Effect Of Persons In Possession Of Real Estate Other Than The Owner/Vendor On A Buyer's Status As A...

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CitedAs of: Aug 04, 2014

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 forejectment against defendants, later grantees and a record owner of 7.63 acres of the parcel. The parties stipulated to theundisputed material facts and each party filed a motion for summary judgment. The trial court entered judgment for theheirs. The record owner appealed.

OVERVIEW: The 95-acre parcel was taken by the county via eminent domain in 1973. The lake project for which theland was taken was abandoned; in 1985, the county granted a half interest to the city. In 2003, the county and cityexecuted quit claim deeds conveying the 7.63 acres to the county development authority, which conveyed it to the firstgrantee. 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 whichwas condemned for the lake project. The city and county quitclaimed their interests to the heirs. The heirs contendedthat the county's failure to comply with O.C.G.A. 36-9-2 by recording the order on the county minutes when itconveyed its interest to the development authority rendered the title void. The record owner argued, and the courtagreed, that it was a bona fide purchaser for value and without notice of this irregularity. The county's ownership wasnot sufficient to excite inquiry under O.C.G.A. 23-1-17. The 2003 conveyance was not a re-taking and thus was notgoverned 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, publicpurpose, summary judgment, redevelopment, condemned, undivided, subsequent purchaser, failure to comply, originalowners, 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 beinterfered 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 theoriginal owners.

Governments > Local Governments > PropertyReal 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 conveyanceof county-owned property must be duly entered on the minutes of the proper county authority.

Real Property Law > Deeds > EnforceabilityReal 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 aforged deed, or those holding under such a grantee, because the grantee has no title to convey.

Governments > Local Governments > PropertyReal Property Law > Deeds > EnforceabilityReal 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 requiredby O.C.G.A. 36-9-2, the deed to the immediate grantee may be voidable in that the county or the immediate granteemay seek to invalidate the conveyance; but as to a subsequent bona fide purchaser without notice of the failure tocomply with the statute, the deed is not void.

Estate, Gift & Trust Law > Conservators & Guardians > General OverviewFamily Law > Guardians > Duties & RightsReal Property Law > Deeds > Execution Formalities[HN6] Guardianship presents a special situation in which the person executing the title has no interest to convey and theexecution is valid and passes title only if there has been an appointment by the probate court. In such a case, it has longbeen 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

Page 2294 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 deedrecords, or at least raise an issue with respect to the purchaser's duty to inquire, include facts showing the purchaserhad been informed of the existence of prior unrecorded deeds; evidence of open and notorious adverse possession ofthe property that should have placed the purchaser on notice of another's interest in the property; and evidence sufficientto put a mortgagee on notice of a fraudulent scheme. But the existence, within the chain of title, of a conveyance by acounty is not a circumstance that requires a subsequent purchaser to inquire into whether the county complied withthe requirements of O.C.G.A. 36-9-2 to enter an order on its minutes authorizing disposal of the real property, andfailure to inquire does not defeat the subsequent purchaser's status as a bona fide purchaser without notice.

Real Property Law > Deeds > EnforceabilityReal 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 theidentity of the corporation intended is clear or can be ascertained by proof.

Real Property Law > Eminent Domain Proceedings > ProcedureReal 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 inaccordance with the Urban Redevelopment Law, unless the property is to be acquired for the purpose of devoting it to apublic use, it may be acquired through the exercise of the power of eminent domain only after the condemning entityhas adopted an urban redevelopment plan authorizing the exercise of eminent domain by the agency to acquire theproperty, the owner of the real property to be acquired has been notified of the planned rehabilitation of the property asset 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 UseReal 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 devotedto another proper public use.

Real Property Law > Eminent Domain Proceedings > ProcedureReal 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 theowner of the property to be acquired the opportunity to develop the property in accordance with an adopted urbanredevelopment plan, was enacted as a remedy to the previous evil of the absolute power granted to counties andmunicipalities to take private property for any public or even non-public purpose so long as the taking was to effectuatean 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 PropertyProtection Act, exempted from the definition of "public use" the public benefit of economic development with respectto authority for exercising the power of eminent domain. O.C.G.A. 22-1-1(9)(B).

Page 3294 Ga. 455, *; 754 S.E.2d 347, **;


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 notviolate the Fifth Amendment prohibition against taking private property for public use without just compensation whenthe 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 OverviewReal 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 orother disposition of property acquired by eminent domain to private enterprise for private uses. The amendment whicheliminated this provision and substituted the requirement that eminent domain shall not be used for redevelopmentpurposes by any entity, except for public use, as defined by general law, was approved by the voters at the generalelection held on November 7, 2006.

HEADNOTES

Georgia Advance Headnotes

(1) Real & Personal Property Law. Deeds & Recording. Bona Fide Purchasers. When a county conveyed propertybut failed to record the conveyance in the minutes as required by OCGA 36-9-2, the deed to the immediate granteemay be voidable in that the county or the immediate grantee may seek to invalidate the conveyance; but as to asubsequent 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 oftitle of a conveyance by a county is not a circumstance under OCGA 23-1-17 that requires a subsequent purchaser toinquire into whether the county complied with the requirements of OCGA 36-9-2 to enter an order on its minutesauthorizing disposal of the real property; a failure to inquire does not defeat the subsequent purchaser's status as abona fide purchaser without notice.

(3) Real & Personal Property Law. Eminent Domain Proceedings. Even if an original 1973 condemnationproceeding was conducted pursuant to the Urban Redevelopment Law and OCGA 36-61-9 was applicable, a county's2003 conveyance of the previously condemned property was not a re-taking by a municipality or county and thus thetransaction 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 onlyas 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 wasoriginally part of a 95.125 acre parcel owned by H.S. Carter, now deceased, that was taken by Bacon County viaeminent domain proceedings commenced in 1973. [*456] As a result of the condemnation proceedings, Bacon Countyacquired a total of 2522.3 acres for the purpose of creating a public recreation project known as Lake Alma and the

Page 4294 Ga. 455, *; 754 S.E.2d 347, **;


95.125 Carter parcel was just one of the parcels condemned for this purpose. The record shows that the proposed LakeAlma was part of a larger urban development project that received funds from the Federal Model Cities Program so thatthe City of Alma and Bacon County could execute a development plan that included, among other things, an industrialpark, a waste water treatment plant, and improvement of the local airport, in addition to construction of Lake Alma. Theother projects were completed but, due to protracted litigation and other reasons, the Lake Alma project [***2] wasabandoned and never constructed. In the meantime, in 1985, the county granted an undivided one-half interest in theLake Alma tract to the City of Alma. After the project was abandoned, at the request of the city and county, the GeneralAssembly passed an amendment to OCGA 36-9-3, effective July 1, 1992, that permitted counties to sell back to theoriginal owners land that had been acquired for creation or development of a lake, such as the Lake Alma project, butthe 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 theonly 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 CountyDevelopment Authority and on that same day the Development Authority executed a warranty deed for the property toSoutheastern Maintenance and Construction, Inc. [***3] In 2005, Southeastern Maintenance granted an easement overa portion of the property to appellant Darling International, Inc. Also in 2005, Southeastern Maintenance executed awarranty deed purporting to convey 3.048 acres of the disputed property to Darling and in 2007 it executed a warrantydeed 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 repurchaseland such as that which was condemned for Lake Alma (OCGA 36-9-3 (g) (3) (B)). See Ga. L. 2010, p. 746, 1/HB703. Shortly thereafter, certain heirs of H.S. Carter sought to repurchase Mr. Carter's original 95.125 acre parcel. OnDecember 21, 2010, the City of Alma executed a quit claim deed to Bacon County conveying its undivided interest inthe 95.125 acres and, that same day, Bacon County executed a quit claim deed [*457] conveying all of its undividedinterest in the property to the H.S. Carter heirs who are the appellees herein. The quit claim deed states that BaconCounty intends "to convey to Grantees only all properties which it obtained from their father Hoke Carter bycondemnation ... Less & Except any portion of said [***4] properties which have been previously legitimatelyconveyed by the Grantor." The Carter heirs then filed a petition to quiet title and for ejectment against Darling andSoutheastern Maintenance with respect to the 7.63 acres. The parties stipulated to the undisputed material facts and eachparty filed a motion for summary judgment. Darling asserted it was entitled to summary judgment with respect to theCarter heirs' quiet title action and their claim for ejection because, as a result of the county's previous conveyance of thedisputed property to the Development Authority and the subsequent chain of conveyances by which Darling ultimatelyobtained title, the Carter heirs do not have title to that property. The Carter heirs asserted they were entitled to summaryjudgment, and that Darling's motion should be denied, because the previous conveyances are not valid. The Carter heirsargued that the previous conveyance to the Development Authority was invalid as a result of the county's failure tofollow 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 Maintenancewas invalid because it amounted to a legally impermissible sale of condemned property to private developers for privateuse and was not a transfer for a proper alternative public use.1 Darling argued that these previous conveyances arelegally valid. Further, Darling asserted it was entitled to judgment in its favor because it was a bona fide purchaser ofthe 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 subsequentconveyance to Southeastern Maintenance and Construction, Inc. occurred on the same day. The Carter heirsassert, and Darling appears to concede, that Bacon County utilized the Bacon County Development Authority asa "straw man" to convey the property to Southeastern Maintenance for purported economic developmentpurposes.2 Although the attorney representing the Carter heirs states in a supplemental brief that the issue of Darling's

Page 5294 Ga. 455, *456; 754 S.E.2d 347, **349;


status as a bona fide purchaser was first raised on appeal and was "never presented to the trial court fordetermination," the record reflects this issue was raised and supported by argument and citations to [***6] legalauthority 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 Carterheirs along with a decree that title to the property vests in them and is superior to Darling's claim of title. The courtfound that the county's 2003 [*458] conveyance to the Development Authority [**351] was invalid and did not serveto pass title because the county failed to follow the procedures required by OCGA 36-9-2 to record on its minutes theauthorization to convey the property, which deficiency was never corrected by ratification. Further, the court found thatthe subsequent attempt to transfer the property to Southeastern Maintenance was invalid because neither the county northe 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 ofOCGA 36-9-2 when it conveyed its undivided one-half interest in the property to the Development Authority, Darlingis a bona fide purchaser for value and without notice [***7] of this irregularity so that its title is superior to that of theCarter heirs. [HN1] Pursuant to OCGA 23-1-20, "[a] bona fide purchaser for value without notice of an equity willnot be interfered with by equity." At the time Darling purchased the property for value, no other outstanding interestwas reflected in the recorded chain of title. At the time of the 2003 conveyance of the property to SoutheasternMaintenance, the 2010 amendment to OCGA 36-9-3 (g), permitting disposition to the heirs of the original owner ofproperty that had been condemned for construction of a recreational lake but which was no longer needed for such apurpose, had not yet been passed. See Ga. L. 2010, p. 746, 1/HB 703. [HN2] "[F]ailure to use the lands for thepurpose for which they were condemned does not cause title to revert to the original owners." Galloway v. Bd. ofCommrs. of Banks County, 246 Ga. 472, 473 (271 SE2d 784) (1980), citing Sadtler v. Atlanta, 236 Ga. 396 (223 SE2d819) (1976). Accordingly, Darling asserts the Carter heirs' interests did not arise until 2010 and thus were nonexistent atthe times of Darling's purchases in 2005 and 2007 and that it was an impossibility for Darling to have notice [***8] ofan 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 becauseBacon County failed either to record authority for the sale to the Development Authority on its minutes as required byOCGA 36-9-2, or to ratify the sale at any time before the 2010 conveyance to them, the purported 2003 conveyance tothe 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 theminutes 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 subjectto taxation and should not have been the subject of levy and sale by the tax commissioner. And in neither Head norWest was the issue of the purchaser's status as a bona fide purchaser without notice raised or considered by thisCourt.

In asserting [***9] the title conveyed to the Development Authority was void, the Carter heirs analogize theconveyance to a forged deed which, this Court has held, is a nullity that does not pass good title even to a subsequentbona 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 aforged deed, or those holding under such a grantee, because the grantee has no title to convey.") But the Carter heirs citeno authority for the proposition that county-owned property conveyed via a properly executed deed, where the orderdirecting disposal of the property was simply not recorded on the minutes, constitutes a void conveyance that would notpass title to a subsequent bona fide purchaser for value without notice. As applied to the facts of this case, we declineto adopt such a rule. Unlike the circumstances present in the case of a forged deed, here the county possessed title to itsundivided one-half interest in the property and no issue was raised regarding the authority of the individual whoexecuted 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

Page 6294 Ga. 455, *457; 754 S.E.2d 347, **350;


voidable by the incompetent person or his heirs even as against a bona fide purchaser for value without notice of suchincompetence. See, e.g., Sewell v. Anderson, 197 Ga. 623, 624 hn. 8 (30 SE2d 102) (1944); Thornton v. Carpenter, 222Ga. App. 809, 813 (2) (d) (476 SE2d 92) (1996). (1) [HN5] In the case of a conveyance of county-owed property thatwas not properly recorded in the minutes as required by OCGA 36-9-2, the deed to the immediate grantee may bevoidable in that the county or the immediate grantee may seek to invalidate the conveyance (compare West v. FultonCounty, supra); but as to a subsequent bona fide purchaser without notice of the failure to comply with the statute, thedeed is not void.

(b) Second, even if the previous conveyance to the Development Authority is not void, the Carter heirs assertDarling does not qualify as a bona fide purchaser without notice. They argue the issue is not whether Darling hadnotice 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 intitle it was under a duty to determine whether the requirements of OCGA 36-9-2 were met [*460] and, having failedto do so, Darling was placed on constructive notice of the defect in the chain of title. No legal authority, however, iscited for this proposition. Instead, the Carter heirs seek to draw an analogy to the duty incumbent upon a purchaser toconfirm the validity of a guardian's appointment when the chain of title contains a deed executed by one who purports toact 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 hasno interest to convey and the execution is valid and passes title only if there has been an appointment by the probatecourt. See Dickey v. Sweeney, 16 Ga. App. 559 (85 SE 766) (1915). In such a case, it has long been held that thepurchaser is "bound, at his peril" to examine the validity of the appointment. See Dooley v. Bell, 87 Ga. 74, 77 (13 SE284) (1891). As noted above, no [***12] issue has been raised with respect to the authority of the individual whoexecuted 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 withauthority to act and thus there was no reason to put a good faith purchaser on notice to inquire further into itsvalidity). Unlike a conveyance by a guardian, Bacon County owned the property in its own name and did not purport toconvey 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 seriousinquiry, is sufficient to constitute notice of a prior unrecorded deed." (Citations and punctuation omitted.) Montgomeryv. Barrow, 286 Ga. 896, 897 (1) (692 SE2d 351) (2010) (an issue of fact was created as to whether the purchaser was abona fide purchaser without notice of prior unrecorded deeds where a representative of the corporation that purchasedthe 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 isafterwards found that such inquiry might have led. Ignorance of a fact due to negligence shall be equivalent toknowledge in fixing the rights of parties.") In this case, however, it is not an unrecorded deed but a fact wholly outsidethe chain of title that the Carter heirs claim should have placed Darling on notice and created a duty to conduct aninquiry into it. [HN9] Circumstances that have been deemed sufficient to incite a duty to inquire into facts outside therecorded deed records, or at least raise an issue with respect to the purchaser's duty to inquire, include facts showingthe purchaser had [*461] been informed of the existence of prior unrecorded deeds (see Montgomery, id.); evidence ofopen and notorious adverse possession of the property that should have placed the purchaser on notice of another'sinterest [**353] in the property (see, e.g., Dyal v. McLean, 188 Ga. 229 (3 SE2d 571) (1939)); and evidence sufficientto 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 acircumstance that requires a subsequent purchaser to inquire into whether the county complied with the requirementsof OCGA 36-9-2 to enter an order on its minutes authorizing disposal of the real property, and that failure to inquiredefeats the subsequent purchaser's status as a bona fide purchaser without notice.3 Consequently, the trial courterred in concluding that the Carter heirs' title is superior to that of Darling's as a result of Bacon County's failure tocomply with the requirements of OCGA 36-9-2 with respect to its 2003 conveyance of its interest in the property to

Page 7294 Ga. 455, *459; 754 S.E.2d 347, **352;


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 oftitle to Darling because the grantor does not appear in the chain of title. The title dated August 1, 2007 inDarling's favor shows "Southeast Maintenance and Construction, Inc." as the grantor instead of SoutheasternMaintenance and Construction, Inc., which was the true previous owner of the property. [HN10] "[A] meremisnomer of a corporation in a written [***15] instrument is not material or vital in its consequences, if theidentity 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 wassufficient to invalidate its quitclaim deed to the Development Authority or defeat the subsequent purchaser'sstatus as a bona fide purchaser without notice of a defect in the chain of title, this would not have served toinvalidate the City of Alma's conveyance of its undivided one-half interest in the property since this statuteapplies 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 ofthe governing authorities' failure to formulate a new economic development plan. The 1973 condemnation petitionreflects condemnation of the subject property was sought to acquire fee simple title for the purpose of using it for apublic lake, park, and recreation area. [***16] While the petition states only that it was filed pursuant to what is nowOCGA 22-2-100 et seq., the Special Master provisions for eminent domain proceedings, the parties stipulated to thefact that the Lake Alma project was part of a development plan formulated by the City of Alma for the purpose ofutilizing funds awarded under the federal Model Cities [*462] Program to combat the effects of blighted neighborhoodsin participating cities. Construction of Lake Alma was one of four projects included in the development plan. The otherprojects were improvement of an industrial park, upgrade of water and sewage treatment facilities, and improvement ofthe airport. Regardless of what condemnation law the proceedings were predicated upon, no one disputes that the 1973condemnation was for a proper public purpose. Nevertheless, the trial court found that the 2003 transfer of title toSoutheastern Maintenance, a private developer, thirty years after the initial condemnation, was invalid because neitherBacon County nor the City of Alma ever formulated a new economic development plan that encompassed an alternativeuse of the condemned property. We find no authority for the proposition that, at [***17] the time of the conveyanceinvolved in this case, a governing authority was required to reformulate a new development plan for an alternativepublic 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 inaccordance with the Urban Redevelopment Law, "[u]nless the property is to be acquired for the purpose of devoting it toa public use," it may be acquired through the exercise of the power of eminent domain only after the condemning entityhas adopted an urban redevelopment plan authorizing the exercise of eminent domain by the agency to acquire theproperty, the owner of the real property to be acquired has been notified of the planned rehabilitation of the property asset 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 domainproceedings 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 UrbanRedevelopment Law and that OCGA 36-61-9 was applicable to it, the 2003 conveyance was not a re-taking by amunicipality 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, are-purposing of the property from that involved in the original taking. [HN12] "[W]here property is not ultimately usedfor 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 constructimprovements on the property that were deemed to be in the public interest [*463] and "to foster and develop new

Page 8294 Ga. 455, *461; 754 S.E.2d 347, **353;


industry and employment opportunities for the citizens of Alma and Bacon County." At the time of the conveyance toSoutheastern Maintenance, such a conveyance was constitutionally permissible. See Talley v. Housing Auth. ofColumbus, 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 citizenwithout any requirement for public use after the original public purpose for the condemnation was abandoned). In 2003the Georgia Constitution had not yet been amended, in response to public concern over the holding of the United StatesSupreme Court in Kelo v. City of New London, 545 U. S. 469 (125 SCt 2655, 162 LE2d 439) (2005),5 to withdraw theprevious constitutionally granted authority for the sale or disposition of property, acquired by a governmental entity byeminent 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 acquiredthe opportunity to develop the property in accordance with an adopted urban redevelopment plan, was enacted as aremedy to the previous "evil" of the absolute power granted to counties and municipalities to take private property forany public or even non-public purpose so long as the taking was to effectuate an adopted urban redevelopment plan. SeeMcCord v. Housing Auth. of City of Atlanta, 246 Ga. 547, 550 (I) (272 SE2d 247) (1980). [***20] But by its terms, thisrequirement applies to the initial acquisition. Likewise, at the time of the conveyance to Southeastern Maintenance, theGeneral Assembly had not yet enacted [HN14] certain amendments to OCGA 22-1-1, known as the Landowner's Billof Rights and Private Property Protection Act, which exempted, from the definition of "public use," the public benefit ofeconomic 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 byeminent domain to another private entity did not violate the Fifth Amendment prohibition against taking privateproperty for public use without just compensation when the disposition was made in furtherance of an economicdevelopment plan that serves a public purpose.6 At the time of the conveyance to Southeastern Maintenance, [HN16] Art. IX, II, Par. VII of the GeorgiaConstitution of 1983 read, in pertinent part: "The General Assembly may authorize any county, municipality, orhousing authority to undertake and carry out [***21] community redevelopment, which may include the sale orother disposition of property acquired by eminent domain to private enterprise for private uses." The amendmentwhich eliminated this provision and substituted the requirement that "eminent domain shall not be used forredevelopment 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 lawgoverning eminent domain. We conclude that at the [**355] time of the 2003 conveyance to SoutheasternMaintenance, the City of Alma and Bacon County were not required to formulate an economic development plan for analternative use of the property originally acquired by condemnation thirty years earlier. See Talley, supra. Further, theconveyance in this case was made for what appears to have been a proper public purpose at that time. We reject theCarter heirs' assertion that it was a one-to-one transfer of property interests for a private and not a public purpose whichviolates the Fifth Amendment.7 Consequently, we reverse [***22] the trial court's holding that the 2003 conveyance toSoutheastern Maintenance was invalid.

7 Because the original condemnation was for a proper public purpose, this case is not analogous to those casesinvolving exercise of eminent domain for the purpose of one-to-one transfers of private property which theSupreme 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 decreeestablishing title is vacated.

Judgment reversed in part and vacated in part. All the Justices concur, except Hunstein and Nahmias, JJ., whoconcur in judgment only as to Division 2.

Page 9294 Ga. 455, *463; 754 S.E.2d 347, **354;


7 of 176 DOCUMENTS

AnalysisAs 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


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 SuperiorCourt (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 allegedproperty owners. The matter was referred to a special master who found in favor of the city. The lower court adoptedthe finding and ruled in favor of the city. The alleged property owners appealed. The court determined that althoughland had been deeded to some of the property owners by the State had made it clear that a portion of the propertybelonged to the state and that because of the easement created there was an exception to the more general rule that agrantor of land could not obtain land by adverse possession from a grantee. The court found that as to one of the deedsin question the terms were clear as to the property line that divided land that belong to the alleged property owner andthat belonged to the State. The court determined that the State owed a portion of the land and that the rest was owned bythe city, but that one of the allege property owners retained interest in the land in question. The court affirmed the priorruling.

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


Civil Procedure > Judicial Officers > Masters > General OverviewCivil Procedure > Appeals > Standards of Review > Clearly Erroneous ReviewReal 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 andadopted by the trial court will be upheld unless clearly erroneous.

Real Property Law > Estates > Present Estates > Fee Simple EstatesReal 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 hispossession for a period of time fixed by law. O.C.G.A. 44-5-160. The State may obtain title to property byprescription. O.C.G.A. 44-5-161 (a) defines the possession which is the foundation of prescriptive title as: (1) the rightof the possessor and not of another; (2) not originating in fraud; (3) public, continuous, exclusive, uninterrupted andpeaceable; (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 ofthe rights or title of the occupant, O.C.G.A. 44-5-169, and the rule that a grantor may not adversely possess againsthis grantee is the notice which starts the running of the prescription. Where a grantor in possession takes someadditional step which gives unequivocal notice that he is claiming property as his own, the prescriptive period begins torun.

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, SusanYandle Middleton, Sibley & Sibley, Jack N. Sibley, Michael J. Bowers, Attorney General, Daniel M. Formby, AssistantAttorney 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 thevery nucleus of Atlanta at the time of its birth. The seeds of this controversy were sown at the beginning of Atlanta, but

Page 11252 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 hasbeen called Meat Row Strip. As the suit progressed, other parties were joined and the title to additional parcels becameinvolved. The parties claiming title to various portions of the subject land are the heirs of Samuel [***2] Mitchell, theMetropolitan Atlanta Rapid Transit Authority, the City of Atlanta, and the State of Georgia. Among the issues the trialcourt faced were the construction of an 1842 deed from Mitchell to the State, the construction of an 1870 settlementagreement and deeds between the heirs of Mitchell and the State, whether the State can acquire title by prescription, andunder 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 inquestion; the City of Atlanta to be the owner of one parcel; and the State of Georgia was found to be the owner of airrights 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 propertywas located between Alabama Street on the south, Decatur Street on the north, Pryor Street on [**811] the west andLoyd Street (now Central Avenue) on the east. The property was deeded to the State for the building of a terminus forthe Western & Atlantic Railroad.

Some years later the heirs of Samuel Mitchell brought [***3] suit [*70] against the State for the return of theproperty, arguing that it had never been used for railroad purposes. The parties arrived at a settlement, and in 1870there was an exchange of deeds which gave the Mitchell heirs certain property fronting on Alabama Street and whichgave 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 theland 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 theproperty of the State. This decision lays to rest the controversy of the reversionary interest, but even if it did not, thereference 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 portionof the property was conveyed to the City of Atlanta. The lessee of the state-owned Western & Atlantic Railroad in 1873built [***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 ofAtlanta over the southern portion of State Square and an area adjoining State Square to the west. In a separatesettlement with the City of Atlanta the Mitchell heirs conveyed to the City a portion of the property received in theirsettlement with the state. This property known as the City subdivision, was ultimately sold to the Metropolitan AtlantaRapid Transit Authority (MARTA) in 1975 and 1976.

MARTA eventually became owner of all the lots in the City subdivision and in the Mitchell heirs subdivisionexcept for the interest reserved by R. C. Seignious, one of the plaintiffs here, in his deed to MARTA. In 1979 the Statedeeded 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 asincluding 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 toparcels, 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 MARTAwith a reservation in the [*71] deed as to all of his right, title and interest in Meat Row Strip. He now claimsownership in fee simple of that part of the strip directly behind his lots together with a right of ingress and egress in therest.

Page 12252 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 theoriginal 1842 deed; (2) because the 1870 deed to the Mitchell heirs from the State included the disputed area and thedeed from the Mitchell heirs to the subdivision lot owners excluded it; and (3) the Mitchell heirs insist that their 1870deed 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 wasa mutual mistake and that the parties always intended that the southern line [***6] of the State's property be the70/113.5 line; and (2) the State acquired the disputed area by adverse possession and subsequently conveyed it toMARTA.

[**812] The State of Georgia asserts that (1) it obtained title to the disputed area by virtue of the 1842 deed andnever relinquished it; (2) it has title by adverse possession or dedication; and (3) the portion of Meat Row Strip claimedby 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 Cityof Atlanta. Before turning to the findings of the Special Master, we note that [HN1] in an action to quiet title broughtunder O.C.G.A. 23-3-60 et seq. (Code Ann. 37-1411 et seq.), the findings of the Special Master and adopted by thetrial 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] markedAppendix A. The Special Master found, and we agree, that the metes and bounds descriptions in the 1870 deedsbetween the State and the Mitchell heirs show the dividing line between the State and Mitchell properties as a linerunning from a point on Loyd Street (Central Avenue) 77 feet north of Alabama Street westerly to a point on PryorStreet 132 feet north of Alabama (the 77/132 line). Although there are plats showing a line beginning on Loyd 70 feetnorth of Alabama and one plat shows it running westerly to a point on Pryor 113.5 feet north of Alabama (the 70/113.5line) as the boundary, the description in the deeds is clear and unambiguous and needs no construction as to the intent ofthe parties. Therefore, we find that the dividing line between the State [*72] and Mitchell heir properties is the 77/132line as claimed by the Mitchell heirs.

As noted above, almost immediately following the settlement with the State the Mitchell heirs subdivided theproperty obtained. The subdivision deeds were made pursuant to a recorded plat of the subdivision which shows thenorthern boundary of 70/113.5. This plat was recorded six days after the date of the deeds between the [***8] Stateand the Mitchell heirs. Further, the metes and bounds descriptions found in the deeds are consistent with the plat. TheSpecial Master found, and we agree, that there was no mutual mistake between the parties as to the property and that thedeeds from the Mitchell heirs to the subdivision lot owners cannot be construed to include Tract A. The Special Masterconcluded that the State, the Mitchell heirs, and the subdivision lot owners all accepted the 70/113.5 line as thesubdivision'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. Seignioushas no claim to a fee interest in any portion of that property. The Special Master found that Seignious' claim that he hadtitle to any portion of Tract A by adverse possession must fail because testimony showed that he and other subdivisionlot owners used the area only intermittently. We agree. Since Seignious never had any fee simple ownership in anypart of Tract A, and since Seignious has sold his fee interest in the subdivision lots to MARTA, the reservation in hisdeed for ingress and egress over Tract A or Tract B is meaningless. [HN2] Once the necessity [***9] ceases, a way ofnecessity also ceases. O.C.G.A. 44-9-5 (Code Ann. 85-1402). From this it is clear that a way of necessity cannotexist 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 whetherit belongs to the State by virtue of adverse possession and has now passed to MARTA.

Page 13252 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 hispossession for a period of time fixed by law." O.C.G.A. 44-5-160 (Code Ann. 85-401). The State may obtain title toproperty 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 rightof the possessor and not of another; (2) not originating in fraud; (3) public, continuous, exclusive, uninterrupted andpeaceable; (4) accompanied by a claim of right. These elements are present in this case. The maintenance of railroadtracks in the disputed area from 1873-1964 by the State or its [*73] [***10] lessee satisfies the requirement ofpossession which is public, continuous, exclusive, uninterrupted and peaceable. The State's claim of right to thisproperty is evidenced by its inclusion in an 1890 inventory of the property of the Western & Atlantic Railroad made bya 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 ameeting of the Western and Atlantic Railroad Commission for June 30, 1916, and in the official State valuation mapsfor that year. Further, the property was included in that leased by the State to the Nashville, Chattanooga & St. LouisRailway in 1919 and in that leased by the State to the Dixie Terminal Building Company in 1930. Evidence at trialshowed that the State has treated the property as its own and that its ownership is widely known. The Mitchell heirsinsist that the State's use of Tract A was permissive rather than adverse. However, a claim of right negatespermissiveness. 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 becausea grantor may not adversely possess against a grantee. This is true where the grantor simply remains in possessionafter a conveyance. In Malette v. Wright, 120 Ga. 735, 742 (48 SE 229) (1904), for example, we held that: "Theexecution of the deed and placing it upon the public records was a solemn publication to the world that the grantor hadconveyed to the grantee the land therein described, and the grantor would be estopped from insisting that one who dealtwith his grantee on the faith of the deed must take notice of his possession so as to make inquiry whether or not hisdeed really spoke the truth." However, in Kent v. Simpson, 142 Ga. 49 (82 SE 440) (1914), we found that the rule thatpossession constitutes notice applies to possession of a grantor after making a grant and that cases in apparent conflictstand on their own facts. In particular, we refused to extend Malette v. Wright beyond its facts, which concerned theeffect 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 constitutesnotice of the [***12] rights or title of the occupant, O.C.G.A. 44-5-169 (Code Ann. 85-408), and the rule that agrantor may not adversely possess against his grantee is the notice which starts the running of the prescription. Wherea grantor in possession takes some additional step which gives unequivocal notice that he is claiming property as hisown, 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 itsinventory combined with the other actions listed above which indicate a claim of right gave sufficient notice toauthorize the Special Master to find that the State had claimed fee simple title for more than twenty years and hadacquired 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 sametime that the Mitchell heirs were engaged in a controversy with the State over the 1842 [**814] deed from SamuelMitchell, they were also battling with the City of Atlanta over the southern portion of State Square and the landadjoining [***13] State Square on the west. In the subsequent settlement the City released any interest it might have inthe area the Mitchell heirs planned to subdivide and the heirs conveyed to the City the western 100 feet of State Squareon Alabama Street, extending north 132 feet from the corner of Pryor and Alabama. The City sold the propertyidentified in Appendix A as "City Subdivision" and retained title to the northern portion identified as Tract C. Tract Cwas conveyed to the State in 1928 and included in the conveyance to MARTA in 1979. The argument of the Mitchellheirs 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 14252 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 fromSamuel Mitchell to the Macon and Western Railroad. The Special Master has concluded that the Mitchell heirsconveyed any interest they might [***14] have had in this parcel to the City in 1870. We agree. We are unable toagree with the State's contention that by resolution of the General Assembly in 1925 (Ga. L. 1925, p. 1596) the Stateacquired title to this tract. Title remains in the City of Atlanta.

Judgment affirmed.

[*75] [**815] Appendix A

[SEEILLUSTRATION IN ORIGINAL]

Page 15252 Ga. 69, *74; 311 S.E.2d 808, **814;

1984 Ga. LEXIS 581, ***13

8 of 176 DOCUMENTS

CautionAs of: Aug 04, 2014

RANDY BACOTE v. BOBBY J. WYCKOFF et al.

No. 40211


251 Ga. 862; 310 S.E.2d 520; 1984 Ga. LEXIS 548


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 aconspiracy between the attorney and the wife's former husband to defraud them out of their interest in real property. Theattorney'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 propertywould 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 attorneyalleging that he conspired with the former husband. The trial court awarded the former wife and children damages andvested title to the property in them. The court reversed the damages award and affirmed the order setting aside theattorney's warranty deed. It held that there was insufficient evidence of fraud to support the imposition of damagesagainst the attorney. The former wife acknowledged that no action, or inaction, taken by her, was in reliance on anyrepresentations 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 thepremises. 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 thatthere was a conspiracy between the attorney and the former husband and affirmed the order setting aside the attorney'swarranty 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


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 maderepresentations, (2) that at the time he knew they were false, (3) that he made them with the intention and purpose ofdeceiving the plaintiff, (4) that the plaintiff relied on the representations, and (5) that the plaintiff sustained the allegedloss and damage as the proximate result of their having been made.

Real Property Law > Adverse Possession > General OverviewReal 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. Inorder for the possession to have the effect of notice, it must be actual, open, visible, exclusive, and unambiguous. Hewho takes with notice of an equity takes subject to that equity. Ga. Code Ann. 23-1-16. Notice sufficient to exciteattention and put a party on inquiry shall be notice of everything to which it is afterwards found that such inquirymight have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge in fixing the rights of theparties. 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, basedupon a jury's verdict, awarding damages to appellees, Bobby Jean Wyckoff and her minor children, and declaring nulland 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 toMrs. Wyckoff. The agreement further provided "Plaintiff [wife] to have exclusive occupancy of the marital domicile at1769 Timothy Drive, S. W., [*863] Atlanta, Fulton County, Georgia. Defendant [husband] [***2] to execute thenecessary warranty deed to said property to the children involved within this settlement within 10 days." JamesWyckoff never executed "the necessary warranty deed" to his children in spite of several unsuccessful petitions seeking

Page 17251 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 subjectto a $ 26,000 note secured by a deed to secure debt held by Charter Mortgage Company and a $ 700 note secured by asecond deed to secure debt held by C & S Mortgage Company. While the decree was silent as to who was to pay thetwo 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, anattorney, saw the foreclosure advertisement in the Fulton Daily Report, and went to the residence to inquire about theproperty. 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 fromforeclosure and asked to see Mr. Wyckoff. She told him that Mr. Wyckoff did not live there, that she knew where helived but did not know his address, and gave him his telephone number. According to Bacote, he gave Mrs. Wyckoffhis business card, told her that he had seen the property advertised, asked if they planned to buy the property back, andtold her he was interested in buying the property. Bacote testified that Mrs. Wyckoff told him that he would have to seeher husband about that. Bacote admitted he made no inquiry about whether the parties were divorced or what claim shehad in the property. Mrs. Wyckoff also admitted she did not volunteer this information. It is undisputed that appellantnever saw nor discussed the Timothy Drive property with appellees again until after he claimed some interest in theproperty.

After the discussion with Mrs. Wyckoff, and after contacting Mr. Wyckoff's former attorney, appellant wascontacted by Mr. Wyckoff and a loan or sale of the property was discussed. A second meeting was held three daysbefore the foreclosure which resulted in [***4] appellant extending a loan to Mr. Wyckoff in the amount of $ 2,029 tostop the foreclosure. At that time, Mr. Wyckoff executed a deed to secure debt, a contract of sale and a power ofattorney in favor of appellant. The agreement between the two was substantially as follows: Appellant was to extendthe 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; andthat an extension of 90 days would be granted to Mr. Wyckoff if he repaid at least $ 1,000 within the initial 90-dayperiod and execute a warranty deed to appellant to be held in escrow during the extension period. The parties alsoagreed that appellant would make monthly advances to Mr. Wyckoff in the amount of and for the purpose of keepingthe mortgage payments current. These amounts were to be added to the underlying obligation. The amount of themonthly 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 byappellee 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 thepremises in the name of James Wyckoff. Appellant admitted he made no further search of the public recordsconcerning this property. A further search would have revealed the following documents: (a) a Lis Pendens filed April19, 1979 purporting to give notice that the Wyckoffs were divorced and that the final judgment entered affected title tothe Timothy Drive property; 1 (b) the final judgment and decree in the Wyckoff's divorce which granted appellees anequitable interest in the marital domicile; and (c) a fi. fa. representing unpaid child support entered on the generalexecution 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 passedupon, Cook v. Hendricks, 146 Ga. 63 (90 SE 383) (1916), and a reasonable time thereafter. Land DevelopmentCorp. 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 torepay the balance. Mr. Wyckoff also executed a warranty deed conveying the Timothy Drive property to appellant,

Page 18251 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 repaidat the end of the 90-day period, the deed would be recorded and the property would belong to appellant. The balance ofthe 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 adispossessory proceeding in the State Court of Fulton County in the name of James [*865] Wyckoff and RandyBacote, agent and successor-in-title. Pending the outcome of this dispossessory proceeding, appellee were ordered topay 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 tomake 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. Wyckoffthen filed this present Petition in Equity, individually and as next friend of the minor children, alleging there was aconspiracy between appellant and her former husband to defraud her and the minor children out of their interest in theTimothy Drive property. At the conclusion of trial, the jury found in favor of James Wyckoff, absolving him of anyliability. The jury also found in favor of appellees in the amount of $ 5,000 actual damages, $ 10,000 punitive damagesand $ 10,000 expenses of litigation against appellant, and that the deed from James Wyckoff to appellant be declarednull and void. The trial court entered judgment in accordance with the verdict and further decreed that title to theTimothy Drive property be vested in appellees in accordance with the divorce decree. Appellant brings this appeal froma 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 dispossessoryproceedings were all a part of a conspiracy between appellant and her former husband to cheat and defraud appelleesout of their interest in the property so they could appropriate the equity to themselves. The jury's verdict, exoneratingJames Wyckoff, negated the conspiracy theory, so any damages awarded against appellant, were awarded on the theoryof appellant's fraud.

[HN1] To recover in tort for fraud, the plaintiff must prove five essential elements: (1) that the defendant maderepresentations; (2) that at the time he knew they were false; (3) that he made them with the intention and purpose ofdeceiving the plaintiff; (4) that the plaintiff relied on the representations; and (5) that the plaintiff sustained the allegedloss 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 thedefendants. 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 timethe only representation made by appellant was that he was in the business of helping poor black people save theirhouses from foreclosure. Appellee further acknowledged that no action, or inaction, taken by her, was in reliance on anyrepresentations made by appellant.

2. Appellant also contends there was insufficient evidence to warrant the trial court's setting-aside his warrantydeed from James Wyckoff. Appellant argues he is a bona fide purchaser for value without [**524] notice of anequity 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 (CodeAnn. 85-408). In order for the possession to have the effect of notice, it must be actual, open, visible, exclusive, andunambiguous. McDonald v. Dabney, 161 Ga. 711 (132 SE 547) (1929). "He who takes with notice of an equity takessubject [***10] to that equity." O.C.G.A. 23-1-16 (Code Ann. 37-115). "Notice sufficient to excite attention and

Page 19251 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. Wyckoffconcerning 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 tohis 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 20251 Ga. 862, *866; 310 S.E.2d 520, **524;

1984 Ga. LEXIS 548, ***10

9 of 176 DOCUMENTS

PositiveAs of: Aug 04, 2014

YANCEY v. HARRIS et al.

No. 29674


234 Ga. 320; 216 S.E.2d 83; 1975 Ga. LEXIS 1121

March 11, 1975, ArguedApril 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 equitableinterest 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 tothe property to stand in his name. After the son-in-law used the property as collateral for a loan and defaulted on hispayments, the lender and his assignee filed a foreclosure action. The homeowner filed an action for a declaration thatshe was the true beneficial owner of the property. The superior court directed a verdict in favor of the lender and hisassignee. On appeal, the court explained that, under Ga. Code Ann. 85-408 and Ga. Civ. Code 4528 (1910), whenrecord title stood in one person's name and another person had open and exclusive possession of it, that possession putprospective purchasers on notice of an equitable title. The lender and the assignee had a duty to ask the homeownerabout the nature of her interest. Although the son-in-law had misrepresented her interest, there was no allegation that thehomeowner had been negligent or dishonest, such that she was estopped from claiming her equitable interest. Nor wasthere 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 thelender 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


Contracts Law > Types of Contracts > Bona Fide PurchasersEstate, Gift & Trust Law > Trusts > Trustees > General OverviewReal 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 theperson with a beneficial interest, is not a bona fide purchaser for value without notice of whatever equitable title thetenant-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 OverviewReal Property Law > Landlord & Tenant > Tenant's Remedies & Rights > General OverviewReal 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). Noticesufficient to excite attention and put a party on inquiry is notice of everything to which it is afterwards found suchinquiry might have led. Ignorance of a fact, due to negligence, is equivalent to knowledge, in fixing the rights of theparties. 4530. A purchaser therefore is put on notice of all the right, title, and interest of a tenant in possession. Therule is not different where the tenant in possession is a cestui que trust. Actual possession by the cestui que trust isconstructive notice to a purchaser as to the occupant's equitable title.

Estate, Gift & Trust Law > Trusts > Resulting TrustsReal Property Law > Title Quality > Adverse Claim Actions > EjectmentReal 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 inpossession, the purchaser takes with notice of the equitable title, and the purchaser will not succeed in an attempt toeject 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 hewould have learned by an inspection of the premises. It is, therefore, the general rule that, if land is in possession of anyone 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 OverviewTorts > Negligence > Gross Negligence[HN6] In order for an equitable estoppel to arise, there must generally be some intended deception in the conduct ordeclarations of the party to be estopped, or such gross negligence as to amount to constructive fraud, by which another

Page 22234 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; otherwiseno equity will arise in his favor.

Contracts Law > Defenses > Equitable Estoppel > General OverviewReal 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 allowinglegal title to stand in the name of another.

Civil Procedure > Trials > Judgment as Matter of Law > General OverviewReal Property Law > Ownership & Transfer > Equitable Interests[HN9] To operate as notice, the possession must be open, visible, exclusive, and unambiguous, not liable to bemisconstrued or misunderstood. It must not be mixed or ambiguous possession.

Estate, Gift & Trust Law > Trusts > Resulting TrustsReal 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 existsa relationship sufficient to account for the situation, and the circumstances do not suggest an inconsistent claim, thensuch a possession will not give notice of a right by an unrecorded grant. If, of two occupants, one has the record title, apurchaser 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 aclaimed 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 herresidential property to stand in the name of her son-in-law because [*321] his income or credit rating was thoughtnecessary to satisfy the mortgage lender at the time of purchase, and, on the other side, an attorney who loaned moneyto the son-in-law on the strength of his record title taking a security deed to the property, and the assignee of theattorney to whom he sold the son-in-law's note and security deed, all of which was done without homeowner'sknowledge. The son-in-law defaulted on payments, and the assignee threatened foreclosure. The homeowner thenbrought suit asking that the court decree that the [**84] property held by the son-in-law was impressed with a resultingtrust 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 truebeneficial owner of the property; that at all times pertinent hereto she had been in open and exclusive possession of it

Page 23234 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 theloan 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 herunder what claim she held the property; and that the assignee similarly never inquired of her. It appeared that theson-in-law had represented to the attorney that the homeowner rented the property from him. The evidence showedwithout conflict that the homeowner was unaware of her son-in-law's attempt to encumber the land until after thesecurity deed was given to Siegel and transferred to Zimmerman. At the close of her case, the court directed that averdict be entered as prayed for against the son-in-law; and that a verdict be entered for the attorney Siegel and theassignee Zimmerman (hereinafter, "the [***3] defendants") to the effect that the security deed was a validencumbrance on the property. The only appeal is by the homeowner from the directed verdict for defendants. We agreewith her contentions and reverse.

Homeowner's argument here, based on Code 85-408, is that although record title stands in another's name heropen, exclusive possession of the property is [*322] notice to all the world of whatever her right or title may be, andthat Siegel and Zimmerman had a duty to inquire of her concerning her right, and as a consequence of their failure todo 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 todispossess the tenant [beneficiary], is not a bona fide purchaser for value without notice of whatever equitable title thedefendant [tenant-beneficiary] had in the property. 'Possession of land is notice of whatever right or title the occupanthas.' 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 towhich it is afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, is equivalent toknowledge, in fixing the rights of the parties.' Civil Code (1910), 4530. A purchaser therefore is put on notice of allthe right, title, and interest of a tenant in possession. The rule is not different where the tenant in possession is a cestuique trust. Actual possession by the cestui que trust is constructive notice to a purchaser as to the occupant's equitabletitle. [Cits.]" (Emphasis supplied.)

The superior court ruled that the son-in-law held the land as trustee under a resulting trust for her benefit. Thisruling has not been appealed. The law is clear that [HN3] where a trustee attempts to transfer the trust realty to apurchaser 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 enjointrespass by purchasers from her trustee).

This result is compatible with generally applied legal principles. [HN4] "In all but a few jurisdictions, a purchaserof land has constructive notice of all facts affecting [*323] the title of which he would have learned by an inspection ofthe premises. It is, therefore, [**85] the general rule that, if land is in possession of any one other than the vendor, apurchaser 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 confusingsituation. However, this does not undercut her right to prevail in this lawsuit. We note with reference to concepts ofestoppel that [HN5] estoppel must be specially pleaded (Code Ann. 81A-108 (c)), and none of the three defendantshere pleaded estoppel in his answer to Mrs. Yancey's complaint. Nonetheless, assuming estoppel had been an issue, wefind that the classical elements giving rise to an estoppel, including either [***6] intentional deception or grossnegligence, are not present here in Mrs. Yancey's actions: [HN6] "In order for an equitable estoppel to arise, there mustgenerally be some intended deception in the conduct or declarations of the party to be estopped, or such grossnegligence 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 notpositioned themselves to claim estoppel against her: [HN7] "'. . . the party who claims the benefit of estoppel . . . must

Page 24234 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 EquityJurisprudence (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 tohold and enforce equitable title to this land while she allows legal title to stand in the name of another. Howev

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