***20] of these cases are: Bunn v. Postell, Orr v. Equitable Mortgage Co., supra; Boynton v.
Reese, 112 Ga. 354, 37 S.E. 437; Woolley v. Gaines, 114 Ga. 122, 39 S.E. 892, 88 Am. St. R. 22); Perry v. Reynolds,
137 Ga. 427, 73 S.E. 656; Wynne v. Fisher, supra; Joiner v. Southern Land Sales Cor., 158 Ga. 752, 124 S.E. 518;
Autry v. Parrish, 164 Ga. 650, 139 S.E. 413; Fields v. Union Central Life Ins. Co., supra; Whiteley v. Downs, 174 Ga.
839, 164 S.E. 318; Jones v. Union Central Life Ins. Co., 178 Ga. 591, 173 S.E. 845. It does not necessarily follow that
these cases are authority for avoiding in equity the title of a bona fide purchaser for value and without notice,
especially in view of the Code of 1933, § 37-111, which provides: "A bona fide purchaser for value, and without
notice of an equity, will not be interfered with by equity." It is true that in Joiner v. Southern Land Sales Cor., and in
Jones v. Union Central Life Ins. Co., supra, headnote 3-a of Warren v. Federal Land Bank, supra, was quoted: "The
deed of an insane person, though made without fraud and for an [*710] [***21] adequate consideration, may be
avoided by his heirs, not only as against his immediate grantee but also as against bona fide purchasers for value and
without notice of such insanity," but the Joiner and Jones cases did not involve the rights of bona fide purchasers. The
quoted expression, "but also as against bona fide purchasers for value and without notice," was obiter and should not
be construed as a binding decision on a point not involved in the cases before the court. In Warren v. Federal Land
Bank, supra, the right of an innocent purchaser was involved, but it was in a case where there had been an
adjudication of insanity prior to the execution of the instrument. In Morris v. Mobley, 171 Ga. 224, 155 S.E. 8, this
court ruled, all the Justices concurring, that "The contract of an insane person who has not been adjudicated a lunatic by
a court of competent jurisdiction is voidable after his death, at the instance of his legal representative," citing cases; and
then stated that "The allegation that the defendants 'knew' of the mental incapacity of the grantor was immaterial to the
plaintiff's case." The authority cited for the last ruling was Warren v. [***22] Federal Land Bank, 157 Ga. 464, 122
S.E. 40 (supra), but in so ruling the fact was overlooked that in the cited case there had been an adjudication of insanity,
whereas in Morris v. Mobley there had been no adjudication. Therefore the court ruled that the same principles of law
applied in both instances, although in the one case the contract was absolutely void and in the other only voidable. A
similar ruling was made in Orr v. Equitable Mortgage Co., supra. Apparently, in a number of cases, while the point was
not directly decided, this court seemed to proceed on the theory that where there had been no adjudication of insanity,
the grantee, without notice of the insanity and for value, would be protected. Cheves-Green Co. v. Horton, 177 Ga.
525, 170 S.E. 491; Stanley v. Stanley, 179 Ga. 135, 175 S.E. 496.
Page 109
180 Ga. 701, *708; 180 S.E. 716, **720;
1935 Ga. LEXIS 534, ***18
36 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
SIMPSON v. RAY et al.
No. 10276.
SUPREME COURT OF GEORGIA
180 Ga. 395; 178 S.E. 726; 1935 Ga. LEXIS 268
February 19, 1935, Decided
PRIOR HISTORY: [***1] Equitable petition. Before Judge Pomeroy. Fulton superior court. January 19, 1934.
Ray purchased a vacant lot from Etheridge. The deferred purchase-money notes were paid, and Etheridge executed
a warranty deed to Ray which was duly recorded. Thereafter Ray employed Etheridge to build a dwelling-house on the
lot, for which Ray should execute notes payable at monthly intervals and secure the notes by mortgage or security deed
on the land. The notes were duly executed, and a warranty deed to Etheridge dated July 8, 1915, was executed and duly
recorded, but it was absolute in form and did not appear to be merely a security deed. The house was completed and
Ray occupied it continuously thereafter. The notes were duly paid, the last in January 1919. On April 1, 1926, while
Ray was in actual possession and occupying the house, Etheridge executed a security deed to Simpson containing a
power of sale, purporting to convey the house and lot as security for a loan. Simpson did not make inquiry of Ray
concerning his actual possession. In January, 1931, the debt was reduced to judgment and declared to be a special lien
on the land. An execution was duly issued and entered on the execution docket. [***2] On the sales day of January,
1932, the property was sold under exercise of the power of sale, and Simpson obtained a warranty deed from Avary, the
purchaser, which also was duly recorded. In January, 1934, Ray instituted an action against Etheridge and Simpson,
seeking to cancel as clouds upon his title the several deeds specified above and the judgment declaring a special lien
upon the land. The suit was in renewal of a former suit instituted March 31, 1931, that was dismissed in October, 1933,
on account of Simpson having raised a question as to service upon him. The petition alleged substantially all that is
stated above, and further: "12. Petitioner had no knowledge of the existence of said loan deed in favor of Simpson, nor
of the fact that the deed which he executed to Etheridge in July, 1915, was a warranty deed, nor of the aforesaid suit and
judgment in the Municipal Court of Atlanta, until after said judgment was rendered in January, 1931. 13. Immediately
after learning of the facts hereinbefore set forth, with reference to the execution of the aforesaid loan deed given by
Etheridge, and the warranty deed in favor of Etheridge, your petitioner went to the said Etheridge, and [***3] also
employed an attorney to see him, and said Etheridge admitted and confessed that the deed executed by your petitioner in
Page 110
July, 1915, to Etheridge, was intended only to secure the indebtedness of $ 1000.00, and that said indebtedness had been
paid by petitioner, and that he, the said Etheridge, had no right to borrow money on petitioner's property, and he
promised to pay off said indebtedness and restore to petitioner the title to his property, but has failed, and now fails and
refuses to do so, or to make any restitution to petitioner. 14. Your petitioner is a negro laborer, of advanced years, and
while able to read and write to some extent, is, nevertheless, illiterate and ignorant of the technicalities and legal
phraseology of deeds and conveyances affecting the title to real estate." The defendant Simpson interposed a general
demurrer to the petition, which being overruled, he excepted.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendant appealed a decision from the Fulton Superior Court (Georgia), which entered
judgment for plaintiff in an equitable action to cancel defendant's deed to property also claimed by plaintiff.
OVERVIEW: Plaintiff bought the land in question from the grantor, paid for it, and received a warranty deed. He then
hired the grantor to build a house on the land and gave a deed absolute in form. Plaintiff paid for the house and occupied
it continuously. While plaintiff was in possession, the grantor executed a security deed to defendant containing a
power of sale, purporting to convey the house and lot as security for the loan. Defendant did not inquire of plaintiff
concerning his possession. Defendant acquired a deed to the property after the grantor's debt was reduced to judgment.
On appeal from the trial court's decision to cancel defendant's deed, the court held: (1) plaintiff's deed to the grantor
could properly be shown to be mere security for a debt where plaintiff stayed in possession; (2) plaintiff's possession
was notice to the world of his rights; (3) plaintiff had an action to cancel defendant's deed when defendant failed to
make an inquiry of plaintiff; and (4) plaintiff was not estopped by laches from seeking cancellation of instruments
operating as a cloud on his title.
OUTCOME: The court affirmed the decision of the trial court.
CORE TERMS: grantee, deed, cancellation, occupant, notice, cloud
LexisNexis(R) Headnotes
Real Property Law > Deeds > Construction & Interpretation
Real Property Law > Deeds > Covenants of Title
[HN1] A deed absolute in form may be shown to have been made to secure a debt, where the maker remains in
possession of the land conveyed.
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN2] Actual possession is notice to the world of the right or title of the occupant.
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
Real Property Law > Title Quality > Marketable Title > Remedies
[HN3] Where the owner of land executes a deed and remains in possession of the land, and the grantee conveys the
land to another who has no actual notice of the undisclosed agreement that the deed should operate as a security for
debt, and who has made no inquiry of the occupant, the latter may pay or tender the amount of the debt to the first
grantee and maintain an equitable action against the first grantee and the remote grantee for cancellation of both deeds
as clouds upon iris title, and to have the title decreed to be in him. The principle is also applicable if the debt has been
fully paid.
Page 111
180 Ga. 395, *; 178 S.E. 726, **;
1935 Ga. LEXIS 268, ***3
COUNSEL: Robert Lee Avary Jr., for plaintiff in error.
Pearce Matthews and A. E. Wilson, contra.
OPINION
[**727] [*395] ATKINSON, Justice. [HN1] A deed absolute in form may be shown to have been made to secure
a debt, where the maker remains in possession of the land conveyed. Mercer v. Morgan, 136 Ga. 632, 71 S.E. 1075.
[HN2] "Actual possession is notice to the world of the right or title of the occupant. [***4] Mercer v. Morgan,
supra; Bridger v. Exchange Bank, 126 Ga. 821, 56 S.E. 97, 8 L.R.A. (N.S.) 463, 115 Am. St. R. 118); Austin v. Southern
Home &c. Asso., 122 Ga. 439, 50 S.E. 382."
[HN3] "Where the owner of land executes a deed of the character mentioned in the first note, and remains in
possession of the land, and the grantee conveys the land to another who has no actual notice of the undisclosed
agreement that the deed should operate as a security for debt, and who has made no inquiry of the occupant, the latter
may pay or tender the amount of the debt to the first grantee and maintain an equitable action against the first grantee
and the remote grantee for cancellation of both deeds as clouds upon iris title, and to have the title decreed to be in
him." Berry v. Williams, 141 Ga. 642, 81 S.E. 881. See also Kent v. Simpson, 142 Ga. 49, 82 S.E. 440.
(a) The principle is also applicable if the debt has been fully paid.
(b) The decisions in Jay v. Whelchel, 78 Ga. 786, 3 S.E. 906; Malette v. Wright, 120 Ga. 735, 48 S.E. 229; Peabody
v. Fletcher, 150 Ga. 468, 104 S.E. 448; Rimes v. Floyd, 168 Ga. [***5] 426, 148 S.E. 86, based on their particular
facts, are not to be extended so far as to bring them in conflict with the general rule stated in the second note. See Kent
v. Simpson, supra.
The plaintiff, being in actual possession of the land and no inquiry having been made by Simpson as to his right
of possession, was not, as against Simpson, estopped by laches from complaining in equity for cancellation of
instruments operating as a cloud upon his title. Smith v. Burrus, 139 Ga. 10, 76 S.E. 362; Code of 1910, § 5465; Code
of 1933, § 37-1407. The case differs from Garrett v. Crawford, 128 Ga. 519, 57 S.E. 792, 119 Am. St. R.. 398, 11 Ann.
Cas. 167), and similar eases involving the rights of innocent purchasers.
[*396] The petition alleged a cause of action for the relief as prayed, and the judge did not err in overruling the
demurrer.
Judgment affirmed. All the Justices concur.
Page 112
180 Ga. 395, *; 178 S.E. 726, **;
1935 Ga. LEXIS 268, ***3
44 of 176 DOCUMENTS
Positive
As of: Aug 04, 2014
CITIZENS BANK OF MOULTRIE et al. v. TAYLOR et al.
No. 6730.
SUPREME COURT OF GEORGIA
169 Ga. 203; 149 S.E. 861; 1929 Ga. LEXIS 315; 67 A.L.R. 355
July 20, 1929, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied October 4, 1929.
PRIOR HISTORY: Equitable petition. Before Judge W. E. Thomas. Colquitt superior court. April 5, 1928.
On October 31, 1914, J. W. Taylor for and in consideration of $ 1,000 conveyed by warranty deed to his wife,
Mary Taylor, in fee simple a described tract of land. This deed was attested by D. F. Luke and J. H. Allegood, the latter
attesting the same in his official capacity of notary public and ex-officio justice of the peace. The attesting officer then
turned it over to the maker, the grantee not being present. After this deed was thus executed and attested, the maker
inserted in the body thereof this provision: "At her death this goes to my children Florence and Medford Taylor." This
was done out of the presence of the attesting witnesses, and without their knowledge; and the deed as thus altered was
not reattested or acknowledged by the subscribing witnesses. After it was thus altered, it was delivered by the maker to
his wife, and was recorded on November 12, 1914.
On October 31, 1914, Taylor executed to his wife a warranty deed purporting to convey to her the same land for a
consideration of $ 1,000. This deed was attested by W. A. Odum and A. L. Mueller, [***2] the latter as a notary public
and ex-officio justice of the peace, with his seal attached. This deed was recorded on November 24, 1917. Mary Taylor
exhibited to the Citizens Bank of Moultrie the deed last described. She claimed that she had title to this land under said
deed, and requested the bank to make her a loan of $ 700 to be secured by her deed to it. On the faith of this
representation and of this deed, without actual notice of the altered deed first above described, the bank in good faith
made said loan; and to secure it Mary Taylor, on March 17, 1922, executed to the bank her deed to said land, the bank
taking her deed in good faith and without any notice of the title claimed by the remaindermen under the altered deed.
She defaulted in the payment of the debt secured; and the land was sold under power of sale contained in said security
deed, after being advertised, and was bought in by the bank. A deed was executed to the bank by the attorney in fact of
Mary Taylor. This land was sold for its State and County tax for 1924, on May 5, 1925, and was bought by Colquitt
Page 113
County, to which a deed was executed. This deed was recorded on November 2, 1925. On July 5, 1927, Colquitt [***3]
County by quitclaim deed conveyed this land to the Citizens Bank.
On September 13, 1927, Medford Taylor and Florence Taylor Gregory, nee Taylor, filed their petition against the
Citizens Bank, the State superintendent of banks, A. G. Whitehead, liquidating agent, C. B. Beck, and Carter Lumber
Company, alleging that they were in possession of the land embraced in the deed from J. W. Taylor to Mary Taylor,
recorded on November 12, 1914, that they claimed title to said land as remaindermen under said deed, the life-tenant
having died in 1926, that the bank claimed title under the quitclaim deed from the county, which claimed title thereto
under tax deed hereinbefore referred to, that the tax deed was void because the levy under which it was made was
grossly excessive, the principal of the tax fi. fa. being $ 14.60, and the land, which was capable of subdivision, was of
greater value than $ 600; that the quitclaim deed from the county to the bank was void, because the county acquired no
title at said tax sale; that the bank claimed title to said land under the four deeds heretofore described; that the bank has
leased the timber on the lands to the Carter Lumber Company; that Beck [***4] claimed some right in the land under
the bank; and that the conveyances under which the bank claimed were clouds upon the title. They prayed that the
defendants be enjoined from interfering with their possession, that said deeds be delivered up and canceled, and that
they have general relief.
In its answer the bank claims title under the deeds attacked by petitioners. Beck filed an affidavit of forgery, in
which he set up that the deed from J. W. Taylor to Mary Taylor, recorded November 12, 1914, was fraudulently altered
by the insertion therein of the words: "At her death this goes to my two children Florence and Medford Taylor," that
said provision was not in said deed when it was executed and attested, and that for this reason it was a forgery.
On the trial the following evidence was introduced:
The officer who attested the deed from J. W. Taylor to Mary Taylor, recorded November 12, 1914, wrote the same.
The provision, "At her death this goes to my two children Florence and Medford Taylor," was not in the deed when it
was attested. The rest of the deed is the same. Eleven or twelve years ago, Taylor and his wife tried to sell this land to
W. A. Freeman. Mrs. Taylor [***5] said she owned the property. Freeman examined the record, and, finding the above
clause in the deed from her husband to her, declined to buy it. They told Freeman to go ahead and buy this land, that the
children would never bother him at all. At that time Mrs. Taylor did not say anything to Freeman about having another
deed. C. E. Carlton tried to buy this land from Taylor and his wife. He looked up the records, and informed them that he
did not wish to buy it. Taylor did not tell him how that clause got in the deed. When Carlton told them that it was in the
deed, nothing was said to him about a new deed. Taylor said something about Florence and Medford having an interest
in the land. J. T. Taylor, a son of J. W. Taylor, testified that his father told him he put the clause in the deed because he
wanted a home as long as he lived, and wanted Medford and Florence to have it when he died. This witness kept this
deed about three years. Mary Taylor gave it to him. She got it back from him. She told him she was satisfied, as she
would have a home as long as she lived, and then the children would have it.
J. H. Allegood, the attesting officer, testified that Taylor came to him and wanted [***6] him to write a deed to his
wife, as he had used some of her money, and he wanted her to have a home for the rest of her life. Witness thought
Taylor said he wanted her to have it for her home, and at her death to go to these children, who were living with them at
the time. Witness would not be positive that Taylor said that, but knows that he said he wanted his wife to have it for the
rest of her life. After writing the deed the officer read it to Taylor. Taylor said he wanted the deed made so his wife
could have a home for her lifetime. She was not present when the deed was drawn. This officer talked to her when she
was trying to sell it. She said she could not sell it with that clause in it to those who wanted to buy it. She did not say
anything about getting another deed with the clause left out. She did not say whether she was satisfied or dissatisfied.
W. S. Stokes testified for defendants: Was formerly cashier of the Citizens Bank. A loan was made to Mrs. Taylor
by the bank. This property was represented to belong to her. We left the matter to our attorneys. There was no limitation
of the estate conveyed in the deed which he handed witness. It was an absolute fee-simple [***7] estate. She claimed
ownership under this deed. The attorneys for the bank approved the title and the loan was made on their certificate.
Page 114
169 Ga. 203, *; 149 S.E. 861, **;
1929 Ga. LEXIS 315, ***2; 67 A.L.R. 355
At the conclusion of the evidence the court directed a verdict in favor of the plaintiffs against the affidavit of
forgery, and in favor of the genuineness of the deed recorded on November 12, 1914, and, on the merits, a verdict in
favor of the plaintiffs against the defendants. To this judgment the defendants excepted.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendants, interest holders in a piece of land, challenged a judgment from the Colquitt
Superior Court (Georgia) directing a verdict in favor of plaintiffs, children of the grantor of the piece of land. The
verdict was against defendants' argument that a deed was forged and was in favor of the genuineness of a deed
purporting to grant plaintiffs a remainder interest in the piece of land.
OVERVIEW: The grantor conveyed a piece of land to his wife. After this deed was executed and attested, the grantor
inserted a provision granting the wife a life estate and his children the remainder interest. The alteration was made
without attestation or acknowledgement. As altered, the deed was recorded. The grantor conveyed another deed
granting the wife a fee simple interest in the same piece of land, which was attested, acknowledged, and recorded. The
wife obtained a loan from a bank with the land as collateral. After her default on the loan, the bank sold the land. The
children then brought an action against defendants, alleging they were remaindermen on the land and defendants needed
to protect their interests. Defendants alleged the deed granting the remainder interest was a forgery. The superior court
directed a verdict holding that the deed granting the remainder interest was valid. Defendants appealed. The court found
that because the altered deed was not attested or acknowledged, it could not act as constructive notice of the children's
interests. Therefore, the deed was not valid against defendants' interests, and it was error to direct a verdict in the
children's favor.
OUTCOME: The court reversed the directed verdict that held that a deed granting plaintiffs a remainder interest in a
piece of property was genuine. The court held that because the altered deed was not attested or acknowledged, it could
not act as constructive notice of the children's interests.
CORE TERMS: deed, attested, recorded, notice, alteration, remainder, delivery, constructive notice, conveyed, altered,
grantor, notary public, bona fide purchaser, actual notice, attestation, fee-simple, grantee, subsequent purchaser,
registration, stepmother, occupant's, convey, vendor, estate in fee, fee simple, sufficient to put, acknowledgment,
purporting, reattested, ex-officio
LexisNexis(R) Headnotes
Real Property Law > Deeds > Covenants of Title
[HN1] A deed to lands in Georgia must be in writing, signed by the maker, attested by at least two witnesses, and
delivered to the purchaser, or some one for him, and be made on a valuable or good consideration. Ga. Civ. Code §
4179 (1910). A deed without witnesses is legal and binding between the parties thereto and those claiming under them
as mere volunteers.
Real Property Law > Deeds > Covenants of Title
[HN2] The requirement of two witnesses is to be taken to apply to a "perfect deed," which on recordation will be
constructive notice to all the world.
Page 115
169 Ga. 203, *; 149 S.E. 861, **;
1929 Ga. LEXIS 315, ***7; 67 A.L.R. 355
Governments > Courts > Clerks of Court
Real Property Law > Deeds > Covenants of Title
Real Property Law > Priorities & Recording > General Overview
[HN3] In order to authorize the record of a deed to realty or personalty, if executed in Georgia, it must be attested by a
judge of a court of record of Georgia, or a justice of the peace, or notary public, or clerk of the superior court, in the
country in which the three last-mentioned officers respectively hold their appointments; or if subsequently to its
execution the deed is acknowledged in the presence of either of the named officers, that fact, certified on the deed by
such officer, shall entitle it to be recorded. Ga. Civil Code § 4202 (1910). If the deed is neither attested by nor
acknowledged before either of the officers aforesaid, it may be admitted to record upon probate by one of its
subscribing witnesses. § 4205.
Real Property Law > Deeds > Covenants of Title
Real Property Law > Estates > Future Interests > Remainders
[HN4] To admit a deed to record, it must be a perfect deed. It must be attested by two witnesses. It must be attested or
acknowledged, if executed in Georgia, as provided in Ga. Civil Code § 4202 (1910), or it must be probated as provided
in § 4205.
Contracts Law > Performance > Tender & Delivery
Real Property Law > Deeds > Covenants of Title
[HN5] In those jurisdictions where attestation or acknowledgment is not made essential to the validity of a deed, until a
deed is delivered the grantor has full power and control over it, and he can make such alterations in it as he may see fit,
for it is not his deed until it is delivered. Complete execution of a deed is consummated only by final delivery. The mere
signing of the deed by the maker, and its attestation by witnesses, does not preclude changes in the instrument before
delivery.
Real Property Law > Deeds > Covenants of Title
Real Property Law > Estates > Future Interests > Remainders
[HN6] The grantor of a deed, as between the parties thereto, could, after signing the same and after its attestation, but
before delivery, lawfully insert therein a provision limiting the estate granted to his wife for life, and granting the
remainder estate in the land conveyed to his children.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN7] When a deed is well recorded, everybody must be presumed to know of the record, for certain purposes; but
when not well recorded, the presumption of ignorance holds, until actual knowledge or information of the record is
clearly proved. The registry of a deed not attested, or not proved or acknowledged according to law, is not constructive
notice to a subsequent purchaser.
Real Property Law > Deeds > Covenants of Title
Real Property Law > Estates > Future Interests > Remainders
[HN8] Material alterations made in a deed after due attestation or acknowledgment necessitate a reattestation or
acknowledgment, to entitle it to record.
Real Property Law > Deeds > Covenants of Title
[HN9] Where there has been a material alteration in a deed, the deed to the extent of such alteration has become a new
deed, and the alteration may be of such character as entirely to change the original deed. In such a case, to give effect to
the alteration, the deed should be reattested and redelivered; and if it has been acknowledged before alteration, it should
Page 116
169 Ga. 203, *; 149 S.E. 861, **;
1929 Ga. LEXIS 315, ***7; 67 A.L.R. 355
be again acknowledged.
SYLLABUS
A recorded deed, to be constructive notice, must be a perfect deed, that is, one executed in compliance with the
terms of section 4179 of the Civil Code, and attested or acknowledged as provided in section 4202, or probated as
provided in section 4205.
Where a deed conveying an absolute estate in fee to the grantee was properly attested, but where the maker
thereafter and before delivery inserted therein a provision limiting the estate of the grantee to her life, and creating a
remainder therein in favor of two of his children, such alteration being made out of the presence and without the
knowledge of the attesting witnesses, and the deed so altered was not thereafter attested, or probated, or its [***8]
execution acknowledged, the record of such altered deed would not furnish constructive notice to a subsequent
purchaser for value from the grantee, without actual knowledge or notice of the terms of the deed as altered.
COUNSEL: Waldo DeLoache, for plaintiffs in error.
Hoyt H. Whelchel, contra.
JUDGES: Hines, J. All the Justices concur, except Hill, J., dissenting. Motion for rehearing denied.
OPINION BY: HINES
OPINION
[*207] [**862] HINES, J. (After stating the foregoing facts.)
[HN1] "A deed to lands in this State must be in writing, signed by the maker, attested by at least two witnesses,
and delivered to the purchaser, or some one for him, and be made on a valuable or good consideration." Civil Code
(1910),§ 4179. Notwithstanding the provisions of this section, as between the parties a deed is valid though attested by
but one witness. Downs v. Yonge, 17 Ga. 295; Lowe v. Allen, 68 Ga. 225. So a deed without witnesses is legal and
binding between the parties thereto, and those claiming under them as mere volunteers. Johnson v. Jones, 87 Ga. 85
(2), 89 (13 S.E. 261); Munroe v. Baldwin, 145 Ga. 215 (88 S.E. 947). [HN2] The requirement of two witnesses [***9]
is to be taken to apply to a "perfect deed," which on recordation will be constructive notice to all the world. Gardner v.
Moore, 51 Ga. 268, 269. [HN3] "In order to authorize the record of a deed to realty or personalty, if executed in this
State, it must be attested by a judge of a court of record of this State, or a justice of the peace, or notary public, or clerk
of the superior court, in the country in which the three last-mentioned officers respectively hold their appointments; or if
subsequently to its execution the deed is acknowledged in the presence of either of the named officers, that fact,
certified on the deed by such officer, shall entitle it to be recorded. Civil Code (1910),§ 4202. If the deed is neither
attested by nor acknowledged before either of the officers aforesaid, it may be admitted to record upon probate [**863]
by one of its subscribing witnesses. Section 4205. So, [HN4] to admit a deed to record, it must be a perfect deed. It must
be attested by two witnesses. It must be attested or acknowledged, if executed in this State, as provided in section 4202,
or it must be probated as provided in section 4205. If a deed purporting to convey an absolute estate [***10] in fee to
the grantee is properly attested, and thereafter the maker before delivery inserts therein a provision limiting the estate of
the grantee to her life, and creating a remainder [*208] therein in favor of his children, such insertion being made out
of the presence and without the knowledge of the attesting witnesses, and the deed so altered is not thereafter attested or
its execution thereafter acknowledged, is the record of such altered deed constructive notice to a subsequent bona fide
purchaser for value from the grantee, without actual notice of the terms of the deed as altered? It is true that [HN5] in
those jurisdictions where attestation or acknowledgment is not made essential to the validity of a deed, until a deed is
delivered the grantor has full power and control over it, and he can make such alterations in it as he may see fit, for it is
not his deed until it is delivered. Complete execution of a deed is consummated only by final delivery. The mere signing
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1929 Ga. LEXIS 315, ***7; 67 A.L.R. 355
of the deed by the maker, and its attestation by witnesses, does not preclude changes in the instrument before delivery.
Wetherington v. Williams, 134 N.C. 276 (46 S.E. 728); Malarin v. U. S., 68 U.S. [***11] 282, 289 (17 L. Ed. 594); 2 C.
J. 1239 (§ 115), 3.
In this State, as we have seen, a deed to land as between the parties thereto is good without attestation or
acknowledgment by the grantor. In view of this principle, [HN6] the grantor in the deed involved in this case, as
between the parties thereto, could, after signing the same and after its attestation but before delivery, lawfully insert
therein the provision limiting the estate granted to his wife for life, and granting the remainder estate in the land
conveyed to his children. Whether, after delivery of a deed, the parties thereto may consent to a material alteration
therein, the authorities are in conflict. Some of the authorities hold that even after delivery the parties may consent to a
change and redelivery, the new delivery constituting a re-execution, even without a reacknowledgment. 2 C. J. 1240 (§
116), b; Baker v. Baker, 239 Ill. 82 (87 N.E. 868); Prettyman v. Goodrich, 23 Ill. 330; Abbott v. Abbott, 189 Ill. 488 (59
N.E. 958); Huffman v. Hatcher, 178 Ky. 8 (198 S.W. 236); Woodbury v. Allegheny, 72 F. 371; Walkley v. Clarke, 107
Iowa 451 (78 N.W. 70); Respess v. Jones, 102 N.C. 5 (8 S.E. 770); [***12] Doe v. Roe, 9 N.C. 33 (11 Am. D. 738);
Chezum v. McBride, 21 Wash. 558 (58 P. 1067); Goodwin v. Norton, 92 Me. 532 (43 A. 111); Eadie v. Chambers, 172
F. 73 (24 L. R. A. (N. S.) 879). In most of these cases redelivery of the deed as a new instrument was held requisite. By
the weight of outside authorities no alteration of a deed after it has once been [*209] delivered will have any effect
upon the grantee's title, whether the alteration be with or without the consent of the parties. Gulf &c. Co. v. O'Neal, 131
Ala. 117 (30 So. 466, 90 Am. St. R. 22); Burgess v. Blake, 128 Ala. 105 (28 So. 963, 86 Am. St. R. 78); Gibbs v. Potter,
166 Ind. 471 (77 N.E. 942, 9 Ann. Cas. 481); Stanley v. Epperson, 45 Tex. 644; Jackson v. Jacoby, 9 Cow. 125;
Alexander v. Hickox, 34 Mo. 496 (86 Am. D. 118); Hancock v. Dodd (Tenn.), 36 S.W. 742; Booker v. Stivender, 47 S.C.
L. 85, 13 Rich. 85; Hunt v. Nance, 122 Ky. 274 (92 S.W. 6); United States v. West, 63 U.S. 315, 22 HOW 315 (16 L. Ed.
317); Woods v. Hilderbrand, 46 Mo. 284 (2 Am. R. 513); Burnett v. McCluey, 78 Mo. 676; McLindon v. Winfree, 14
N.C. 262; Wheeler v. Single, 62 [***13] Wis. 380 (22 N.W. 569); Waldron v. Waller, 65 W. Va. 605 (64 S.E. 964, 32 L.
R. A. (N. S.) 284); Carr v. Frye, 225 Mass. 531 (114 N.E. 745, L. R. A. 1917E, 814). Under the rulings of this court that
a deed is good without any witnesses, perhaps any material alteration in a deed made with the consent of the parties
thereto, and the redelivery of the instrument, might operate to effectuate the changes so made in the instrument, and to
convey the property in accordance with such changes; but we deem it unnecessary in this case to decide that question.
We have shown that to entitle a deed to be recorded it must be executed in accordance with the requirements of section
4179 of the Civil Code. Among these requirements is the one that the instrument must be attested by two witnesses. We
have further seen that to authorize the record of a deed to realty it must be attested by one of the officers named in
section 4202 or must, subsequently to its execution, be acknowledged in the presence of either of said officers, or, if not
attested or acknowledged before either of said officers, it may be probated as provided in section 4205. The proper
registration of, a deed required by law to [***14] be recorded is conclusive notice of the conveyance to the world.
[HN7] "When a deed is well recorded, everybody must be presumed to know of the record, for certain purposes; but
when not well recorded, the presumption of ignorance holds, until actual knowledge or information of the record is
clearly proved." Gardner v. Granniss, 57 Ga. 539, 557. The registry of a deed not attested, or not proved or
acknowledged according to law, is not constructive notice to a subsequent purchaser. Herndon v. Kimball, 7 Ga. 432
(50 Am. D. 406); Coniff v. Hunnicutt, 157 Ga. 823 (122 S.E. 694).
[*210] The alteration made in the deed involved in this case was material. It reduced [**864] the absolute estate
in fee granted to the wife by the husband, as it originally stood, to a life-estate, and conveyed the remainder to the two
children of the grantor. Thus altered the deed became in effect a new instrument, and in this situation it could not be
admitted to record without reattestation or reacknowledgment by the grantor, although as originally attested it could be
properly admitted to record. [HN8] Material alterations made in a deed after due attestation or acknowledgment [***15]
necessitate a reattestation or acknowledgment, to entitle it to record. 1 C. J. 755 (§ 18), b; Harvey v. Crane, 11 Fed.
Cas. 6,178, 2 Biss. 496; Bryant v. Charleston Bank, 107 Tenn. 560 (64 S. W. 895, 897). [HN9] Where there has been a
material alteration in a deed, the deed to the extent of such alteration has become a new deed, and the alteration may be
of such character as entirely to change the original deed. In such a case, to give effect to the alteration, the deed should
be reattested and redelivered; and if it has been acknowledged before alteration, it should be again acknowledged.
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1929 Ga. LEXIS 315, ***10; 67 A.L.R. 355
Moelle v. Sherwood, 148 U.S. 21 (37 L. Ed. 350, 13 S. Ct. 426); Booker v. Stivender, 47 S.C. L. 85, 13 Rich. 85; Sharpe
v. Orme, 61 Ala. 263; Webb v. Mullins, 78 Ala. 111; Houston v. Jordan, 82 Tex. 352 (18 S.W. 702); 1 Devlin on Deeds
(3d ed.), § 462a. The altered deed in this case, being in effect a new deed, was not so attested or acknowledged as to
authorize its record; and this being true, its record would not afford notice to a subsequent purchaser from the grantee
for value, without actual notice of the altered instrument. Especially is this so where the remaindermen [***16] under
this deed were volunteers. It follows that the trial judge erred in directing a verdict in favor of the plaintiffs against the
defendants.
Judgment reversed. All the Justices concur, except
DISSENT BY: HILL
DISSENT
HILL, J., dissenting. I can not concur in the judgment of reversal. It appears from the record that on October 31,
1924, a paper was signed by J. W. Taylor, in the form of a warranty deed, purporting to convey to his wife, Mary
Taylor, who was a third wife, "forever in fee simple," described realty upon a cash consideration of $ 1,000. The paper
was duly attested by two witnesses, one of whom was an officer authorized to attest deeds. After the paper was thus
signed and attested, Taylor added thereto, out of the presence of attesting witnesses, a clause as follows: "At her death
[*211] this goes to my children Florence and Medford Taylor." After the paper was thus altered it was delivered by
Taylor to his wife and was recorded November 12, 1914. J. W. Taylor executed, on what purports to be the same day,
October 31, 1914, a warranty deed to his said wife, purporting to convey the same land upon a cash consideration of $
1,000. This deed was attested by two subscribing [***17] witnesses, one of whom purported to be a notary public and
ex-officio justice of the peace. The deed was recorded on November 24, 1917, over three years later. In 1922 Mrs.
Taylor exhibited the last-named deed to the Citizens Bank of Mountrie, and, on the strength of her apparent title in
virtue of such deed and possession of the land, obtained a loan, the bank having no actual notice of the deed first above
mentioned. The loan deed executed by Mrs. Taylor was subsequently foreclosed, and the bank became the purchaser at
the foreclosure sale. After the death of Mrs. Taylor, the two children designated in the first deed, who had lived with
Mrs. Taylor, their stepmother, on the land, and who remained in possession of the land, instituted an action to cancel the
second deed as a cloud upon their title, and to enjoin interference with their possession. On the trial the judge directed a
verdict for the plaintiffs, and the defendants assign error on the ground that this direction was contrary to law and
without evidence to support it. I am of the opinion that the exception is without merit under the facts of this case. The
first deed was, so far as the registration shows, perfectly regular [***18] on its face, as to execution and registration,
and was sufficient to put a subsequent purchaser under a deed purporting to be executed by the same vendor on the
same date, to the same property, but recorded nearly three years later, on notice of whatever interest the vendees (the
children) had therein. This case is different in its facts from the case of So. Iron Co. v. Voyles, 138 Ga. 258, 261 (75
S.E. 248, 41 L. R. A. (N. S.) 375, Ann. Cas. 1913D, 369), in that in the present case both witnesses who attested. the first
deed were qualified to attest deeds, including the official who witnessed it. In the Voyles case the instrument was
defectively attested, because the notary public was a stockholder in the corporation, and was therefore disqualified on
account of interest. from attesting as such notary the deed or bill of sale to which the corporation was a party. The
record in the present case is silent as to which of the two deeds was executed first. They purport to [*212] have been
executed on the same date. If they were executed simultaneously, the first deed recorded would take precedence over
the one recorded about three years later. Civil Code (1910), §§ [***19] 3320, 4198. Where two deeds between the
same parties, for a valuable consideration, are executed on the same date, conveying the same land, one recorded twelve
days after its execution, and the other not recorded until nearly three years after its execution, and the title conveyed in
each deed is conflicting, the first deed filed for record will prevail over the second. §§ 3320, 4198. Title once vested is
not divested or revested in the vendor by the mere destruction or change of the first deed, by agreement in parol
between the vendor and vendee. Marchant v. Young, 147 Ga. 37 (2) (92 S.E. 863); see 18 C. J. 406, § 473. Where a
deed is properly executed by a vendor to his third wife, conveying a fee-simple title, but before delivery of the deed the
vendor inserts therein a clause: "at her death [vendee] this goes to my children Florence and Medford Taylor," without
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1929 Ga. LEXIS 315, ***15; 67 A.L.R. 355
further attestation, and the deed is then delivered to the wife, who accepts the deed, goes into possession of the land, and
has the deed promptly recorded, this will create a life-estate in the wife, with remainder over to the children, and the
delivery of the deed to the life-tenant and possession of the [***20] land by her will enure to the benefit of the
remaindermen; and where such deed is duly recorded, and such registration shows the deed to be regular on its face,
such record is sufficient to put subsequent purchasers of the fee from the wife on notice of the remainder interest
vested in the children. I can not concur in the view of the majority that a deed must be "a perfect deed" in order to admit
it to record and put third parties on constructive notice of the interest of the vendee in the deed which is regular on its
face and properly recorded. The evidence shows that Mr. and Mrs. Taylor tried to sell this land to several persons before
selling it to the bank; and the parties declined to buy it, because they examined the recorded deed in the clerk's office,
and saw that Mrs. Taylor did not have a fee-simple title to the land. And neither Mr. nor Mrs. Taylor claimed that the
latter had a fee-simple title, but they said that "the children would not bother them" if they bought. If the bank had used
the same precaution, it would have discovered the same thing, viz., that Mrs. Taylor could not sell what she did not
possess--a fee simple title. The deed was perfectly [*213] good, [***21] recorded or unrecorded, as between Mr. and
Mrs. Taylor, and that deed as recorded gave Mrs. Taylor only a life-interest in the land, and the remainder to the
children, and, being regular on its face and properly recorded, was sufficient to put the world on notice as to who owned
the remainder interest in the land. The court properly directed a verdict for the plaintiffs.
ON MOTION FOR REHEARING.
HINES, J. In their motion for a rehearing the defendants in error insist that we overlooked the testimony of J. T.
Taylor, who testified that his father, his father's wife, and his father's children, Medford and Florence, were living on the
land involved in this litigation, under the deed by which said children claimed title to the land involved in this case, and
that we overlooked the principle of law contained in section 4528 Of the Civil Code of 1910, which is applicable under
the facts testified to by said witness. Said section declares in part that "Possession of land is notice of whatever right or
title the occupant has." It is insisted, as Medford and Florence were in possession of this land at the time their
stepmother executed her deed to this land to the bank, that their possession [***22] was notice to the bank of whatever
right or title they had in or to said land. In Goodwynne v. Bellerby, 116 Ga. 901 (43 S.E. 275), this court held that where
minor children resided with their father who was in possession of land to which he had the legal title, the children's
residence on the land was not sufficient to put a purchaser from the father upon notice or inquiry as to any secret
equity they might have therein. In Hall v. Hilley, 134 Ga. 77 (67 S.E. 428), it was held: "If an owner of land lived in the
house upon it, together with a man and his wife and child, under an agreement with the wife that if she would board him
and do his washing for the remainder of his life the property would belong to her for life, with remainder to her child,
presumptively the possession would be that of the owner of the legal title; and if there were no other evidence to rebut
such presumption or to show notice of any right or equity on the part of the woman and her child, the rule that
possession of land is notice of whatever right or title the occupant has would not apply unqualifiedly; and if a third
person purchased the land from the owner bona fide for value, and [***23] without notice, he would acquire a good
title." In Manning v. Manning, 135 Ga. 597 (69 S.E. 1126), it was held: "The possession [*214] or occupancy of land
which will be notice of the occupant's title must have some element in it indicative that the occupancy is exclusive in its
nature. Where, therefore, a daughter lives in the house with her mother, upon land the title to which is in the mother,
and where the mother receives the rents, issues, and profits of the land, a bona fide purchaser from the mother while in
possession of the land takes his title freed from any secret equity of the daughter." In Dix v. Wilkinson, 149 Ga. 103 (99
S.E. 437), this court held: "Possession of land is notice of whatever right or title the occupant has; but, in addition to
other essential elements of possession, it must be present, visible and open." In McDonald v. Dabney, 161 Ga. 711, 714
(132 S.E. 547), this court laid down these propositions: "The possession of land which will be notice of the occupant's
title must have some element in it indicative that the occupancy is exclusive in its nature. . . The protection which the
registration law gives to one taking [***24] title to lands upon the faith of the record title should not be destroyed
except upon clear and satisfactory evidence showing a clear equity in him who seeks to establish a right in hostility to
the record title. . . Such possession must be actual, open, visible, exclusive and unambiguous." By parity of reasoning,
where children lived with their stepmother to whom their father had conveyed the legal title, the possession of the
children under these circumstances alone was not notice to a purchaser bona fide from the stepmother of any claim
Page 120
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1929 Ga. LEXIS 315, ***19; 67 A.L.R. 355
[**865] or right of the children under the deed referred to in the second division of the opinion in this case.
Plaintiffs further insist that we overlooked certain facts which appear in the record. One of these facts is that these
plaintiffs in the 9th paragraph of their petition alleged that the defendants were claiming under the deed from their father
to their stepmother, attested by A. L. Mueller, as a notary public and ex-officio J.P., and that the defendants in answer to
this paragraph alleged that they were unable to admit or deny the allegations of said paragraph, for want of sufficient
information. Movants further insist that we overlooked [***25] the fact that there was in the record a certificate of the
secretary of State showing that Mueller was not in commission as a notary public and ex-officio J.P. on the date of the
deed from Taylor to his wife, which purported to be officially witnessed by him as a notary public and ex-officio J.P.
These [*215] facts go to invalidate the deed so witnessed; but conceding the invalidity of this deed, we think the bank
acquired a good title under the deed from Taylor to his wife, under which the plaintiffs claim title to this land. This deed
when prepared purported to convey to the wife an absolute estate in fee simple. It was duly attested. Before delivery the
maker inserted therein a provision that at the death of his wife the land should go to the plaintiffs. The deed with this
insertion in it was not afterwards attested or acknowledged by the maker before the witnesses thereto. When this deed
was duly recorded and delivered it was notice to the world that the husband had conveyed to the wife a fee-simple estate
in this land; but as it was not reattested by or acknowledged before the witnesses with this provision in it, it was not
effective to cut down the fee-simple estate conveyed [***26] to the wife into a life-estate with remainder to the
children, as against a bona fide purchaser from the wife, without any actual notice of this provision in the deed. Its
record, as we held, was not constructive notice of the title of the children. Without the provision in favor of the children
it was effective as a conveyance of the fee in the land to the wife; and while this provision in favor of the children was
good as between the parties, as the record did not furnish constructive notice to a subsequent purchaser for value from
the grantee of the provision in favor of the children, without actual notice or knowledge of the terms of the deed as
altered, this instrument did not create a remainder in favor of the children which was good against an innocent
purchaser. The deed as originally executed and attested being one conveying to the wife land in fee simple, it was
effective for that purpose when delivered by the husband to his wife. Not being reattested or acknowledged after the
grantor inserted therein the provision in favor of his two children, its record was not constructive notice of such
provision, and this provision would not have the effect of cutting down the estate [***27] in fee simple, conveyed by
the deed to the wife before the insertion of this provision (although it was inserted before delivery), as against one who
in good faith advanced money to the wife and took her deed to this land to secure the same without actual notice of the
change in this deed by the grantor. The deed as executed and attested was good to put the title to the land in the wife in
fee simple when delivered. Not being reattested or acknowledged by the maker after the insertion of [*216] this
provision, it was not constructive notice to a bona fide purchaser, of the provision in favor of the children, and as to
such purchaser was it not effective to cut down the fee-simple estate in the land conveyed by the wife to the bank to an
estate in the wife for life, with remainder to the children. We see no reason to change our ruling to this effect. The other
grounds of the motion for rehearing are without merit; and the motion is denied.
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1929 Ga. LEXIS 315, ***24; 67 A.L.R. 355
47 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
CITIZENS AND SOUTHERN BANK v. REALTY SAVINGS AND TRUST
COMPANY et al.; et vice versa. PERKINS MANUFACTURING COMPANY v.
REALTY SAVINGS AND TRUST COMPANY et al.
Nos. 6219, 6225, 6227.
SUPREME COURT OF GEORGIA
167 Ga. 170; 144 S.E. 893; 1928 Ga. LEXIS 120
September 26, 1928, Decided
PRIOR HISTORY: [***1] Equitable petition. Before Judge Franklin. Richmond superior court. August 3, 1927.
DISPOSITION: Judgment affirmed on both main bills of exceptions and reversed on cross-bill of exceptions.
CASE SUMMARY:
PROCEDURAL POSTURE: In an equitable petition before the Richmond Superior Court (Georgia), concerning lien
priority of certain realty, a bank and a manufacturer challenged the trial court's finding that a trust company had first
priority in a security deed on the land.
OVERVIEW: A vendor conveyed realty to a lender as loan security. The vendor sold the land to a vendee in exchange
for assumption of the debt and promissory notes. The vendor indorsed the notes and delivered them with the sale
contract, to the bank as collateral security. The vendor then executed security deeds with the trust company in exchange
for a loan to pay the original lender. The vendor and vendee became insolvent, and the case was brought to determine
priority. The trial court held, upon an auditor's finding, that first priority was in the trust company, followed by a lienor,
whose loan was marked as subordinate, the bank, and the manufacturer. The court affirmed, holding that because the
vendor retained an equitable interest upon the original loan, he could sell the land, subject to the debt. The vendor's
transfer of the notes and contract of sale to the bank with his indorsement in blank did not affect the trust company, as
grantee, which purchased without notice of the transfer to the bank, as the vendee was in actual possession of the land,
the vendor promised the trust company first security, and the trust company performed due diligence in inquiring who
owned the property.
Page 122
OUTCOME: The court affirmed the main bill of exceptions.
CORE TERMS: deed, auditor, notice, recorded, contract of sale, executory, purchaser, purchase-money, pre-existing,
conveyance, equitable, realty, transferee, authorize, conveyed, delivery, holder, rank, cross-bill, diligence, buy,
subsequent purchasers, equitable interest, indorsement in blank, good faith, holds possession, possessor, assigned,
grantee, vendor
LexisNexis(R) Headnotes
Contracts Law > Types of Contracts > Executory Contracts
Real Property Law > Financing > Mortgages & Other Security Instruments > Definitions & Interpretation
Real Property Law > Financing > Mortgages & Other Security Instruments > Satisfaction & Termination > General
Overview
[HN1] A deed to land, executed to secure a debt under the provisions of Ga. Civ. Code § 3306 will vest legal title to the
land in the grantee and his assigns, subject to be defeated by payment of the debt. The grantor in such a deed retains
the right of possession and the right of redemption by payment of the debt, and consequently an equitable estate in the
land which may be assigned or subjected to payment of his debts.
Contracts Law > Negotiable Instruments > Enforcement > Duties & Liabilities of Parties > Types of Parties >
Assignees & Assignors
Contracts Law > Negotiable Instruments > Negotiation > Indorsement > Blank Indorsements
Contracts Law > Third Parties > Beneficiaries > Claims & Enforcement
[HN2] As a general rule, where secured purchase-money notes are transferred by indorsement in blank and delivery to a
third person, the transfer will carry the security or such equitable interest therein as will authorize an action by the
transferee to subject property to which the security attaches to payment of the notes.
Real Property Law > Financing > Mortgages & Other Security Instruments > Definitions & Interpretation
[HN3] Ga. Civ. Code § 3306 (1910) contains statutory provision for making deeds to secure debt.
Real Property Law > Nonmortgage Liens > Lien Priorities
Real Property Law > Priorities & Recording > General Overview
[HN4] See Ga. Civ. Code § 3307 (1910).
Civil Procedure > Equity > General Overview
Civil Procedure > Judicial Officers > Magistrates > Trial by Consent & Appeal
[HN5] Where in an equitable proceeding the evidence, though conflicting, is sufficient to sustain a finding of fact by the
auditor to whom the case has been referred, it is not an abuse of discretion by the court to refuse to approve an
exception of fact and overrule an exception of law to the finding.
Real Property Law > Adverse Possession > Procedure
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN6] Adverse possession of land is notice of whatever facts in reference to the title would be developed by inquiry of
a person in possession, the presumption being that inquiry of him will disclose how and under what right he holds
possession, and therefore lead to the discovery of the real adverse holder, whether himself or another for or under whom
he holds possession; and in the absence of such inquiry, the presumption is that had it been made, the right, title, or
Page 123
167 Ga. 170, *; 144 S.E. 893, **;
1928 Ga. LEXIS 120, ***1
interest under which the possessor held would have been discovered. The effect of possession is to put a prospective
purchaser upon inquiry; and if it can be shown that he made such inquiry and followed it up in good faith, and was
informed that the title was in another, from whom he purchased, the presumption arising from possession will be
overcome.
Real Property Law > Financing > Installment Land Sale Contracts
Real Property Law > Title Quality > Marketable Title > General Overview
Real Property Law > Title Quality > Title Bonds
[HN7] A purchaser from a vendor of land whose vendee is in possession under a bond for title is charged with notice of
every fact which "due inquiry" would bring to his knowledge.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
Real Property Law > Title Quality > Marketable Title > General Overview
[HN8] Possession of land is not conclusive upon the purchaser as to the rights of the possessor or those under whom he
claims. The effect of it is to put him upon inquiry; and when it is shown that prior to the purchase from the holder of
the record title he followed up the inquiry in good faith, and received no information which would impeach the apparent
rights of the holder of the record title, the presumption arising from possession by another will be overcome.
SYLLABUS
Under the principles stated and applied in the opinion of this court, the trial judge did not err in sustaining the
findings of the auditor, and in the decree setting up the priorities of the several parties.
COUNSEL: Paul T. Chance, for Citizens and Southern Bank.
William K. Miller, for Perkins Manufacturing Company.
Hamilton Phinizy, James B. Mulherin, William H. Fleming. and Sam F. Garlington, contra.
JUDGES: Atkinson, J. All the Justices concur, except Gilbert, J., disqualified.
OPINION BY: ATKINSON
OPINION
[*170] [**894] ATKINSON, J. Claude T. Burnett conveyed certain realty to Mrs. Henrietta Sancken as security
for a loan. Subsequently he executed an executory contract of sale of the same realty to H. C. Bryson Jr., the
consideration of which was a small payment in cash, assumption of the Sancken debt, and Bryson's promissory notes for
the balance of the purchase-price. The contract provided also that if Bryson should fail to pay taxes and insurance on the
property, Burnett should pay them and the [***2] amount thereof should become a part of the principal debt, and when
the whole [*171] debt should be paid "down to" the amount of the Sancken debt Burnett should execute a deed for the
land if Bryson should so desire. After this transaction Burnett executed security deeds for the same land, which in time
of execution and recording were in the following order: first to the Realty Savings & Trust Company, second to the
Augusta Lumber Company, and third to the Perkins Manufacturing Company. The Augusta Lumber Company deed was
to secure a pre-existing debt, and stated that it was subject to "a $ 4000.00 loan" [the Trust Company debt?]; but with
this exception none of them mentioned the others or the Sancken deed or the Bryson contract. Prior to execution of the
above deeds to the Trust Company, the Lumber Company, and the Perkins Company, Burnett indorsed in blank the
purchase-money notes received from Bryson, and delivered them, with his duplicate of the sale contract with Bryson, to
the Citizens and Southern Bank as collateral security for his pre-existing debts and debts for future loans that were
subsequently made to him. There was no written transfer of the sale contract, nor [***3] was the contract recorded at
Page 124
167 Ga. 170, *; 144 S.E. 893, **;
1928 Ga. LEXIS 120, ***1
the time of its delivery to the bank. The contract was [**895] not recorded at the time the three above-mentioned
subsequent security deeds were executed but was held by the bank, and after the last of them was recorded it was
recorded. The money loaned Burnett by the Trust Company was used to pay Mrs. Sancken's debt, and the Sancken deed
was canceled of record. Burnett became insolvent and absconded, and Bryson was insolvent. In an equitable suit for
receiver and adjustment of priorities, the realty was sold at receiver's sale and a fund produced for distribution, not quite
sufficient to pay the Trust Company debt but more than sufficient to pay severally the debts to the Lumber Company or
to the Bank or to Perkins. The controlling questions are as to the right of priority as between the parties last mentioned;
the auditor to whom the case was referred having found priorities first in favor of the Trust Company, and in favor of
the other parties in the order above named.
[HN1] A deed to land, executed to secure a debt under the provisions of the Civil Code, § 3306, will vest legal title
to the land in the grantee and his assigns, subject to be defeated [***4] by payment of the debt. The grantor in such a
deed retains the right of possession and the right of redemption by payment of the debt, and [*172] consequently an
equitable estate in the land which may be assigned or subjected to payment of his debts. Citizens' Bank of Moultrie v.
Taylor, 155 Ga. 416 (117 S.E. 247). Applying the above principle, Burnett, as maker of the security deed to Sancken,
retained an equitable interest in the land upon which his subsequent executory contract of sale to Bryson operated.
[HN2] As a general rule, where secured purchase-money notes are transferred by indorsement in blank and delivery
to a third person, the transfer will carry the security or such equitable interest therein as will authorize an action by the
transferee to subject property to which the security attaches to payment of the notes. Carter v. Johnson, 156 Ga. 207,
119 S.E. 22 (5, 6) (119 S.E. 22); Cross v. Citizens' Bank & Trust Co., 160 Ga. 647 (8) (128 S.E. 898). Under application
of the principle just stated, the Citizens and Southern Bank, in virtue of the indorsement of the purchase-money notes
and their delivery with the executory contract of sale [***5] between Bryson and Burnett, became transferee of the
notes and equitable successor of Burnett relatively to his interest in the land.
The Civil Code (1910), § 3306, [HN3] contains statutory provision for making deeds to secure debt, and § 3307
contains the provisions: [HN4] "Every such deed shall be recorded in the county where the land conveyed lies. . . Such
deeds . . not recorded remain valid against the persons executing them, but are postponed to all liens created or
obtained, or purchases made, prior to the actual record of the deed. . . If, however, the younger lien is created by
contract, and the party receiving it has notice of the prior unrecorded deed, . . or if the purchaser has the like notice, then
the title conveyed by the older deed . . shall be held good against them." See also Cross v. Citizens Bank and Trust Co.,
supra; Randall v. Hamilton, 156 Ga. 661 (119 S.E. 595, 32 A. L. R. 342).
(a) Under the above rule, the executory contract of purchase by Bryson from Burnett would not affect the rights of
subsequent purchasers for value from Burnett, without notice thereof, who received deeds from Burnett and duly
recorded them prior to record of the contract [***6] with Bryson, but would affect such purchasers if they had notice of
the executory contract.
(b) Burnett's transfer of the notes to the Bank and transfer of the contract of sale by delivering the notes with his
indorsement [*173] in blank thereon, and delivering the contract of sale without any written transfer thereof, would not
affect a subsequent grantee of the land from Burnett, who purchased without notice of the transfer to the Bank, although
he had notice of the executory contract of sale.
[HN5] Where in an equitable proceeding the evidence, though conflicting, is sufficient to sustain a finding of fact
by the auditor to whom the case has been referred, it is not an abuse of discretion by the court to refuse to approve an
exception of fact and overrule an exception of law to the finding. Faucett v. Rogers, 152 Ga. 168 (108 S.E. 798);
Peyton v. McMillan, 145 Ga. 179 (7) (88 S.E. 937); Mayor &c. of Gainesville v. Jaudon, 145 Ga. 299 (3) (89 S.E. 210).
[HN6] "Adverse possession of land is notice of whatever facts in reference to the title would be developed by
inquiry of the person in possession, the presumption being that inquiry of him will [***7] disclose how and under
what right he holds possession, and therefore lead to the discovery of the real adverse holder, whether himself or
Page 125
167 Ga. 170, *171; 144 S.E. 893, **894;
1928 Ga. LEXIS 120, ***3
another for or under whom he holds possession; and in the absence of such inquiry, the presumption is that had it been
made, the right, title, or interest under which the possessor held would have been discovered. . . The effect of
possession is to put a prospective purchaser upon inquiry; and if it can be shown that he made such inquiry and
followed it up in good faith, and was informed that the title was in another, from whom he purchased, the presumption
arising from possession will be overcome." Austin v. Southern Home Building &c. Asso., 122 Ga. 439 (50 S.E. 382).
(a) The foregoing principle was applied in Georgia State Building &c. Asso. v. Faison, 114 Ga. 655, 659 (40 S.E.
760), where it was held that [HN7] a purchaser from a vendor of land whose vendee is in possession under a bond for
title is charged with notice of every fact [**896] which "due inquiry" would bring to his knowledge.
(b) In Austin v. Southern Home B. & L. Asso., supra, there was a discussion in the opinion as to what would amount
to [***8] due inquiry. It was there said that while the company "did not in terms address the inquiry to Austin, 'Are you
the owner of this property?' it did what was equivalent thereto, and received what was in effect a response that he was
the owner. He came to it and [*174] represented that the record title was in him. He in effect asserted by his
application for a loan that he was the owner, and under such circumstances it was not necessary, in order to make
complete the inquiry which the law required, that there should be a direct interrogatory addressed to him, 'Are you in
reality the owner of this property?' His conduct was such as to indicate that specific inquiry would have brought no
other response than that given in effect by his application for a loan, based upon assertions by him that he was the true
owner of the property. [HN8] Possession of land is not conclusive upon the purchaser as to the rights of the possessor or
those under whom he claims. The effect of it is to put him upon inquiry; and when it is shown that prior to the
purchase from the holder of the record title he followed up the inquiry in good faith, and received no information
which would impeach the apparent rights [***9] of the holder of the record title, the presumption arising from
possession by another will be overcome." See also Dix v. Wilkinson, 149 Ga. 103, 106 (99 S.E. 437).
In this case the auditor's finding of fact shows that at the time of the loan by the Trust Company to Burnett, Bryson
was in actual possession of the land; that there was a written application for a loan of $ 6,500, signed "H. C. Bryson Jr.,
by C. T. Burnett;" that the application was delivered to the company by Burnett, and was approved for $ 4,000; that in
discussing the application for the loan the agent of the company asked Burnett "what Bryson had to do with the
property," and, upon being told that Bryson was going to buy it, requested that Bryson be brought to see him; that
several days later Burnett and Bryson went to the office of the company, and Bryson stated to the agent of the company
"that he was going to buy the property, and that the proposed loan was agreeable to him," and that the purpose of the
loan was to pay off the Sancken debt; and it was agreed by Burnett that the Trust Company was to have first security on
the property; that on examination of the title to the property by the attorney [***10] for the company he found that the
record title was in Burnett, with the exception of the Sancken deed; that when the attorney saw that the application was
signed as indicated above, he sent for Burnett and was assured that Bryson had no present interest in the property; that
Bryson was his tenant, and was contemplating purchasing the property. In the auditor's findings of law it was stated
[*175] that when the agent "sent for Bryson and Bryson told him 'he was going to buy the property,' this was all that he
could do. The law says that he had notice of Bryson's rights, and when Bryson explains his possession by stating why
he was there, no further inquiry was necessary; and consequently the Trust Company exercised due diligence and
complied with all requirements of law. . . As the Trust Company loaned $ 4,000.00 on the property and as its deed is the
prior deed on record, it is legally entitled to be paid first." The evidence brought up in the record shows a conflict of
evidence upon the question of diligence; but notwithstanding the conflict, the evidence stated by the auditor in his report
as to the statements of Bryson was sufficient, under the principles stated in division [***11] 5(b) of this opinion
relating to due diligence, to authorize the finding of the auditor as to the priority of the Trust Company.
The auditor also found that the deed to the Lumber Company was given as security for a pre-existing debt, but that
such deed was executed and recorded prior to the date of the deed to the Perkins Company, and that Bryson was not in
possession at the time of such conveyances, and consequently was entitled to rank second in priority; holding that the
case does not fall within the principle of Hubert v. Merchants' Bank, 137 Ga. 70 (72 S.E. 505), relating to the rights of a
subsequent purchaser based on a pre-existing debt as against creditors of the vendor. There was no error in this ruling.
Page 126
167 Ga. 170, *173; 144 S.E. 893, **895;
1928 Ga. LEXIS 120, ***7
The auditor also found as a matter of fact that Bryson was in possession of the land at the time of the conveyance
by Burnett to the Perkins Company, and upon such finding held as a matter of law that such possession was notice to
the Perkins Company of Bryson's interest in the land, and that the Bank as transferee of the purchase-money notes
executed by Bryson to Burnett was entitled to third rank in priority. There was no evidence that amounted to an [***12]
inquiry by Perkins Company concerning Bryson's possession of the land, but the evidence was sufficient to authorize
the finding by the auditor that Bryson was in possession of the land at the time of such subsequent conveyance. Under
the principles set forth in the preceding divisions of this opinion, the auditor was authorized to find that the Bank was
entitled to third rank in priority.
[*176] Upon principles already stated, the evidence was sufficient to support the auditor's findings of fact relating
to the claim of the Perkins Company, and on the basis thereof fixing the priority of the Perkins Company as ranking in
the fourth place.
The trial judge on demurrer struck so much of the answer of the Trust Company in the nature of a cross-petition as
sought the preference based on its deed from Burnett. Exceptions pendente lite to that judgment [**897] were filed,
and error was assigned thereon in the cross-bill of exceptions. Notwithstanding the ruling of the court on demurrer, the
auditor found priority for the Trust Company based on the deed, and the final decree entered by the judge sustained the
ruling of the auditor. Under the principles hereinabove stated, it was [***13] erroneous to strike the portion of the
cross-petition as complained of in the cross-bill of exceptions; but, the defendant having preserved its rights and
procured a reversal of that ruling, the final judgment will not be reversed, because on the further trial of the case the
conveyance was set up and sustained as a basis for the priority as declared in the final judgment.
The foregoing divisions relate to the controlling questions in the case, and the trial judge did not err in sustaining
the findings of the auditor, and in entering a final decree setting up the priorities of the several parties as indicated
above.
Judgment affirmed on both main bills of exceptions, and reversed on, the cross-bill of exceptions. All the Justices
concur, except Gilbert, J., disqualified.
Page 127
167 Ga. 170, *175; 144 S.E. 893, **896;
1928 Ga. LEXIS 120, ***11
50 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
SIKES v. SECKINGER.
No. 5526.
SUPREME COURT OF GEORGIA
164 Ga. 96; 137 S.E. 833; 1927 Ga. LEXIS 133
April 15, 1927, Decided
PRIOR HISTORY: [***1] Complaint for land. Before Judge Sheppard. Tattnall superior court. May 3, 1926.
Mrs. Sidney M. Sikes, on March 30, 1925, brought her complaint against J. B. Seckinger, for the recovery of a
described tract of land and mesne profits. In her petition she alleges that she attaches thereto "an abstract of her title on
which she relies for a recovery." This abstract refers only to a deed from Victoria E. Sikes to the plaintiff, dated August
30, 1900, and sets up actual possession of the premises in dispute by the plaintiff under said deed since its date. In his
answer the defendant denied that the plaintiff had title to the land, and her possession thereof. He alleged that he had
title thereto. On the trial the plaintiff introduced the deed to herself from her mother-in-law, Victoria E. Sikes, above
referred to, which was witnessed by her husband, J. P. R. Sikes, and by two other witnesses, one of whom was a notary
public. The husband signed under the attestation clause, and beneath the signatures of the said two attesting witnesses.
This deed recites a consideration of $ 5 and love and affection for the grantee. It was recorded on June 21, 1901. It
embraces the premises in dispute. [***2] Plaintiff introduced oral testimony tending to establish the following facts:
She and J. P. R. Sikes were married on July 4, 1896. On the following Wednesday, Victoria E. Sikes, the mother of J. P.
R. Sikes, and the plaintiff visited Fletcher Sikes. On their return Victoria E. Sikes said to plaintiff "Let's go by; I want to
show you your home." The husband of plaintiff was not with them. They went by the premises in dispute and Victoria
Sikes showed the plaintiff the lines around the premises and said to her, "This is your home, and I am going to give it to
you, and I am going to make the deeds to you, and I want you to take care of it and raise the children on it." Mrs. Sikes
did not then make a deed to the plaintiff. Afterwards she said to the plaintiff, "I am going to make the deed," and the
husband said, "Mother, make it to me." Thereupon she executed the deed to the husband on March 13, 1900, and turned
it over to the plaintiff, who accepted and kept it for him. On August 30, 1900, the mother, with the approval of the
husband, made to the plaintiff the deed under which she claims the premises in dispute. The husband then told the wife
to burn the deed which his mother had made [***3] to him.
Plaintiff and her husband, under the above promise of his mother to the plaintiff, moved on these premises in
Page 128
January, 1897. Before they did so the husband had the frame of the dwelling-house up and one room finished. They
finished the dwelling after they moved in. They put upon the premises, before March 13, 1900, permanent and valuable
improvements. The character and cost of these improvements are set out in the testimony of plaintiff. These
improvements were put upon the place by the husband and those working for him, and from the proceeds of crops
grown on the place. Plaintiff and her husband made these crops. She helped her husband in clearing the land. Plaintiff
supervised the work of making the improvements on the land. The workers who helped her husband in making these
improvements were paid out of the proceeds of the crops grown on the place. Plaintiff paid Victoria E. Sikes the $ 5
mentioned as a part of the consideration in the deed under which plaintiff claims title to these premises. Before the
husband received his deed, some of the improvements had been put upon this land. Some were made after he received
his deed from his mother, and some were made after [***4] the plaintiff got her deed to the premises. In 1907 plaintiff
borrowed from the John Hancock Life Insurance Company $ 1250, and secured its payment by a deed to this land. In
1912 executions against the husband were levied on this land. The wife filed a claim thereto. On the trial she withdrew
this claim. This land was afterwards sold by the sheriff as the husband's property, on the first Tuesday in 1917, to Mike
Edwards. It does not appear whether the land was sold under the executions against the husband, which were levied in
1912. Thereafter, on January 6, 1917, the wife made to Edwards a quitclaim deed to this land. She and her husband
continued in possession of the land from 1917 to January, 1923, when she rented the same to Pharicy Jenkins. She
testified that she made this quitclaim deed to Edwards for the purpose of enabling him to pay the debts of her husband.
Edwards then made a deed to Lucius Sikes, her husband's brother, and Lucius Sikes made a deed to the husband, who
afterwards procured a loan thereon. The plaintiff did not know of these transactions until after they had been completed.
The husband, on October 23, 1923, conveyed the premises to the defendant. None [***5] of these deeds were
introduced in evidence, but the plaintiff testified to the making of them. The plaintiff and her husband lived on these
premises from January, 1897, until 1924, with the exception of two or three years, when they lived in Glennville. She
was living on this land at the time of the sheriff's sale to Edwards, and when the latter sold to L. G. Sikes. Plaintiff
rented this land to Pharicy Jenkins for the year 1923. The defendant rented it to Jim Futch for the year 1924. Futch
wanted to get possession of this land before January 1, 1924, and in November or December paid Pharicy Jenkins five
or ten dollars to surrender possession to him, which was done. Plaintiff testified that she did not know that her husband
was going to sell this place to the defendant. Her husband, on April 25, 1924, and some time before his death, told her
that he had sold it to the defendant. It was in either November or December, 1923, that Jim Futch had gone on the place.
The defendant paid to the husband on the purchase-money of this place $ 600 cash, gave four notes of $ 600 each, and
assumed a debt on the place of $ 2000. When the husband died one of these notes was found in his trunk, and [***6]
the plaintiff took possession of it. Before bringing suit the plaintiff offered to give this note back to the defendant. This
note was dated February 7, 1923, and was due August 15, 1926. It is signed by C. R. Sikes, payable to the order of J. P.
R. Sikes, and indorsed by the defendant. The plaintiff has seen the other notes in her husband's possession. She never
received any of the purchase-money paid by the defendant to her husband for this land. At the time the mother made the
deed to this land to her son she said she wanted to make it to the plaintiff. The value of the land for mesne profits was
shown. S. J. Kicklighter, in behalf of the defendant, testified that he had leased from the husband of the plaintiff, in the
fall of 1922, the turpentine boxes on the land in dispute, for four years, but the husband of plaintiff was living on the
place at the time, and the plaintiff raised no objection to this transaction.
The court directed a verdict for the defendant. The plaintiff made a motion for new trial upon the general grounds.
By an amendment to her motion she added two grounds. In the first of these she complains that the court erred in
refusing to allow her to testify that [***7] she made a quitclaim deed to Mike Edwards, to enable him to dispose of the
property to pay her husband's debts, and that Edwards was to make her back a bond for title to that portion of it
constituting the land now in dispute; that Edwards said he did not have a blank bond, that he was in a hurry to go, and
promised to send her the bond for title but never did, that he would stand between plaintiff and all trouble, as he knew it
would not take but just a part of the land to pay off the debts, "said that if I would trust him to attend to it he would give
me his bond for title and that as quick as he got the debts paid off he would make the deed back to me, but he did not do
it;" and that she still stayed in possession of it. Counsel for the defendant objected to this testimony on the ground that it
was engrafting on the deed an oral condition which would not bind a bona fide purchaser. The court sustained the
Page 129
164 Ga. 96, *; 137 S.E. 833, **;
1927 Ga. LEXIS 133, ***3
objection and rejected this testimony. In the second special ground the plaintiff sets up the material facts in her proof
upon which she based her right to recover in this case, and alleges that at the conclusion of the evidence counsel for the
defendant moved the court to direct [***8] a verdict for the defendant under the pleadings and evidence, which the
court did, and thereupon entered up judgment against the plaintiff. To this ruling of the court in directing a verdict for
the defendant and entering up judgment against the plaintiff on such verdict, the plaintiff excepts, and says that the court
erred in directing said verdict and entering up said judgment thereon, as the same is against the evidence and is without
law or evidence to sustain the same, but on the contrary plaintiff contends that a verdict, if directed at all, should have
been directed in her favor and against the defendant. Upon this ruling she assigns error. The court overruled the motion
for new trial, and the plaintiff excepted.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff property claimant sought review of a judgment of the Tattnall Superior Court
(Georgia), which directed a verdict for defendant property claimant and denied plaintiff's motion for a new trial in
plaintiff's action to recover a tract of land.
OVERVIEW: Plaintiff filed an action against defendant to recover a tract of land that she contended was deeded to her
by her husband's mother. Plaintiff alleged that the mother-in-law had made a deed for the property to plaintiff and a
previous deed from the mother-in-law to the husband had been destroyed. Defendant claimed the land as a purchaser
from plaintiff's husband. The trial court entered a directed verdict in favor of defendant and denied plaintiff's motion for
a new trial. On appeal, the court reversed the trial court's judgment. The court held that the evidence that the wife
introduced that showed that her mother-in-law had deeded the land to her with the knowledge of the donor and that
plaintiff had made improvements upon the land. The court also found that if the mother-in-law to plaintiff was
ineffectual to convey the title to the husband, the husband was estopped in denying the title to wife under the deed from
the mother-in-law. The court also held that the trial court erred in rejecting evidence offered by plaintiff to prove that a
quit claim deed that was made by her to a grantee was made for the purpose of paying her husband's debts.
OUTCOME: The court reversed the trial court's grant of a directed verdict in favor of defendant.
CORE TERMS: deed, gift, perfect, donor, valuable improvements, purchaser, estopped, conveyed, vendee, convey,
donee, mother-in-law, conveyance, ejectment, parol gift, notice, vendor, sheriff's sale, quitclaim deed, asserting,
acquires, grantee, action of ejectment, purchase-money, afterwards, recorded, daughter-in-law, disclaimer, specific
performance, attesting witnesses
LexisNexis(R) Headnotes
Real Property Law > Ownership & Transfer > Equitable Interests
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
[HN1] A donee of land under a parol gift based upon a meritorious consideration, who, with the consent of the donor,
enters into possession and makes valuable improvements upon the faith of the gift, acquires a perfect equity as against
the donor, his heirs and those claiming under him with notice. In such circumstances the donee can defend an action of
ejectment by proof of such perfect equity.
Commercial Law (UCC) > Secured Transactions (Article 9) > Perfection > Methods > Possession
Page 130
164 Ga. 96, *; 137 S.E. 833, **;
1927 Ga. LEXIS 133, ***7
Real Property Law > Ownership & Transfer > Equitable Interests
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
[HN2] The purchase of land, full payment of the purchase-money, and possession, create a perfect equity, which is good
against the vendor, his heirs and those claiming under him with notice, is equivalent to legal title, and will support an
action of ejectment by the purchaser.
Real Property Law > Ownership & Transfer > Equitable Interests
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
[HN3] A perfect equity is, in Georgia, a good title even at law; it is a title sufficient to support or defeat ejectment.
Real Property Law > Ownership & Transfer > Equitable Interests
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN4] Where a vendor, having no title to land, sells the same to another, with warranty, but afterwards acquires the
title, such title inures to the benefit of the vendee and vests in him complete title the moment the vendor acquires it.
Real Property Law > Ownership & Transfer > Equitable Interests
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
[HN5] Prior possession of land under a claim of ownership is prima facie evidence of title in the occupant, upon which
he may recover in ejectment, unless a defendant shows a better adverse title, by possession or otherwise. Such claim of
ownership, if bona fide, may be supported by proof of a parol gift from another and entry thereunder even where such
entry was not made until after the donor's death, and although it does not affirmatively appear that the donor had ever
been in possession of, or had title to, the property. Such a gift would not pass title to the donee, but it could nevertheless
be made the basis of an honest possession by the latter, accompanied by a bona fide claim of right, which could in time
ripen into a perfect title.
Real Property Law > Ownership & Transfer > Equitable Interests
[HN6] A complete equity arises out of payment of purchase-money and the like, out of a consideration beneficial to the
former owner, to him who parts with title, not to him who acquires it. It looks to what has been done for another, not to
what one has done for himself by inducement of another.
Civil Procedure > Equity > General Overview
Contracts Law > Remedies > Specific Performance
Real Property Law > Deeds > Remedies > Specific Performance
[HN7] Parties can voluntarily do what equity will compel them to do; and equity will not force parties to litigate in
order to have done what they ought to do, when they have already performed. Ga. Civil Code § 4532 (1910).
Family Law > Marital Duties & Rights > Property Rights > General Overview
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN8] If improvements are in fact made by a husband, but for a wife, they would stand upon the same footing as if
made by the wife.
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN9] A party and his privies in estate may be estopped from denying the title of a vendee under a conveyance which
of itself would be ineffectual to pass the title of the party estopped. Where one attests a deed with full knowledge of its
contents, he is estopped from asserting against the grantee therein an interest based upon any right then outstanding in
himself.
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Real Property Law > Deeds > Remedies > Cancellation & Rescission
Real Property Law > Estates > General Overview
Real Property Law > Purchase & Sale > Contracts of Sale > General Overview
[HN10] A grantor can not convey any greater title or estate than he has. If one having the title to land sells and conveys
the same by deed to another, he can not thereafter by his deed convey to a subsequent purchaser any title thereto. The
mere surrender or cancellation of a deed will not divest the title to land which has once been conveyed and vested by
transmutation of possession.
Family Law > Marital Duties & Rights > Property Rights > General Overview
Real Property Law > Deeds > Types > Quit Claim Deeds
[HN11] A wife can not sell her land in extinguishment of her husband's debts, whether the conveyance be made directly
to a creditor, or to a third person for the purpose of selling her land and applying the proceeds to the extinguishment of
the debts of her husband. Ga. Civil Code §§ 2993, 3007 (1910).
Real Property Law > Estates > General Overview
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN12] Possession of land is notice of whatever right or title the occupant has. Ga. Civil Code § 4528 (1910).
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN13] Possession of land may be held by a tenant. If actual possession of this land was held by a tenant, at the time a
defendant purchased, if no inquiry was made, the presumption is that inquiry would have developed under what
right, title, or interest the possessor held.
SYLLABUS
A donee of land under a parol gift, based upon a meritorious consideration, who, with the consent of the donor,
enters into possession and makes valuable improvements upon the faith of the gift, acquires a perfect equity as against
the donor, his heirs, and those claiming under him with notice.
(a) Such perfect equity in the donee, with a subsequent deed from the donor to the donee, will support an action of
ejectment.
(b [***9] ) Where the donee was the daughter-in-law of the donor, and where, after the gift had become complete
by her entry into possession and the making of valuable improvements upon the land upon the faith of the gift, the
mother-in-law, before making a deed to the daughter-in-law, conveyed the land to her son, who was the husband of the
donee, the daughter-in-law could have maintained an equitable petition for specific performance against the
mother-in-law, and to have the deed made by the mother-in-law to the son cancelled, the son taking his deed with
knowledge of the prior gift of his mother to his wife.
(c) Parties can voluntarily do what equity will compel them to do; and equity will not entertain a bill for specific
performance when the parties have already performed what they ought to have done.
(d) Upon proof of the gift of this land by the donor to the donee, possession thereof by the donee with the consent
of the donor, and the making thereon of valuable improvements upon the faith of the gift, was proper to establish in the
plaintiff a perfect equity and to account for the subsequent execution of a deed by the donor to the donee to effectuate
such gift.
Upon [***10] proof of the gift of this land by the mother-in-law to the daughter-in-law, possession thereof by the
donee with the consent of the donor, the erection thereon of valuable improvements by the donee, and the subsequent
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1927 Ga. LEXIS 133, ***8
execution of a deed by the donor to the donee, which was made With the consent and at the request of the donee's
husband, the donee acquired a legal title to the land.
(a) Where the husband of the donee, who was the son of the donor, after receiving his deed from the donor,
requested the latter to execute a deed to his wife, which was attested by two witnesses, one of whom was a notary
public, and where the husband signed the attestation clause of the deed under the signatures of the attesting witnesses,
the son and those claiming under him would be estopped from asserting that the wife acquired no title under the deed to
her from her mother-in-law, although such deed might not operate to convey to the donee whatever title the son had in
the land.
If one having title to land sells and conveys the same by deed to another, he can not thereafter by his deed convey
to a subsequent purchaser any title thereto.
(a) After the making of a parol gift of [***11] land to a donee who went into possession with the consent of the
donor, and on the faith of the gift made valuable improvements on the land, the gift thereby became complete, the donee
thereby acquired a perfect equity in the land, and the donor could not thereafter revoke the gift and convey the land to
another, for the reason that she had no title to or interest in the land which she could then convey.
Where the land, after the making of the deed from the donor to the donee, was levied upon under execution against
the husband of the donee, and where the donee filed a claim to the land so levied on, the dismissal of her claim by the
donee would not estop her from asserting title to the land where it was afterwards sold at sheriff's sale under the
executions so levied.
If after the sheriff's sale the wife executed to the purchaser her quitclaim deed to the land in order to enable him to
sell the land for the purpose of paying the debts of her husband, such quitclaim deed was void, and would not estop the
wife from asserting her title to the land against such purchaser and those claiming under him with notice of the wife's
title.
Possession of land is notice of whatever [***12] title or right the occupant has.
(a) Possession of land by a tenant is the possession of the landlord.
(b) So if, at the time of the sheriff's sale, and at the time when those claiming under the purchaser at such sale
obtained their conveyances, the wife was in possession of this land, either by herself or by her tenants, such possession
was notice to such purchaser, and those claiming under him, of whatever right or title the wife had to this land.
The court erred in directing a verdict for the defendant, issues of fact being involved which could only be
determined by a jury.
COUNSEL: W. T. Burkhalter, for plaintiff.
J. T. Grice and C. L. Cowart, for defendant.
JUDGES: Hines, J. All the Justices concur. Beck, P. J., concurs in the result. Atkinson, J., concurs specially.
OPINION BY: HINES
OPINION
[*102] [**836] HINES, J. (After stating the foregoing facts.)
[HN1] A donee of land under a parol gift based upon a meritorious consideration, who, with the consent of the
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1927 Ga. LEXIS 133, ***10
donor, enters into possession and makes valuable improvements upon the faith of the gift, acquires a perfect equity as
against the donor, his heirs and those claiming under him with notice. Floyd v. [***13] Floyd, 97 Ga. 124 (24 S.E.
451); Looney v. Watson, 97 Ga. 235 (22 S.E. 935); Ogden v. Dodge County, 97 Ga. 461 (25 S.E. 321); Garbutt v. Mayo,
128 Ga. 269 (2) (57 S.E. 495, 13 L. R. A. (N. S.) 58). It is now well settled that in such circumstances the donee can
defend an action of ejectment by proof of such perfect equity. Vanduzer v. Christian, 30 Ga. 336; Floyd v. Floyd,
Looney v. Watson, Ogden v. Dodge County, supra. Can a donee in such circumstances maintain an action of ejectment
upon proof of such perfect equity?
[HN2] The purchase of land, full payment of the purchase-money, and possession, create a perfect equity, which is
good against the vendor, his heirs and those claiming under him with notice, is equivalent to legal title, and will support
an action of ejectment by the purchaser. Pitts v. Bullard, 3 Ga. 5 (46 Am. D. 405); Dowdell v. Neal, 10 Ga. 148; Winter
v. Jones, 10 Ga. 190 (54 Am. D. 379); Peterson v. Orr, 12 Ga. 464 (58 Am. D. 484); Wilkinson v. Chew, 54 Ga. 602;
Grace v. Means, 129 Ga. 638 (59 S.E. 811); Mays v. [***14] Redman, 134 Ga. 870 (68 S.E. 738); Lee v. Pearson, 138
Ga. 646 (5) (75 S.E. 1051); Wall v. L. & N. R. Co., 143 Ga. 417 (85 S.E. 325); May v. Sorrell, 153 Ga. 47, 53 (111 S.E.
810); Elrod v. Bagley, 154 Ga. 670 (115 S.E. 3); Citizens Mercantile Co. v. Easom, 158 Ga. 604, 610 (123 S.E. 883, 37
A. L. R. 378). "The distinction between a legal and an equitable title consists in the payment or non-payment of the
purchase-money." Peterson v. Orr, supra. This court has held that where the grantee of a lot of land sold the same and
made a deed thereto before the grant issued from the State, and then, after the grant issued, sold the [*103] same to
another person and made a deed to the latter, the first deed took precedence over the second. Bivins v. Vinzant, 15 Ga.
521; Henderson v. Hackney, [**837] 23 Ga. 383 (68 Am. D. 529); Helms v. O'Bannon, 26 Ga. 132; McLeod v.
Bozeman, 26 Ga. 177; Dudley v. Bradshaw, 29 Ga. 17; Moore v. Coulter, 31 Ga. 278; Clements v. Wheeler, 62 Ga. 53,
57; Bank of Cumming v. Waldrip, 151 [***15] Ga. 328 (106 S.E. 546). In Dudley v. Bradshaw, supra, it was said that
[HN3] "A perfect equity is, in Georgia, a good title even at law; it is a title sufficient to support or defeat ejectment." In
Bivins v. Vinzant, supra, this court made this ruling: "Before grant, the drawer of a lot of land makes a deed for the lot to
A; after grant he makes a deed to B. Ejectment is brought by B against A. Held, that A's deed, though not sufficient, by
its priority in date, to estop B, is yet admissible in evidence for A; since it is a deed fit to help establish in A a title
perfect in equity.
[HN4] Where a vendor, having no title to land, sells the same to another, with warranty, but afterwards acquires the
title, such title inures to the benefit of the vendee and vests in him complete title the moment the vendor acquires it.
Goodson v. Beacham, 24 Ga. 150; Parker v. Jones, 57 Ga. 204; Terry v. Rodahan, 79 Ga. 278, 292 (5 S.E. 38, 11 Am.
St. Rep. 420); Lathrop v. White, 81 Ga. 29, 35 (6 S.E. 834); Hill v. O'Bryan, 104 Ga. 137 (30 S.E. 996); Oliver v. Holt,
141 Ga. 126 (80 S.E. 630). So in Hadaway v. [***16] Smedley, 119 Ga. 264 (46 S.E. 96), it was held: "Where a father
in possession of land under a bond for titles, a part of the purchase-money being paid, makes a parol gift of the land to a
son, and the latter goes into possession and, on the faith of the gift, makes valuable improvements on the land, and
subsequently the father acquires the legal title by a conveyance from the maker of the bond for titles, the title thus
acquired by the father passes, by the statute of uses, into the son and inures to his benefit in preference to one to whom
the father conveyed after he had acquired the legal title." The theory upon which the doctrine rests, that the vendee upon
the payment of the full purchase-money acquires a perfect title, which is the equivalent of legal title, upon which he can
recover in ejectment, is, that the vendor is a mere naked trustee, holding the title for the benefit of the vendee, which,
under the statute of uses, passes to the latter. In Ellis v. Dasher, 101 Ga. 5 (29 S.E. 268), this [*104] court held that
[HN5] "Prior possession of land under a claim of ownership is prima facie evidence of title in the occupant, upon which
he may recover in ejectment, [***17] unless the defendant shows a better adverse title, by possession or otherwise.
Such claim of ownership, if bona fide, may be supported by proof of a parol gift from another and entry thereunder even
where such entry was not made until after the donor's death, and although it does not affirmatively appear that the donor
had ever been in possession of, or had title to, the property. Such a gift would not pass title to the donee, but it could
nevertheless be made the basis of an honest possession by the latter, accompanied by a bona fide claim of right, which
could in time ripen into a perfect title." Under the ruling in that case, the plaintiff made a case which would entitle her to
recover; but it is difficult to reconcile the ruling in that case with other decisions made by this court. In Hughes v. Clark,
67 Ga. 19, this court held that a claim by the administrator of a deceased donee, whose right rested on a parol gift from
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his father, followed by valuable improvements made by the son, could not be asserted against a fi. fa. for year's support
for the father's widow and minor children, upon the ground that legal title had not vested in the son, but only a perfect
equity, [***18] which could only be asserted in a court of equity. Afterwards the proper proceeding was instituted, and
a decree was had for specific performance, under which the title of the son was held superior to that of the father.
Hughes v. Hughes, 72 Ga. 173. In Howell v. Ellsberry, 79 Ga. 475 (5 S.E. 96), this court held that in the case of gift of
land by father to son, made without writing, with valuable improvements made by the son upon the faith of the gift, a
decree of specific performance was necessary to pass the legal title so as to recover thereon in ejectment or complaint
for land, brought by the heir at law of the donee against a subsequent purchaser from the donor, with general warranty
of title. In that case Judge Bleckley said: "But the doctrine of perfect equity as the equivalent of legal title is, so far as
we know, restricted to the relation of vendor and purchaser." He further said: [HN6] "A complete equity arises out of
payment of purchase-money and the like, out of a consideration beneficial to the former owner, to him who parts with
title, not to him who acquires it. It looks to what has been done for another, not to what one has done for himself [*105]
[***19] by inducement of another." In Roberts v. Mullinder, 94 Ga. 493 (20 S.E. 350), this court held that a
stepgranddaughter had no title by reason merely of a parol gift of the land to her by her stepgrandfather, and the making
of valuable improvements thereon, which she could assert in a claim case. The ruling in Howell v. Ellsberry, supra, was
followed in Thomas v. Walker, 115 Ga. 11 (41 S.E. 269). In Bell v. Mention, 152 Ga. 625 (110 S.E. 883), this court held
that a gift of land by a father to a son, who went into possession with the consent of his father, and made valuable
improvements thereon upon the faith of the gift, did not give to the son a perfect title upon which the son could recover
in ejectment.
It is difficult to reconcile the rulings in Hughes v. Clark, Howell v. Ellsberry, Roberts v. Mullinder, Thomas v.
Walker, and [**838] Bell v. Mention, and the ruling in Ellis v. Dasher. It is likewise difficult to understand why a
perfect equity, which springs out of the relation of vendor and vendee, will support an action of ejectment brought by
the vendee, and that a perfect equity, springing out [***20] of the relation of donor and donee, will not support such
action. Upon reason and principle it would seem that all perfect equities should have the same force and effect; and that
if a perfect equity arising out of the relation of vendor and vendee will support an action in ejectment, a perfect equity
springing out of the relation of donor and donee would likewise support such action. But clearly, a perfect equity in the
donee, with a deed from the donor to the former, would support an action of ejectment. If in the case at bar the
mother-in-law gave to her daughter-in-law the land in dispute; and if the daughter-in-law took possession with consent
of the donor, and made valuable improvements upon the land, the daughter-in-law was entitled to maintain an equitable
petition for specific performance by the mother-in-law, and to have the deed made by the former to her son cancelled,
the son taking his deed with knowledge of the prior gift of his mother to the daughter-in-law. Hardaway v. Smedley,
supra. [HN7] Parties can voluntarily do what equity will compel them to do; and equity will not force parties to litigate
in order to have done what they ought to do, when they have already [***21] performed. Civil Code (1910), § 4532. So
proof of the gift of this land by Victoria E. Sikes to the plaintiff, possession thereof by the plaintiff with the [*106]
knowledge of the donor, and the making thereon of valuable improvements upon the faith of the gift, was proper to
establish in the plaintiff a perfect equity, and to account for the subsequent execution of a deed by the donor to the
plaintiff to effectuate such gift. Such proof made a case which would entitle plaintiff to recover, unless the defendant
made some valid defense which would defeat her recovery. Under the evidence the jury was authorized to find the
making of such gift, the possession of the land by the plaintiff and her husband with the consent of the donor, the
erection thereon by the plaintiff and her husband, upon the faith of such gift, of valuable permanent improvements, and
the subsequent execution by the donor to the plaintiff of a deed to this land, at the request of the husband, to effectuate
the gift. The evidence introduced upon this issue should have been submitted to the jury, and the court erred in directing
a verdict for the defendant, unless the latter succeeded in making some defense which [***22] would defeat the right of
the plaintiff to recover. [HN8] If the improvements were in fact made by the husband, but for the wife, they would stand
upon the same footing as if made by the wife. Walker v. Neil, 117 Ga. 733 (9) (45 S.E. 387).
Under the evidence the jury was authorized to find that the plaintiff and J. P. R. Sikes were married on July 4, 1896;
that on the following Wednesday Victoria E. Sikes, the mother of J. P. R. Sikes, took the plaintiff to the land in dispute,
and said to her, "This is your home, and I am going to give it to you, and I am going to make the deeds to you;" that the
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plaintiff and her husband lived with the latter's parents until January, 1897; that, in the interval between their marriage
and January, 1897, the husband of the plaintiff, on the faith of his mother's gift of this land to his wife, erected a frame
of a dwelling on this land, one room of which was finished and made habitable by January, 1897; that in January, 1897,
the plaintiff and her husband went into possession of the land in dispute, occupying the room which had been finished
in the dwelling previously erected thereon; that the plaintiff and her husband took possession with the [***23] consent
of Victoria E. Sikes, and in pursuance of her gift to the plaintiff; that thereafter, on the faith of this gift by the
mother-in-law to her, the plaintiff and her husband acting for [*107] her, made valuable improvements upon this land;
that on March 13, 1900, the donor said to the plaintiff that she was going to make to her a deed to this land, when the
plaintiff's husband requested his mother to make the deed to him, which she then did; that on August 30, 1900, the
donor, at the request of plaintiff's husband, and in fulfillment of the oral gift of this land to plaintiff, executed and
delivered to the latter a deed to this land, which was recorded on June 21, 1901; that this deed recites a consideration of
$ 5, which was actually paid by the plaintiff, and natural love and affection which the grantor bore to the grantee; that
this deed was attested by two witnesses, one of whom was a notary public, and that the husband signed the attestation
clause under the signatures of said attesting witnesses; that plaintiff's husband told her to burn the deed which his
mother had made to him, and which had not been recorded at that time, but was afterwards recorded in 1910; and
[***24] that the plaintiff and her husband lived on this land for a period of twenty-eight years, the wife claiming the
same under the deed to her. In these circumstances, the plaintiff acquired a legal title to this land. The deed from her
mother-in-law to plaintiff, made at the request of plaintiff's husband, and signed by him to attest its execution and
signifying his approval of the conveyance, was in effect his deed, and conveyed to the wife whatever title he had under
the previous deed from his mother to him. As the deed was attested by two witnesses other than the husband, which
rendered his signature as a witness unnecessary, it may well be assumed, in the absence of proof to the contrary, that he
signed it, not as a mere attesting witness, but for the [**839] purpose of joining in the execution of the instrument.
But if this deed was not in effect the conveyance of whatever title the husband had in this land, he, and those
claiming under him, are estopped from asserting that the wife acquired no title under the deed to her from her
mother-in-law. It is true that estoppel conveys no title. Sheppard v. Reese, 114 Ga. 411 (40 S.E. 282); Bussey v. Bussey,
157 [***25] Ga. 648 (121 S.E. 821); Peacock v. Horne, 159 Ga. 707 (126 S.E. 813). But while this is so, [HN9] a party
and his privies in estate may be estopped from denying the title of a vendee under a conveyance which of itself would
be ineffectual to pass the title of the party estopped. [*108] Where one attests a deed with full knowledge of its
contents, he is estopped from asserting against the grantee therein an interest based upon any right then outstanding in
himself. Butt v. Maddox, 7 Ga. 495 (4), 504; Georgia Pacific Ry. Co. v. Strickland, 80 Ga. 776 (6 S.E. 27, 12 Am. St.
Rep. 282); Fleming v. Ray, 86 Ga. 533 (12 S.E. 944). It is true that in such a case the vendee must be ignorant of the
title of the subscribing witness. Where one as agent of another signs a deed conveying property, he is estopped from
thereafter asserting against the grantee any adverse right based on a title or interest subsisting in such agent at the time
of the execution of the deed. American Freehold &c. Co. v. Walker, 119 Ga. 341 (46 S.E. 426). A deed conveying land,
executed in the name of the ostensible makers, but not in their presence, by a person [***26] authorized by them
verbally, is invalid, but will pass the title in favor of those who act upon it in a way to be prejudiced, should the
authority to make it be revoked. As to such persons, after they have parted with their money on the faith of the deed, the
ostensible makers will be estopped from denying the authority of the person who, with their consent, subscribed their
names to the instrument. McCalla v. American Freehold &c. Co., 90 Ga. 113 (15 S.E. 687). Where the owner of land
executes a formal disclaimer of title thereto, and permits another to sell it to a third person, such disclaimer being
attached to the deed under which such land is sold, and on the strength of which disclaimer the vendee buys and accepts
title, the maker of such disclaimer and his privies will be estopped from afterwards asserting title to the property so
conveyed. Caraker v. Brown, 152 Ga. 677 (111 S.E. 51). Writings which on their face are not sufficient to operate as a
deed or conveyance of land, and to take the transaction out of the statute of frauds, may constitute an equitable estoppel.
Peacock v. Horne, 159 Ga. 707 (126 S.E. 813). So in this case, when the [***27] mother of plaintiff's husband pointed
out the land in dispute to the plaintiff, and told her that it was her home, and that she would give the land to the wife and
make her a deed to it, and where thereafter the mother put the wife in possession of the land upon which the husband
erected permanent and valuable improvements, and where, after the erection of such improvements the mother made a
deed to the husband, and where thereafter, at the request of the husband, [*109] his mother conveyed by deed the land
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1927 Ga. LEXIS 133, ***22
to his wife, for a consideration which was partly valuable and partly good, the wife actually paying the valuable portion
of the consideration, although small, and where the husband signed the deed beneath the signatures of the two attesting
witnesses and under the attestation clause, the wife in these circumstances acquired the legal title to the land. But if the
conveyance of the mother to the wife was ineffectual to convey the title of the son, in these circumstances the son will
be estopped to deny the title of the wife to this land under her deed from his mother.
It is contended by counsel for the defendant that when Victoria E. Sikes conveyed the land by deed to her [***28]
son on March 13, 1900, she had no further title to or interest in this land which she could afterwards convey to the
plaintiff. Generally, [HN10] a grantor can not convey any greater title or estate than he has. If one having the title to
land sells and conveys the same by deed to another, he can not thereafter by his deed convey to a subsequent
purchaser any title thereto. The mere surrender or cancellation of a deed will not divest the title to land which has once
been conveyed and vested by transmutation of possession. Jordan v. Pollock, 14 Ga. 145; Holder v. Scarborough, 119
Ga. 256 (46 S.E. 93); Warren v. Ash, 129 Ga. 329 (58 S.E. 858); King v. McDuffie, 144 Ga. 318 (87 S.E. 22); Drew v.
Drew, 146 Ga. 479 (91 S.E. 541); Padgett v. Norrell, 157 Ga. 526 (122 S.E. 65). The application of this principle in this
case cuts both ways. If the mother-in-law made a parol gift of this land to the plaintiff, and the latter went into
possession, and on the faith of the gift made valuable improvements on the land, the gift thereby became complete; the
plaintiff thereby acquired a perfect equity in this land, and the donor could [***29] not thereafter revoke the gift and
convey the land to her son, for the reason that she had no title to or interest in the land which she could then convey.
Hardaway v. Smedley, supra. Of course the situation would be different if the mother-in-law had not made a parol gift
of this land to the plaintiff, which had become complete by her possession and the erection of valuable improvements
on the land, before she conveyed the land to her son. In such circumstances the mother would have no title to or interest
in this land after she had conveyed it to her son, and for this reason could [*110] convey no title to the plaintiff
subsequently to the execution and delivery of the deed to her son.
[**840] The deed from the mother to the son was recorded in 1910. In 1912, executions issued upon judgments
obtained against the husband were levied upon this land. Subsequently, the wife interposed her claim thereto. Upon the
trial of these claims, and after some ruling adverse to her, the claimant dismissed the same. Thereafter, and while the
wife was in possession, the land was sold at sheriff's sale under the same or other executions against the husband. It is
now insisted by [***30] the defendant that under these facts the wife is estopped from asserting title to this land against
the purchaser at the sheriff's sale and those claiming under him. We do not think this contention is well taken. The wife,
under these circumstances, is not estopped from seeking in ejectment to recover the land from a person who claims title
thereto under the purchaser at the sheriff's sale, she, at the time of said sale, being in possession of the land under the
deed to her from her mother-in-law, which had been previously recorded.
After the sheriff's sale, the wife executed and delivered to the purchaser at such sale a quitclaim deed to this land.
The defendant contends that the wife is now estopped, by virtue of the quitclaim deed, from asserting title to this land.
In reply to this contention the wife alleges that she made such quitclaim deed to said purchaser in order to enable him to
sell the land and pay the debts of her husband. [HN11] A wife can not sell her land in extinguishment of her husband's
debts, whether the conveyance be made directly to a creditor, or to a third person for the purpose of selling her land and
applying the proceeds to the extinguishment of the debts of her [***31] husband. Civil Code (1910), §§ 2993, 3007;
Webb v. Harris, 124 Ga. 723 (53 S.E. 247); Gross v. Whitely, 128 Ga. 79 (57 S.E. 94); Rountree v. Rentfroe, 139 Ga.
290 (77 S.E. 23); Jackson v. Reeves, 156 Ga. 802 (120 S.E. 541); Frommel v. Cox, 158 Ga. 310 (123 S.E. 296); Reeves
v. Jackson, 158 Ga. 676 (124 S.E. 135); Lee v. Johnston, 162 Ga. 560, 134 S.E. 166 (2 a) (134 S.E. 166). So if the wife
by this quitclaim deed conveyed this land to another, under a scheme by which such person was to sell the same, or so
much thereof as might be necessary, and apply the proceeds to the extinguishment of the debts of her husband, such
quitclaim deed was null and [*111] void, and persons acquiring title to the land under the grantee in such quitclaim
deed, with notice, acquired no title against the wife. It follows that the court erred in rejecting evidence offered by the
plaintiff to establish the fact that such quitclaim deed was made by her to the grantee therein for the purpose of paying
her husband's debts.
[HN12] Possession of land is notice of whatever right or title the occupant has. Civil Code (1910), § [***32]
Page 137
164 Ga. 96, *109; 137 S.E. 833, **839;
1927 Ga. LEXIS 133, ***27
4528. The record of the deed from Victoria E. Sikes to the plaintiff was constructive notice of the wife's title to a
purchaser of the land at the sheriff's sale, and those claiming under him. [HN13] Possession of land may be held by a
tenant. McMullin v. Erwin, 58 Ga. 427; Knorr v. Raymond, 73 Ga. 749. If actual possession of this land was held by
the plaintiff by a tenant, at the time the defendant purchased, if no inquiry was made, the presumption is that inquiry
would have developed under what right, title, or interest the possessor held. Parker v. Gortatowsky, 127 Ga. 560 (2)
(56 S.E. 846). So if at the time of the sheriff's sale, and at the times when those claiming under the purchaser at such
sale obtained their conveyances, the wife was in possession of this land, either by herself or by tenants, such possession
was notice to such purchaser and those claiming under him of whatever right or title the wife had to this land.
Residence by a husband and wife upon land which the wife claims and to which the husband had procured a deed to be
made to his wife is notice of whatever interest the wife has therein. Walker v. Neil, supra.
Applying the [***33] above rulings, the court erred in directing a verdict for the defendant.
Judgment reversed. All the Justices concur.
BECK, P. J., concurs in the result.
ATKINSON, J., concurs specially.
Page 138
164 Ga. 96, *111; 137 S.E. 833, **840;
1927 Ga. LEXIS 133, ***32
52 of 176 DOCUMENTS
Questioned
As of: Aug 04, 2014
MCDONALD et al. v. DABNEY; et vice versa.
Nos. 4948, 5000.
SUPREME COURT OF GEORGIA
161 Ga. 711; 132 S.E. 547; 1926 Ga. LEXIS 326
February 10, 1926, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied February 24, 1926.
PRIOR HISTORY: Equitable petition. Before Judge Humphries. Fulton superior court. April 25, 1925.
A petition was brought by Joseph T. Dabney against James McDonald, Elizabeth Dabney, the wife of plaintiff, and
Luetta T. Boddie, for an accounting between plaintiff and McDonald as to partnership assets, for establishment of
plaintiff's interest therein, and for recovery of a half interest in certain described real estate, upon the ground that funds
of the McDonald Furniture Company, of which plaintiff and McDonald were partners, had been invested in said
property under an agreement between plaintiff and McDonald, by which the title to this real estate was taken in the
name of McDonald and was to be held by him for said firm. He further sought to have cancelled the deeds made by
McDonald to Elizabeth Dabney, and a deed made by the latter to Luetta T. Boddie, embracing the property known as
200-204 West Mitchell Street. The defendants denied this contention of the plaintiff, and denied that he had any interest
in this real estate on the ground that funds of this firm had been invested therein. They further denied the existence of
said partnership. The case was [***2] referred to an auditor, who made his report. The plaintiff filed certain exceptions
of law and of fact to the findings of the auditor. The findings of fact by the auditor were as follows: (1) That the
evidence does not establish the definite interest in the real estate in controversy. (2) That the complainant has no title to
the real estate described in the bill. (3) That there was no partnership between complainant and respondent McDonald;
and if complainant has any monetary claim against respondent McDonald, it is merely an action at law for money had
and received. The trial judge sustained the plaintiff's exceptions to these findings of fact, and in his order provided "that
the issues of fact involved in said exceptions be referred to a jury, by appropriate questions to be propounded to the jury
as the court shall determine to be suitable and proper at the time of the submission of the issues of fact to the jury." To
this provision of the order the defendants excepted, and alleged that the same was erroneous because contrary to law.
The case proceeded to trial. The court submitted the case to the jury independently of and without any reference to
the report of the auditor, [***3] and propounded to the jury these questions: 1. Was there a partnership prior to
Page 139
September 9, 1915, as alleged in the petition, between James McDonald and J. T. Dabney? 2. What interest did J. T.
Dabney have in such partnership, if there was a partnership? 3. Was the property at 110-112 West Mitchell Street, and
200-204 West Mitchell Street, and the other properties described in paragraph eight of the petition, assets or property of
the partnership, if there was a partnership? 4. What interest, if any, did J. T. Dabney have in said real property? 5. If the
jury find that J. T. Dabney had an interest in the real estate involved in this suit, did James McDonald convey it to Mrs.
Elizabeth T. Dabney with the consent and approval of J. T. Dabney? 6. Was J. T. Dabney in possession either by
himself or tenants, of 200-204 West Mitchell Street, claiming a personal interest therein at the time of the alleged
purchase of said property by Luetta T. Boddie, and at the time the deed was made to her to such property by Mrs.
Elizabeth Dabney, August 25, 1922? These questions were propounded to the jury after consultation with counsel for
both parties as to the form of questions to be propounded to [***4] the jury. Both sides made suggestions as to the
forms of questions to be propounded, question 5 being suggested by counsel for the defendants; but "counsel for
defendants did not waive their exceptions to the order of the court of November 28, 1924, referring the issues of fact to
a jury by appropriate questions. They cooperated with the court in preparing the questions to be submitted to the jury,
with a view to covering the issues in the case, after the court had directed that the case be thus submitted to the jury, but
without waiving their exceptions pendente lite to said order of the court." The jury returned a verdict answering
questions Nos. 1, 3, and 6 in the affirmative. In answer to question 2 they found that the plaintiff had a half interest in
the partnership. In answer to question 4 they found that the plaintiff had a half interest in the real property involved in
this case. They answered question 5 in the negative. The defendants moved for a new trial upon the general grounds,
and by amendment added various special grounds. The court overruled the motion for a new trial, and they excepted.
The case was tried before the jury upon the evidence introduced before the [***5] auditor. The evidence for the
plaintiff tended to establish the following facts: In the latter part of April, 1902, plaintiff went into the furniture business
with McDonald, under the firm name of McDonald Furniture Company. His wife brought $ 400 and he brought $ 100.
Under his advice his wife gave her $ 400 to McDonald to put in the furniture business. In the following summer he put
into the business nearly $ 400. He received $ 1000 from the estate of his brother, which he put in the business. With this
money he put a shed and workshop to the rented building in which they were conducting the furniture business. He
bought a horse for $ 36. They enlarged the store at 110 West Mitchell Street, and afterward rented 112 West Mitchell
Street, where the present store is. After enlarging 110 West Mitchell Street and renting No. 112 on that street, they had
to pay more rent. Before they bought the property 110-112 West Mitchell Street, they made it larger, built some wings
and a back. Afterwards they bought 110-112 West Mitchell Street. The title was put in McDonald's name for the
protection of the property and the business. In 1911 plaintiff and others organized a liquor club in Atlanta. [***6]
Plaintiff furnished the furniture and the hall, and his salary was $ 100 a month until the last of November, 1912. His
salary was put in the furniture business, or in property investments. After November, 1912, plaintiff got a salary of $
240 a month from this club, and ten per cent. of the gross income, until September 1913. He turned over his salary and
commissions to McDonald. In March, 1913, plaintiff turned over to McDonald eight hundred and seventy-odd dollars
from his commissions of ten per cent. and $ 1300 from his salary. He received the salary of $ 240 per month for 21
months. He paid this amount and all other moneys he got from the liquor club to McDonald. After May 1, 1916, he got
$ 200 a month. McDonald left Atlanta in September, 1915. Up to the time McDonald left, he got every cent of this
money. His ten per cent. in March, 1913, amounted to $ 879.30. He had whisky rebates of $ 2 per case for all liquor
bought by him. He bought 21 cases a month. He gave this to McDonald. He sold about 300 cases of Mud Lick and
Dairy Maid, from which he got $ 1.50 per case. After McDonald left, plaintiff's daughter, Dorothy, sent the former $ 1 a
day from the business. This continued up [***7] until about two years before the trial of this case.
There was a loan on 202-204 West Mitchell Street for $ 3,500. Plaintiff paid the interest thereon for six years, at
eight per cent. Under the power of attorney which he then had from McDonald, he renewed this loan in the latter's
name, and paid $ 175 for commissions. In this six years time he paid $ 900 insurance on this property, and a loan of $
900 on the store. Plaintiff had charge of the property 202-204 West Mitchell Street when McDonald left. He rented the
property to various negroes. The last tenant he had was a woman, who was still in the premises. On August 25, 1923,
she was on the premises. He made repairs on this property before he heard of the deed to Boddie, made repairs thereon
between August and October. Was notified in October that McDonald had conveyed this property to Elizabeth Dabney.
Page 140
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***3
Plaintiff put the property in the hands of M. L. Thrower, and never took it out of his hands. He, his wife and children,
and McDonald occupied apartments in the upstairs of the furniture store at 110-112 West Mitchell Street. Mrs. Dabney
said plaintiff was a partner with McDonald, many times. Plaintiff testified that they paid [***8] $ 2,400 for the
property at 202-204 West Mitchell Street. They erected on it a brick apartment for negroes, at a cost of $ 3,000. They
assumed a loan on 204 West Mitchell Street. They put in the rear fourteen rooms. In discussing the widening of West
Mitchell street, McDonald referred to this property as our property. Plaintiff employed nearly every man, and fired all of
them. Plaintiff testified that McDonald did not own any interest in the business; that it became his business when he had
to rebuild it. Plaintiff, his family, and McDonald lived very largely out of this business for thirteen years. Plaintiff
worked in the business from 1902 until McDonald left in 1915. McDonald collected the cream of the accounts just
before he left here. Rents of the property standing in the name of McDonald were applied, after he left, to the upkeep of
the property. The business was built mainly on the money from the liquor club. When McDonald left, the debts were
around $ 2,000. The accounts amounted to about $ 25,000. They were worth about $ 5,000.
John Jentzen testified that, after McDonald left, Dabney paid some of the purchase-money notes on the property.
Plaintiff was unable to state [***9] how much of the money he furnished McDonald, pertaining to any one piece of
property. Plaintiff bought one house and lot and put the title in his wife's name. He testified that he and McDonald were
equal partners in the business. He permitted the taxes on the property go unpaid. The property at 110-112 West Mitchell
Street was sold for the taxes, and bought in by one Grant. Plaintiff afterwards acquired a quitclaim deed from Grant to
this property. Afterwards he released this property to McDonald. He received for this release $ 500 paid to Mather
Brothers, and about $ 200 to Rosenfeld. Did not recollect that he had received $ 1500 which he had put in the bank. In
paragraph three of the petition he alleged that McDonald and he entered into a partnership agreement, and that he
invested in the business $ 700 in cash, and in exchange therefor was to have an equal interest in the business with
McDonald. James McDonald was in the heading of the stationery. McDonald conveyed all of the property in which the
plaintiff now claims an interest, except two pieces of income-bearing property, to plaintiff's wife. Plaintiff testified that
when McDonald left he gave to him power of attorney to manage [***10] this property, and he operated it under that
power of attorney. This power of attorney was revoked on June 20, 1921. McDonald then gave to his niece, Dorothy
Dabney, power of attorney to manage this property. Plaintiff did not know how much money he had received from the
various properties standing in the name of McDonald after the latter left Atlanta. The property was badly run down, and
not more than half of the wooden houses were rented. Many months he collected less than $ 60 per month. If it had been
all in good shape and rented, it would not have gone over $ 80 per month. He did not know anything about the amount
of the rentals that he had received from the property. He never paid anything for the rent of the property known as
110-112 West Mitchell Street; but he testified that he put in this property ten times its value, by paying purchase-money
notes, taxes, insurance, and repairs. He never signed any of the notes at the bank when McDonald was here. Plaintiff
introduced witnesses that corroborated him as to the money he received from the liquor club by way of salary. He
testified that he did not hear that McDonald had deeded this property to his wife until he was notified to [***11] turn it
over to Adair for rent. He testified that from 1915 to the date of this suit he was in possession of 202-204 West Mitchell
Street; that he rented it to tenants and made leases on it; that he was in possession of the property at 110-112 West
Mitchell Street; that the rent he got from 202-204 West Mitchell Street was $ 75 per month until Thrower took it and
raised the rent; and that all the rents of the properties went into the bank, with the funds of the store, all in one fund.
Witnesses testified that Dabney employed help at the store and discharged them, and that plaintiff and McDonald
were engaged in operating the store. Plaintiff introduced a statement by Thrower, of rents collected from June 30, 1922,
to and through September, 1922, $ 1,205.50, which was turned over to the clerk of the superior court under garnishment
proceedings in a suit against the firm.
The defendants introduced evidence tending to establish the following: There was no partnership between
McDonald and Dabney. When McDonald went to Texas in September, 1915, he gave to Dabney a general power of
attorney to manage all of his real estate fully, and with power to mortgage and sell the same. This [***12] power
remained in force until June, 1921, when it was revoked by McDonald, who gave a similar power to Dorothy Dabney,
the daughter of plaintiff and niece of McDonald. In depositions taken in this case on May 21, 1924, Dabney testified,
Page 141
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***7
that he turned over to McDonald about $ 1200, which went into the general funds of the McDonald Furniture Company;
that the property was bringing in about $ 148 per month from rents; that he had no agreement with McDonald as to what
interest he was to get in this property by virtue of the payments he made after McDonald left, that his contention was
that McDonald had ceased to be a member of the McDonald Furniture Company as soon as he left Atlanta, and that the
business was almost broken; that the power of attorney from McDonald to him was revoked because the women folks
were going with James McDonald, and wanted to make some disposition of the property; that he made no objection to
their making the loan of $ 5,000 on the property at 110-112 West Mitchell Street. A signature card filed with the Fulton
National Bank by McDonald Furniture Company on November 4, 1910, was signed by James McDonald. In a statement
signed on December 1, 1913, in the handwriting [***13] of James McDonald, of the condition of the McDonald
Furniture Company, McDonald was named as proprietor, and in this paper it was stated that the value of his equities in
the property referred to in this litigation was $ 60,605, and that his liabilities were $ 1,800, plus State and county taxes.
A statement made by James McDonald on January 21, 1911, showed accounts secured by contract for $ 2,000, $ 2,000
of deferred notes, stock about $ 5,000, insurance on buildings $ 800, and amounts paid on lots held on bond for title $
425, and on notes about $ 1100; that he owned three horses and wagons; and that he owed in the business less than $
1,500. A statement was made by McDonald to Fulton National Bank on February 16, 1912, affirming that he was doing
business as McDonald Furniture Company, and giving a statement of his assets and liabilities. When McDonald left
Atlanta the business was in first-class condition. McDonald denied making any agreement with Dabney by which he
was to have any interest in the real estate involved in this case. He testified that his idea of accumulating this property in
Atlanta was to give it to his sister and nieces, as they would not have anything otherwise.
Dorothy [***14] Dabney denied that there was any partnership between plaintiff and McDonald, and testified that
plaintiff worked for McDonald two days in the week.
Defendants introduced a statement of the affairs of the McDonald Furniture Company, made by Dabney, dated
October 26, 1917, in which it was stated that Dabney was admitted into the partnership in the spring of that year. On
July 29, 1922, plaintiff wrote to his daughter Dorothy Dabney, and stated that one Higginbotham was in to see him the
day before, and said that he (Higginbotham) had an offer for 202 West Mitchell street, for $ 12,000; that one Smith had
stated that Elizabeth and Dorothy Dabney should keep this property as an income; that he wished his wife would get all
of the property; and that if they ever got out of debt she and the kids would have a little income regularly. By deed dated
March 23, 1922, from Joseph T. Dabney to James McDonald, Dabney quitclaimed to McDonald, his heirs and assigns,
"all his right, title, interest, claim, or demand which said party of the first part has or may have had in and to" the
property located at 110-112 West Mitchell Street. It contained this provision: "This deed made for the purpose [***15]
of releasing all rights acquired under quitclaim deed from Dr. Horace Grant to grantor herein." Contracts taken from the
files of the McDonald Furniture Company, for the sale of furniture, one dated September 1, 1914, one March 25, 1918,
and one September 15, 1920, each contained this language: "This indenture witnesseth that I have this day bargained
with James McDonald, doing business as the McDonald Furniture Company, under the terms and conditions herein set
out. . . Title to said property shall remain in James McDonald, doing business as McDonald Furniture Company, until
the whole amount of said purchase money shall have been paid." A power of attorney from James McDonald to
Dorothy Dabney, dated March 22, 1922, authorized her to sell and convey all property belonging to him in Fulton
County, Georgia, to borrow money, execute loan deeds and mortgages, sign notes, warranty deeds, quitclaim deeds,
receipts, and acceptances, to collect rents and to receive all moneys in connection with the management of such
properties or for the sale or borrowing of money on the same. A quitclaim deed from Horace Grant to plaintiff, dated
December 21, 1916, on consideration of $ 277, conveyed the [***16] house and lot known as 110 on West Mitchell
Street. This deed recited that said property had been purchased by Grant from the City of Atlanta for taxes for the year
1916. A quitclaim deed from Grant to plaintiff, on consideration of $ 278.75, conveyed the same property, purchased by
Grant from the City of Atlanta for city taxes for 1917. A warranty deed from James McDonald to Elizabeth Dabney,
dated September 21, 1915, on consideration of $ 10 and other considerations, conveyed a lot on the corner of Stephens
and West Hunter Streets, lots on the corner of Dunkirk Street, lots Nos. 11 and 13 Electric Avenue, and lots known as
12-24 Electric Avenue, with the houses thereon, being a part of the property involved in this litigation. A warranty deed
from McDonald to Elizabeth Dabney, dated January 29, 1916, conveyed the lot at the southeast corner of Carter and
Page 142
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***12
Maple streets. A trust deed to secure a loan of $ 5,000, dated March 24, 1922, between James McDonald and Dorothy
Dabney, his attorney in fact, and the Adair Realty & Trust Company, conveyed 110-112 West Mitchell Street. A
warranty deed from Elizabeth Dabney to Luetta T. Boddie, dated August 25, 1922, on consideration of $ 11,300,
[***17] subject to two loans aggregating $ 3,500, conveyed 202-204 West Mitchell Street. A warranty deed from
Luetta T. Boddie to Reliance Investment Company, to secure $ 4,300 principal, dated August 25, 1922, embraced the
property 202-204 West Mitchell Street.
DISPOSITION: Under the principles announced, the judgment in the main bill of exceptions must be reversed, and
that in the cross-bill of exceptions affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Complainant businessman filed suit against respondents, his brother-in-law, his own
wife, and a purchaser, for an accounting of assets of a partnership of the businessman and his brother-in-law, for
recovery of an interest in real estate, and for cancellation of deeds from the brother-in-law to his wife and to the
purchaser. After a jury trial, the Fulton Superior Court (Georgia) entered judgment for the businessman and the
respondents appealed.
OVERVIEW: The businessman claimed that he and his brother-in-law were partners in an enterprise selling furniture
and investing in real estate. The businessman claimed that he invested considerable money in the partnership. The
brother-in-law asserted that they were not partners, and that he acquired the assets in his own name to give to the wife
and her daughter. When the brother-in-law left, he gave the businessman a power of attorney to manage the property,
and later revoked it and gave the daughter that responsibility. The businessman twice purchased the interest of a man
who bought the property at tax sales, and later signed a quitclaim deed so that the brother-in-law was able to borrow
money on the property. The brother-in-law had conveyed the property to the wife, who later sold it to the purchaser. The
court ruled that the purchaser was not put on notice that the businessman might have had a secret interest by his
activities as agent of his brother-in-law. The court added that the recital in the quitclaim deed of its purpose did not
affect the transfer of all his rights to the property, and the finding of the one-half undivided interest in the property was
contrary to law.
OUTCOME: The court reversed the judgment and remanded the case for a new trial.
CORE TERMS: deed, quitclaim deed, notice, conveyed, purchaser, grantor, convey, granting clause, quitclaim, recital,
real estate, possession of land, implied trust, contributed, grantee, partner, bought, partnership, unrecorded, remainder,
occupant, daughter, warranty, secret, power of attorney, husband and wife, quitclaimer, conveyance, afterwards,
releasor
LexisNexis(R) Headnotes
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN1] Possession of land is generally notice of whatever right or title the occupant has. Ga. Civ. Code § 4528 (1910).
Possession is not only notice of the rights of the possessor, but of those under whom he claims. The possession of land
which is sufficient to give notice of the occupant's title, or of the title or rights of those under whom he holds, must have
some element indicative that the occupancy is exclusive in its nature.
Real Property Law > Financing > Mortgages & Other Security Instruments > Mortgagee's Interests
Page 143
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***16
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] Possession by husband and wife is presumptively his possession, but the presumption may be rebutted. Ga. Civ.
Code § 4528 (1910). So where husband and wife are in possession of land, and the record title is in the husband, who
makes application for a loan upon the property, and by his application asserts title to and ownership of the property, the
lender is protected against a secret equity of the wife.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN3] Possession of land is notice of whatever right or title the occupant has does not apply unqualifiedly; and if a
third party has purchased the land from the owner bona fide for value and without notice, he acquires a good title.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN4] Where the vendor is in apparent possession, the purchaser finding the title of record in the vendor is not put on
further inquiry; and if at the same time another person is also in possession, there is no presumption of title in him
inconsistent with that of the purchaser, unless there is some fact or circumstance, apparent to his observation, calculated
to excite suspicion of a prudent man dealing with the property that the possessor other than the vendor has some equity
therein.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] The possession which is sufficient to put one proposing to purchase real estate from a person having the record
title on inquiry, and which is equivalent to actual notice of rights or equities in another, must be actual, open, and
visible, not equivocal or ambiguous, or inconsistent with the title of the apparent owner by the record.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN6] If, of two occupants, one has the record title, a purchaser has the right to assume that the other has no title.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN7] The possession which puts a purchaser upon inquiry must actually exist at the time of the purchase, and the
purchaser is not affected by a possession which has been abandoned before that time.
Real Property Law > Deeds > Covenants of Title
Real Property Law > Deeds > Types > Quit Claim Deeds
Real Property Law > Deeds > Types > Warranty
[HN8] A quitclaim deed to land does not estop the maker from afterwards setting up, as against his grantee, a title
acquired subsequently to the making of said deed. Words in releases or quitclaims without warranty of title, which
purport to convey any future interest or title which the releaser or quitclaimer may acquire, are void at law, on the
ground that one can not convey any greater title that he has. Such release or quitclaim passes nothing but what the
releaser or quitclaimer has at the time.
Contracts Law > Types of Contracts > Covenants
Real Property Law > Deeds > Types > Quit Claim Deeds
Real Property Law > Deeds > Types > Warranty
[HN9] If a grantor has a title to land, a deed of quitclaim is just as effective to pass that title as a deed with covenants of
warranty.
Real Property Law > Deeds > Construction & Interpretation
Page 144
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***17
Real Property Law > Estates > Future Interests > Remainders
Real Property Law > Estates > Present Estates > Life Estates
[HN10] In the construction of a deed, the words used are taken most favorably against the person using them, and most
to the advantage of the other party. The rule has been stated thus: That all the words of the deed, in construction, be
taken most strongly against him who doth speak them, and most in advantage of the other party. In the construction of a
deed, an intention expressed in different recitals is controlled by the terms of the granting part of the deed.
Business & Corporate Law > General Partnerships > Management Duties & Liabilities > General Overview
Estate, Gift & Trust Law > Trusts > Resulting Trusts
Real Property Law > Estates > Concurrent Ownership > Tenancies in Common
[HN11] An implied trust arises when the legal title is in one person, but the beneficial interest, either from the payment
of the purchase money or other circumstances, is either wholly or partially in another. Ga. Civ. Code § 3739 (1910).
Whenever the circumstances are such that a person taking the legal estate, either from fraud or otherwise, can not enjoy
the beneficial interest without violating some established principle of equity, the court declares him a trustee for a
person beneficially entitled, if such person has not waived his right by subsequent ratification or long acquiescence. Ga.
Civ. Code § 3780 (1910). Where land is bought for a firm, paid for with money of the firm, and the title is conveyed to
one of the members of the firm, an implied trust arises in favor of such firm. The members of the firm become equitable
owners and tenants in common of such land. The trust which arises in these circumstances in favor of the partnership is
not destroyed by the express verbal, and therefore unenforceable, agreement of the partner in whose name the title is
taken, that he holds the land for the use of the firm. While such parol agreement can not be enforced as an express trust,
the implied trust arising under these circumstances is enforced by a court of equity. Notwithstanding such agreement,
the resulting trust may be proved by matter not in writing.
Business & Corporate Law > General Partnerships > Dissolution & Winding Up > General Overview
Business & Corporate Law > General Partnerships > Management Duties & Liabilities > General Overview
Real Property Law > Trusts > Resulting Trusts
[HN12] Where real estate is purchased with funds of a partnership, contributed by both members, and title is taken in
the name of one of the members under an agreement that he is to hold the same for the use of the firm, equity treats the
lands as partnership assets; and a partner seeking to enforce the implied trust arising under these circumstances is not
required to show the specific amount of the funds contributed by him to the partnership capital which go into the
purchase thereof. The rights of respective partners in such realty depends upon the final accounting between them, upon
the dissolution of the firm for any cause.
SYLLABUS
Where a motion for new trial was overruled on April 25, 1925, the bill of exceptions reciting that the hearing was
had during term time, and where the court did not adjourn within thirty days from the date of the organization and
opening of the court, and where the bill of exceptions was presented and certified on May 30, 1925, which was within
sixty days from the date of the judgment overruling the motion for new trial, the bill of exceptions will not be dismissed
on the ground that it was not presented to the judge within the proper time. Civil Code (1910), § 6152.
The court sustained certain exceptions of fact filed by the plaintiff to the findings of fact by the auditor. The order
sustaining these exceptions provides "that the issues of fact involved in said exceptions be [***18] referred to a jury, by
appropriate questions to be propounded to the jury as the court shall determine to be suitable and proper at the time of
the submission of the issues of fact to the jury." To the provision of the order that the issues of fact involved in said
exceptions be referred to a jury "by appropriate questions to be propounded to the jury as the court shall determine to be
suitable and proper," the defendants excepted pendente lite on the ground that the same was contrary to law; and they
assign error on these exceptions in their bill of exceptions in this case. Held:
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1926 Ga. LEXIS 326, ***17
(a) Where exceptions of fact to the report of an auditor are filed, the judge shall cause each issue thus made to be
submitted to the jury; and in all cases the jury shall find for or against such exceptions submitted, seriatim. Civil Code
(1910), § 5146. Harris v. Lumpkin, 136 Ga. 47 (70 S.E. 869); Whitfield-Baker Co. v. Anderson, 147 Ga. 242 (93 S.E.
406).
(b) The issues of fact involved in such exceptions can not be referred to the jury, independently of and without
reference to the findings of the auditor, by such questions as the court shall determine to [***19] be suitable and
proper, at the time of the submission of the issues of fact to the jury; but each exception of fact must be submitted to the
jury under appropriate instructions to determine whether they sustain or find against the findings of fact made by the
auditor. In no case, when exceptions to findings of fact by the auditor are filed, can the court submit all issues of fact
raised by the pleadings and evidence to the jury for their determination, as if the case had not been submitted to an
auditor, over the objection of a party. The court having construed this provision of the order as providing for such
submission and having acted upon such construction in trying the case, this provision of the order was contrary to law.
(c) The assignment of error that this provision of the order was contrary to law is sufficient. Pace v. Pace, 154 Ga.
712 (115 S.E. 65).
On the trial of exceptions of fact to the report of the auditor, which exceptions had been duly approved by the court,
the court charged the jury as follows: "Now you take this case, gentlemen, as an original proposition in the matter. It is
your duty to pass on it under the evidence in the case. In [***20] so doing, you will not be influenced in any manner
whatsoever by the findings of the auditor. The auditor's findings in the case, one way or the other, should have nothing
to do with your deliberations; you are not bound by his findings; you should not be influenced by any finding that the
auditor may have made, or that he may have failed to make in the case. You are trying the case as an original
proposition under the evidence in the case, and it is your duty, as upright, intelligent, impartial jurors, acting fairly and
impartially in the matter, uninfluenced by anything outside of the evidence in this case and the principles of law that the
court will give you in charge, and your deliberations under all the facts and circumstances of the case, under the
evidence in the case--it is your duty, acting, I say, fairly and impartially in the matter, to reach a verdict that will speak
the truth as you think the truth is under all the facts and circumstances of the case, under all the evidence in the case,
taking the principles of law in the case as given you in charge by the court. . . Now I am submitting this case to the jury
without any reference to anything that the auditor has decided, [***21] and the court is controlling the case and
sending it to the jury as an original proposition for the jury to decide under the facts and evidence in the case, and not to
be influenced in any way by what the auditor may or may not have found in the case--the court has taken it from the
auditor and is sending it to you, gentlemen of the jury, as an original proposition. Held:
(a) The findings of fact by an auditor are prima facie true, and the burden of overcoming such findings rests upon
the party making the exception. Adair v. St. Amand, 136 Ga. 1 (70 S.E. 578); Livingston v. Wynne, 147 Ga. 307 (93
S.E. 877). It follows that the court erred in giving the above instructions to the jury.
(b) The fact that, upon the determination of the court to require the jury to find a special verdict of the facts only in
the case, counsel for the defendants submitted an issue of fact which they claimed arose under the pleadings and
evidence in the case and should be passed upon by the jury, did not authorize the court to give said instruction to the
jury. Upon the trial of exceptions of fact to an auditor's report, whether such trial is had under the method [***22]
provided for in the Civil Code (1910), § 5146, or under the method pursued by the court in this case, the findings of fact
by the auditor are prima facie true, and the burden of overcoming them rests upon the exceptor.
The court charged the jury as follows: "A joint interest in the partnership property, or a joint interest in the profits
and losses of the business, constitutes a partnership as to third persons. A common interest in profits alone does not."
Movants except to this charge upon the ground that it was not applicable under the facts. Held, that this exception was
well taken. The question of the existence of this partnership as to third persons was not involved.
The court charged the jury as follows: "If you should find that Mr. Dabney had no interest in the real estate under
Page 146
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***18
his agreement and relations with McDonald, then the question of whether he consented or approved of the conveyance
would not be material." Movants except to this charge upon the ground that it assumes the existence of an agreement
between Dabney and McDonald, when the existence of such agreement was one of the strongly disputed questions in
the case. Held, that this instruction was [***23] erroneous for the reason assigned.
In the 11th, 12th, 13th, 14th, 15th, and 16th grounds of the motion for new trial, movants complain that the court
erred in refusing to give in charge to the jury certain principles of law embraced in requests which were timely
preferred. In these grounds it is not alleged that these requests were preferred by movants. It not being alleged that these
instructions were requested by the defendants, we can not say that they were hurt by the refusal to give them. Before a
party can complain of the refusal of the court to give instructions embraced in requests, it must appear that such requests
were preferred by the complaining party.
Movants insist that the court erred in propounding to the jury the series of questions it submitted to them, on the
ground that the only questions which should have been put to the jury were whether the findings of fact by the auditor
were true. Under the ruling made in headnote 2, the court erred in propounding such series of questions. Movants,
having expressly excepted to an order providing for the submission to the jury of such questions as the court might think
appropriate in eliciting the facts of the case, [***24] which exception was properly preserved by exceptions pendente
lite, on which error is assigned in their bill of exceptions in this court, are not now estopped from complaining of the
series of questions propounded by the court by reason of their participation in shaping these questions; movants at the
time expressly reserving their said exception to this mode of trial. In Malette v. Wright, 120 Ga. 735 (48 S.E. 229), the
parties agreed that the jury should not pass upon each exception of fact, but that all matters of fact should be submitted
as a whole, to be decided either for the plaintiff or the defendant. In Pearce v. Smith, 160 Ga. 337 (127 S.E. 764), the
case was submitted to the judge under an order in which it was provided that he might render a final decree, or such
other decree as he saw fit, in vacation.
Possession of land is notice of whatever right or title the occupant has.
(a) Possession is notice of the rights of those under whom the possessor claims.
(b) The possession of land which will be notice of the occupant's title must have some element in it indicative that
the occupancy is exclusive in its nature.
(c [***25] ) The protection which the registration law gives to one taking title to lands upon the faith of the record
title should not be destroyed except upon clear and satisfactory evidence showing a clear equity in him who seeks to
establish a right in hostility to the record title.
(d) Such possession must be actual, open, visible, exclusive and unambiguous.
(e) Applying the above principles, the plaintiff did not make out a case which entitled him to recover from Luetta T.
Boddie the property bought by her from Elizabeth Dabney, the grantee of McDonald, located at 202-204 West Mitchell
Street, said Elizabeth Dabney having record title to these premises, and said Luetta T. Boddie having bought in good
faith, for value, and without notice of the alleged secret equity of the plaintiff, except such as is to be imputed to her
from the facts which he sets up as showing possession in him, which we hold insufficient for that purpose.
If the grantor has title to or an interest in land, a deed of quitclaim is just as effective to pass that title as a deed
with covenants of warranty.
(a) Where the grantor in such deed conveys to the grantee, his heirs and assigns, "all [***26] his right, title,
interest, claim, or demand" which he "has or may have had in and to the tract of land conveyed," the grantor will be
estopped from asserting any title to or interest in the property conveyed, acquired previously to the execution of such
quitclaim deed, although it contains a recital that it was made for the purpose of releasing all rights acquired by the
grantor under a quitclaim deed from a named party. The quantum of estate conveyed in the granting clause is not cut
Page 147
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***22
down by such recital.
(b) Applying the above principles, the plaintiff was not entitled to recover from his wife an undivided half interest
in the lands known as 110-112 West Mitchell Street, in the City of Atlanta; and a verdict in his favor for such interest is
contrary to the evidence.
A trust is implied whenever the legal title is in one person, but the beneficial interest, either from the payment of
the purchase-money or other circumstances, is either wholly or partially in another.
(a) Where land is bought in whole or in part with money contributed by one of the members of a firm, and the legal
title is taken in the name of the other member, under an agreement that the latter [***27] is to hold the land for the use
of the firm, an implied trust arises in favor of the partnership, and the members become equitable owners and equitable
tenants in common of the land.
(b) A resulting trust, which arises solely from the payment of the purchase-price, is not created unless the
purchase-money is paid either before or at the time of the purchase.
(c) To engraft an implied trust upon an absolute deed by parol evidence, such evidence ought to be clear and
satisfactory.
(d) In an equitable petition brought by one partner against another, for an accounting, for the establishment of his
interest in the partnership assets, and for the recovery of an undivided half interest in real estate held in the name of the
partner proceeded against, on the ground that such real estate was purchased with funds of the firm and title taken in the
name of the partner for the use of the firm, the burden was on the plaintiff to show that, upon full accounting between
them as to the partnership assets, he was entitled to an undivided half interest in the realty. Proof alone that such realty
was bought with partnership funds would not entitle the complainant to an undivided [***28] half interest in such
realty.
(e) In carrying such burden the plaintiff would not be required to show how much of the funds of the partnership, or
how much of the funds contributed by him to the capital of the firm, was expended in the purchase of each piece of such
realty, if the same was purchased in whole or in part with assets of the firm, under an agreement between the partners
that it should be bought with the firm's money and title taken in the name of one of the partners who was to hold the
same for the use of the firm. In such circumstances such real estate will be treated as firm assets; but the interest of each
partner therein will be determined by the result of the final account taken between them.
(f) When one partner leaves the State and abandons the control and management of the partnership to the resident
partner, the latter does not become the sole owner of the business and assets of the firm by that fact alone; and in a
proceeding brought by him against the former for accounting and establishment of his interest in the joint assets, he
must account for all assets of the firm and all profits made in the conduct of the partnership business.
It [***29] follows from the rulings above announced that the trial judge erred in the respect pointed out in
headnote 2, and in refusing to grant a new trial.
The trial judge in the final decree assessed one half of the court costs, including the fees of the auditor and
stenographer, against the plaintiff. To this portion of the decree the plaintiff, in the cross-bill of exceptions, excepted on
the grounds that it was contrary to law and was an abuse of the discretion of the court under the law and facts of this
case. Held:
(a) In an equity case it is the province of the judge to determine upon whom the costs shall fall. Civil Code (1910),
§ 5423.
(b) Auditor's fees may, in the discretion of the court, be apportioned between the parties. Central Ry. Co. v.
Page 148
161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***26
Central Trust Co., 135 Ga. 472 (6) (69 S.E. 708).
(c) The stenographer's fee for reporting the evidence in a case shall be paid upon such terms as the parties may
agree upon; and if no agreement is entered into as to the payment thereof, then in such manner as may be prescribed by
the presiding judge. There being no agreement between the parties as to the payment of this fee, the presiding judge
[***30] was authorized to fix the terms of the payment.
(d) No abuse of discretion by the court in these matters is made to appear.
The court rendered separate judgments against the plaintiff for one half of the fees awarded the auditor and
stenographer. Plaintiff had no notice of and hearing on the taking of these judgments; and he excepted to the same on
the grounds (1) of lack of such notice and hearing, (2) that the main decree is contrary to the law and evidence, and (3)
that the court could not allow these fees as costs. Held: A party is not denied due process of law where costs are taxed
against him without notice and an opportunity to be heard. His remedy is by motion for retaxing the cost, and not by
writ of error in the first instance. McGuire v. Johnson, 25 Ga. 604; Markham v. Ross, 73 Ga. 105; Thornton v.
McLendon, 99 Ga. 590 (27 S.E. 186). If, upon the hearing of such motion to retax the costs, the court should tax against
the movant any costs for which he was not liable, such error could be reached and corrected by writ of error to this
court. Baker v. Bancroft, 79 Ga. 672 (5 S.E. 46).
Applying the above principles, [***31] the assignments of error in the crossbill of exceptions are without merit.
COUNSEL: Jones, Evins, Moore & Powers and W. A. Sutherland, for plaintiffs in error in main bill of exceptions.
Lowndes Calhoun, contra.
JUDGES: Hines, J. All the Justices concur, except Russell, C. J., dissenting.
OPINION BY: HINES
OPINION
[*724] [**554] HINES, J. (After stating the foregoing facts.)
We shall not elaborate any of the principles enunciated in the headnotes, except those embraced in headnotes 8, 9,
and 10.
[8] [HN1] Possession of land is generally notice of whatever right or title the occupant has. Civil Code (1910), §
4528. Possession is not only notice of the rights of the possessor, but of those under whom he claims. Walker v. Neil,
117 Ga. 733, 745 (45 S.E. 387); Austin v. Southern Home B. & L. Asso., 122 Ga. 439 (50 S.E. 382). The possession of
land which will be sufficient to give notice of the occupant's title, or of the title or rights of those under whom he holds,
must have some element indicative that the occupancy is exclusive in its nature. Manning v. Manning, 135 Ga. 597 (69
S.E. 1126). [HN2] Possession by husband and wife is presumptively his possession, [***32] but the presumption
[*725] may be rebutted. Civil Code (1910), § 4528. So where husband and wife are in possession of land, and the
record title is in the husband, who makes application for a loan upon the property, and by his application asserts title to
and ownership of the property, the lender is protected against a secret equity of the wife. Austin v. Southern Home B. &
L. Association, supra. So where a daughter lived in the house with her mother, upon lands the title to which was in the
mother, and where the mother received the rents and profits of the land, a bona fide purchaser from the mother, while
in possession of the land, took its title freed from any secret equity of the daughter. Manning v. Manning, supra. In that
case the mother bought the land with money belonging to the daughter and took the legal title in her own name. So
where the owner of land lived in a house upon it, together with a man and his wife and child, under an agreement with
the wife that if she would board him and do his washing for the remainder of his life the property would belong to her
for life, with remainder to her child. Presumptively the possession was that of the legal [***33] holder of the title; and
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161 Ga. 711, *; 132 S.E. 547, **;
1926 Ga. LEXIS 326, ***29
where there was no other evidence to rebut such presumption, or to show notice of any right or equity in the woman and
her child, this court held that the rule that [HN3] possession of land is notice of whatever right or title the occupant has
would not apply unqualifiedly; and that if a third party purchased the land from the owner bona fide for value and
without notice, he would acquire a good title. Hall v. Hilley, 134 Ga. 77 (67 S.E. 428). To operate as notice, the
possession must be open, visible, exclusive, and unambiguous, not liable to be misconstrued or misunderstood. It must
not be a mixed or ambiguous possession. So it has been held that possession of land by the grantee, holding under an
unrecorded deed, together with the grantor, is not constructive notice of the unrecorded deed to a subsequent
purchaser. Wells v. American Mortgage Co., 109 Ala. 430 (20 So. 136). Where a widow contributed a part of the
purchase-money of a farm, and her brother, who contributed the remainder, took title thereto in his own name without
her knowledge, it was held that the fact that she lived on the farm with him did not give notice of her resulting trust
[***34] to a purchaser from him. Harris v. McIntyre, 118 Ill. 275 (8 N.E. [*726] 182). The correct rule is that when
the occupation by one is not exclusive, but in connection with another, with respect to whom there exists a relationship
sufficient to account for the situation, and the circumstances do not suggest an inconsistent claim, then such a
possession will not give notice of a right by an unrecorded grant. Rankin v. Coar, 46 N.J. Eq. 566 (22 A. 177, 11 L. R.
A. 661).
So where a husband and wife were in possession [**555] of lands to which the wife held title by the record, it was
held that the continuing possession was not notice of an unrecorded deed whereby her title had been conveyed to him.
Atwood v. Bearss, 47 Mich. 72 (10 N.W. 112). The possession of a plural wife of a Mormon, along with the possession
of the husband and his lawful wife, was held not to be notice of her right to a share of the property, to one who took a
mortgage from the husband who held the record title. Townsend v. Little, 109 U.S. 504 (3 S. Ct. 357, 27 L. Ed. 1012).
[HN4] Where the vendor is in apparent possession, the purchaser finding the title of record in the vendor is not put on
further [***35] inquiry; and if at the same time another person is also in possession, there is no presumption of title in
him inconsistent with that of the purchaser, unless there is some fact or circumstance, apparent to his observation,
calculated to excite suspicion of a prudent man dealing with the property that the possessor other than the vendor had
some equity therein. Campbell v. Grennan, 13 Cal. App. 481 (110 P. 156). When it appeared from the record that
McDonald had the title, the proper inference was that the plaintiff's possession was under McDonald and in
subordination to the true title. [HN5] The possession which will be sufficient to put one proposing to purchase real
estate from the person having the record title on inquiry, and which will be equivalent to actual notice of rights or
equities in another, must be actual, open, and visible, not equivocal or ambiguous, or inconsistent with the title of the
apparent owner by the record. Brown v. Volkening, 64 N.Y. 76; Pope v. Allen, 90 N.Y. 298. The rule may be stated thus:
[HN6] If, of two occupants, one has the record title, a purchaser has the right to assume that the other has no title. Smith
v. Yule, 31 Cal. 180 (89 Am. D. 167); [***36] Kirby v. Tallmadge, 160 U.S. 379 (16 S. Ct. 349, 40 L. Ed. 463); Walden
v. Williams, 128 Ark. 5 [*727] (193 S.W. 71); Thierman v. Bodley, 23 Ky. L. Rep. 756 (63 S.W. 737); Munn v. Achey,
110 Ala. 628 (18 So. 299); 39 Cyc. 760 (1). [HN7] The possession which will put a purchaser upon inquiry must
actually exist at the time of the purchase, and the purchaser is not affected by a possession which has been abandoned
before that time. O'Neal v. Prestwood, 153 Ala. 443 (45 So. 251); Aden v. Vallejo, 139 Cal. 165 (72 P. 905); Hewes v.
Wiswell, 8 Me. 94; Roussain v. Norton, 53 Minn. 560 (55 N.W. 747); Hiller v. Jones, 66 Miss. 636 (6 So. 465); Bingham
v. Kirkland, 34 N.J. Eq. 229; Bost v. Setzer, 87 N.C. 187; Boggs v. Varner, 6 Watts & S. (Pa.) 469; King v. Porter, 69
W. Va. 80 (71 S.E. 202); 2 Tiffany on Real Property, 2225.
The plaintiff does not pretend that he had the exclusive possession of this real estate. His contention is that his
firm, through an agent, rented the same to tenants, and that the possession of these tenants of the firm was notice to
Luetta T. Boddie of his rights therein when she bought the property at 200-204 West [***37] Mitchell Street. He had
managed this property from 1915 to June 21, 1921, under a power of attorney from McDonald. During that period he
secured a loan thereon standing in the name of McDonald, and under this power of attorney he executed the notes and
the deed to secure the same in McDonald's name, all of which appeared of record. On June 21, 1921, McDonald
revoked this power, and executed a power of attorney to Dorothy Dabney, the daughter of plaintiff, empowering her to
manage and control his business and property. Under this power of attorney Dorothy Dabney assumed the duties
imposed upon her, and undertook to exercise the powers conferred upon her by this instrument. She undertook to sell
Page 150
161 Ga. 711, *725; 132 S.E. 547, **554;
1926 Ga. LEXIS 326, ***33
this real estate at 202-204 West Mitchell Street. Plaintiff knew of this. He made no objection. In these circumstances the
alleged possession of the plaintiff was not so clear and unambiguous as to be sufficient to put the purchaser upon notice
of his alleged secret equity in these premises. His possession can well be referred to his possession as agent for
McDonald. Under all the facts and circumstances, the legal title of Luetta T. Boddie ought to prevail over this secret
equity of the plaintiff.
[***38] [9] On March 23, 1922, plaintiff conveyed to McDonald by quitclaim deed certain described real estate,
the same being [*728] a portion of the realty involved in this litigation, and known as 110-112 West Mitchell Street,
Atlanta. The granting clause declares that the plaintiff, "in consideration of $ 1.00 and other considerations in hand paid,
does forever quitclaim to the party of the second part, his heirs and assigns, all his right, title, interest, claim or demand,
which said party of the first part has or may have had in and to" the land embraced in this deed. Following the granting
clause in this instrument is the recital, "This deed made for purpose of releasing all rights acquired under quitclaim deed
from Dr. Horace Grant to the grantor herein" to said described real estate. The taxes due the City of Atlanta were not
paid, and the property known as 110-112 West Mitchell Street was sold under a tax fi. fa. against McDonald for these
taxes, when it was bought in by Dr. Grant, who, on Dec. 21, 1916, in consideration of $ 277, by quitclaim deed
conveyed this property to the plaintiff. This property was again purchased by Dr. Grant from the City of Atlanta, which
had acquired [***39] title thereto under a sale thereof for taxes due for the year 1917. By quitclaim deed Dr. Grant
conveyed this property to the plaintiff for the consideration of $ 278.75. Upon obtaining the above quitclaim deed from
the plaintiff, McDonald borrowed upon this property $ 5,000, securing the lender by his deed thereto. Of this loan $
1,500 was paid [**556] to the plaintiff as the consideration of his quitclaim deed to McDonald. The purpose of this
deed was to put title in McDonald so that he could borrow on this property. McDonald thereafter conveyed this property
to Elizabeth Dabney, who is the wife of plaintiff and the sister of McDonald. Under the verdict and decree in this case
plaintiff recovered an undivided half interest in this property from his wife. The question is, whether the plaintiff could
recover this property in the face of the quitclaim deed which he made to McDonald.
It is now well settled in this State that [HN8] a quitclaim deed to land does not estop the maker from afterwards
setting up, as against his grantee, a title acquired subsequently to the making of said deed. Bivins v. Vinzant, 15 Ga. 521;
Morrison v. Whiteside, 116 Ga. 459 (42 S.E. [***40] 729); Taylor v. Wainman, 116 Ga. 795 (43 S.E. 58). This is so
for the reason that words in releases or quitclaims without warranty of title, which purport to [*729] convey any future
interest or title which the releasor or quitclaimer may acquire, are void at law, on the ground that one can not convey
any greater title that he has. Such release or quitclaim passes nothing but what the releasor or quitclaimer has at the
time. Right ex dem. Jeffreys v. Bucknell, 2 B. & A. 278. A release or quitclaim with warranty of title, which purports to
convey what the grantor or the releasor or quitclaimer may in any manner hereafter have, operates as an estoppel on the
ground that it prevents circuity of action. Bivins v. Vinzant, supra. But a quitclaim deed is just as effective to pass any
title or interest which the maker has in lands as a deed with warranty of title. Washburn states the rule as follows: [HN9]
"If the grantor have a title to land, a deed of quitclaim is just as effective to pass that title as a deed with covenants of
warranty." 3 Washburn on Real Property (6th ed.), 332, § 2239. Professor Washburn further says: "Though in one sense
a deed of acquittance [***41] or release may be said to be an estoppel, as it is a valid and final bar to all existing
claims, and all the possibilities arising from previous contracts of which it imports a relinquishment, it can not affect
rights of which the foundation is laid afterwards." 3 Washburn on Real Property (6th ed.), 102, § 1917. In Morrison v.
Whiteside, supra, this court expressly approved these principles. But it is insisted by his counsel that the plaintiff under
his quitclaim deed did not intend and did not undertake to convey to McDonald all his right, title, interest, or claim in
the premises at 110-112 West Mitchell Street, but only the particular interest or title which he acquired to said premises
under his quitclaim deed from Dr. Horace Grant. In the granting clause of the conveyance from plaintiff to McDonald it
is expressly provided that he "does forever quitclaim to party of the second part, his heirs and assigns, all his right, title,
interest, claim or demand, which said party of the first part has or may have had in and to" these premises. Following
the granting clause is this recital: "This deed made for the purpose of releasing all rights acquired under quitclaim deed
from [***42] Dr. Horace Grant to grantor herein." It is urged that this recital discloses the purpose of the grantor to
convey only the rights which he acquired to this property under Dr. Horace Grant, and that, construing this recital in
connection with the granting clause, this instrument [*730] must be held to convey only these rights in these premises
Page 151
161 Ga. 711, *727; 132 S.E. 547, **555;
1926 Ga. LEXIS 326, ***37
and no other. According to the plain language of the granting clause, the plaintiff conveyed to McDonald "all his right,
title, interest, claim or demand" in this property. This included every right, title, interest, claim, or demand which the
plaintiff had in this land. Will the quantum of the estate, or of the right, title, claim, or demand thus conveyed in the
granting clause be cut down so as to convey only specific rights in this property obtained under the plaintiff's
conveyance from Dr. Grant? [HN10] In the construction of a deed, the words used shall be taken most favorably against
the person using them, and most to the advantage of the other party. The rule has been stated thus: "That all the words
of the deed, in construction, be taken most strongly against him who doth speak them, and most in advantage of the
other party." Ball v. [***43] Wallace, 32 Ga. 170. In the construction of a deed an intention expressed in different
recitals will be controlled by the terms of the granting part of the deed. Augusta Land Co. v. Augusta Ry. &c. Co., 140
Ga. 519, 523 (79 S.E. 138). So where a deed recited that it was the purpose of the grantor to give a life-estate to the
grantee, with remainder in fee to his children, but in the granting part of the deed a conveyance was made to the grantee
and his heirs in fee simple, it was held that the granting part of the deed controlled, and that the grantee took an estate in
fee simple. Dunbar v. Aldrich, 79 Miss. 698, 31 So. 341. This recital in this quitclaim deed merely states the purpose
which moved the grantor to make it. Such purpose and the estate conveyed are separate and distinct things. To
effectuate this purpose the grantor conveyed all his right, title, interest, claim, or demand in the premises; and the extent
of the right conveyed will not be cut down by a mere recital of the purpose for which the instrument was made.
Some light will be thrown upon the question of the proper construction of this quitclaim deed, by a consideration of
the circumstances [***44] under which it was executed. The property embraced therein had been twice [**557] sold as
the property of McDonald, for its city taxes, the first time in 1916 and the second time in 1917. It had been bought in by
Dr. Grant, who afterwards quitclaimed it to the plaintiff. McDonald wanted to borrow $ 5,000 thereon. To do this he
had to acquire from the plaintiff [*731] the title which he had acquired by the quitclaim deed from Dr. Grant.
Thereupon plaintiff executed to McDonald the quitclaim deed involved in this discussion, and to induce him to
quitclaim the property to McDonald the latter paid him from the proceeds of the loan which he obtained the sum of $
1,500. It is hardly conceivable that it was the purpose of the plaintiff merely to convey the rights which he acquired in
this property under his quitclaim deed from Dr. Grant, and not to convey his rights under the implied trust which he
seeks to set up and enforce in this case. To impute to him the latter purpose would be to charge him and McDonald with
fraud. So we are of the opinion that the plaintiff in this case is estopped by his quitclaim deed from asserting title to the
premises at 110-112 West Mitchell Street. [***45] It follows that the finding in his favor of the one-half undivided
interest in this property is contrary to law, and a new trial should have been granted on this ground.
[10] [HN11] An implied trust arises when the legal title is in one person, but the beneficial interest, either from the
payment of the purchase money or other circumstances, is either wholly or partially in another. Civil Code (1910), §
3739. Whenever the circumstances are such that the person taking the legal estate, either from fraud or otherwise, can
not enjoy the beneficial interest without violating some established principle of equity, the court will declare him a
trustee for the person beneficially entitled, if such person has not waived his right by subsequent ratification or long
acquiescence. Civil Code (1910), § 3780. Where land is bought for a firm, paid for with money of the firm, and the title
is conveyed to one of the members of the firm, an implied trust arises in favor of such firm. The members of the firm
become equitable owners and tenants in common of such land. Cottle v. Harrold, 72 Ga. 830 (3); Roach v. Roach, 143
Ga. 486, 488 (85 S.E. 703). The trust which arises in these [***46] circumstances in favor of the partnership is not
destroyed by the express verbal, and therefore unenforceable, agreement of the partner in whose name the title is taken,
that he will hold the land for the use of the firm. While such parol agreement can not be enforced as an express trust, the
implied trust arising under these circumstances will be enforced by a court of equity. Jackson v. Jackson, 150 Ga. 544,
549 (104 S.E. 236). Notwithstanding [*732] such agreement, the resulting trust may be proved by matter not in
writing. Poulet v. Johnson, 25 Ga. 403, 411; Jackson v. Jackson, supra. It is urged, however, by counsel for the
defendants, that, where various tracts of land are purchased under these circumstances, it is incumbent upon the partner
who is seeking to set up and enforce such trust to show the specific amount of his funds which went into the purchase of
each tract, where both partners contributed funds toward their purchase. Ordinarily, where one person seeks to enforce
an implied trust in land because it was paid for in part by his money and title thereto was taken in the name of another,
he must prove the amount of his money so used; [***47] but [HN12] where real estate is purchased with funds of a
Page 152
161 Ga. 711, *730; 132 S.E. 547, **556;
1926 Ga. LEXIS 326, ***42
partnership, contributed by both members, and title is taken in the name of one of the members under an agreement that
he is to hold the same for the use of the firm, this rule does not apply. Equity will treat the lands as partnership assets;
and the partner seeking to enforce the implied trust arising under these circumstances will not be required to show the
specific amount of the funds contributed by him to the partnership capital which went into the purchase thereof. The
rights of the respective partners in such realty will depend upon the final accounting between them, upon the dissolution
of the firm for any cause.
Under the principles announced, the judgment in the main bill of exceptions must be reversed, and that in the
cross-bill of exceptions affirmed.
All the Justices concur, except Russell, C. J., dissenting.
Page 153
161 Ga. 711, *732; 132 S.E. 547, **557;
1926 Ga. LEXIS 326, ***47
56 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
PATTERSON CO. v. PEOPLES LOAN & SAVINGS CO.
No. 4239.
SUPREME COURT OF GEORGIA
158 Ga. 503; 123 S.E. 704; 1924 Ga. LEXIS 287
June 16, 1924, Decided
PRIOR HISTORY: [***1] The Court of Appeals requested (in Case No. 14385) instruction from the Supreme
Court upon the following questions, answers to which are necessary to a decision of this case:
"1. Where one holding title to personal property sells it and takes from the purchaser a retention-of-title note for the
purchase-money, but, under an arrangement with the purchaser, retains possession of the property and does not deliver
it to the purchaser, and transfers the note and also the title to the property to a third person, who buys the note from him
and acquires title to the property by reason of the transfer, but in ignorance of the fact that his transferor at the time had
possession of the property and had not delivered it to the purchaser, will a fourth person, who afterwards takes from the
original owner, who still has possession of the property, a chattel mortgage covering the property, when such fourth
person in so doing has no notice of the title to the property in the transferee of the note, but has constructive notice from
the record of the execution of the retention-of-title note, be protected in his title thus acquired, as a bona fide purchaser
for value, against the title of the person [***2] taking the transfer of the note? (See 24 Am. & Eng. Ene. Law (2d ed.),
1164, and cases there cited.)
"2. If the transferee of the note, instead of acquiring title to the property in ignorance of its possession by the
transferor, in fact knew, at the time of taking the transfer of the note and the title to the property, that the property was at
the time in the possession of the transferor and had not by the transferor been delivered to the original purchaser, would
a different rule be applicable?"
CASE SUMMARY:
PROCEDURAL POSTURE: The Court of Appeals requested instructions from the court by submitting two certified
questions. The answers were necessary to a decision of a case. The questions involved retaining possession of personal
Page 154
property after a sale, fourth persons and bona fide purchaser status, and knowledge or lack of knowledge that property
was not delivered to an original purchaser.
OVERVIEW: Georgia's rule, applying in real and personal property sales, was that if a vendee took an absolute
conveyance, but left the property with a vendor, it was prima facie evidence of fraud. If someone conveyed property
absolutely, but was allowed to continue possession as an apparent absolute, unqualified owner, it was prima facie proof
of fraudulent conveyance. Possession was not per se fraud, but was prima facie evidence before a jury of fraud, and
could be explained. The court opined that where presumption of fraud arising from continued possession by an original
vendor was explained and rebutted, the title of the transferee of the retention-of-title note and the property title was
superior to a mortgage a vendor later gave, although the mortgagee was an innocent purchaser for value and without
actual notice of the noteholder's claim and the transferee of the retained title. The court pointed out that a person taking
a mortgage from a vendor, with constructive notice of the contract of conditional sale arising from the record of the
instrument evidencing the sale, should have required the vendor to show that he still had the instrument and did not
transfer it to an innocent holder.
OUTCOME: The court answered both questions in the negative.
CORE TERMS: vendor, mortgage, purchaser, transferee, mortgagee, notice, vendee, personal property, innocent
purchasers, recorded, seller, holder, subsequent purchaser, attested, prima facie, conditional contract, conditional sale,
constructive notice, retention-of-title, purchase-price, fraudulent, retention, ownership, innocent, embraced, indicia,
mortgagor, duly executed, per se, bona fide purchaser
LexisNexis(R) Headnotes
Contracts Law > Negotiable Instruments > Transfers
Contracts Law > Types of Contracts > Personal Property
Contracts Law > Types of Contracts > Rights of Possessors
[HN1] Where the owner of personal property sells it, takes the note of the purchaser for the purchase price, in which he
retains the title to the property until it is paid for, and thereafter transfers the note and the title to the property to a third
person, the title to such property passes from the vendor to his transferee. After the transfer the original vendor has no
title or interest in the property. The seller can convey no greater title than he has himself. Ga. Civ. Code § 4118 (1910).
Real Property Law > Financing > Mortgages & Other Security Instruments > Transfers > General Overview
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN2] No one can transfer a better title than he has, or mortgage property to which he has no title, or in which he has no
interest, unless some principle of estoppel comes into operation against the person claiming under what would
otherwise be the better title.
Civil Procedure > Eminent Domain Proceedings > Jury Trials
Real Property Law > Deeds > Enforceability
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN3] If a vendee takes an absolute conveyance, but nevertheless leaves the property in the possession of a vendor, it is
prima facie evidence of fraud. If a man conveys his property absolutely, and yet is allowed to continue in possession as
its apparent absolute, unqualified owner, this will be prima facie proof that the conveyance is fraudulent. Such
possession is not per se fraud, but is prima facie evidence before the jury of fraud, and may be explained.
Page 155
158 Ga. 503, *; 123 S.E. 704, **;
1924 Ga. LEXIS 287, ***2
Civil Procedure > Trials > Jury Trials > Province of Court & Jury
Contracts Law > Types of Contracts > Rights of Possessors
Real Property Law > Deeds > Enforceability
[HN4] The rule, equally applicable to real and personal estate, to sales for valuable consideration, and to voluntary
deeds, is that possession in the vendor, in case of an absolute sale, is prima facie evidence of fraud; that it may be
explained; that the onus of explanation, after possession is proven, is upon the grantee; and that the question of fraud or
not is submitted to the jury.
Contracts Law > Sales of Goods > Performance > Buyer's Rights
Contracts Law > Sales of Goods > Title, Creditors & Good Faith Purchasers > General Overview
Contracts Law > Types of Contracts > Bona Fide Purchasers
[HN5] The true owner will lose his title in favor of an innocent purchaser for value without notice only where he has
given to another such evidence of the right of selling his goods as, according to the custom of trade or the common
understanding of the world, usually accompanies the authority of disposal, or has given the external indicia of the right
of disposing of his property. Ga. Civ. Code § 4119 (1910).
Real Property Law > Deeds > Statutes of Frauds
Real Property Law > Financing > Mortgages & Other Security Instruments > Formalities
Real Property Law > Financing > Secondary Financing > General Overview
[HN6] Conditional sales, in order for the reservation of the title to be valid as against third parties, must be in writing
and executed and attested in the same manner as mortgages on personal property. Ga. Civ. Code § 3318 (1910).
Real Property Law > Financing > Mortgages & Other Security Instruments > Transfers > General Overview
Real Property Law > Purchase & Sale > Contracts of Sale > General Overview
[HN7] Conditional sales must be recorded within 30 days from date, and in other respects are governed by the laws
relating to the registration of mortgages. Ga. Civ. Code § 3319 (1910).
Real Property Law > Financing > Mortgages & Other Security Instruments > Transfers > General Overview
[HN8] Mortgages, as against the interest of third parties acting in good faith and without notice, who may have acquired
a transfer or lien binding the same property, take effect from the time they are filed for record. Ga. Civ. Code §§ 3259,
3320 (1910).
Contracts Law > Types of Contracts > Bona Fide Purchasers
[HN9] A purchaser or mortgagee from the vendee of personal property, which has been previously sold under a
conditional contract of sale, properly executed and recorded, wherein the title is retained in the vendor until the
purchase price is paid, is bound to inquire whether the purchase price is paid; otherwise the purchaser purchases, or
the mortgagee takes his mortgage, at his peril.
SYLLABUS
Where the owner and vendor of personal property takes from the purchaser thereof his note for the purchase-price,
in which the title to the property is retained in the vendor until the purchase-price is paid, and thereafter transfers the
note and title to the property to a third person, the title to such property passes from the vendor to his transferee.
After such transfer, the vendor has no title or interest in the property which he can mortgage to a third person.
The rule that the retention of possession of property by the vendor, after he has sold the same to another, is per se
Page 156
158 Ga. 503, *; 123 S.E. 704, **;
1924 Ga. LEXIS 287, ***2
fraudulent and void as to a subsequent bona fide purchaser from him, is not of force in this [***3] State, but the rule
in this State is that if the vendee takes an absolute conveyance of property, and leaves the same in the possession of the
vendor, it is prima facie evidence of fraud, but such prima facie presumption may be rebutted.
The true owner of personal property can lose his title thereto in favor of an innocent purchaser for value without
notice, only where he "has given to another such evidence of the right of selling his goods as, according to the custom of
trade or the common understanding of the world, usually accompanies the authority of disposal, or has given the
external indicia of the right of the disposition of his property."
The prima facie presumption that the possession of the property by the vendor was fraudulent, and therefore void as
to a subsequent bona fide mortgagee, is explained and rebutted under the facts stated in the first question propounded
by the Court of Appeals.
The record of a duly attested retention-of-title note is constructive notice to a mortgagee, taking from the vendor a
mortgage upon the property to which title is retained by him in such instrument, of the title of another, who may have
previously taken in good faith and [***4] for value a transfer of such note and title, although at the time of the
execution of the mortgage the vendor was in possession of the property; and the mortgagee takes subject to the title
previously acquired by the holder of the outstanding retention-of-title note.
COUNSEL: R. B. Blackburn, for plaintiff in error.
Etheridge, Sams & Etheridge, contra.
JUDGES: Hines, J. All the Justices concur.
OPINION BY: HINES
OPINION
[*505] [**705] HINES, J. [HN1] Where the owner of personal property sells it, takes the note of the purchaser
for the purchase-price, in which he retains the title to the property until it is paid for, and thereafter transfers the note
and the title to the property to a third person, the title to such property passes from the vendor to his transferee. English
v. Hill, 116 Ga. 415 (42 S.E. 717); Cade v. Jenkins, 88 Ga. 791 (15 S.E. 292); Townsend v. Southern Product Co., 127
Ga. 342 (56 S.E. 436, 119 Am. St. R. 340); West Yellow Pine Co. v. Kendrick, 9 Ga. App. 350 (71 S.E. 504); Jordan
Mercantile Co. v. Brooks, 149 Ga. 157 (99 S.E. 289).
After such transfer the original vendor has no title or interest in the property. [***5] The seller can convey no
greater title than he has himself. Civil Code (1910), § 4118. After such transfer of the title the vendor had no interest
which he could mortgage to a third person. The purchaser would get no better title than the vendor had. His mortgage
would create no lien upon such property, as he had no title or interest which he could mortgage. Such mortgagee would
stand in the shoes of the mortgagor, and would be in no better position than the mortgagor. The mortgagee acquired no
lien upon any interest in the property, as the mortgagor did not have any on which the mortgage could operate. [HN2]
No one can transfer a better title than he has, or mortgage property to which he has no title, or in which he has no
interest, unless some principle of estoppel comes into operation against the person claiming under what would
otherwise be the better title. 24 R. C. L. 373, §§ 662, 663.
[*506] What was the effect of the retention of possession of this property by the vendor under the undisclosed
terms of the arrangement between him and the purchaser? Would this fact estop the assignee of the vendor from
asserting his title to this property, which he acquired by the vendor's transfer [***6] to him of the purchase-money note
and the title to the property therein retained, in ignorance of the fact that the original vendor at the time had possession
of the property and had not delivered it to the purchaser, and when said note was duly executed, attested, and recorded?
Page 157
158 Ga. 503, *; 123 S.E. 704, **;
1924 Ga. LEXIS 287, ***2
Many courts hold that the mere retention of possession of property by the vendor, after he has sold the same to another,
is per se fraudulent and void as to a subsequent bona fide purchaser from him, and that a sale to such subsequent
purchaser would defeat the title of the original purchaser. There are many authorities which hold that where the vendor
of personal property is allowed by the vendee to continue in possession thereof, and thus to give a colorable appearance
of continued ownership, the title of a subsequent bona fide purchaser from such vendor will be upheld as against the
first vendee. 24 Am. & Eng. Enc. Law, 1164; Flanigan v. Pomeroy, 85 Minn. 264 (88 N.W. 761); Streeper v. Eckart, 2
Whart. (Pa.) 302 (30 Am. D. 258); Barr v. Reitz, 53 Pa. 256; Clow v. Woods, 5 Serge. & Rawle 275 (9 Am. D. 346);
Babb v. Clemson, 10 Serge. & Rawle 419 (13 Am. D. 684); Miller v. Browarsky, [***7] 130 Pa. 372 (18 A. 643);
Ticknor v. McClelland, 84 Ill. 471; Norton v. Doolittle, 32 Conn. 405; Weeks v. Prescott, 53 Vt. 57. The reason given
for this rule is that such retention of possession permits innocent purchasers to be misled by the apparent ownership of
goods, where the real ownership does not exist, through an undisclosed transfer to another; and that public policy
requires that while the goods remain in the possession of the former owner, with the consent of the purchaser, they
should, as to innocent purchasers, be treated as his property. Under this view the rights of innocent purchasers in
such cases do not depend upon the actual title of the person with whom they deal, but are derived from the act of the
real owner, which precludes him from disputing, as against them, the existence of the title or power which, through
negligence or mistaken confidence, he caused or allowed to appear to be vested in the person making the transfer or
sale. McNeil v. Tenth Nat. Bk., 46 N.Y. 325 (7 Am. R. 341).
[*507] But such is not the rule in this State. The rule in this State, applicable alike in sales of real and personal
property, is that [HN3] if the vendee take an [***8] absolute conveyance, but nevertheless leave the property in the
possession of the vendor, it is prima facie evidence of fraud. If a man convey his property absolutely, and yet is allowed
to continue in possession as its apparent absolute, unqualified owner, this will be prima facie proof that the conveyance
is fraudulent. Such possession is not per se fraud, but is prima facie evidence before the jury of fraud, and may be
explained. Peck v. Land, 2 Ga. 1, 12 (46 Am. D. 368); Spalding v. Grigg, 4 Ga. 75, 85; Fleming v. Townsend, [**706]
6 Ga. 103, 105 (50 Am. D. 318); Smith v. McDonald, 25 Ga. 377; Stephens v. Southern Cotton Oil Co., 147 Ga. 410 (94
S.E. 245). In Fleming v. Townsend, Judge Nisbet said: "This point has been so often before this court, that I do not
consider it an open question. Few, if any, courts have ventured to question that the retaining of possession, was a badge
of fraud. The question has been, whether it was not per se a fraud, not susceptible of explanation, and which of itself
would annul the sale. It has also been a question, as to what amount of explanation would remove [***9] the
presumption of fraud from possession; and whether courts should not lay their hand upon the matter, and adjudge, as a
question of law, when the presumption was rebutted, rather than that the whole question of explanation should be left in
the hands of the jury. That possession is a mark of fraud has not been doubted--certainly not since Twyne's case, in
which it was resolved to be one. This court has adopted [HN4] the rule, equally applicable to real and personal estate, to
sales for valuable consideration, and to voluntary deeds, that possession in the vendor, in case of an absolute sale, is
prima facie evidence of fraud; that it may be explained; that the onus of explanation, after possession is proven, is upon
the grantee; and that the question of fraud or not is submitted to the jury."
In this State we have adopted the less drastic principle, that [HN5] the true owner will lose his title in favor of an
innocent purchaser for value without notice, only where he "has given to another such evidence of the right of selling
his goods as, according to the custom of trade or the common understanding of the world, usually accompanies the
authority of disposal, or has given the external [***10] indicia of the right of disposing of his property." Civil Code
(1910), § 4119. The mere fact that the purchaser of personal property [*508] leaves it in the possession of the seller is
not evidence of the right of the former to sell it; nor does the purchaser, by permitting the property to remain in the
possession of the seller, give to the latter the external indicia of the right of its disposition. There must be something
more. As to what will furnish such indicia, see Rosser v. Darden, 82 Ga. 219 (7 S.E. 919). This being the rule in
Georgia, was the prima facie presumption that the possession of the vendor was fraudulent, and therefore void as to a
subsequent bona fide mortgagee, overcome under the facts stated in the first question propounded by the Court of
Appeals? At the time the transferee took a transfer of the retention-title note and the title to the property therein
embraced, he was ignorant of the fact that the vendor was then in possession of this property. Clearly then the transferee
could not have entertained any intention of defrauding a subsequent purchaser of this property by its then possession
Page 158
158 Ga. 503, *506; 123 S.E. 704, **705;
1924 Ga. LEXIS 287, ***6
by the vendor. We do not think that the transferee [***11] of the note and title would be guilty of fraud by his mere
failure to inquire and inform himself of the then or subsequent possession of this chattel. The purchaser of the note
and the transferee of the retained title would naturally and reasonably suppose that the vendee in the conditional
contract of sale, which was duly executed and recorded, was in possession of the purchased property and would so
remain. The due execution, attestation, and record of the contract of conditional sale presupposed, and was evidence of,
both the sale and delivery of this property to the purchaser. We do not think that the transferee of the note was so
lacking in the exercise of ordinary care in failing to inform himself as to the possession of the property as would render
his negligence in this matter a fraud against any one who would, after his purchase of the note, take a mortgage on the
property or buy it from the original seller. Under these circumstances we think that the presumption of fraud arising
from the continued possession of the property by the original vendor was explained and rebutted; and this being so, the
title of the transferee of the retention-of-title note and the title to the [***12] property therein embraced would be
superior to a mortgage afterwards given by the vendor, although the mortgagee was an innocent purchaser for value
and without actual notice of the claim of the holder of this note and the transferee of the retained title.
Was the mortgagee, under the facts, an innocent purchaser [*509] for value without notice? He was without
actual notice that the title to the property was in the transferee of the note. The retention-of-title note was duly attested
and recorded. This gave the mortgagee constructive notice of all facts and information which the record of this
instrument would furnish. Did the record of the sale contract give to the taker of the subsequent mortgage on this
property from the vendor notice of the rights of the holder of this note, who bought the property from such vendor prior
to the execution of the mortgage; and would such constructive notice subordinate the mortgage to the title thus acquired
by the holder of the purchase-money note? [HN6] Conditional sales, in order for the reservation of the title to be valid
as against third parties, must be in writing and executed and attested in the same manner as mortgages on personal
property. [***13] Civil Code (1910), § 3318. They [HN7] must be recorded within thirty days from date, and in other
respects are governed by the laws relating to the registration of mortgages. Civil Code (1910), § 3319. [HN8]
Mortgages, as against the interest of third parties acting in good faith and without notice, who may have acquired a
transfer or lien binding the same property, take effect from the time they are filed for record. Civil Code (1910), §§
3259, 3320. [**707] [HN9] A purchaser or mortgagee from the vendee of personal property, which had been
previously sold under a conditional contract of sale, properly executed and recorded, wherein the title is retained in the
vendor until the purchase-price is paid, is bound to inquire whether the purchase-price is paid; otherwise the
purchaser purchases, or the mortgagee takes his mortgage, at his peril. McNatt v. Clarke, 143 Ga. 159 (3) (84 S.E.
447); First Nat. Bank v. Spicer, 10 Ga. App. 503 (73 S.E. 753). So, clearly, the record of this instrument would protect
the seller against the title or claim of any subsequent purchaser or mortgagee from the buyer. English v. Hill, 116
Ga. 415, 42 S.E. 717 (supra). Why should not [***14] the record of this instrument have the like effect to protect the
transferee of the retention-of-title note and the title therein retained against a subsequent purchaser or mortgagee from
the vendor therein? The record of such instrument was notice to the world that the owner of the property therein
embraced had parted with his absolute dominion over it, that he could no longer deal with the property as his own
except as to such interest as he had under the contract of conditional sale, and that he might have divested himself of
[*510] all title to or interest in this property by trading the note, negotiable in form, and by transferring the title to some
innocent holder for value before due. The vendor in the conditional contract of sale, duly attested and recorded, could
not sell the property and defeat the claim of his vendee thereunder. The person taking the mortgage from the vendor to
such property, with constructive notice of the contract of conditional sale arising from the record of the instrument
evidencing such sale, should have required the vendor to show that he still had possession of such instrument and had
not transferred it to some innocent holder; and failing to [***15] do so, he took the risk of the vendor having
transferred the note and his title to the property to an innocent third person. The object of the statute requiring the
record of such instrument is to protect the vendee and vendor against each other, and the public against both.
Burkhalter v. Ector, 25 Ga. 55; Conder v. Holleman, 71 Ga. 93; Rhode Island Loco. Works v. Empire L. Co., 91 Ga.
639, 642 (17 S.E. 1012); Merchants &c. Bank v. Cottrell, 96 Ga. 168 (23 S.E. 127). The record of such instrument is
notice to those who subsequently acquire some interest or right in the property under either of the parties to such
instrument.
Page 159
158 Ga. 503, *508; 123 S.E. 704, **706;
1924 Ga. LEXIS 287, ***10
So we are of the opinion that both questions propounded by the Court of Appeals should be answered in the
negative.
All the Justices concur.
Page 160
158 Ga. 503, *510; 123 S.E. 704, **707;
1924 Ga. LEXIS 287, ***15
69 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
COURSEY et al. v. COURSEY, executor.
[NO NUMBER IN ORIGINAL]
SUPREME COURT OF GEORGIA
141 Ga. 65; 80 S.E. 462; 1913 Ga. LEXIS 322
November 17, 1913, Decided
PRIOR HISTORY: [***1] Complaint for land. Before Judge Rawlings. Toombs superior court. November term,
1912.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiffs filed an action against defendant executor to recover land. The Toombs
Superior Court (Georgia) granted a nonsuit and plaintiffs excepted.
OVERVIEW: Title to the land was originally in a husband and wife from whom the executor's decedent claimed title
following a sale by them to another. Plaintiffs argued that there had been a sheriff's sale under an execution against the
husband and wife, at which another purchaser bought the land and then conveyed it to plaintiffs' mother in trust for her
and her children. The court affirmed the grant of nonsuit. The sheriff's deed was properly excluded because the levy was
made by the sheriff, which was invalid, and it did not appear that the deed or execution were recorded. The deed might
have been admissible if it and the estoppel had been chargeable to the executor's decedent, but because a prima facie
case of notice to the decedent was not made, there was no error in rejecting the deed. Because the purchaser bought the
land and made a deed to the wife as trustee to which her husband was a witness, an equitable estoppel arose that
prevented them from denying the trust as against the beneficiaries. However, estoppel was not a conveyance of title.
The purchaser from the husband and wife was not a party to this proceeding and, therefore, notice to him was not notice
to the decedent.
OUTCOME: The court affirmed the judgment.
Page 161
CORE TERMS: deed, estoppel, purchaser, notice, sheriff's sale, testator, sheriff's deed, trust deed, levy, pais, nonsuit,
constructive notice, accompanied, admissible, chargeable, executor, recorded, bought, color, properly granted
LexisNexis(R) Headnotes
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN1] Color of title, to be of avail, must be accompanied or followed by possession.
Contracts Law > Defenses > Equitable Estoppel > General Overview
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] Estoppel is not a conveyance of title. Its office is to prevent denial by one affected by it, not to affirmatively
transfer title. An estoppel in pais on account of representations made by the owner of land, which induces another
person to extend credit and to accept a mortgage on the land from a third person, is not operative against a subsequent
grantee of the owner of the land, who is a bona fide purchaser for value and without notice.
SYLLABUS
Prior to 1885 (Acts 1884-5, p. 68) a sheriff was not authorized to levy an execution issued from a justice's court;
and if a sheriff levied such an execution upon land and sold the same by virtue thereof, the sale was invalid.
(a) From the statement in the record it is not clear whether the sheriff made the levy or not; but as the objection was
raised that he did so, and such objection was sustained and the sheriff's deed excluded from evidence, and it seems to
have been conceded that the levy was made by the sheriff, this court can not hold that such ruling was erroneous.
(b) The sheriff's deed appears to have been offered as title, and not as color of title. Moreover, it did not purport to
convey title to any one who took possession thereunder. Color of title to one person who never takes possession, but
subsequently conveys to another without referring to the former conveyance, is not color of title to such second person.
The conveyance from his grantor is his color of title.
(c) Notice of the estoppel dealt with in the next headnote not having [***2] been shown so as to affect the
defendant's testator, the sheriff's deed was not admissible in that connection.
In an action to recover land, it appeared that the title was originally held by a man and his wife. Under an execution
against them there was a void sheriff's sale. The husband negotiated with the purchaser for the purpose of having the
latter buy the land and allowing the husband or wife to redeem it. Later, the purchaser at the sheriff's sale made a deed
to the wife, as trustee for her children then living, and those who might be living at her death, reciting a consideration of
love and affection for the grantee's children, and also ten dollars paid. The husband attested this deed. The purchaser at
the sheriff's sale never took possession, but the husband and wife retained it. Held, that an estoppel arose against the
husband and wife in favor of the beneficiaries of the trust deed, preventing them from denying the trust.
Such estoppel would not operate against a subsequent grantee from the husband and wife as individuals, if he were
a bona fide purchaser for value and without notice.
The record of the deed to the wife as trustee for her children, made [***3] by the purchaser at the sheriff's sale,
who was not shown to have any claim of title except the invalid and unrecorded sheriff's deed, did not operate as
constructive notice to a subsequent purchaser from the husband and wife as individuals, they having held a good title
prior to the sheriff's sale, and having remained in possession thereafter.
Page 162
141 Ga. 65, *; 80 S.E. 462, **;
1913 Ga. LEXIS 322, ***1
Adverse possession of land is notice of whatever facts in reference to the title would be developed by inquiry of
the person in possession, reasonably prosecuted, the presumption being that inquiry of such person would disclose
how and under what right he holds possession, and therefore lead to the discovery of the real adverse holder, whether
himself or another for or under whom he holds possession; and in the absence of such inquiry, the presumption is that,
had it been made, the right, title, or interest under which the possessor held would have been disclosed.
(a) If husband and wife are in possession of land, the prima facie presumption is that the possession is that of the
husband.
(b) The purchaser at the sale from the husband and wife was not the defendant in the action to recover the land, but
such defendant was [***4] the executor of another, and the testator was not shown to have been charged with notice or
put upon inquiry. As the plaintiffs failed to show a perfect title, and were compelled to rely upon estoppel in pais, the
burden of showing that the defendant was affected by it rested upon them.
(c) The defendant was not shown to claim under the trust deed, and the rule of estoppel as against privies in estate,
did not apply to him, so as to work an estoppel regardless of the question of notice.
(d) A case of prescriptive title in favor of the plaintiffs was not made out.
There was no error in granting a nonsuit.
COUNSEL: G. W. Lankford and P. W. Meldrim, for plaintiffs.
Way & Burkhalter and Hines & Jordan, for defendant.
JUDGES: Lumpkin, J. All the Justices concur.
OPINION BY: LUMPKIN
OPINION
[*67] [**463] LUMPKIN, J. A. J. Coursey and others brought an action to recover land, against T. J. Coursey as
executor of R. E. L. Coursey, deceased. On the trial the presiding judge excluded from evidence a sheriff's deed on
which the plaintiffs relied. Upon the close of the evidence introduced by them, he granted a nonsuit, and they excepted.
It was admitted by the plaintiffs that [***5] the title was originally in William A. and Mary R. Coursey, under whom
the defendant claimed; but it was contended that there was a sheriff's sale under an execution against the Courseys, at
which William A. McLeod bought, that he conveyed to Mary R. Coursey in trust for her three children then living and
such other children as she might leave living at her death, and that the plaintiffs were the children, or those representing
children, except one, Mrs. Coursey being dead.
The deed from the sheriff to McLeod purported to have been based on a sale by the sheriff in 1860, under an
execution issued from a justice's court. It is not clear from the abstract of the deed contained in the record whether the
levy was made by the sheriff or by a constable, but it was treated as having been made by the sheriff. If so, such levy
was invalid prior to the act of 1885 (Acts 1884-5, p. 68). Code of 1863, § 3574; Treadwell v. Beauchamp, 82 Ga. 736,
737 (9 S.E. 1040). The sheriff's deed was not accompanied by an execution, nor did the deed or execution appear to
have been recorded. An attorney testified that he could not find the execution in the office of the clerk or sheriff, but its
[***6] existence and contents, or the entries of levy, were not shown. Under these facts, we can not say that there was
error in rejecting the sheriff's deed as title.
It did not appear that the deed was offered as color of title, but it is contended that it was admissible as such. It did
not purport to convey title to any one who took possession under it. [HN1] Color of title, to be of avail, must be
accompanied or followed by possession. Turner v. Neisler, ante, 27 (80 S.E. 461).
Page 163
141 Ga. 65, *; 80 S.E. 462, **;
1913 Ga. LEXIS 322, ***3
If notice of this deed and the estoppel presently to be mentioned had been shown to have been chargeable to the
defendant's testator, the deed might have been admissible in that connection. Parks v. [*68] Williams, 137 Ga. 578 (73
S.E. 839). This was the last piece of evidence offered; and as it will be held that a prima facie case of notice to the
defendant's intestate was not made, there was no error in rejecting the deed.
W. A. Coursey and his wife occupied the land, and remained on it after the sheriff's sale. The evidence showed that
Coursey, the husband, was present at the sheriff's sale, and negotiated with the purchaser for the latter to buy the land
and let Coursey or his wife redeem [***7] it; and later McLeod, the purchaser at the sheriff's sale, made a deed to Mrs.
Coursey as trustee, reciting a consideration of love and affection for her children, and ten dollars paid. Coursey was
[**464] a witness to this deed. Against Coursey and Mrs. Coursey an estoppel arose, preventing them from denying the
trust as against the beneficiaries. 2 Herman on Estoppel, § 846; Smith v. Sutton, 74 Ga. 528. But [HN2] estoppel is not a
conveyance of title. Its office is to prevent denial by one affected by it, not to affirmatively transfer title. In Thornton v.
Ferguson, 133 Ga. 825 (67 S.E. 97, 134 Am. St. R. 226), it was held that an estoppel in pais on account of
representations made by the owner of land, which induced another person to extend credit and to accept a mortgage on
the land from a third person, is not operative against a subsequent grantee of the owner of the land, who is a bona fide
purchaser for value and without notice. See also Brian v. Bonvillain, 52 La. Ann. 1794 (28 So. 261).
The question then arises, what notice was shown to the defendant's testator? The deed from McLeod to Mrs.
Coursey as trustee was recorded. But, as McLeod was not [***8] proved to have a legal title, the record of the deed was
not constructive notice to the subsequent purchaser from Mr. and Mrs. Coursey as individuals. The husband and wife
already had title to the property individually. This deed was not a part of the chain under which the purchaser claimed,
and as to him it was not constructive notice. 39 Cyc. 1721 (3), 1722; Felton v. Pitman, 14 Ga. 530; 24 Am. & Eng. Enc.
Law (2d ed.), 148.
W. A. Coursey and his wife having title in themselves, and Mrs. Coursey also having the trust deed from the
purchaser at the void sheriff's sale, when they offered the property for sale, their possession put a proposed purchaser
on inquiry as to the right or title under which they held, and he was chargeable with whatever that [*69] inquiry,
reasonably prosecuted, would have developed. Walker v. Neil, 117 Ga. 733 (45 S.E. 387); Austin v. Southern Home
Building & Loan Association, 122 Ga. 439 (50 S.E. 382). The purchaser from Coursey and his wife, however, is not the
defendant in this action, but the executor of another, and the testator was not shown to have been charged with notice or
put upon inquiry, as it did not [***9] appear that Coursey or his wife were in possession when the testator bought the
land. As the plaintiffs must recover on the strength of their own title, and not on the weakness of that of the defendant,
when they failed to show a superior legal title from W. A. Coursey and his wife, and sought to bridge over the chasm
with an estoppel in pais, it became a part of their case, and the burden of showing that the defendant was affected by it
rested upon them. The rule of estoppel of privies in estate did not apply so as to work an absolute estoppel, as the
defendant was not shown to claim under the trust deed.
It is unnecessary to discuss whether the plaintiffs could set up estoppel in this short form of action, without
pleading it. At any rate, they failed to prove a good title in themselves, or that the defendant's testator was affected with
notice or bound by the estoppel in pais. The nonsuit was therefore properly granted. Other reasons were urged by the
defendant in error why a nonsuit was properly granted. But those discussed above dispose of the case.
It was argued that Mrs. Coursey, as trustee, acquired a good prescriptive title. But she and her husband had title
before the trust [***10] deed was made, and both remained on the land. Prescription did not ripen in her favor as
trustee against herself and her husband.
Judgment affirmed. All the Justices concur.
Page 164
141 Ga. 65, *67; 80 S.E. 462, **463;
1913 Ga. LEXIS 322, ***6
142 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
THOMAS et al. v. HENRY COUNTY WATER AND SEWERAGE AUTHORITY.
A11A2377.
COURT OF APPEALS OF GEORGIA
317 Ga. App. 258; 731 S.E.2d 66; 2012 Ga. App. LEXIS 608; 2012 Fulton County D.
Rep. 2216
July 2, 2012, Decided
SUBSEQUENT HISTORY: Reconsideration denied July 30, 2012 -- Cert. applied for.
Writ of certiorari denied Thomas v. Henry County Water & Sewerage Auth., 2013 Ga. LEXIS 308 (Ga., Mar. 25, 2013)
PRIOR HISTORY: Boundary dispute. Henry Superior Court. Before Judge Crumbley.
DISPOSITION: [***1] Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: A Georgia trial court denied summary judgment to appellant brothers and granted it to
appellee Henry County Water and Sewerage Authority (Authority), concluding that the Authority owned the title to the
riverbed in the disputed area, subject to an easement. The brothers appealed.
OVERVIEW: The brothers argued that the neighbor's quit-claim deeds were not entitled to priority because the
neighbor was not an innocent purchaser who bought in good faith and therefore could not convey good title to the
Authority. The appellate court found that it was undisputed that the neighbor's 2008 deeds were recorded before the
brothers' 1977 deed. The trial court correctly concluded that the brother's repeated and visible activities in the riverbed
did not put the neighbor on notice of their claim to own the entire riverbed. The trial court did not err in concluding that
the neighbor was an innocent purchaser who bought the riverbed without notice that the brothers claimed ownership.
The riverbed was the only portion the Authority wanted to buy. The facts were insufficient to establish that the brothers
were in such notorious possession that they acquired title to the riverbed by prescriptive easement or adverse
possession, O.C.G.A. § 44-5-165. All of the brothers' actions were consistent with their 1976 easement, and therefore
Page 165
they did not hive notice that they claimed the entire riverbed to the exclusion of others.
OUTCOME: The judgment was affirmed.
CORE TERMS: deed, riverbed, disputed, notice, quitclaim deeds, easement, recorded, heirs, acres, adverse possession,
river, summary judgment, bought, bona fide purchaser, unrecorded deed, undisputed, purchaser, Property Law, dry land,
ownership, prescriptive, punctuation, notorious, dam, property line, innocent purchaser, warranty deed, hydroelectric,
holders, plat
LexisNexis(R) Headnotes
Real Property Law > Priorities & Recording > Recording Acts
[HN1] Competing deeds conveying the same property are effective only when they are recorded, and in a contest
between deeds of the same property from the same grantor, when taken without notice to the buyer and with
consideration to the seller, the deed filed first has priority, O.C.G.A. § 44-2-2 (b). O.C.G.A. § 44-2-1 provides that a
deed may be recorded at any time; but a prior unrecorded deed loses its priority over a subsequent recorded deed from
the same vendor when the purchaser takes such deed without notice of the existence of the prior deed.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] A bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no
notice. However, any circumstance which would place a man of ordinary prudence fully upon his guard, and induce
serious inquiry, is sufficient to constitute notice of a prior unrecorded deed. And a younger deed, taken with such
notice, acquires no preference by being recorded in due time.
Real Property Law > Adverse Possession > Elements of Adverse Claims
[HN3] To establish title by adverse possession a party must show possession not originated in fraud that is public,
continuous, exclusive, uninterrupted and peaceable, and accompanied by a claim of right, O.C.G.A. § 44-5-161 (a).
Under O.C.G.A. § 44-5-165, actual possession may be evidenced by enclosure, cultivation, or any use and occupation
which is so notorious as to attract the attention of every adverse claimant and so exclusive as to prevent actual
occupation by another.
Real Property Law > Adverse Possession > Elements of Adverse Claims
[HN4] While adverse possession is usually a mixed question of law and fact -- whether the facts exist which constitute
adverse possession, is for the jury to judge. Whether, assuming the facts proven to be true, they constitute adverse
possession, is for the court to decide.
HEADNOTES
Georgia Advance Headnotes
(1) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. A bona fide purchaser for value is
protected against outstanding interests in land of which the purchaser has no notice; however, any circumstance which
would place a man of ordinary prudence fully upon guard, and induce serious inquiry, is sufficient to constitute
notice of a prior unrecorded deed.
(2) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. Trial court properly determined
Page 166
317 Ga. App. 258, *; 731 S.E.2d 66, **;
2012 Ga. App. LEXIS 608, ***1; 2012 Fulton County D. Rep. 2216
that easement holders' repeated and visible activities on a riverbed did not put an innocent purchaser on notice of their
claim to own the entire riverbed, as the holders' activities were consistent with their easement rights.
(3) Real & Personal Property Law. Deeds & Recording. Deed Interpretation. Trial court did not err in finding that
quit-claim deeds were supported by consideration, as required by OCGA § 44-2-1, in parties' boundary dispute over a
portion of a riverbed, as the deeds were obtained without additional consideration because the riverbed had been
mistakenly omitted from the prior deed, for which valuable consideration had been paid.
(4) Real & Personal Property Law. Adverse Possession. Facts were insufficient as a matter of law to establish that
easement holders were in such notorious possession that they acquired title to the riverbed by prescriptive easement or
adverse possession pursuant to OCGA §§ 44-5-161 (a) and 44-5-165; rather, their actions were consistent with their
easement.
COUNSEL: Stone & Baxter, Ward Stone, Jr., Matthew S. Cathey, Power, Jaugstetter & Futch, Warren R. Power,
Arnall, Golden & Gregory, James P. Smith, Hall, Booth, Smith & Slover, W. Scott Henwood, Dargan S. Cole, Kawania
B. James, for appellants.
Smith, Welch, Webb & White, William A. White, for appellee.
JUDGES: BARNES, Presiding Judge. Adams and McFadden, JJ., concur.
OPINION BY: BARNES
OPINION
[*258] [**67] BARNES, Presiding Judge.
This case involves a boundary dispute over a portion of the South River riverbed located on the Henry and Newton
County line, in an area known as Snapping Shoals, and additional land including a portion of the riverbed and dry land
in Henry County. The trial court denied summary judgment to Hoke Thomas, Jr., and the estate of [*259] Michael
Thomas ("the Thomases") and granted it to the Henry County Water and Sewerage Authority ("the Water Authority"),
concluding that the Water Authority owns the title to the disputed land, subject to an easement. The Thomases appeal,
arguing that the trial court erred, but for the reasons that follow, we affirm.
The Thomas brothers bought land on the Newton County side of the river in 1976 and have been operating a
hydroelectric power generating station there ever since. The Thomases and Henry County dispute ownership of 4.82
acres of riverbed and dry land in Henry County and of additional land including the riverbed at Snapping Shoals
(collectively, the "disputed land"). Initially, the Thomases would not allow the Water Authority to survey the boundary
lines of the disputed property, so [***2] the Water Authority filed a complaint for injunctive relief, seeking authority
for their surveyors to enter onto the disputed land. After an initial hearing, the Water Authority amended the resolution
that authorized the complaint by stating that it might want to use this property for a public purpose at some future time,
and the Thomases agreed to allow the survey. The trial court entered an order enjoining them from preventing the
surveyors from entering onto the property for 30 days, and the property was surveyed. The Thomases then answered the
complaint and counterclaimed for a declaratory judgment as to ownership of the disputed land.
1
1 The trial court noted that this is not an action to quiet title, and its ruling applies only to the parties in this
case.
The parties conducted extensive discovery, and the record establishes that all of the property owned by these parties
was previously owned by Whitehead Die Casting Company, Ltd. In 1976, Hoke and Michael Thomas bought 8.1 acres
from Whitehead Die, on which a mill was located, and obtained certain water rights and easements over Whitehead
Die's other property as needed to maintain water power for the mill. On June [***3] 21, 1976, the Thomases recorded a
Page 167
317 Ga. App. 258, *; 731 S.E.2d 66, **;
2012 Ga. App. LEXIS 608, ***1; 2012 Fulton County D. Rep. 2216
warranty deed showing that their property line ran to the middle of the riverbed. The Thomases contend that Whitehead
Die gave them an additional 4.82 acres in 1977, extending their property line from the middle of the riverbed onto a
portion of dry land in Henry County. Inexplicably, only the plat from 1977 was recorded contemporaneously, but not
the [**68] deed. The deed was discovered in a flood-damaged safe inside the mill and recorded on June 8, 2008, after
this litigation began. The Thomases began operating a hydroelectric generating station on the property in 1976, using
water diverted from the South [*260] River by the dam and the "mill race," a canal that diverts the water from the river
to the mill.
In 1991, Whitehead Die's heirs sold to John Hanger property abutting the Thomases' property in Henry County.
Hanger intended to buy "all the remaining property that the Whitehead Die Casting Company, Ltd., had an interest in,"
or the entire original property of Whitehead Die except those portions already sold to other buyers. The 1991 warranty
deed from the heirs described Hanger's [***4] property by reference to an attached plat, which described the property
line as being "along the bank of [the] river."
In 2004, the Thomases applied to the State Environmental Protection Division ("EPD") for a permit to withdraw 30
million gallons of water per day from the South River at Snapping Shoals for treatment and distribution to six
surrounding counties. The EPD directed the Thomases to consult the surrounding county water authorities about
entering into a public-private venture, and the Thomases presented the proposal to the Henry County Board of
Commissioners. The Board directed the Thomases to discuss the matter with the Water Authority, which rejected the
proposal, apparently due to concerns about the water quality.
In 2008, Hanger agreed to sell the Water Authority a portion of the riverbed and land in Henry County, but after
researching titles, the Water Authority discovered that the plat described in Hanger's 1991 deed from Whitehead Die's
heirs described land that did not include a portion of the disputed land. In February and March 2008, the Water
Authority obtained quitclaim deeds from Whitehead Die's heirs to Hanger, to clarify that they had [***5] intended to
sell to Hanger all the property that had not already been sold to others, which included the 4.82 acres to which the
Thomases had an unrecorded deed. The 2008 quitclaim deeds conveyed to Hanger three tracts of land previously owned
by Whitehead Die, a total of approximately 273.6 acres, specifically excepting all of the property that had previously
been conveyed to approximately 12 other parties.
The parcels excepted from the sale of Whitehead Die's property to Hanger included the property sold to and
recorded by the Thomases in 1976, but not the unrecorded 1977 deed granting them 4.82 acres in Henry County, which
included both riverbed and dry land. The Water Authority then bought property from Hanger that included the 4.82
acres and the riverbed at Snapping Shoals. On March 31, 2008, the Water Authority recorded the quitclaim deeds from
the Whitehead Die heirs to Hanger and the Limited Warranty Deed from Hanger to the Water Authority.
In April and May 2008, Water Authority representatives attempted unsuccessfully to obtain permission from the
Thomases to survey the [*261] property the Water Authority had just purchased from Hanger, which led the Thomases
to discover and record the 1977 deed from Whitehead Die granting them the 4.82 acres in Henry County.
After [***6] the complaint, injunction, and counterclaim were filed, the Water Authority moved for summary
judgment on the Thomases' counterclaim, arguing that the undisputed facts showed that it owned the property it had
purchased from Hanger. The Thomases also moved for summary judgment, contending that they held superior title to
the 4.82 acres by virtue of their 1977 deed, and also that they had prescriptive title to the Snapping Shoals riverbed and
other disputed land through adverse possession. The trial court conducted a hearing in January 2010, and in June 2010
denied the motions for summary judgment. According to the trial court's final order issued in June 2011, at a pre-trial
conference in July 2010 "both sides ... insisted that a trial is not necessary" and both sides renewed their motions for
summary judgment. The trial court granted summary judgment to the Water Authority and denied it to the Thomases,
who appeal.
1. The Thomases contend on appeal that Hanger's quitclaim deeds are not entitled to [**69] priority because first,
Page 168
317 Ga. App. 258, *259; 731 S.E.2d 66, **67;
2012 Ga. App. LEXIS 608, ***3; 2012 Fulton County D. Rep. 2216
Hanger was not an innocent purchaser who bought in good faith and therefore could not convey good title to the
Water Authority. They contend that Hanger had notice that they owned the disputed land, or was at [***7] least aware
of facts that should have caused him to inquire further. Thus, they assert, Hanger's quitclaim deeds acquired no
preference despite being recorded first.
[HN1] Competing deeds conveying the same property are effective only when they are recorded, and in a contest
between deeds of the same property from the same grantor, when taken without notice to the buyer and with
consideration to the seller, the deed filed first has priority. OCGA § 44-2-2 (b); Church of the Nativity v. Whitener, 249
Ga. App. 45, 47 (2) (547 SE2d 587) (2001). OCGA § 44-2-1 provides that "[a] deed may be recorded at any time; but a
prior unrecorded deed loses its priority over a subsequent recorded deed from the same vendor when the purchaser takes
such deed without notice of the existence of the prior deed." As the trial court found in this case, "it is undisputed that
Hanger's 2008 deeds were recorded before [the Thomases'] 1977 deed."
The trial court also concluded that Hanger's quitclaim deeds were entitled to priority because he was an "innocent
purchaser" who had no notice that the Thomases had a prior claim to the riverbed.
(1) [HN2] "A bona fide purchaser for value is protected against outstanding interests [***8] in land of which the
purchaser has no notice. [Cits.]" Farris [*262] v. Nationsbanc Mtg. Corp., 268 Ga. 769, 771 (2) (493 SE2d 143)
(1997).
However, any circumstance which would place a man of ordinary prudence fully upon his guard, and
induce serious inquiry, is sufficient to constitute notice of a prior unrecorded deed. And a younger deed,
taken with such notice, acquires no preference by being recorded in due time.
(Citations and punctuation omitted.) Montgomery v. Barrow, 286 Ga. 896, 897 (1) (692 SE2d 351) (2010).
The Thomases argue that the fact that the Water Authority told Hanger it would buy the property if Hanger got the
deeds corrected put Hanger on notice that the Thomases had a claim to the disputed land. In other words, they argue
that, because the Water Authority had reservations about Hanger's title to the disputed land, Hanger had notice that the
Thomases claimed to own the disputed land before he filed the quitclaim deeds. They also argue that Hanger had a duty
to investigate ownership of the disputed land because the Thomases had maintained the dam, riverbed, and mill race for
30 years.
(2) The trial court correctly concluded that the Thomases' repeated and visible activities on the [***9] disputed
land did not put Hanger on notice of their claim to own it. Because their 1976 deed from Whitehead Die granted them
an easement to use some of the disputed land, all of the Thomases' activities were consistent with their easement rights.
Further, all of the structures related to the Thomases' hydroelectric facility are located on the 8.1-acre property they
bought from Whitehead Die in 1976, about which there is no title dispute. Finally, the evidence shows that the Water
Authority's reservations about Hanger's title were related to the wording of the deed from Whitehead Die's heirs, not to
whether someone else owned that land, and therefore did not constitute notice of the Thomases' claims. The trial court
did not err in concluding that Hanger was an innocent purchaser who bought the disputed land without notice that the
Thomases claimed ownership.
2. The Thomases also argue that the trial court erred in finding that Hanger's 2008 quitclaim deeds from Whitehead
Die's heirs were supported by consideration, as required by OCGA § 44-2-1. The trial court held that the Thomases'
argument
ignores that undisputed evidence that Hanger obtained the [***10] 2008 quitclaim deeds for the
riverbed without any additional consideration being paid based on the proposition that the riverbed had
been mistakenly omitted from the 1991 deed. It is undisputed that Hanger paid valuable consideration for
the [*263] 1991 deed. This serves as the valuable consideration supporting the 2008 corrective deeds as
Page 169
317 Ga. App. 258, *261; 731 S.E.2d 66, **69;
2012 Ga. App. LEXIS 608, ***6; 2012 Fulton County D. Rep. 2216
well. See 17A C.J.S. Contracts § 564; [**70] Bullock v. Johnson, 110 Ga. 486 (1) (35 SE 703, 705)
(1900).
2
(3) This conclusion is logical and legally sound. If the parties intended, as the evidence shows, that Hanger purchase
and the Whitehead Die heirs sell, all of the Whitehead Die property that had not previously been sold, then no new
consideration was necessary to support deeds that clarified that intent, as the new deeds "rest upon the original
consideration." Bullock, 110 Ga. at 490. Hanger already owned that property, and the quitclaim deeds rectified a mutual
mistake by clarifying the boundaries of the property purchased in 1991.
2 While the Thomases assert that the trial court lacked authority to rule "sua sponte" that the consideration
Hanger paid Whitehead Die in 1991 constituted consideration for the 2008 quitclaim deeds, the Thomases raised
the consideration [***11] issue in their brief responding to the Water Authority's supplemental motion for
summary judgment.
The Thomases argue that the only evidence supporting the conclusion that the quitclaim deeds merely corrected a
mistake was the "unilateral, self-serving declaration by Hanger" about his intentions in 1991 to acquire all of Whitehead
Die's unsold land. But the fact that all 13 of the Whitehead Die heirs signed and returned quitclaim deeds also supports
that conclusion, as do the quitclaim deeds themselves. The Thomases also argue that the fact that Hanger sold only the
disputed land, which was added by the quitclaim deeds, confirms that the 1991 deed was accurate, but the disputed land
was the only portion the Water Authority wanted to buy.
3. Finally, the Thomases contend that they adversely possessed the Snapping Shoals riverbed and other disputed
land and thus acquired title by prescription.[HN3] "To establish title by adverse possession a party must show
possession not originated in fraud that is public, continuous, exclusive, uninterrupted and peaceable, and accompanied
by a claim of right. OCGA § 44-5-161 (a)." (Citation and punctuation omitted.) Bailey v. Moten, 289 Ga. 897, 898 (2)
(717 SE2d 205) (2011).
"Under [***12] OCGA § 44-5-165, actual possession may be evidenced by enclosure, cultivation, or any use and
occupation which is so notorious as to attract the attention of every adverse claimant and so exclusive as to prevent
actual occupation by another." Friendship Baptist Church v. West, 265 Ga. 745 (462 SE2d 618) (1995). The Thomases
did not enclose or cultivate the riverbed, of course, but assert that they exercised dominion and control over it by
damming the river upstream of their property, diverting the water through the mill race, and maintaining the riverbed.
Regarding other disputed [*264] land, they also make numerous factual arguments about their exclusion of others from
the property and representations from Whitehead Die principals affirming that the Thomases owned the dam.
(4) [HN4] "While adverse possession is usually a mixed question of law and fact -- whether the facts exist which
constitute adverse possession, is for the jury to judge. Whether, assuming the facts proven to be true, they constitute
adverse possession, is for the court to decide." (Citation and punctuation omitted.) Ga. Power Co. v. Irvin, 267 Ga. 760,
766 (2) (482 SE2d 362) (1997). Aside from the trial court's recitation that the parties insisted a jury trial [***13] was
unnecessary, the facts as set out by the trial court and as recited by the Thomases are insufficient as a matter of law to
establish that the Thomases were in such notorious possession that they acquired title to the disputed land by
prescriptive easement or adverse possession. All of the Thomases' actions were consistent with their 1976 easement,
and therefore did not give notice that they claimed the disputed land to the exclusion of others.
Judgment affirmed. Adams and McFadden, JJ., concur.
Page 170
317 Ga. App. 258, *263; 731 S.E.2d 66, **69;
2012 Ga. App. LEXIS 608, ***10; 2012 Fulton County D. Rep. 2216
149 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
WHITEN v. MURRAY et al.
A04A0655.
COURT OF APPEALS OF GEORGIA
267 Ga. App. 417; 599 S.E.2d 346; 2004 Ga. App. LEXIS 671; 2004 Fulton County D.
Rep. 1757
May 14, 2004, Decided.
PRIOR HISTORY: [***1] Implied trust. Stephens Superior Court. Before Judge Woods.
DISPOSITION: Judgment affirmed in part and reversed in part.
CASE SUMMARY:
PROCEDURAL POSTURE: The Georgia trial court granted summary judgment in favor of appellees, a husband, the
buyers, and the alleged bona fide purchasers (BFP), and against appellant wife, in this equitable action regarding the
existence of an implied trust. The wife appealed.
OVERVIEW: The wife contended on appeal that the trial court erred in: (1) holding that the BFP purchased the
property without notice; (2) holding that she had an adequate remedy at law, thereby preventing her equitable claims;
and, (3) basing its grant of summary judgment on her failure to plead a remedy at law. First, summary judgment to the
husband was proper, as he quitclaimed any interest he had in the property to the wife. Second, a resulting trust arose in
favor of the wife, through monthly payments to the financing company and taxes. Third, the trial court erred in holding
that the BFP were bona fide purchasers of the property without notice, as they were aware of the wife's interest by
filing suit to have a mobile home removed. Also, they had a duty to make inquiry as to the wife's rights in the
premises. Fourth, because the wife filed her complaint in equity less than a year after the action accrued, she was not
guilty of laches. Fifth, since no representation that the property was in the wife's hands was ever made, she could not
have been said to have unclean hands. Finally, the fact that an action might have been brought at law for damages did
not divest equity of jurisdiction.
Page 171
OUTCOME: Summary judgment in favor of the husband was affirmed, but the judgment in favor of the buyers and the
BFP was reversed.
CORE TERMS: notice, constructive trust, summary judgment, bona fide purchasers, equitable, implied trust, resulting
trusts, divorce, punctuation, laches, unclean hands, beneficial interest, trustee ex maleficio, deed, financing, partake,
monthly payments, mobile home, adequate remedy, unambiguous, claimant, visible, prevail, couple, affirmative
defense, action in equity, own use, subsequent events, classification, constructive
LexisNexis(R) Headnotes
Civil Procedure > Summary Judgment > Burdens of Production & Proof > General Overview
[HN1] The party moving for summary judgment has the burden of showing the absence of a genuine issue of any
material fact and if the trial court is presented with a choice of inferences to be drawn from the facts all inferences of
fact from the proofs proffered at the hearing must be drawn against the movant and in favor of the party opposing the
motion. A litigant has a right to a trial where there is the slightest doubt as to the facts. All inferences from the evidence
introduced will be interpreted favorably toward making an issue of fact. Thus, to prevail on motion for summary
judgment, the movant has the burden to produce evidence which conclusively eliminates all material issues in the case.
Civil Procedure > Summary Judgment > Appellate Review > Standards of Review
Civil Procedure > Appeals > Standards of Review > De Novo Review
[HN2] A de novo standard of review applies to an appeal from a grant of summary judgment.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Creation
[HN3] Trusts are either express or implied. Trusts are implied: (1) whenever the legal title is in one person, but the
beneficial interest, either from the payment of the purchase money or other circumstances, is either wholly or partially
in another; (2) where, from any fraud, one person obtains the title to property which rightly belongs to another; and (3)
where from the nature of the transaction it is manifest that it was the intention of the parties that the person taking the
legal title should have no beneficial interest. Thus, it will be seen that implied trusts arise under varying circumstances.
Such trusts are divided into two categories; resulting trusts and constructive trusts, and sometimes it is exceedingly
difficult to differentiate between the two; but ordinarily distinctions are unnecessary since both are implied trusts and
are governed by the same rules. Not infrequently in the case of resulting trusts no fraud exists, such trusts resting
primarily on an implication of law from the nature of the transaction; but generally, if not necessarily, the element of
fraud is present in constructive trusts.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
[HN4] Sometimes a trust partakes of the nature of both a resulting and a constructive trust. For instance (aside from
those cases calling for special considerations, as where there arises an inference of a gift), if A purchases land, paying
the purchase-price therefor, and for convenience, or by agreement with B, the legal title is placed in B's name, a
resulting trust arises in favor of A; and if B, who had every intention of conveying the property to A, should die, his
heirs or representative would hold the property impressed with a resulting trust, although no fraud had entered into the
transaction. If, under the same circumstances, B took title, having induced the transaction, intending at the time to break
the agreement and appropriate the property to his own use, or after acquiring the title formed such an evil and dishonest
intention, which was followed by a retention or disposition of the trust res, this would constitute fraud, and he would
hold the property or the proceeds as a trustee ex maleficio. Thus, what in the beginning might have been a resulting trust
may by subsequent events partake more of the nature of a constructive trust.
Page 172
267 Ga. App. 417, *; 599 S.E.2d 346, **;
2004 Ga. App. LEXIS 671, ***1; 2004 Fulton County D. Rep. 1757
Estate, Gift & Trust Law > Trusts > Constructive Trusts
[HN5] A constructive trust is a remedy created by a court in equity to prevent unjust enrichment. Equity will not allow
one with a legal interest in a piece of property a windfall recovery when the beneficial interest should flow to another.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN6] A bona fide purchaser for value is protected against outstanding equitable interests in land of which the
purchaser has no notice. Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to
which it is afterwards found that such inquiry might have led. Ignorance of a fact due to negligence shall be equivalent
to knowledge in fixing the rights of parties.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN7] Possession of land shall constitute notice of the rights or title of the occupant. In order for the possession to have
the effect of notice, it must be actual, open, visible, exclusive, and unambiguous. He who takes with notice of an equity
takes subject to that equity. Notice sufficient to excite attention and put a party on inquiry shall be notice of
everything to which it is afterwards found that such inquiry might have led. Ignorance of a fact, due to negligence, shall
be equivalent to knowledge in fixing the rights of the parties.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Affirmative Defenses > General
Overview
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Waiver & Preservation
Estate, Gift & Trust Law > Trusts > Constructive Trusts
[HN8] Under O.C.G.A. § 53-12-93, a person claiming the beneficial interest in property may be found to have waived
the right to a constructive trust by subsequent ratification or long acquiescence. In addition, courts of equity may
interpose an equitable bar whenever, from the lapse of time and laches of the complainant, it would be inequitable to
allow a party to enforce his legal rights. Whether laches should apply depends on a consideration of the particular
circumstances, including the length of the delay in the claimant's assertion of rights, the sufficiency of the excuse for the
delay, the loss of evidence on disputed matters, the opportunity for the claimant to have acted sooner, and whether the
claimant or the adverse party possessed the property during the delay. These factors are relevant because laches is not
merely a question of time, but principally a matter of inequity in permitting the claim to be enforced.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Governments > Legislation > Statutes of Limitations > Time Limitations
Real Property Law > Limited Use Rights > Easements > General Overview
[HN9] By analogy to the doctrine that an action for the recovery of land can be defeated by prescriptive title resulting
from possession for seven years under color of title, an action to enforce an implied trust must generally be brought
within seven years from the time the action accrues.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Affirmative Defenses > General
Overview
[HN10] The unclean-hands maxim which bars a complainant in equity from obtaining relief has reference to an inequity
which infects the cause of action so that to entertain it would be violative of conscience. It must relate directly to the
transaction concerning which complaint is made. The rule refers to equitable rights respecting the subject-matter of the
action. It does not embrace outside matters.
Civil Procedure > Equity > General Overview
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Page 173
267 Ga. App. 417, *; 599 S.E.2d 346, **;
2004 Ga. App. LEXIS 671, ***1; 2004 Fulton County D. Rep. 1757
[HN11] Constructive or implied trusts are such as are raised by equity in respect of property which has been acquired by
fraud, or where, though acquired originally without fraud, it is against equity that it should be retained by him who
holds it. Trusts are children of equity. A court of law may entertain them; but when the case is complicated, especially
when it has a flavor of fraud, equity will not banish them, and remit the parties to another forum. As against a trustee ex
maleficio, the person injured is entitled to recover the property wrongfully obtained or in equity subject it and its
income to such a trust; and if the trust property cannot be traced, the fact that an action might have been brought at law
for damages or that the plaintiff may in his suit to establish the trust also seek a money judgment for the proceeds of the
trust property, will not divest equity of jurisdiction.
HEADNOTES
Georgia Advance Headnotes
(1) Real & Personal Property Law. Estates, Rights & Titles. Equitable Interests. Appellant argued that the trial
court erred in granting summary judgment to a couple who held title to property but had never made a payment.
Through monthly payments to the financing company and payment of taxes and by terms of her divorce settlement, an
equitable interest in real property lay solely in appellant; the sale of the property constituted fraud, and thus a
constructive trust arose in her favor.
(2) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. Trial court erred in determining
that a couple were bona fide purchasers of property without notice of appellant's interest, where they lived across the
road from the property and knew appellant had a mobile home on the property. Appellant was in actual, open, visible,
exclusive, and unambiguous possession of the property; the purchasing couple had an affirmative duty to inquire of
her concerning her rights, and, as a consequence of their failure to do so, could not prevail as purchasers.
COUNSEL: McClure, Ramsay, Dickerson & Escoe, Bambi N. Carswell, for appellant.
Smith & Tabor, Donald C. Tabor, Jeffery S. Malcom, for appellees.
JUDGES: BLACKBURN, Presiding Judge. Barnes and Mikell, JJ., concur.
OPINION BY: BLACKBURN
OPINION
[**348] [*417] BLACKBURN, Presiding Judge.
In this equitable action regarding the existence of an implied trust, Melessa C. Whiten appeals the trial court's grant
of summary judgment to appellees, Billy Ray Murray, Jr., John and Debra Weems (the "Weems"), and Dean and Anita
Michaud (the "Michauds"),
1
arguing that the trial court erred in: (1) holding that the Michauds were bona fide
purchasers of the property without notice; (2) holding that Whiten had an adequate remedy at law, thereby preventing
her equitable claims; and (3) basing its grant of summary judgment on Whiten's failure to plead a remedy at law. For the
reasons set [**349] forth below, we affirm in part and reverse in part.
1 Whiten filed her appeal in the Supreme Court of Georgia. Finding that the appeal did not invoke its equity
jurisdiction, the Supreme Court transferred the appeal to this Court.
[HN1] The party moving for summary judgment has the burden of showing the absence of a genuine
issue of any material fact and if the trial court is presented with a choice of inferences to be drawn from
the facts all inferences of fact from the proofs proffered at the hearing must be drawn against the movant
Page 174
267 Ga. App. 417, *; 599 S.E.2d 346, **;
2004 Ga. App. LEXIS 671, ***1; 2004 Fulton County D. Rep. 1757
and in favor [***2] of the party opposing the motion. A litigant has a right to a trial where there is the
slightest doubt as to the facts. All inferences from the evidence introduced will be interpreted favorably
toward making an issue of fact. [*418] Thus, to prevail on motion for summary judgment, the movant
has the burden to produce evidence which conclusively eliminates all material issues in the case.
(Citations and punctuation omitted.) Lewis v. C & S Nat. Bank.
2
[HN2] A de novo standard of review applies to an
appeal from a grant of summary judgment. Matjoulis v. Integon Gen. Ins. Corp.
3
2 Lewis v. C & S Nat. Bank, 139 Ga. App. 855, 860-861 (1) (b) (229 S.E.2d 765) (1976).
3 Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 S.E.2d 684) (1997).
Viewed in the light most favorable to [***3] Whiten, the record shows that in 1996, Whiten and Murray, who were
married at the time, entered into an agreement with the Weems, under which the Weems agreed to purchase a certain
tract of land and obtain financing for the purchase and Whiten and Murray would make all payments on the property,
keep the property insured, pay the property taxes, and maintain and keep up the property. The understanding of the
parties was that the Weems would eventually transfer fee simple ownership of the property to Whiten and Murray but
that, if necessary, the property could remain in the Weems' name until the loan was paid in full. This agreement was
never reduced to writing as required by the Statute of Frauds, but, because of the partial performance of the parties
under the oral contract, the agreement would be removed from the statute. O.C.G.A. § 13-5-31 (3).
In 1998, Whiten and Murray were divorced; at the time of the divorce, the transfer of the property from the Weems
to Whiten and Murray still had not occurred. The divorce decree incorporated a separation agreement which required
Murray to make the monthly payments on the property and to quitclaim any and all interest [***4] he had in the
property to Whiten.
After the divorce, Murray made all the mortgage payments on the property in a timely manner until the property
was sold by the Weems to the Michauds in August 2002. Whiten paid the taxes on the property for tax years 1998 and
1999 and reimbursed the Weems for taxes they paid on the property for tax years 2000 and 2001.
On August 29, 2002, the Weems transferred the property by warranty deed to the Michauds, who paid $ 18,000 for
the property. Subsequently, the Michauds filed suit against Whiten and Murray in the Magistrate Court of Stephens
County to have the mobile home located on the property removed.
On January 15, 2003, Whiten filed a complaint in equity to establish a constructive trust on the property. Whiten
also made a claim for fraud. Whiten asked that the deed be declared void and that [*419] she be declared the owner of
the property. In the alternative, she asked for damages in the amount of the fair market value of the property.
The appellees filed a motion to dismiss, alleging that the Michauds were bona fide purchasers for value without
notice and that Whiten was guilty of laches and unclean hands. The motion to dismiss was converted into [***5] a
motion for summary judgment, which was granted by the superior court. This appeal followed.
1. As a preliminary matter, we affirm the trial court's grant of summary judgment to Billy Ray Murray, Jr. As the
trial court found, Murray quitclaimed any interest he had in the property to Whiten and, in the absence in the record of
any misrepresentations made to Whiten, is entitled to judgment in his favor as to Whiten's claims.
2. Whiten argues that the trial court erred in holding that the Michauds were [**350] bona fide purchasers for
value without notice of Whiten's right to and interest in the property. Before we address the merits of Whiten's first
enumeration of error, we must determine whether an implied trust arose in Whiten's favor. In doing so, we find the
decision of our Supreme Court in Hancock v. Hancock
4
particularly instructive. In setting forth basic principles
regarding implied trusts, the Supreme Court said:
4 Hancock v. Hancock, 205 Ga. 684 (54 S.E.2d 385) (1949).
Page 175
267 Ga. App. 417, *417; 599 S.E.2d 346, **349;
2004 Ga. App. LEXIS 671, ***1; 2004 Fulton County D. Rep. 1757
[HN3] Trusts are either express or implied. ... Trusts are implied: 1. Whenever the legal title is in one
person, but the beneficial interest, either from the payment of the purchase money or other
circumstances, is either wholly or partially in another. 2. Where, [***6] from any fraud, one person
obtains the title to property which rightly belongs to another. 3. Where from the nature of the transaction
it is manifest that it was the intention of the parties that the person taking the legal title should have no
beneficial interest. Thus it will be seen that implied trusts arise under varying circumstances. Such trusts
are divided into two categories; resulting trusts and constructive trusts, and sometimes it is exceedingly
difficult to differentiate between the two; but ordinarily distinctions are unnecessary since both are
implied trusts and are governed by the same rules. Generally trusts arising under the first and third
classifications in the cited Code section are resulting trusts, while those arising under the second
classification are constructive trusts. Not infrequently in the case of resulting trusts no fraud exists, such
trusts resting primarily on an implication of law from the nature of the transaction; [*420] but generally,
if not necessarily, the element of fraud is present in constructive trusts.
[HN4] Sometimes a trust partakes of the nature of both a resulting and a constructive trust. For instance
(aside from those cases calling for special [***7] considerations, as where there arises an inference of a
gift), if A purchases land, paying the purchase-price therefor, and for convenience, or by agreement with
B, the legal title is placed in B's name, a resulting trust arises in favor of A; and if B, who had every
intention of conveying the property to A, should die, his heirs or representative would hold the property
impressed with a resulting trust, although no fraud had entered into the transaction. If, under the same
circumstances, B took title, having induced the transaction, intending at the time to break the agreement
and appropriate the property to his own use, or after acquiring the title formed such an evil and dishonest
intention, which was followed by a retention or disposition of the trust res, this would constitute fraud,
and he would hold the property or the proceeds as a trustee ex maleficio. Thus, what in the beginning
might have been a resulting trust may by subsequent events partake more of the nature of a constructive
trust.
(Citation and punctuation omitted.) Id. at 689-690.
[***8] The facts and circumstances in the present case are similar to those described in Hancock. (1) Though title
to the property was in the Weems, a resulting trust arose in favor of Whiten and Murray through their payment of
monthly payments to the financing company and taxes. By the terms of the divorce settlement, and pursuant to the
quitclaim deed executed by Murray, the equitable interest lay solely in Whiten. The sale of the property by the Weems
to the Michauds, after all mortgage payments on the property and tax payments had been made by Whiten or Murray,
constituted fraud, a constructive trust then arose in favor of Whiten, and the Weems held the property or the proceeds as
trustees ex maleficio for Whiten. As in the example given in Hancock, what was in the beginning a resulting trust came,
by subsequent events, to partake more of the nature of a constructive trust.
We note further that [HN5] "a constructive trust is a remedy created by a court in equity to prevent unjust
enrichment." St. Paul Mercury Ins. [*421] Co. v. Meeks.
5
"Equity will not allow one with a legal interest in a piece of
property a windfall recovery when the beneficial interest should flow to another." [**351] Weekes [***9] v. Gay.
6
In
this case, to allow the Weems to retain the proceeds of the sale of the property when they had made no payments toward
purchase of the property would result in just such an inequitable windfall recovery to them.
5 St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 138 (2) (508 S.E.2d 646) (1998).
6 Weekes v. Gay, 243 Ga. 784, 787 (3) (256 S.E.2d 901) (1979).
Having concluded that an implied trust exists in favor of Whiten, the question is whether the Michauds were bona
fide purchasers for value without notice of Whiten's interest.
Page 176
267 Ga. App. 417, *419; 599 S.E.2d 346, **350;
2004 Ga. App. LEXIS 671, ***5; 2004 Fulton County D. Rep. 1757
[HN6] A bona fide purchaser for value is protected against outstanding equitable interests in land of
which the purchaser has no notice. Notice sufficient to excite attention and put a party on inquiry shall
be notice of everything to which it is afterwards found that such inquiry might have led. Ignorance of a
fact due to negligence shall be equivalent to knowledge in fixing the rights of parties.
(Punctuation and footnote [***10] omitted.) R. W. Holdco, Inc. v. SCI/RW Holdco, Inc.
7
7 R. W. Holdco, Inc. v. SCI/RW Holdco, Inc., 250 Ga. App. 414, 415 (1) (551 S.E.2d 825) (2001).
It is uncontested, as the trial court held, that the Michauds did not have notice of any interest of record since neither
Whiten nor Murray was in the chain of title. Whiten concedes as much and argues instead that the issue is possession
and whether her possession of the property constituted actual or constructive notice to the Michauds of her right to the
property.
[HN7] Possession of land shall constitute notice of the rights or title of the occupant. In order for the
possession to have the effect of notice, it must be actual, open, visible, exclusive, and unambiguous. He
who takes with notice of an equity takes subject to that equity. Notice sufficient to excite attention and
put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry
might have led. Ignorance of a fact, due to negligence, shall [***11] be equivalent to knowledge in
fixing the rights of the parties.
(Citations and punctuation omitted.) Bacote v. Wyckoff.
8
8 Bacote v. Wyckoff, 251 Ga. 862, 866 (2) (310 S.E.2d 520) (1984).
(2) In light of the foregoing equitable principles, we conclude that the trial court erred in holding that the Michauds
were bona fide [*422] purchasers of the property without notice of Whiten's interest. The record shows that Whiten
had a mobile home on the property and that the Michauds, aware of her interest in the home on the property, filed suit
against her and Murray to have the home removed. The record also shows that the Michauds lived across the road from
Whiten's property, that they were aware of her divorce from Murray, and that, shortly after the Michauds bought the
property from the Weems, Dean Michaud went onto the property and confronted Whiten, who told him to stay off the
property. These facts demonstrate that Whiten was in actual, open, visible, exclusive, and unambiguous possession
[***12] of the property and that the Michauds had an affirmative duty to inquire of Whiten concerning her rights in
the premises; as a consequence of their failure to do so, they may not now prevail.
We go further to point out that even if the Michauds had been bona fide purchasers without notice, Whiten's
action in equity nonetheless would have survived and the trial court's grant of summary judgment would have been
error. As Hancock makes clear, where one takes title to property and, after acquiring title, forms an evil and dishonest
intention to appropriate the property to his own use, which is followed by retention or disposition of the trust res, he
holds the property or the proceeds as a trustee ex maleficio. Thus, even if the Michauds were protected because they
had no notice of Whiten's interest in the property, the proceeds of the sale of the property held by the Weems would be
impressed with a constructive trust in favor of Whiten.
The appellees argue that Whiten's claims are barred by the doctrines of laches and [**352] unclean hands. We find
neither of these defenses applicable.
[HN8] Under O.C.G.A. § 53-12-93 (b), a person claiming the beneficial interest [***13] in property may be found
Page 177
267 Ga. App. 417, *421; 599 S.E.2d 346, **351;
2004 Ga. App. LEXIS 671, ***9; 2004 Fulton County D. Rep. 1757
to have waived the right to a constructive trust by subsequent ratification or long acquiescence.
In addition, courts of equity may interpose an equitable bar whenever, from the lapse of time and
laches of the complainant, it would be inequitable to allow a party to enforce his legal rights. Whether
laches should apply depends on a consideration of the particular circumstances, including the length of
the delay in the claimant's assertion of rights, the sufficiency of the excuse for the delay, the loss of
evidence on disputed matters, the opportunity for the claimant to have acted sooner, and whether the
claimant or the adverse party possessed the property during the delay. These factors are relevant because
laches is not merely a question [*423] of time, but principally a matter of inequity in permitting the
claim to be enforced.
(Citations and punctuation omitted.) Cagle v. Cagle.
9
9 Cagle v. Cagle, 277 Ga. 219, 220 (1) (586 S.E.2d 665) (2003).
[HN9] "By analogy [***14] to the doctrine that an action for the recovery of land can be defeated by prescriptive
title resulting from possession for seven years under color of title, an action to enforce an implied trust must generally
be brought within seven years from the time the action accrues." Richards v. Richards.
10
In this case, Whiten's action in
equity accrued in August 2002, when she learned that the Michauds were claiming title to the property. Id. Whiten filed
her complaint in equity on January 15, 2003, less than a year after the action accrued. It is clear, then, that she is not
guilty of laches.
10 Richards v. Richards, 209 Ga. 839, 843 (3) (76 S.E.2d 492) (1953).
The appellees also assert that Whiten had unclean hands because she did not list the property as an asset in a
bankruptcy petition she had filed and which was active at the time of the sale of the property,
11
and because she asked
Murray to take title to the property in his own name when she was going through a later divorce. Again, [***15] we
disagree.
11 We note that [HN10] the appellees did not raise the affirmative defense of judicial estoppel in their answer.
See, e.g., Cochran v. Emory Univ., 251 Ga. App. 737 (555 S.E.2d 96) (2001); Dillard-Winecoff, LLC v. IBF
Participating Income Fund, 250 Ga. App. 602 (552 S.E.2d 523) (2001). If an affirmative defense is not pled in
the answer, it is waived. Brown v. Little, 227 Ga. App. 484, 485 (1) (489 S.E.2d 596) (1997).
The unclean-hands maxim which bars a complainant in equity from obtaining relief has reference to an
inequity which infects the cause of action so that to entertain it would be violative of conscience. It must
relate directly to the transaction concerning which complaint is made. The rule refers to equitable rights
respecting the subject-matter of the action. It does not embrace outside matters.
(Citation and punctuation omitted.) Partain v. Maddox.
12
Neither Whiten's bankruptcy petition nor her divorce
concerned parties to the present action and is thus not directly related to that action. Moreover, though asked by Whiten
to do so, Murray never put title to the property in his name; since no representation that the property was in Murray's
hands was ever made, Whiten cannot be said to have had unclean hands in that matter. Fuller v. Fuller
13
(holding that
unclean [*424] hands rule did not apply where party fell short of executing fraudulent purpose and thus was guilty of
no wrong).
12 [***16] Partain v. Maddox, 227 Ga. 623, 637-638 (4) (182 S.E.2d 450) (1971).
Page 178
267 Ga. App. 417, *422; 599 S.E.2d 346, **352;
2004 Ga. App. LEXIS 671, ***13; 2004 Fulton County D. Rep. 1757
13 Fuller v. Fuller, 211 Ga. 201, 203 (84 S.E.2d 665) (1954).
3. Whiten also maintains that the trial court erred in granting summary judgment to the appellees by holding that
she had an adequate remedy at law. We agree.
[HN11] Constructive or implied trusts are such as are raised by equity in respect of property which has
been acquired by fraud, or where, though acquired originally without [**353] fraud, it is against equity
that it should be retained by him who holds it. Trusts are children of equity. A court of law may entertain
them; but when the case is complicated, especially when it has a flavor of fraud, equity will not banish
them, and remit the parties to another forum. As against a trustee ex maleficio, the person injured is
entitled to recover the property wrongfully obtained or in equity subject it and its income to such a trust;
and if the trust property cannot be traced, the fact that an action might have been brought at law for
damages or that the plaintiff may in his suit to [***17] establish the trust also seek a money judgment
for the proceeds of the trust property, will not divest equity of jurisdiction.
(Citations and punctuation omitted.) Bateman v. Patterson.
14
Hence, in this case, it was error for the trial judge to grant
summary judgment to the appellees on the ground that Whiten had an adequate remedy at law.
14 Bateman v. Patterson, 212 Ga. 284, 285 (2) (92 S.E.2d 8) (1956).
4. Our holding in Division 3 renders Whiten's third enumeration of error moot.
Judgment affirmed in part and reversed in part. Barnes and Mikell, JJ., concur.
Page 179
267 Ga. App. 417, *424; 599 S.E.2d 346, **352;
2004 Ga. App. LEXIS 671, ***16; 2004 Fulton County D. Rep. 1757
150 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
CISTOLA v. DANIEL. ODEGAARD et al. v. DANIEL.
A03A2482. A03A2483.
COURT OF APPEALS OF GEORGIA
266 Ga. App. 891; 598 S.E.2d 535; 2004 Ga. App. LEXIS 435; 2004 Fulton County D.
Rep. 1267
March 25, 2004, Decided.
SUBSEQUENT HISTORY: [***1] Reconsideration denied April 9, 2004 -- Cert. applied for.
Writ of certiorari denied Cistola v. Daniel, 2004 Ga. LEXIS 711 (Ga., Sept. 7, 2004)
PRIOR HISTORY: Real property. Hall Superior Court. Before Judge Fuller.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellants, original buyers and a second buyer, challenged a judgment from a trial court
(Georgia), which ordered rescission of a quitclaim deed that appellee seller executed for a strip of land that was between
the buyers' property and the adjoining landowners' property.
OVERVIEW: The seller's father conveyed a tract of land to the buyers and then conveyed an adjacent tract of land to
another, who conveyed it to a third party. The ownership of a strip of land between the properties became at issue when
the buyers sold the land to the second buyer. The buyers' real estate agent requested a corrective quitclaim deed for the
strip, which was given. When the adjacent landowners claimed ownership of the strip, the seller, remembering his father
intended that the strip should go to them, signed an affidavit of title alleging the real estate agent fraudulently induced
him to sign the quitclaim deed. The seller then filed a complaint seeking rescission of the quitclaim deed for fraud. That
rescission was ordered. The buyers and the second buyer appealed, arguing their motions for a directed verdict should
have been granted. The court found that whether the agent's conversation with the seller amounted to a
misrepresentation was a jury question. Also, their defenses of estoppel and that the second buyer was a bona fide
Page 180
purchaser were subject to jury questions. Since denials of the directed verdict motions were proper, the judgment was
proper.
OUTCOME: The court affirmed the judgment ordering rescission of the quitclaim deed the seller made.
CORE TERMS: quitclaim deed, disputed, deed, tract, diligence, directed verdict, conveyed, ownership, notice, built,
signing, "corrective", claim of fraud, disputed property, misrepresentation, inform, conversation, convey, fraud claim,
justifiably relied, bona fide purchaser, purchaser, real estate agent, strip of land, tract of land, evidence showed,
proximate cause, rescission, landowners, defrauded
LexisNexis(R) Headnotes
Civil Procedure > Trials > Judgment as Matter of Law > General Overview
Civil Procedure > Appeals > Standards of Review > General Overview
[HN1] In reviewing a trial court's denial of a motion for directed verdict, an appellate court reviews and resolves the
evidence and any doubts or ambiguities in favor of the verdict. A directed verdict is not appropriate unless there is no
conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom,
demands a certain verdict.
Real Property Law > Purchase & Sale > Fraudulent Transfers
Torts > Business Torts > Fraud & Misrepresentation > General Overview
[HN2] In order to prove fraud in a land transfer case, the transferor is required to demonstrate an intentional false
representation or omission of material fact by the transferee, designed to induce him to sign the quitclaim deed, upon
which he justifiably relied, and which results in damage to him.
Real Property Law > Purchase & Sale > Fraudulent Transfers
Torts > Business Torts > Fraud & Misrepresentation > General Overview
[HN3] A party to a quitclaim transaction cannot rely upon the representations of the other party unless he exercises
reasonable due diligence to protect his own interests. In Georgia, equity will grant no relief in favor of one who buys
land when he fails to exercise any diligence for his protection, and assertions that the buyer blindly relied on the
representations of the seller as to matters of which he could have informed himself. It cannot be said that the purchase
originated in fraud so much as in the carelessness of the purchaser to exercise ordinary care for his own interest.
Civil Procedure > Trials > Judgment as Matter of Law > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
Torts > Business Torts > Fraud & Misrepresentation > General Overview
[HN4] The trial court properly denies a motion for directed verdict on issue of due diligence when, in addition to
inspecting the property, a home buyer asked the seller questions to which he gave false, deceptive or otherwise reckless
answers.
Contracts Law > Defenses > Equitable Estoppel > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN5] See O.C.G.A. § 51-6-4.
Real Property Law > Priorities & Recording > Bona Fide Purchasers
Page 181
266 Ga. App. 891, *; 598 S.E.2d 535, **;
2004 Ga. App. LEXIS 435, ***1; 2004 Fulton County D. Rep. 1267
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN6] Notice of possession can give rise to further inquiry notice of the possessor. While the rule is that possession
of land is notice of whatever title or interest therein the possessor has, the real principle applicable in such a case is
broader than this. The principle upon which the rule is founded is that adverse possession of land is notice of whatever
facts in reference to the title would be developed by inquiry of the person in possession, the presumption being that
inquiry of him will disclose how, or under what right, he holds possession, and therefore lead to the discovery of the
real adverse holder, whether himself or another for whom he holds possession.
HEADNOTES
Georgia Advance Headnotes
(1) Torts. Real Property Torts. Affirmance was warranted for a judgment ordering rescission of a quitclaim deed
executed in connection with a strip of land. The person signing the quitclaim deed understood the intent was not
actually to convey additional property, but merely to correct a scrivener's error in a deed signed by his father years
earlier, and the answers by a real estate agent to his specific questions about the nature of the deed reinforced his
understanding that no conveyance would take place.
COUNSEL: Lefkoff, Duncan, Grimes & Miller, John R. Grimes, for appellant (case no. A03A2482).
Stewart, Melvin & Frost, Frank Armstrong III, for appellants (case no. A03A2483).
King & Spalding, Robert K. Woo, Jr., Hartness & Link, Frederick E. Link, for appellee.
JUDGES: ADAMS, Judge. Andrews, P. J., and Barnes, J., concur.
OPINION BY: ADAMS
OPINION
[**536] [*891] ADAMS, Judge.
Jenifer B. Cistola and John C. and Ellen T. Odegaard appeal from the trial court's judgment [**537] ordering the
rescission of a quitclaim deed executed by Tom W. Daniel, Jr. in connection with a tract of land in Hall County. Daniel,
the named plaintiff in this case,
1
sought rescission of the deed on the ground of fraud and misrepresentation. We affirm.
1 Daniel originally attempted to assign his fraud claim to Robert and Sally Woo, who initially filed the
lawsuit. Daniel was later allowed to intervene in the suit. Subsequently, the trial court granted partial summary
judgment to Cistola and the Odegaards as to the Woos' claims, holding that Daniel could not legally assign his
fraud claim to them. See O.C.G.A. § 44-12-24; Peoples v. Consolidated Freightways, 226 Ga. App. 265, 266 (1)
(486 S.E.2d 604) (1997).
[***2] On April 30, 1974, Daniel's father conveyed a tract of land in Hall County to the Odegaards by warranty
deed. On September 4, 1980, Daniel's father conveyed an adjacent tract of land to Leslie W. Buie and Kathryn D.
Ekleberry. This tract was subsequently conveyed to Robert K. and Sally L. Woo by warranty deed dated December 17,
1981.
At issue in this lawsuit is the ownership of an approximately 40-foot strip of land that lies between the property
originally deeded [*892] to the Odegaards and the property eventually deeded to the Woos. This disputed tract was not
included in the description of the land conveyed by Daniel's father to Buie and Ekleberry, which they subsequently sold
to the Woos. Nor was the tract included in the numerical metes and bounds description of the property conveyed by
Daniel's father to the Odegaards. In fact, the metes and bounds description in the Odegaards' deed describes a
Page 182
266 Ga. App. 891, *; 598 S.E.2d 535, **;
2004 Ga. App. LEXIS 435, ***1; 2004 Fulton County D. Rep. 1267
landlocked parcel. This anomaly apparently went unnoticed by anyone, including Hall County, until 1999 when the
Odegaards decided to sell their land.
2
2 For example, although the disputed tract apparently remained titled in the name of Daniel's father, the Daniel
family never received any tax bills on the property.
[***3] When the Odegaards discovered the mix-up, they approached Daniel through their real estate agent, Kelly
Moore, to request a corrective quitclaim deed with regard to the land that Daniel's father had conveyed to the
Odegaards. The contents of Moore's conversations with Daniel are in dispute, and will be addressed further below. But
it is undisputed that following those discussions, on October 19, 1999, Daniel signed a quitclaim deed that had the effect
of conveying the disputed tract to the Odegaards.
In 2000, the Odegaards contracted to sell their property, including the disputed tract, to Cistola. During the sales
process, Cistola was informed that the Woos' improvements were encroaching upon the disputed tract, and she
requested that the Woos be sent a formal request to remove the encroachment. Moore, the Odegaards' real estate agent,
testified that prior to the closing on her purchase, Cistola acknowledged reading a letter, which noted this encroachment.
Moreover, before the sale closed, Moore told Cistola and the Odegaards that the Woos were claiming ownership of the
disputed property. Cistola's purchase of the Odegaard property closed on June 23, 2000.
In the interim, Daniel [***4] became aware that a dispute existed regarding the land conveyed in the quitclaim
deed. After discussing the matter with the Woos, he recalled that his father had intended to convey the disputed tract to
Buie and Ekleberry and that he had not intended to convey it to the Odegaards. On June 2, 2000, Daniel signed an
Affidavit Affecting Title, asserting this recollection and claiming that he was fraudulently induced by Moore to sign the
quitclaim deed. This affidavit was not filed of record in Hall County until July 7, 2000, approximately two weeks after
the Cistola closing and more than eight months after Daniel signed the quitclaim deed.
During the jury trial, additional evidence showed that the Woos resided on their property after they purchased it,
with their driveway [*893] and garden lying partly upon the disputed tract. The Woos maintained the disputed tract
and added improvements to it because they believed that it was included in the land they purchased from Buie and
Ekleberry. Buie had also believed that he owned the land, and he had maintained a garden on it. He believed that he had
conveyed this property to the Woos. The Odegaards made no improvements to either the property originally [***5]
conveyed to them or the disputed tract during their twenty years of ownership, and [**538] on at least two occasions,
asked the Woos for permission to walk across the disputed property to get to their land. And until 1999, the Odegaards
never exerted any ownership over, or questioned, the Woos' ownership over, the disputed tract.
1. Cistola and the Odegaards assert that the trial court erred in denying their motion for directed verdict on Daniel's
fraud claim. [HN1] In reviewing a trial court's denial of a motion for directed verdict, we review and resolve the
evidence and any doubts or ambiguities in favor of the verdict. A directed verdict is not appropriate "unless there is no
conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom,
demands a certain verdict." (Punctuation and footnote omitted.) Paul v. Destito, 250 Ga. App. 631 (550 S.E.2d 739)
(2001).
Here, [HN2] in order to prove fraud, Daniel was required to demonstrate an intentional false representation or
omission of material fact by Moore, designed to induce him to sign the quitclaim deed, upon which he justifiably relied,
and which resulted in damage to him. See [***6] State Farm Mut. Auto Ins. Co. v. Health Horizons, 264 Ga. App. 443,
447 (2) (590 S.E.2d 798) (2003); Paul v. Destito, 250 Ga. App. at 635 (1). Cistola and the Odegaards assert that they
were entitled to a directed verdict because Daniel failed to establish that he justifiably relied on Moore's statements in
signing the quitclaim deed.
Daniel's claim of fraud arises from the telephone conversation in which Moore asked him to sign a corrective
quitclaim deed. Daniel testified that Moore called and told him he was representing the Odegaards in the sale of their
Page 183
266 Ga. App. 891, *892; 598 S.E.2d 535, **537;
2004 Ga. App. LEXIS 435, ***2; 2004 Fulton County D. Rep. 1267
property and that a mistake had been found in the description on the deed Daniel's father had signed in connection with
their land. Daniel is an attorney, and over his years of practice he had seen a number of occasions when errors had been
discovered in prior deeds and quitclaim deeds were required to correct the error. Daniel understood that the intent in
signing a quitclaim deed under such circumstances was not actually to convey additional property, but merely to correct
a descriptive error. He said that Moore never told him that the disputed 40-foot strip had never been conveyed or that
his [***7] father might have retained an interest in the strip.
[*894] Moreover, before agreeing to sign a corrective deed, Daniel asked Moore two questions. First, he asked
whether the Odegaards or anyone else had built anything on the property, and Moore replied, "No." Second, he asked
whether Moore had discussed the need for the "corrective" deed with the adjoining landowners. Daniel said that Moore
told him he had discussed the issue with the Woos, and they were in agreement. Daniel said that the answers to these
questions were important. He explained:
If ... the adjacent landowners ... were in agreement with it and nobody had built on it, then it seemed to
me to be something that why wouldn't I do it. I mean, it was just the right thing to do to be helpful. If he
had relayed to me the real facts, the truth as he knew it to be, I certainly would have done it differently.
Daniel indicated that if he knew something had been built on the property or that the adjoining landowners had not been
informed of the issue or that he had an ownership interest in any of the land, he would have investigated the matter
further.
Moore testified that before talking to Daniel, he was aware that Daniel [***8] appeared to have an interest in the
disputed 40-foot strip of land. He also knew at the time of his call to Daniel that the Woos had built a tool shed on the
disputed property. Moore testified, however, that he told Daniel about the disputed strip and also told him that a utility
shed had been built on an easement on the land.
Cistola and the Odegaards contend that under these facts, Daniel cannot establish that he justifiably relied upon
Moore's representations in signing the quitclaim deed. They assert that the evidence showed as a matter of law that
Daniel failed to exercise the requisite due diligence in signing the quitclaim deed.
In support of this argument, Cistola and the Odegaards point to a long line of cases involving claims of fraud in the
purchase and sale of real estate. These cases [**539] hold that [HN3] a party to such a transaction cannot rely upon the
representations of the other party unless he exercises reasonable due diligence to protect his own interests. As our
Supreme Court explained in one early decision:
[I]t is well settled in Georgia that equity will grant no relief in favor of one who buys land, when he
fails to exercise any diligence for his protection, and [***9] asserts that he blindly relied on the
representations of the seller as to matters of which he could have informed himself. ... So it can not be
said that the [*895] purchase originated in fraud so much as in the carelessness of the purchaser to
exercise ordinary care for his own interest.
(Citation and punctuation omitted.) Browning v. Richardson, 181 Ga. 413, 415 (182 SE 516) (1935). See also, e.g.,
Brakebill v. Hicks, 259 Ga. 849, 852 (388 S.E.2d 695) (1990); Crawford v. Williams, 258 Ga. 806, 807-808 (375 S.E.2d
223) (1989); Howard v. McFarland, 237 Ga. App. 483, 484-485 (1) (515 S.E.2d 629) (1999); Fowler v. Overby, 223
Ga. App. 803, 804-805 (1) (478 S.E.2d 919) (1996).
But as the trial court correctly observed in denying the defendants' earlier motion for summary judgment on the
Page 184
266 Ga. App. 891, *893; 598 S.E.2d 535, **538;
2004 Ga. App. LEXIS 435, ***6; 2004 Fulton County D. Rep. 1267
same ground, this matter does not involve a typical purchase or sale of land and thus is distinguishable from the line of
cases upon which Cistola and the Odegaards rely. Daniel was not undertaking to sell or purchase any property. Rather,
he testified that Moore requested the quitclaim deed as a mere accommodation to correct a scrivener's error in [***10]
a deed signed by his father years earlier.
Under these circumstances, Daniel could not be held to the same level of diligence required of a purchasing or
selling party in a standard real estate transaction. But our research has disclosed no cases addressing the issues of
justifiable reliance or due diligence under similar facts. The evidence here, however, showed that Daniel asked Moore
questions to ascertain additional information before agreeing to sign the quitclaim deed. In Brookshire v. Digby, 224
Ga. App. 512, 517 (481 S.E.2d 250) (1997), this Court held that [HN4] the trial court properly denied a motion for
directed verdict on the issue of due diligence when, in addition to inspecting the property, a home buyer asked the seller
questions to which he gave "false, deceptive or otherwise reckless" answers. Similarly, we find that whether Daniel's
inquiry constituted reasonable diligence under the circumstances of this case was for the jury to decide. See Ades v.
Werther, 256 Ga. App. 8, 12 (2) (a) (567 S.E.2d 340) (2002) (justifiable reliance ordinarily a question for the jury).
Cistola and the Odegaards also assert that the trial court should have granted [***11] their motion for directed
verdict because in the absence of a confidential relationship or any special circumstances in this case, Moore had no
duty to inform Daniel that he had an interest in the disputed property. See generally O.C.G.A. § 23-2-23. But this
argument mischaracterizes Daniel's fraud claim, which does not rely solely upon a failure to disclose. Daniel also based
his claim on Moore's alleged misrepresentations in response to his specific questions. Daniel stated that if Moore had
told him that there were improvements on the property or that the Woos had not been informed about the mistake in the
property description, he would have investigated the matter further. (1) Thus, it was for the jury to determine [*896]
whether Moore's answers "defeated [Daniel's] efforts to exercise due diligence" under the circumstances of this case.
Brookshire, 224 Ga. App. at 517.
2. In a related argument, Cistola and the Odegaards take issue with a portion of the trial court's jury instructions
stating that a "defrauded party may justifiably rely where one party's agent's affirmative representations have led the
defrauded party to forego inquiry which [***12] the defrauded party might otherwise have made." They assert that this
charge was not based on Georgia law, but instead came from legal authority in other jurisdictions. They argue that this
charge told the jury that "a person lied to can rely on the statements of the liar alone without an independent inquiry."
Although the disputed charge comes from other jurisdictions, it finds at least some support in Georgia law. As
noted above, the Brookshire court found that a [**540] fraud could arise where the defendant's misrepresentations
defeated further inquiry or diligence. Id. But even if the charge was error, we find that it was harmless when the jury
instructions are considered as a whole. The contested portion of the charge followed earlier instructions outlining the
elements of fraud and noting that before a person is entitled to relief on the ground of fraud, "it must appear that person
used ordinary care to find out the facts and protect against loss" in the absence of special circumstances or a confidential
relationship. And later in the charge, the trial court gave a complete and expanded instruction on the requirement of due
diligence.
Thus, even though the disputed portion of the [***13] charge may not be as clear or precise as may be desired,
when the charge as a whole is considered in the context of the facts and law, the trial court fully informed the jury
regarding Daniel's obligation of due diligence and the elements of fraud. "The charge given by the court was adapted to
the facts and clearly illuminated the issues presented to the jury for resolution." (Citation omitted.) Big Bend
Agri-Services v. Bank of Meigs, 174 Ga. App. 493, 495-496 (2) (330 S.E.2d 422) (1985).
3. Cistola and the Odegaards further contend that they were entitled to a directed verdict on the issue of their
defense of estoppel because Daniel did not act promptly to inform Cistola or the Odegaards of his claim of fraud. In
making this argument, Cistola and the Odegaards cite O.C.G.A. § 51-6-4 (b) which states that [HN5] "[o]ne who silently
stands by and permits another to purchase his property, without disclosing his title, is guilty of such a fraud as estops
him from subsequently setting up such title against the purchaser." They assert that Daniel is estopped from asserting
Page 185
266 Ga. App. 891, *895; 598 S.E.2d 535, **539;
2004 Ga. App. LEXIS 435, ***9; 2004 Fulton County D. Rep. 1267
fraud because he failed to inform them of his claim until after the closing on Cistola's [***14] purchase.
[*897] But the record demonstrates that Daniel believed that the Woos were notifying the other parties of his
claim. The Woos did, in fact, tell Moore that they claimed the disputed tract. And Moore stated that he told both Cistola
and the Odegaards about the Woos' claim before the closing. This evidence raises a question of fact, and the trial court
did not err in denying the defendants' motion for directed verdict on the ground of estoppel. See generally Efstathiou v.
Reiss, 227 Ga. App. 735, 737 (1) (c) (490 S.E.2d 426) (1997).
4. In addition, Cistola and the Odegaards assert that the trial court erred in denying their motion for directed verdict
on the ground that the evidence supported Cistola's defense that she was a bona fide purchaser for value without notice
of any adverse claim by Daniel to her title. See generally O.C.G.A. §§ 23-1-19; 23-1-20. Cistola asserts that she took
title before Daniel filed his "Affidavit Affecting Title" and that he failed to inform her of his claim of fraud before she
purchased the property.
The evidence showed that Cistola was aware before she closed on the [***15] property that the Woos claimed
ownership of the disputed tract. She spoke with Moore and read correspondence outlining the issue. Moreover, she
knew that the Woos had built on the tract and also maintained it. But Cistola and the Odegaards argue that this did not
put her on notice that Daniel was claiming fraud in the execution of his quitclaim deed, only that the Woos claimed
ownership. Moreover, they note that Cistola's attorney called Daniel directly, but before Daniel became aware of the
controversy over the disputed tract, to inquire about his interest in the land, and he denied having any interest.
We agree with the trial court that the evidence presented a jury issue on Cistola's defense that she was a bona fide
purchaser. Cistola was clearly aware of a dispute regarding the land she intended to purchase, but there was no
evidence that she discussed the matter with the Woos or inquired into the basis of their claim of ownership. In the
somewhat analogous context of adverse possession, the Supreme Court of Georgia explained that [HN6] notice of
possession can give rise to further inquiry notice of the possessor:
While the rule, as ordinarily stated, is that possession of land is [***16] notice of whatever title or
interest therein the possessor has, we think that the real principle applicable in such a case is broader
than this. The [**541] principle upon which the rule is founded is, that adverse possession of land is
notice of whatever facts in reference to the title would be developed by inquiry of the person in
possession, the presumption being that inquiry of him will disclose how, or under what right, he holds
possession, and therefore lead to the discovery of the [*898] real adverse holder, whether himself or
another for whom he holds possession.
Walker v. Neil, 117 Ga. 733, 745 (45 SE 387) (1903). Thus, it was for the jury to determine whether the notice given to
Cistola prior to the closing was sufficient to defeat Cistola's claim that she was a bona fide purchaser. See generally
Price v. Watts, 223 Ga. 805, 806 (158 S.E.2d 406) (1967) (finding evidence sufficient to create jury issue on whether
purchaser had notice of unrecorded deed).
5. Cistola and the Odegaards also contend the trial court erred in denying their motion for directed verdict on the
ground that Daniel failed to prove the misrepresentations were the proximate cause of [***17] his injury. They note
that Daniel's conversation with Moore occurred in May 1999, but he did not sign the deed until October 1999. At that
time, the deed was sent to him with a cover letter from an attorney enclosing a "Corrective Quitclaim Deed." Daniel had
no conversations with Moore at the time he signed the deed, thus they assert that the two events cannot be causally
linked to support a finding of proximate cause. We find no merit to this argument. The evidence at trial created a jury
issue as to whether Moore's representations to Daniel were the proximate cause of his decision to sign the quitclaim
Page 186
266 Ga. App. 891, *896; 598 S.E.2d 535, **540;
2004 Ga. App. LEXIS 435, ***13; 2004 Fulton County D. Rep. 1267
deed.
Judgment affirmed. Andrews, P. J., and Barnes, J., concur.
Page 187
266 Ga. App. 891, *898; 598 S.E.2d 535, **541;
2004 Ga. App. LEXIS 435, ***17; 2004 Fulton County D. Rep. 1267
152 of 176 DOCUMENTS
Cited
As of: Aug 04, 2014
HADLOCK et al. v. ANDERSON.
A99A2489.
COURT OF APPEALS OF GEORGIA
246 Ga. App. 291; 540 S.E.2d 282; 2000 Ga. App. LEXIS 1210; 2000 Fulton County D.
Rep. 4106
October 6, 2000, Decided
PRIOR HISTORY: [***1] Fraudulent conveyance. Carroll Superior Court. Before Judge Hicks, Senior Judge.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendants appealed from the order of the Carroll Superior Court (Georgia), which
rendered judgment in favor of plaintiffs in their action for cancellation of deeds transferring title to land in fraud of
creditors in violation of Ga. Code Ann. § 18-2-22.
OVERVIEW: Previously plaintiffs were awarded judgment against defendants for fraud in the sale of a log home
package. Plaintiffs were unable to collect on the judgment and they the sued defendants alleging that defendant husband
transferred several parcels of real estate to his wife for the purpose of defrauding his creditors in violation of Ga. Code
Ann. § 18-2-22. The trial court awarded judgment in favor of plaintiffs and defendants appealed contending that the
court erred in denying defendants' motion for a directed verdict; that there was insufficient evidence regarding attorney
fees; and that the form of the verdict was incorrect. Judgment was affirmed because under the evidence presented, the
trial court did not err in denying the motion for directed verdict; and defendants waived the other issues by failing to
object in the trial court.
OUTCOME: Damage award in favor of plaintiffs and cancellation of deeds executed in fraud of creditors were
affirmed because under the evidence presented, the trial court did not err in denying the motion for directed verdict; and
defendants waived the other issues by failing to object in the trial court.
Page 188
CORE TERMS: conveyance, deed, void, transferred, defraud, directed verdict, attorney fees, parcels, enumeration,
valuable consideration, fraudulent intent, fraudulent conveyance, fraudulently, grantee, verdict form, financial
problems, cancellation, correction, cancelled, insolvent, conveyed, marriage, notice, defeat, waived
LexisNexis(R) Headnotes
Bankruptcy Law > State Insolvency Laws
Civil Procedure > Trials > Judgment as Matter of Law > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN1] Ga. Code Ann. § 18-2-22(2), (3), makes null and void every conveyance of real or personal estate made with
intention to delay or defraud creditors, where such intention is known to the taking party; a bona fide transaction on a
valuable consideration, where the taking party is without notice or ground for reasonable suspicion of said intent of the
debtor, shall be valid; and every voluntary deed or conveyance, not for a valuable consideration, made by a debtor who
is insolvent at the time of the conveyance.
Civil Procedure > Trials > Jury Trials > Province of Court & Jury
Real Property Law > Deeds > Enforceability
[HN2] Insolvency and intent are questions for the jury.
Civil Procedure > Trials > Jury Trials > Province of Court & Jury
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN3] The question of a grantee's knowledge of fraudulent intent is for the jury, and such intent may be established by
proof of circumstances sufficient to put the grantee on inquiry.
Evidence > Inferences & Presumptions > General Overview
Real Property Law > Deeds > Enforceability
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN4] Relevant considerations of intent include whether there is a close family relationship and whether the grantor
remains in possession of the property after the conveyance. In fact, when a transaction between spouses is attacked for
fraud by a creditor, the husband and wife bear the burden of showing that the transaction was fair. Ga. Code Ann. §
19-3-10.
Civil Procedure > Trials > Judgment as Matter of Law > Directed Verdicts
Evidence > Inferences & Presumptions > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN5] Inadequacy of price, taken in connection with other circumstances of a suspicious nature, raises a vehement
presumption of fraud.
Real Property Law > Purchase & Sale > Fraudulent Transfers
Torts > Damages > Compensatory Damages > Property Damage > General Overview
[HN6] Ga. Code Ann. § 18-2-22 makes void certain acts committed by debtors against creditors and others. The
inclusion of "and others" indicates that the statute applies in other than debtor/creditor situations. The word "others" as
used in the statute includes plaintiffs with claims against debtors liable as tort-feasors, or otherwise for an unascertained
damage to person or property, so far as fraudulent conveyances are concerned. It is not necessary for a defendant to be
Page 189
246 Ga. App. 291, *; 540 S.E.2d 282, **;
2000 Ga. App. LEXIS 1210, ***1; 2000 Fulton County D. Rep. 4106
indebted to a plaintiff at the time of the transfers for the statute to apply.
Civil Procedure > Trials > Judgment as Matter of Law > General Overview
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN7] Ga. Code Ann. § 18-2-22 may be invoked where a person makes a conveyance with actual intent to defraud a
future creditor or to defeat a debt which, though contemplated, is not yet in actual existence.
Civil Procedure > Appeals > Reviewability > Preservation for Review
[HN8] Issues presented for the first time on appeal furnish nothing for the appellate court to review, for it is a court for
the correction of errors committed by the trial court where proper exception is taken.
Civil Procedure > Appeals > Reviewability > Preservation for Review
[HN9] A party cannot abandon an issue in the trial court and on appeal raise issues neither raised nor ruled upon by the
trial court.
Civil Procedure > Judgments > Relief From Judgment
Civil Procedure > Appeals > Reviewability > Preservation for Review
[HN10] If the form of the verdict is improper, irregular or incomplete, it is incumbent on the defendant to object to it in
a timely manner. In light of the defendant's failure to do so, any alleged deficiency is waived.
COUNSEL: Kent C. Hadlock, pro se.
Janice Hadlock, pro se.
Tisinger, Tisinger, Vance & Greer, Charles D. Mecklin, Jr., for appellee.
JUDGES: JOHNSON, Chief Judge. Smith, P. J., and Phipps, J., concur.
OPINION BY: JOHNSON
OPINION
[**283] [*291] JOHNSON, Chief Judge.
Matt Anderson sued Kent Hadlock based on fraud in the sale of a log home package. In March 1998, Anderson was
awarded judgment against Hadlock in the amount of $ 22,969. When Anderson was unable to collect the judgment, he
filed a complaint against Kent Hadlock and his wife, Janice Hadlock, alleging Kent Hadlock transferred several parcels
of real estate to his wife for the purpose of [*292] defrauding his creditors. Anderson sought to have the deeds
cancelled and also requested general damages and attorney fees. A jury returned a verdict in favor of Anderson. The
trial court cancelled the deeds and entered judgment against the Hadlocks for attorney fees and litigation expenses. The
Hadlocks appeal from the judgment.
1
1 This Court initially transferred the appeal to the Supreme Court of Georgia, as the case involves the review of
cancellation of deeds. The Supreme Court returned the case to us, finding that any equitable issues in the case
involving the cancellation of deeds appeared to be ancillary to the legal issue of whether the Hadlocks
fraudulently conveyed property.
[***2] 1. The Hadlocks allege they were entitled to a directed verdict on the issue of whether the deeds were
fraudulently made, arguing that Anderson failed to present evidence as to each of the elements necessary to prove a
Page 190
246 Ga. App. 291, *; 540 S.E.2d 282, **;
2000 Ga. App. LEXIS 1210, ***1; 2000 Fulton County D. Rep. 4106
fraudulent conveyance. We disagree. [HN1] O.C.G.A. § 18-2-22 makes null and void:
(2) Every conveyance of real or personal estate . . . made with intention to delay or defraud creditors, where such
intention is known to the taking party; a bona fide transaction on a valuable consideration, where the taking party is
without notice or ground for reasonable suspicion of said intent of the debtor, shall be valid; and (3) Every voluntary
deed or conveyance, not for a valuable consideration, made by a debtor who is insolvent at the time of the conveyance.
According to the Hadlocks, the conveyances could not have been declared void based on subsection (2), because
there was no evidence that Kent Hadlock intended to defraud his creditors or that Janice Hadlock knew he intended to
defraud his creditors. They argue further that subsection (2) could not render the conveyances void because there was
evidence that the conveyances were based on a valuable consideration, and that Janice [***3] Hadlock was without
notice or grounds to suspect her husband had any fraudulent intent. The Hadlocks also contend subsection (3) could not
have been the basis for declaring the conveyances void because there was consideration, and there was no evidence that
Kent Hadlock was insolvent at the time of the transfers.
At trial, the parties presented evidence that about 50 judgments had been rendered against Kent Hadlock or his
business and, at the time this case was tried, some of the judgments were still unsatisfied. Among those were judgments
entered against Kent Hadlock in January and February 1996. In February 1996, Kent Hadlock transferred five parcels of
real property to his wife, including their residence. In September 1997, he conveyed two other parcels to a [**284]
third party, who then transferred those properties to Janice Hadlock in July 1998. [*293] Kent Hadlock admitted that
he transferred some of the properties after he met Anderson and "subsequent to [Anderson's] lawsuit."
Just before Kent Hadlock made the transfers in 1996, he was advised by attorneys to file bankruptcy. Kent Hadlock
admitted being unable to pay Anderson's judgment because of garnishments and "some financial problems. [***4] "
He also testified that he "believes in working out of these situations and repaying people," that he paid some of the
judgments off in installments, and that he was still making payments on some of them.
Janice Hadlock paid either no money or "like $ 10" for the properties. Both of the Hadlocks testified that their
22-year marriage was in trouble and Kent Hadlock transferred the properties to his wife in order to "salvage the
marriage" and to give her some independence and security. Janice Hadlock testified that she knew nothing about her
husband's business, that their financial situation was "fine" at the time of the transfers, that she knew of no financial
problems, and that she had no reason to believe her husband made the transfers to defraud his creditors.
The evidence raised questions of fact for the jury and authorized the jury to find that the conveyances were void
under either O.C.G.A. § 18-2-22 (2) or (3).
2
As noted in Merrill v. Beckwith, [HN2] insolvency and intent are questions
for the jury.
3
Similarly, [HN3] the question of a grantee's knowledge of fraudulent intent is for the jury, and such intent
may be established by proof of circumstances sufficient to put the grantee [***5] on inquiry.
4
[HN4] Relevant
considerations of intent include whether there is a close family relationship and whether the grantor remains in
possession of the property after the conveyance.
5
In fact, when a transaction between spouses is attacked for fraud by a
creditor, the husband and wife bear the burden of showing that the transaction was fair.
6
Finally, [HN5] inadequacy of
price, taken in connection with other circumstances of a suspicious nature, raises a vehement presumption of fraud.
7
Under the evidence presented, the trial court did not err in denying the motion for directed verdict.
8
2 See Merrell v. Beckwith, 263 Ga. 779, 781 (1) (439 S.E.2d 488) (1994).
3 Id.
4 Id.; Stokes v. McRae, 247 Ga. 658, 659 (2) (278 S.E.2d 393) (1981).
5 See Merrill, supra.
6 O.C.G.A. § 19-3-10.
7 Jefferson Ins. Co. v. Dunn, 224 Ga. App. 732, 740 (5) (b) (482 S.E.2d 383) (1997).
8 See id. at 741 (5) (b).
Page 191
246 Ga. App. 291, *292; 540 S.E.2d 282, **283;
2000 Ga. App. LEXIS 1210, ***2; 2000 Fulton County D. Rep. 4106
We note [***6] that within this enumeration challenging the sufficiency of the evidence to submit the case to the
jury, the Hadlocks argue that their motion for directed verdict should have been granted because Anderson was not yet a
creditor when the transfers were made; therefore, O.C.G.A. § 18-2-22 does not apply. Assuming this argument [*294]
is properly raised within this enumeration, and further assuming it was properly raised at trial in the Hadlocks' motion
for directed verdict based on general sufficiency grounds, it is without merit.
[HN6] O.C.G.A. § 18-2-22 makes void certain acts committed "by debtors . . . against creditors and others."
(Emphasis supplied.) The inclusion of "and others" indicates that the statute applies in other than debtor/creditor
situations. In fact, we have held that the word "others" as used in the statute includes "plaintiffs with claims against
debtors 'liable as tort-feasors, or otherwise . . . for an unascertained damage to person or property, so far as fraudulent
conveyances are concerned.'"
9
It was not necessary for Kent Hadlock to be indebted to Anderson at the time of the
transfers for the statute to apply.
10
9 Rolleston v. Cherry, 237 Ga. App. 733, 735 (1) (a) (521 S.E.2d 1) (1999).
[***7]
10 Id.
We have also held that [HN7] the statute may be invoked where a person makes a conveyance with actual intent to
defraud a future creditor or to defeat a debt which, though contemplated, [**285] is not yet in actual existence.
11
Here, there was evidence from which a jury could find that Kent Hadlock made the transfers intending to defraud
future creditors or to defeat contemplated debts. A directed verdict was not authorized.
11 Roach v. Roach, 212 Ga. 40, 44 (2) (90 S.E.2d 423) (1955).
2. The Hadlocks contend that the trial court erred in allowing the jury to award attorney fees when Anderson did
not present sufficient evidence to guide the jury in determining the amount of damages to be awarded. This argument
was waived.
At trial, at the end of Anderson's case, Anderson's attorney announced to the court that he would state in his place
the amount of attorney fees being claimed. Counsel for the Hadlocks [***8] interjected that such testimony "may be
premature," and asked the trial court if it wished to bifurcate the case. The court declined to do so. Anderson's attorney
then stated that he has been practicing law for 22 years, has tried cases in that court, and has experience in handling
these types of cases. He added that he agreed to represent Anderson at a rate of $ 140 per hour, and that as of that
morning, he had earned $ 5,000. The following then transpired:
[Court to defense counsel]: Do you have any questions of counsel about his time and attorney fees?
Any questions? You're entitled to ask him if you wish.
[Defense counsel]: Do you have schedules supporting those?
[Plaintiff's counsel]: Yes.
[*295] [Defense counsel]: I'll take counsel's word for it. I don't have any questions as to his time.
The Hadlocks' attorney declined to cross-examine Anderson's attorney regarding the fee claim.
[HN8] Issues presented for the first time on appeal furnish nothing for this Court to review, for this is a court for
correction of errors committed by the trial court where proper exception is taken.
12
[HN9] A party cannot abandon an
issue in the trial court and on appeal raise issues neither [***9] raised nor ruled upon by the trial court.
13
This
enumeration presents no grounds for reversal.
12 Cagle v. Davis, 236 Ga. App. 657, 662 (4) (b) (513 S.E.2d 16) (1999).
Page 192
246 Ga. App. 291, *293; 540 S.E.2d 282, **284;
2000 Ga. App. LEXIS 1210, ***5; 2000 Fulton County D. Rep. 4106
13 Id.
3. The Hadlocks contend that the trial court erred "in failing to inquire into and correct the jury's obvious
confusion" regarding one of the deeds, as shown by the jury's answer to one of the interrogatories in its verdict form.
The Hadlocks complain that the jury refers in the verdict form to one of the parcels of property as "Sec. 8" rather than
"Sec. 5." According to the Hadlocks, the jury's error does not demand that the verdict be reversed, but it shows the jury's
confusion or "just plain sloppiness," and that the court should have inquired into and corrected the problem. However,
the Hadlocks did not object to the form of the verdict when it was returned by the jury and did not request that the trial
court make any such inquiry or correction. [HN10] If the form of the verdict was improper, irregular, or incomplete,
[***10] it was incumbent on the Hadlocks to object to it in a timely manner.
14
In light of their failure to do so, any
alleged deficiency has been waived.
15
14 Perryman v. Rosenbaum, 205 Ga. App. 784, 787 (3) (423 S.E.2d 673) (1992).
15 Id.
Judgment affirmed.
Smith, P. J., and Phipps, J., concur.
Page 193
246 Ga. App. 291, *295; 540 S.E.2d 282, **285;
2000 Ga. App. LEXIS 1210, ***9; 2000 Fulton County D. Rep. 4106
156 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
WATSON v. WACHOVIA NATIONAL BANK OF GEORGIA, N. A.
No. A92A2162
Court of Appeals of Georgia
207 Ga. App. 780; 429 S.E.2d 111; 1993 Ga. App. LEXIS 348; 93 Fulton County D.
Rep. 890
February 26, 1993, Decided
SUBSEQUENT HISTORY: [***1] Reconsideration Denied March 12, 1993. Certiorari Applied For. Petition for
Certiorari Denied May 27, 1993, Reported at: 1993 Ga. LEXIS 613.
PRIOR HISTORY: Action for damages. Walton Superior Court. Before Judge Ott.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant ex-wife challenged an order of the Walton Superior Court (Georgia), which
granted appellee bank's motion for summary judgment in an action filed by the ex-wife to recover damages for the
bank's alleged interference with the ex-wife's interest in real property acquired under the terms of a divorce decree.
OVERVIEW: The ex-wife was granted exclusive possession of the former marital residence and the right to receive
half of the proceeds when the house was eventually sold. The decree ordered the ex-husband to make the mortgage
payments on the house. The decree further ordered the ex-husband not to create any additional liens or encumbrances
against the property. Several months later, the ex-husband created a second mortgage on the property by conveying the
property to the bank in a deed to secure debt as security for the loan. The bank conducted a title examination prior to the
closing. However, the bank's title search failed to reveal the ex-wife's interest. The ex-wife sued the bank for
interference with her interest in real property acquired under the terms of a divorce decree. The trial court granted the
bank's subsequent motion for summary judgment. On appeal, the court affirmed. The court found that there was no
evidence that the bank acted to interfere with the ex-wife's interest, possession, or use of the property. The court noted
Page 194
that the ex-wife's possession was not recorded. The court concluded that ex-wife's possession was not sufficient to put
the bank on notice.
OUTCOME: The court denied the bank's motion to dismiss the ex-wife's appeal and affirmed the trial court judgment
that granted the bank's motion for summary judgment in the ex-wife's action to recover damages for the bank's alleged
interference with her property interests.
CORE TERMS: deed, divorce decree, notice, former husband, recorded, mortgage, lender, divorce, exclusive
possession, lis pendens, sufficient to put, unrecorded, interfered, interfere, property rights, summary judgment,
substitution, foreclosure, consented
LexisNexis(R) Headnotes
Civil Procedure > Remedies > Lis Pendens > Notices
Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures
Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Property Distribution > General
Overview
[HN1] The doctrine of lis pendens does not apply to give notice where the conveyance at issue occurs long after the
final divorce decree is entered.
COUNSEL: Walker & Bailey, David S. Walker, Jr., for appellant.
Alston & Bird, T. Michael Tennant, Elizabeth A. Gilley, A. McCampbell Gibson, for appellee.
JUDGES: Andrews, Judge. Birdsong, P. J., and Beasley, J., concur.
OPINION BY: ANDREWS
OPINION
[*780] [**111] Watson sued Wachovia National Bank for interference with her interest in real property acquired
under the terms of a divorce decree. Watson appeals from the trial court's order granting summary judgment in favor of
the Bank.
Under a divorce decree dated October 6, 1986, Watson was granted exclusive possession of the former marital
residence and the right to receive half of the proceeds when the house was eventually sold. The decree ordered the
former husband, in whom the house was titled, to make the mortgage payments on the house, and not to create any
additional liens or encumbrances against the property. In December 1987, the former husband borrowed money from
the Bank, [***2] and without notice to Watson, and in violation of the divorce decree, created a second mortgage on
the property by conveying the property at issue to the Bank in a deed to secure debt as security for the loan.
The Bank presented evidence that its title examination of the public records conducted prior to the loan closing
failed to reveal Watson's interest in the property under the divorce decree. A lis pendens notice respecting the property
was filed of record during the pendency of the divorce proceedings in 1985, but [HN1] the doctrine of lis pendens does
not apply to give notice where, as here, the conveyance at issue occurred long after the final divorce decree was entered.
Bacote v. Wyckoff, 251 Ga. 862, 864, fn. 1 (310 S.E.2d 520) (1984); Patent Scaffolding Co. v. Byers, 220 Ga. 426, 433
(139 S.E.2d 332) (1964). Moreover, the former husband signed an owner's affidavit at the loan closing stating that he
knew of no claims under any unrecorded instrument, nor of any suits, judgments or liens which could affect title to the
property. Watson does not claim the divorce decree was recorded, but asserts her open, exclusive possession of the
Page 195
207 Ga. App. 780, *; 429 S.E.2d 111, **;
1993 Ga. App. LEXIS 348, ***1; 93 Fulton County D. Rep. 890
property was [*781] sufficient [***3] to put the Bank on notice, and trigger an affirmative duty to inquire as to her
rights in the property. See O.C.G.A. § 44-5-169; Bacote, supra at 866.
Watson contends the debt deed placed on the property in favor of the Bank interfered with her property rights, and
ultimately caused the loss of her interest in the property by foreclosure. After the debt deed was recorded in December
1987, the Bank became aware of the existence of the divorce decree and Watson's interest in the property, however,
there is no evidence the Bank took any action to interfere with Watson's interest, possession, or use of the property. In
August 1986, after conferring with her attorney, Watson consented to an agreement whereby her former husband
refinanced the debt over the property. The Bank relinquished its debt deed; the property was conveyed by deed to
secure debt to a new lender; and Watson consented in writing to substitution of the new mortgage over the property.
Subsequently, the former husband defaulted, and the new lender foreclosed on the property terminating Watson's
interest.
The trial court granted summary judgment to the Bank on the basis that Watson's loss of property rights in the
[***4] foreclosure by the new lender was not the result of any action taken by the Bank, but was caused when, against
the advice of her attorney, Watson waived her rights and voluntarily agreed to the substitution of the mortgage in favor
of the new lender.
Pretermitting the waiver issue, we agree the Bank was entitled to summary judgment. The interest Watson claims
in title to the property was granted to her, not by deed, but under the terms of the judgment for divorce. See Richardson
v. Park Avenue Bank, 173 Ga. App. 43 (325 S.E.2d 455) (1984) (divorce decree transfers interest in property as would a
deed); LeBlanc v. Easterwood, 242 Ga. 99 (249 S.E.2d 567) (1978); O.C.G.A. § 9-11-70. Given that the judgment by
which Watson obtained an interest in the property was not recorded, her open possession of the property was the only
notice which could prevent the Bank from claiming the status of a bona fide purchaser for value without notice, and
asserting the priority of its debt deed over Watson's interest under the divorce judgment. See Eavenson v. Parker, 261
Ga. 607 (409 S.E.2d 520) (1991). Thus, possession sufficient to put the Bank on notice of her interest was essential to
[***5] Watson's claim against the Bank. Assuming without deciding such possession was sufficient to provide notice
to the Bank under O.C.G.A. § 44-5-169, Watson's interest in the property by virtue of the unrecorded judgment would
have had priority over the Bank's subsequent recorded debt deed. See Price v. Watts, 223 Ga. 805-806 (158 S.E.2d 406)
(1967) (construing O.C.G.A. §§ 44-2-1 and 44-2-2). Since there is no evidence the Bank made or acted on any claim,
its interest was superior to Watson's, nor did it otherwise interfere with her possession of the [*782] property, there
was no basis for a claim the Bank interfered with Watson's interest in or possession of the property. See O.C.G.A. §§
51-9-1; 51-9-3.
Appellee's motion to dismiss the appeal is denied.
Judgment affirmed.
Page 196
207 Ga. App. 780, *780; 429 S.E.2d 111, **111;
1993 Ga. App. LEXIS 348, ***2; 93 Fulton County D. Rep. 890
163 of 176 DOCUMENTS
Caution
As of: Aug 04, 2014
WADDELL v. CITY OF ATLANTA et al.
No. 44977
Court of Appeals of Georgia
121 Ga. App. 94; 172 S.E.2d 862; 1970 Ga. App. LEXIS 1120
January 8, 1970, Submitted
January 16, 1970, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied February 3, 1970. Certiorari Applied For.
PRIOR HISTORY: Claim to fund. Clayton Superior Court. Before Judge Banke.
DISPOSITION: Judgment affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant, deed holder, sought review from a decision of the Clayton Superior Court
(Georgia) which refused to award her summary judgment against appellee former wife in their controversy over
proceeds paid into court on a condemnation proceeding. The holder asserted that she had acquired her interest in these
proceedings from bona fide purchaser for value of the condemned property.
OVERVIEW: Following his divorce, a property owner transferred title to his home to a grantee. The owner's former
wife had previously been awarded exclusive use of the home and after this transfer she was awarded her former
husband's equity in the home. The former wife was then ordered to vacate the home pursuant to condemnation
proceedings. By that time the grantee had transferred the deed to the property. The deed holder asserted that she was
entitled to the proceeds paid on the condemnation proceeding. The trial court refused to award the deed holder summary
judgment on her action and the court affirmed its decision. Although the deed holder asserted that there was no lis
pendens of record against the original owner or the property at the time the deed he transferred to the grantee was filed,
the court found that the former wife's actual possession of the property should have put the grantee on notice as to
what rights she might have had pursuant to Ga. Code Ann. § 85-408. The grantee failed to make an inquiry regarding
the former wife's claim. Further, there was an issue as to whether the deeds was made simply to hinder the or defraud
Page 197
the wife in the enforcement of the alimony decree.
OUTCOME: The court affirmed the trial court's decision which refused to award summary judgment to the deed
holder.
CORE TERMS: deed, summary judgment, alimony, decree, temporary, divorce action, lis pendens, grantee, notice,
bona fide purchaser, divorce, warranty deed, condemnation
COUNSEL: Rich, Bass, Kidd & Broome, Casper Rich, Robert J. NeSmith, for appellant.
Dan C. Mitchell, for appellees.
JUDGES: Eberhardt, Judge. Jordan, P. J., and Pannell, J., concur.
OPINION BY: EBERHARDT
OPINION
[*94] [**863] This is an appeal from a certified order denying Minnie S. Waddell's motion for summary
judgment in a controversy between her and Ruth M. Hall over proceeds paid into court in a condemnation proceeding.
Benjamin Hall, the former husband of Ruth Hall and previous owner of the property involved, filed a divorce action
against Mrs. Hall January 8, 1965, to which she filed a cross petition praying, inter alia, that she be awarded permanent
alimony for the support of herself and the minor children, [*95] including his equity in the property, and that he be
required to pay off the mortgages. On March 3, 1965, she was awarded the temporary exclusive use of the home. On
May 18, 1966, the case came on for final hearing before a jury, and it was then disclosed that Hall had transferred title
to the property [***2] to Lois Simmons by warranty deed dated April 6, 1966, while Mrs. Hall was residing there with
her children under the temporary award. The warranty deed was recorded only fifteen days prior to the trial. The
verdict and decree, rendered May 18, 1966, awarded Hall's equity in the home to Mrs. Hall as well as periodic
permanent alimony.
Lois Simmons, Hall's grantee, was the sister of Ruth McIntyre, the correspondent named on the trial who
subsequently married Mr. Hall. Although the deed recited $ 10 and other valuable consideration, it does not appear
from the record that any revenue stamps were affixed or that value was given. The attorney representing Hall in the
divorce case was the same attorney who prepared the deed and witnessed Hall's signature. Mrs. Hall continued to live
in the home with her children from the time of the temporary award until she was notified to vacate in the condemnation
proceedings. In the interim Lois Simmons had, on April 1, 1968, made a deed of the [**864] property to her mother
Minnie Waddell, movant below.
The basis of Mrs. Waddell's motion for summary judgment was that there was no lis pendens of record against
Benjamin Hall or the property [***3] at the time the Hall-Simmons deed was filed of record, and that the divorce
decree was entered subsequent to the filing date of the deed. Mrs. Hall resisted the motion on the basis that Lois
Simmons had actual knowledge of the pendency of the divorce action and of Mrs. Hall's claim to an interest in the
property; that the conveyance was without consideration and was entered into for the purpose of defeating her claim;
and that Lois Simmons was not a bona fide purchaser for value. The superior court overruled the motion and certified
it for immediate review, and Mrs. Waddell appeals. Held:
1. Although this case presents questions respecting title to land, this court has jurisdiction of the appeal. Boswell v.
Underwood, 217 Ga. 675 (124 SE2d 394); Grant v. Oakey, 218 Ga. 723 (130 SE2d 490); Howard v. Pate, 218 Ga. 741
(130 SE2d 752); Richardson v. Anderson, 219 Ga. 264 (133 SE2d 16); Alexander v. Rozetta, 219 Ga. 707 (135 SE2d
409); State Hwy. Dept. v. Holleman, 220 Ga. 72 (137 SE2d 39).
Page 198
121 Ga. App. 94, *; 172 S.E.2d 862, **;
1970 Ga. App. LEXIS 1120, ***1
[*96] 2. Actual possession of the realty by the wife and children was sufficient to put all who might purchase
from the husband on notice and on inquiry as [***4] to what interest, claim or rights they might have therein. Code §
85-408, and cases cited in the annotation thereunder. This notice by reason of possession was effective as to the
property possessed whether a lis pendens notice was filed under the requirements of Code Ann. § 30-112 or not. It
would be otherwise, of course, as to property not in actual possession.
If Miss Simmons had made inquiry as to the rights or claims of the wife and children to the home place she would
have learned that they occupied it under the terms of an award of temporary alimony, and subsequently under a final
decree and award of alimony. Dyal v. McLean, 188 Ga. 229 (1, 2) (3 SE2d 571); Neal v. Jones, 100 Ga. 765 (28 SE
427). This she apparently failed to do.
Consequently there is a substantial issue as to whether, in the wife's opposing the motion for summary judgment,
the husband's grantee is or can be a bona fide purchaser for value, and as to whether the deed was made for the
purpose of hindering, delaying and defrauding the wife in the enforcement of the decree and award of the husband's
equity in the property to her, which is not resolved, as the grantee contends, by a showing [***5] that there was no
filing of lis pendens as to the divorce action. See Lewis v. Lewis, 210 Ga. 330 (80 SE2d 312). Nor can it be resolved on
the motion for summary judgment.
Judgment affirmed.
Page 199
121 Ga. App. 94, *95; 172 S.E.2d 862, **864;
1970 Ga. App. LEXIS 1120, ***3
171 of 176 DOCUMENTS
Analysis
As of: Aug 04, 2014
BROADWELL v. MAXWELL.
13917.
COURT OF APPEALS OF GEORGIA
30 Ga. App. 738; 119 S.E. 344; 1923 Ga. App. LEXIS 662
September 22, 1923, Decided
PRIOR HISTORY: [***1] Eviction; from Cobb superior court -- Judge Searcy presiding. August 12, 1922.
Application for certiorari was made to the Supreme Court.
DISPOSITION: Judgment reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff in error debtor sought review of a verdict by the Cobb Superior Court
(Georgia), which was directed in favor of defendant in error purchaser in the purchaser's action to evict the debtor.
OVERVIEW: The debtor had given a creditor the deed to the property to secure a loan. When the debtor defaulted, the
creditor reduced the debt to judgment and offered the property for sale. The debtor alleged that before the sale was
conducted the creditor's attorney agreed with the debtor that the creditor would buy the property and allow the debtor to
redeem it by paying the debt in the form of "rent." The debtor signed an agreement, which referred to him as a tenant
and set the amount of rent due each month. The creditor later sold the property to the purchaser, who claimed that his
relationship with the debtor was that of landlord and tenant. The court held that the superior court erred by directing a
verdict for the purchaser because there were outstanding issues of fact to be resolved. There was contradictory evidence
regarding whether the purchaser ever made a demand for possession of the premises. More importantly, it had not been
established as a matter of law that the relation of landlord and tenant existed between the purchaser and the debtor.
Instead, the court believed that when the creditor purchased the property, a resulting trust was created for the benefit of
the debtor.
Page 200
OUTCOME: The court set aside the verdict for the purchaser and remanded the matter for a new trial.
CORE TERMS: right to redeem, tenant, rent, tenancy, cestui que trust, equitable, notice, redeem, written contract,
purchaser, rental, indebtedness, demanded, counter-affidavit, conveyance, deed, dispossess, so-called, fide purchaser,
constructive notice, landlord, bid, foreclosed, forfeited, paying, matter of law, trust relationship, issue of fact, relation of
landlord, unconscionable
LexisNexis(R) Headnotes
Contracts Law > Statutes of Frauds > General Overview
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Estate, Gift & Trust Law > Trusts > Resulting Trusts
[HN1] The statute of frauds does not apply to a resulting trust and a court can consider a parol agreement.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
[HN2] Any contract made by a cestui que trust with his trustee, which has upon its face the effect of limiting or
obliterating the trust and establishing a relationship more beneficial to the trustee, if not void, should at least be scanned
with great care. Effect will not be given thereto where it appears that the trustee is seeking thereby to exercise an
inequitable and unconscionable advantage, and is attempting, without any benefit to the cestui que trust, but to the
advantage of the trustee, to destroy such relationship, and establish one giving all benefit to the trustee.
Real Property Law > Financing > Mortgages & Other Security Instruments > Foreclosures > General Overview
[HN3] Where the right of a defendant is an equitable interest or estate in the property, this right, even conceding that it
is limited to a definite period of 12 months, cannot be considered as having been automatically forfeited by a
defendant's mere failure to redeem within that period. Equity does not look with favor upon a forfeiture.
Contracts Law > Types of Contracts > Bona Fide Purchasers
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Real Property Law > Landlord & Tenant > Tenant's Remedies & Rights > General Overview
[HN4] Possession of land is notice of whatever right or title the occupant has. Ga. Civ. Code § 4528 (1910). He who
takes with notice of an equity takes subject to that equity. Ga. Civ. Code § 4529 (1910). Notice sufficient to excite
attention and put a party on inquiry is notice of everything to which it is afterwards found such inquiry might have
led. Ignorance of a fact, due to negligence, is equivalent to knowledge, in fixing the rights of the parties. Ga. Civ. Code
§ 4530 (1910). A purchaser, therefore, is put on notice of all the right, title, and interest of a tenant in possession. The
rule is not different where the tenant in possession is a cestui que trust.
Estate, Gift & Trust Law > Trusts > Constructive Trusts
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN5] Actual possession by the cestui que trust is constructive notice to a purchaser as to the occupant's equitable title.
Contracts Law > Types of Contracts > Bona Fide Purchasers
Real Property Law > Financing > Installment Land Sale Contracts
Real Property Law > Title Quality > Title Bonds
[HN6] A bond for title conveys no title, and is nothing more than a contract to sell. A purchaser, to be protected as a
bona fide purchaser for value, must show a conveyance and not an agreement to purchase. The money must be wholly
Page 201
30 Ga. App. 738, *; 119 S.E. 344, **;
1923 Ga. App. LEXIS 662, ***1
paid before notice. This rule proceeds upon the ground that as the purchaser is taking the transfer of a title that defeats
the equitable rights of a third person, he shall be held to take such title subject to all the equities that attach to it at the
time it passes. If, therefore, he pays no money at the time the title passes, he has no equity to set up against the equity of
a third person, and if he has notice before he pays the money, he pays in his own wrong. And so, if he has paid his
money, but has not yet taken the title when he receives notice, he takes the title subject to all the equities that attach to it
when the conveyance is actually made to him, as he then has a right to refuse the conveyance and to demand back his
money.
SYLLABUS
A demand upon a tenant to deliver possession to his landlord being a condition precedent to the right of the
landlord to dispossess the tenant summarily under the Civil Code (1910), § 5385, for nonpayment of rent or as a tenant
holding over, it is, in such a proceeding, error to direct a verdict for the plaintiff where the evidence is conflicting on the
issue as to whether such demand upon the tenant had been made.
"It has been held: 'A plaintiff in execution who, at the instance of the defendant in execution in possession of land
under a deed, bids off the land at a sheriff's sale, under a parol agreement with the defendant that he will buy in the land
and take the sheriff's conveyance to himself for the benefit of the defendant and allow the defendant to redeem the land
upon the payment of the judgment (the value of the land exceeding the amount of the judgment), and who, while the
bidding is in progress, discourages bidding by others by stating that he is bidding in behalf of the defendant, holds as
trustee for [***2] the latter such title as he derives from the sheriff, and, on being paid or tendered in due time the
amount of the judgment with interest, may be compelled by decree to convey the premises to the defendant in execution
by release or quitclaim deed.' Dowling v. Doyle, 149 Ga. 727 (102 S.E. 27)." Broadwell v. Smith, 152 Ga. 161 (108 S.E.
609).
Any contract made by a cestui que trust with his trustee which upon its face has the effect of limiting the trust and
establishing a relationship more beneficial to the trustee should be scanned with great care, and effect will not be given
thereto if it appears that the trustee is thereby seeking to exercise an inequitable and unconscionable advantage, and is
attempting, without any benefit to the cestui que trust, but to the advantage of the trustee, to destroy the relationship and
establish another which gives all the benefit to the trustee.
A contract of "tenancy" containing an agreement to pay "rent," made by a debtor or cestui que trust in possession of
land to his creditor or trustee holding title to or a lien upon the land as security for a debt, will be construed in the light
of this equitable relationship [***3] between the parties, giving due consideration to the advantage under the
circumstances held by the creditor or trustee over the debtor or cestui que trust. When so construed such contract may
be taken as not establishing the relationship of landlord and tenant, but as further defining the terms of the trust, and the
agreement to pay "rent" may be construed as an agreement to pay interest on the debt.
Where the so-called contract of tenancy is but an effort to reduce to writing certain terms of the agreement between
the creditor and the debtor, made when the creditor acquired title by purchasing the property for the benefit of the
debtor, whereby it is agreed that the debtor shall continue in possession of the premises as tenant with the right to
redeem the property upon payment of the purchase-money, such contract may be looked to in determining the
conditions and limitations upon the defendant's right to redeem.
Where such contract of tenancy provides for a tenancy at will between the parties it may, when construed as above
indicated with reference to the trust relationship and all the circumstances surrounding its creation, establish the debtor's
right to redeem as existing [***4] so long as the so-called tenancy exists and the debtor remains in possession paying
the "rent" or interest contracted for.
Where the debtor or cestui que trust in possession with an existing right to redeem the property upon the payment
of the purchase-money attempts to exercise such right by making a proper tender of the purchase-money, and the tender
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is refused, the debtor can not, upon remaining in possession and failing to continue the payment of "rent," be summarily
dispossessed as a tenant.
"Possession of land is notice of whatever right or title the occupant has." Civil Code (1910), § 4528. A purchaser
bona fide for value therefore is not protected as a purchaser without notice; and where the legal status of the person in
possession is that of one holding an equitable title in the property, the purchaser takes with notice of such title, and
therefore can not treat the occupant as a tenant and summarily dispossess him for non-payment of rent.
The evidence here makes an issue, under a proper application of the rulings of law herein announced, as to whether
or not the relationship between the parties was that of landlord and tenant, or some other relationship whereby [***5]
the defendant has an equitable title in the land.
The bond to reconvey given by the creditor to the debtor, conditioned upon the repayment of the loan which created
the indebtedness out of which the present situation arose, is relevant to the issue.
COUNSEL: George F. Gober, for plaintiff in error.
Clay & Blair, Anderson & Roberts, contra.
JUDGES: Stephens, J. Bell, J., concurs. Jenkins, P. J., concurs in the judgment.
OPINION BY: STEPHENS
OPINION
[*740] [**345] STEPHENS, J. W. H. Maxwell instituted summary proceedings to dispossess R. G. Broadwell as
his tenant failing to pay rent and holding over beyond his term, alleging that possession of the premises had been
demanded of the tenant and that the demand had been refused. The tenant interposed a counter-affidavit, which in
substance alleged that he did not hold the property as a tenant but that he had been the original owner of the premises,
and as such had borrowed thereon $ 3,500 from one Peter Smith, to whom he had given a deed to the property to secure
the indebtedness; that the debt had been reduced to judgment by Smith and the property offered for sale on the first
Tuesday in November, 1916; that on the day of the sale, and [***6] before the property was sold, Smith, through his
attorney, agreed with the defendant that, if the defendant and his friends would refrain from bidding on the property,
Smith would buy in the property and allow the defendant to redeem it by the payment of the indebtedness, which at that
time amounted to $ 4,300; that the property was reasonably worth $ 10,000, having cost the defendant $ 14,000; that
Smith bid in the property for $ 2,100; that "soon thereafter Smith agreed that this defendant could have until November
1st, 1917, to redeem the property, and should pay $ 25 per month to keep the debt [from] growing larger; the interest
was computed at 7% per annum; and while the property, being in the town of Roswell, was worth only $ 12.50 per
month as rent, this defendant paid said $ 25 per month on the debt; . . that during the month of October, 1917, this
defendant went to Smith and asked that he extend the time to redeem to February 1st, 1918, which said Smith agreed to
do upon the condition that this defendant [*741] pay the $ 25 per month to February 1st, 1918, which defendant agreed
to do, and has paid as agreed, up to February 1st, 1918, the agreement was carried out by [***7] this defendant as
agreed, and on the 18th day of January, 1918, this defendant tendered to Mrs. Smith, the administrator of Peter Smith,
the $ 4,300, and also the Sessions Loan & Trust Company, who had the matter in charge, and which tender was refused,
and any other amount that might be due, although under the agreement of Smith this was the entire amount due; this
defendant sets up and alleges that he complied with his agreement, and he holds the property as his own under the said
facts." The defendant further alleged his ability and willingness to carry out his contract and to pay the amount due
under the agreement with Smith. He also denied that the plaintiff, Maxwell, demanded possession of the property as
required under the statute as a condition precedent to the institution of the proceedings to dispossess.
On the trial the plaintiff proved that he was a purchaser of the property, holding under a bond for title from Smith,
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and that he had paid the entire purchase price therefor, but that he held no deed to the property. He put in evidence a
written agreement between Smith and the defendant, executed November 21, 1916, made less than three weeks after the
date of the sheriff's [***8] sale to Smith, the material parts of which, after reciting the [**346] sale at public outcry on
November 7, 1916, and describing the property in question, are as follows: "Whereas said Peter Smith was the highest
bidder at said sale and same was knocked off to him, and whereas the said R. G. Broadwell desires to remain in
possession of said property as the tenant of said Peter Smith, now therefore this agreement witnesseth: that for and in
consideration of said Peter Smith allowing and permitting said R. G. Broadwell to remain in possession of said
property, the said R. G. Broadwell does hereby covenant and agree that he is now a tenant at will in the possession of
the said property, and so long as said tenancy shall last he will pay rent to said Peter Smith at and after the rate of $
25.00 per month in advance, the said rent to begin on the date hereof and to be due and payable on the 21st day of each
month in advance pending the termination of this lease by either party." The plaintiff proved also a failure by the
defendant to continue paying [*742] rent after the defendant had offered to repay the amount due on the loan.
Without more, the plaintiff Maxwell would, provided [***9] he had complied with the statutory requirement and
demanded of the defendant possession of the property prior to the institution of the proceeding to dispossess, have been
entitled to a verdict. There being, however, the evidence of the defendant denying that any such demand had ever been
made upon him, which, if believed by the jury, would have authorized a verdict for the defendant, the action of the court
in directing a verdict for the plaintiff was, irrespective of any other issues in the case, error. For this reason the verdict
rendered for the plaintiff must be set aside and a new trial granted.
Under our view of the law applicable to the case, this evidence can not be taken standing alone, but must be taken
in connection with all the other evidence in the case. The entire evidence, including the written contract of "tenancy,"
when considered with all the deductions that can be made therefrom, tends to establish the defendant's relationship to
the property as being other than that of a tenant of either Smith or the plaintiff Maxwell.
The Supreme Court of this State, in a case between Smith and the defendant Broadwell, where Broadwell sought
specific performance of the alleged [***10] right to redeem, held that the defendant's situation under the facts here
alleged in the counter-affidavit (without any reference to the written contract of "tenancy," evidence of which was not in
the record before that court) was that of a cestui que trust, with Smith holding the legal title to the premises as trustee.
See Broadwell v. Smith, 152 Ga. 161, 108 S.E. 609 (supra); Dowling v. Doyle, 149 Ga. 727, 102 S.E. 27 (supra);
McRarey v. Huff, 32 Ga. 681; 1 Perry on Trusts (6th ed.), § 215. It follows, therefore, that when the defendant
Broadwell made the alleged agreement with Smith's attorney, by the terms of which bids were choked off and Smith bid
in the property at reduced figures and took a deed from the sheriff and allowed Broadwell to remain in possession and
pay a certain amount as "rent," with the right to redeem the property upon the payment of the indebtedness, the
relationship between the parties was that of trustee and cestui que trust. In the case now before us, where the evidence is
supplemented by [*743] the written contract of "tenancy," so called, this contract must be construed in the light of this
relationship, and equitable [***11] principles must be applied thereto, and this contract given an effect accordingly.
This being a resulting trust, [HN1] the statute of frauds does not apply ( Chastain v. Smith, 30 Ga. 96), and the parol
agreement will be considered. It is fundamental that [HN2] any contract made by a cestui que trust with his trustee
which has upon its face the effect of limiting or obliterating the trust and establishing a relationship more beneficial to
the trustee, if not void, should at least be scanned with great care. Effect will not be given thereto where it appears that
the trustee is seeking thereby to exercise an inequitable and unconscionable advantage, and is attempting, without any
benefit to the cestui que trust, but to the advantage of the trustee, to destroy such relationship, and, as in the case here
under consideration, establish one giving all benefit to the trustee. Without elaborating this proposition or citing
authorities here to sustain it, attention is called to the authorities collected by the writer in an opinion in the case of
Adams v. Shewmake, 23 Ga. App. 741 (99 S.E. 473). There the question was as to the effect to be given to a contract
between a mortgagee [***12] and a mortgagor which purported to convert that relationship into one of landlord and
tenant. The principles there applicable are applicable to the situation here, where the trust relationship is that of creditor
and debtor, and the creditor trustee is seeking to destroy the trust relationship and to convert it into a relationship of
landlord and tenant.
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1923 Ga. App. LEXIS 662, ***7
When the written contract of tenancy was executed by Broadwell at the instance of Smith through his attorney, the
parties were not contracting at arm's length. Smith had foreclosed on Broadwell, who was his debtor or mortgagor, and
had bought in the property, and, but for the agreement allowing Broadwell to redeem, made on the day of the sale, had
forever foreclosed Broadwell's right to redeem. Broadwell, after the sale and purchase of the property by Smith,
continued to live on the property virtually at the sufferance of Smith, Smith voluntarily agreeing to allow him to remain
by continuing to pay "rent," with an assurance of a right to redeem. When therefore the written contract of tenancy, so
called, was presented [**347] by Smith's attorney to Broadwell for execution, Broadwell was at a disadvantage, and by
reason of said [***13] [*744] disadvantage and the circumstances under which he was holding possession of the
property, he was necessarily under more or less coercion and constraint in executing this contract. Broadwell testified as
follows: "The sale by the sheriff was about the 1st of November, 1916. The agreement entered into with Mr. Bently was
on the day of the sale, but the papers were fixed, I believe, on the 21st, but I wont say for certain about the date. I signed
the paper you hand me. As to this contract being a culmination of the conference and agreements between Mr. Bently
and myself from the time the sale was had, there wasn't anything said about this contract until the 21st; we had an
agreement I was to pay the interest and he drew that contract and brought it to me, and I told him at first I wouldn't sign
it; he said, 'That won't keep you from having the right to redeem the property. . . After Mr. Bentley's statement to me
that I still had the right to redeem this property I voluntarily took the contract and executed it at Roswell. I understand
the meaning of the English language, but I took Mr. Bentley at his word, thinking that he would treat me right. I
understood that I was signing [***14] a paper stating that I was a tenant at will of Smith's, but I signed under protest to
him, unless he agreed to it. I did not put my protest in writing."
This contract, therefore, can not be taken standing alone and divorced from all other facts and circumstances
between the parties. It must be construed in connection with the right given to Broadwell to redeem the property, and
with due consideration to his occupancy of the property and his payment of the agreed "rental" for such purpose, which
"rental," it appears, was equivalent to the interest due, and was in excess of the true rental value. So construed, this
contract can not be given the effect of destroying the relationship of trustee and cestui que trust and converting the
relationship into that of landlord and tenant.
It being the duty of Smith under his original agreement with the defendant Broadwell to stand as trustee for the
defendant Broadwell as cestui que trust until after the expiration of the time given for redemption and the termination of
the trust, an acquisition by Smith of this equitable interest of Broadwell, the cestui que trust, by any breach of Smith's
duty as trustee, such as by forcing, if he did, from [***15] the cestui que trust the contract of rental by which the cestui
que trust surrendered to his trustee [*745] all of his equitable estate and agreed to hold as tenant, would be an
unconscionable and mala fide violation of his trust, and such contract would therefore be void and would not be allowed
to stand. 1 Perry on Trusts (6th ed.), § 347.
The defendant testifies generally that the right to redeem was given him until the first of February, 1918. This
evidence, taken in connection with the so-called written agreement to pay "rent," which provides for a "tenancy" at will
at the "rental" previously. agreed upon, authorizes the inference that the true agreement between the parties was that the
defendant should continue in possession of the property as under a tenancy at will, with a right to redeem existing so
long as the so-called tenancy continued. This "tenancy" had not expired when the defendant sought to redeem the
property by tendering payment of the amount due on the loan.
The Supreme Court, in reviewing this case, where the evidence presented in the record was silent as to the written
contract of "tenancy" at will appearing here, but established that the defendant's right [***16] to redeem expired on the
first of November, 1917, and there appeared no consideration for the renewal thereof, held that the alleged right to
redeem, so far as it depended upon the renewal, could not be given effect. Broadwell v. Smith, supra. The evidence
here, in the light of the written contract of "tenancy," presents a different case.
It is true that in his counter-affidavit the defendant alleges that there was an agreement allowing him until
November 1, 1917, to redeem the property, and that before this date Smith agreed to extend this right until February 1,
1918. It may be true that the defendant and Smith had dealings and conversations with one another which might be
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1923 Ga. App. LEXIS 662, ***12
urged as establishing such a contractual relation between them, but which, by reason of some infirmity, did not
constitute a valid and enforceable agreement. Yet the existence of such seeming contract and the allegations by the
defendant as to its legal existence would not preclude the existence of a legal and binding agreement between the
defendant and Smith, evidenced by the written rental contract, taken in connection with all the facts and circumstances
of the case, giving the defendant the right to [***17] redeem upon repayment of the loan so long as the tenancy existed
and the defendant remained in possession paying [*746] the $ 25 so-called rent, which included interest on the loan.
Whether this latter contractual relationship between the parties, which is sustained by evidence in the case before us,
can be sustained under the defendant's pleadings set out in his counter-affidavit, it is not necessary to decide, since a
new trial is granted upon the ground that there was an issue of fact as to whether possession of the premises had been
demanded by the plaintiff.
The defendant's right to redeem was more than a mere contract to purchase at his option, where this right would be
forfeited upon his failure to assert it within a specified time. [HN3] The right of the defendant was an equitable interest
or estate in the property. This right, even conceding that it was limited to a definite period of twelve months, can not
[**348] be considered as having been automatically forfeited by the defendant's mere failure to redeem within that
period. Equity does not look with favor upon a forfeiture. Even assuming that there was no consideration for the
extension of the agreement, regarded as [***18] a mere option to purchase, yet where the trustee, Smith, had not
declared the defendant's right to redeem forfeited upon the defendant's failure to exercise it within the time limited, but
had continued to accept the monthly payments agreed upon as "rent," which "rent" amounted to or included interest
upon the indebtedness, and therefore kept the indebtedness alive and as an obligation resting upon the defendant, which
was inconsistent with a forfeiture of all of the defendant's equitable rights to redeem, a declaration by Smith, the trustee,
that the defendant's time for redemption had been extended until a certain date, at least amounted to a waiver by the
trustee of his right to terminate the defendant's equitable estate for the failure to redeem within the time originally
stipulated. The acceptance from the defendant by the trustee of the "rent," or interest, originally agreed upon, which was
paid by the defendant under the belief, as the trustee knew, that the defendant's right to redeem still existed, estopped
the trustee from denying the defendant's right to redeem within the extended period, during which the defendant had
paid the rent or interest required. So long as the defendant [***19] was paying as rent what in reality was interest on
the loan, and the loan was thus left open as a binding obligation upon him, which was the situation up to the time tender
was made and a deed demanded, the defendant's right to redeem [*747] the property upon payment of the loan
certainly was not foreclosed. This is true without reference to any question as to a consideration for the bare agreement
to extend the so-called option.
The evidence adduced upon the trial tended to establish an equitable title in the defendant with the right to redeem
and acquire the legal title upon a tender and a payment of the debt, and the relation of landlord and tenant between the
plaintiff and the defendant therefore was not as a matter of law established.
The plaintiff Maxwell, who claims to have purchased the property from Smith, and who is seeking to dispossess the
tenant, is not a bona fide purchaser for value without notice of whatever equitable title the defendant had in the
property. [HN4] "Possession of land is notice of whatever right or title the occupant has." Civil Code (1910), § 4528.
"He who takes with notice of an equity takes subject to that equity." Civil Code (1910), § 4529. "Notice [***20]
sufficient to excite attention and put a party on inquiry is notice of everything to which it is afterwards found such
inquiry might have led. Ignorance of a fact, due to negligence, is equivalent to knowledge, in fixing the rights of the
parties." Civil Code (1910), § 4530. A purchaser therefore is put on notice of all the right, title, and interest of a tenant
in possession. The rule is not different where the tenant in possession is a cestui que trust.
[HN5] Actual possession by the cestui que trust is constructive notice to a purchaser as to the occupant's equitable
title. Bridger v. Exchange Bank, 126 Ga. 821 (56 S.E. 97, 8 L. R. A. (N. S.) 463, 115 Am. St. R. 118); Baldwin v.
Sherwood, 117 Ga. 827 (45 S.E. 216); Garbutt v. Mayo, 128 Ga. 269 (57 S.E. 495, 13 L. R. A. (N. S.) 58); Sewell v.
Holland, 61 Ga. 608; Jordan v. Rhodes, 24 Ga. 478; Thompson v. Lewis, 2 Ga. Dec. 205.
Perry, in his work on Trusts, says: "Actual possession by the cestui que trust . . . is constructive notice to the
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1923 Ga. App. LEXIS 662, ***16
purchaser that there is some claim, title or possession of the property adverse to his vendor; and this fact should put him
[***21] upon his inquiry, for if he had inquired he would have discovered the exact title and the equitable claims
upon it; he therefore has constructive notice." 1 Perry on Trusts (6th ed.), § 223.
It appears from the evidence that the plaintiff holds under a bond for title. [HN6] It conveys no title, and is nothing
more than a [*748] contract to sell. Martin v. Wright, 21 Ga. 504. Although he has paid the purchase-money he has
not received a conveyance from Smith, from whom he purchased. A purchaser, to be protected as a bona fide
purchaser for value, must, according to Mr. Perry, show a conveyance and not an agreement to purchase. See 1 Perry
on Trusts, §§ 219, 829. "It is held that the money must be wholly paid before notice. This rule proceeds upon the ground
that as the purchaser is taking the transfer of a title that defeats the equitable rights of a third person, he shall be held to
take such title subject to all the equities that attach to it at the time it passes. If, therefore, he pays no money at the time
the title passes, he has no equity to set up against the equity of a third person, and if he has notice before he pays the
money, he pays in his own wrong. And so, [***22] if he has paid his money, but has not yet taken the title when he
receives notice, he takes the title subject to all the equities that attach to it when the conveyance is actually made to him,
as he then has a right to refuse the conveyance and to demand back his money." 1 Perry on Trusts (6th ed.), 221. Isn't
Maxwell, for this reason, an unprotected purchaser?
It not being established as a matter of law that the relation of landlord and tenant existed between the plaintiff and
the defendant, and the plaintiff not being a bona fide purchaser for value without notice of the defendant's title, an
issue of fact was presented for the jury. Bashinski v. Swint, 133 Ga. 38 (65 S.E. 152); Griffin v. Collins, 116 Ga. 420
(42 S.E. 743); Henry v. Perry, 110 Ga. 630 (36 S.E. 87); Story v. Epps, 105 Ga. 504 ( [**349] 31 S.E. 109); Edwards v.
Blackshear, 24 Ga. App. 622 (101 S.E. 585).
Judgment reversed. Bell, J., concurs. Jenkins, P. J., concurs in the judgment.
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