GA Code § 23-1-20 (2021)
2021 Georgia Code|Title 23 - Equity|Chapter 1 - General Provisions|§ 23-1-20. Interference With Bona Fide Purchaser

 A bona fide purchaser for value without notice of an equity will not be interfered with by equity.   (Orig. Code 1863, § 3025; Code 1868, § 3037; Code 1873, § 3092; Code 1882, § 3092; Civil Code 1895, § 3934; Civil Code 1910, § 4531; Code 1933, § 37-111.)   Law reviews.   - For note, "Vesting Title in a Murderer: Where is the Equity in the Georgia Supreme Court's Interpretation of the Slayer Statute in Levenson?," see 45 Ga. L. Rev. 877 (2011).   JUDICIAL DECISIONS   Section constitutes mandatory charge to jury.    - When this section is applicable to a case, and warranted both by the pleadings and the evidence, it should be given as a charge to the jury, even in the absence of a request. Anderson v. Barron, 208 Ga. 785, 69 S.E.2d 874 (1952).   Bona fide purchaser obtains good title notwithstanding forgery in chain of title.    - Trial court erred in holding that a mortgage company had a valid security interest as to the other one-half undivided interest in certain property because the company could not acquire a valid security interest in the entire property by virtue of the company's status, if any, as a bona fide purchaser for value; a bona fide purchaser for value, or a security deed holder occupying such position, obtains good title notwithstanding a forgery in the chain of title. Brock v. Yale Mortg. Corp., 287 Ga. 849, 700 S.E.2d 583 (2010).    Bonner v. Norwest Bank Inc., 275 Ga. 620 (2002), is inconsistent with the Second Refuge Church Inc. v. Lollar, 282 Ga. 721 (2007), line of cases and is overruled to the extent that the case extends the bona fide purchaser for value doctrine to those acquiring title under a grantee in a forged deed; Mabra v. Deutsche Bank Inc., 277 Ga. App. 764 (2006), is likewise overruled as Mabra also runs contrary to the Lollar line of cases, which does not recognize that the bona fide purchaser for value doctrine may apply when forgery occurs between spouses. Brock v. Yale Mortg. Corp., 287 Ga. 849, 700 S.E.2d 583 (2010).    A bona fide purchaser without notice acquires an unqualified legal right and title to the property purchased; and a court of equity has no jurisdiction to interfere with such vested legal right and title. Gamble v. Brooks, 170 Ga. 662, 153 S.E. 759 (1930); Jenkins v. Sosebee, 74 Bankr. 440 (Bankr. N.D. Ga. 1987)See.    A bona fide purchaser for value, and without notice of an equity, will not be interfered with by a court of equity and this doctrine proceeds on 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 the purchaser's own injury, or who is guilty of laches in not sooner asserting a mere secret equity. Gamble v. Brooks, 170 Ga. 662, 153 S.E. 759 (1930).    When the absolute title to property is apparently in a vendor or mortgagor, the vendee or mortgagee is protected, unless the one seeking to set up a lien or trust against the property can show that the vendee or mortgagee had notice of trust funds having gone into the property. Tattnall Bank v. Harvey, 186 Ga. 752, 198 S.E. 724 (1938).    Plaintiff may not reform the plaintiff's deed because of mutual mistake, third party acquired title subsequently to that deed and is an innocent purchaser without notice of such mistake. Cox v. Zucker, 214 Ga. 44, 102 S.E.2d 580 (1958).   Reformation of agreement was not permitted against bona fide purchaser of promissory note.    - In a suit on a promissory note by a lender's assignee, although some evidence supported the borrowers' claim that terms in a Forbearance Agreement (FA) binding the guarantors were the product of mutual mistake and release of the guarantors was intended, the trial court erred in reforming the FA because the borrowers had not overcome the presumption that the assignee was a bona fide purchaser for value without notice of the mistake. Hamilton State Bank v. Kelly Capital Invs., LLC, 335 Ga. App. 252, 779 S.E.2d 757 (2015).    While it is the rule that a bona fide purchaser of property in which trust funds have been invested is protected, the beneficiary of a trust estate may at the beneficiary's option, within a reasonable time, "affirm or reject an unauthorized investment by the trustee," and equity will aid the beneficiary in recovering the funds or property, or enforcing a lien for the wrongfully used funds, provided that the assets can be traced and remain in the hands of a person "affected with notice of the misapplication." Tattnall Bank v. Harvey, 186 Ga. 752, 198 S.E. 724 (1938).   Recital of consideration insufficient.    - While proof of payment of the purchase money alone raises a presumption of good faith, and carries the burden of claimant, when no testimony was introduced to prove that the consideration recited in the deed was in fact paid, nor was it otherwise proved to have been paid, the recital of the consideration in the deed and the recital therein that it was paid does not carry the burden of proving payment of the purchase money. Pound v. Faulkner, 193 Ga. 413, 18 S.E.2d 749 (1942).   Owner's negligence impacting bona fide purchaser.    - The fact that the owner of the automobile, estranged from the owner's spouse, negligently allowed the spouse to get possession of the keys and the automobile and to thereafter drive it to another city and sell it to a dealer in automobiles of the same make was not such an act as clothed the spouse, who had no interest therein, with the external indicia of ownership and right of disposition, so as to enable the spouse to pass the dealer such title to the automobile that the dealer could in turn give to a third-party purchaser clear title which would defeat the right of the true owner to recover the automobile in a trover action, nor did the act require a finding that the third-party purchaser was a bona fide purchaser for value without notice of any infirmity in the title to the automobile. Arnold v. Conner, 100 Ga. App. 503, 111 S.E.2d 638 (1959).   Purchase at administrator's sale.    - When one purchases land at an administrator's sale duly authorized by order of the court of ordinary (now probate court), which land was in the possession of such administrator, one's deed will not be canceled on the petition of parties claiming an equitable title to such land, of which equity the purchaser had no notice. Beecher v. Carter, 189 Ga. 234, 5 S.E.2d 648 (1939).   No right to cancellation of deed.    - When a purchaser of land from one in possession, who holds a deed thereto which is absolute on its face, has paid the purchase price and taken possession, parties claiming an equity therein of which the purchaser had no notice are not entitled to have the purchaser's deed canceled. Beecher v. Carter, 189 Ga. 234, 5 S.E.2d 648 (1939).   Third party purchasers without notice of chattel mortgages.    - When third-party purchasers of chattels were bona fide purchasers for value without notice of the chattel mortgages, it is not error to sustain their general demurrers (now motions to dismiss) to the mortgagee's petition for equitable foreclosure. Morris & Eckels Co. v. Fulton Nat'l Bank, 208 Ga. 222, 65 S.E.2d 815 (1951).    Purchaser of real estate is not bound by recitals in a deed executed by the purchaser's grantor to realty not embraced in the purchase, and which, therefore, does not constitute a muniment in purchaser's chain of title. Thompson v. Randall, 173 Ga. 696, 161 S.E. 377 (1931).   Purchaser must retain bona fides until purchase money actually paid.    - It is a rule in equity that a bona fide purchaser without notice, to be entitled to protection, must be so, not only at the time of the contract or conveyance, but until the purchase money is actually paid. Ross v. Rambo, 195 Ga. 100, 23 S.E.2d 687 (1942).    A partial payment of the purchase money before notice of the equitable title of the true owners, although not sufficient to invest the vendee with the character of a bona fide purchaser as regards the entire estate purchased, will entitle the vendee to invoke the aid of the equitable principle that the vendee who asks equity must do equity and to be reimbursed for the amount actually paid before. Ross v. Rambo, 195 Ga. 100, 23 S.E.2d 687 (1942).   Bona fide purchaser not found when purchased with notice of quiet title action.    - Investment company was not entitled to the protection accorded to bona fide purchasers because the company admitted that the company had actual knowledge of the quiet title action filed by a bank as well as the recorded lis pendens before purchasing the subject property at a foreclosure sale; because a grantee's security deed was recorded with the maturity date clearly set forth, the company was on constructive notice that the date of the reversion of the title interest, pursuant to O.C.G.A. § 44-14-80(a)(1), had occurred before the foreclosure sale. MPP Invs., Inc. v. Cherokee Bank, N.A., 288 Ga. 558, 707 S.E.2d 485 (2011).   Purchasers entitled to protection of bona fide purchaser for value.    - There was no error in the trial court's grant of summary judgment to a bank and nursery in a daughter's action to cancel deeds executed by her mother before her death to the bank and the nursery because they were entitled to the protection of bona fide purchaser for value under O.C.G.A. §§ 23-1-19 and23-1-20; the title search showed that the property was transferred to the mother via the will of the daughter's father through a trustees deed of distribution from the remainder trust to the primary beneficiary of the trust, and there was nothing in the chain of title or the trust instruments that would put either the bank or nursery on notice that there were any issues affecting title to the properties because the wording of the trusts allowed the trustees to sell or dispose of any property, at any time, for reasons the trustees deemed best, for the benefit of the mother. Kitchings v. Ameris Bank, 309 Ga. App. 837, 711 S.E.2d 392 (2011).    Although a county failed to comply with O.C.G.A. § 36-9-2 by recording a transfer in the minutes when the county conveyed the county's interest in property the county had formerly acquired by eminent domain to the county development authority, a subsequent purchaser was a bona fide purchaser without notice of this irregularity under O.C.G.A. § 23-1-20, so that the county's title was superior to that of the condemnee's heirs, who sought to repurchase the property under O.C.G.A. § 36-9-3(g)(3)(B). Darling Int'l, Inc. v. Carter, 294 Ga. 455, 754 S.E.2d 347 (2014).   Bona fide purchaser status properly denied.    - Trial court did not err in denying purchasers and the holders of two outstanding security deeds bona fide purchaser status because a quitclaim deed showed on the deed's face that a parent signed the deed as the children's purported "guardian"; thus, the designation of a "guardian" in the chain of title put the purchasers and holders on notice of the need to confirm the parent's legal authority to convey the children's interest in the property. Chase Manhattan Mortg. Corp. v. Shelton, 290 Ga. 544, 722 S.E.2d 743 (2012).    Cited in Long v. Atlanta Trust Co., 164 Ga. 21, 137 S.E. 394 (1927); Rountree v. Davis, 90 Ga. App. 223, 82 S.E.2d 716 (1954); Mathis v. Blanks, 212 Ga. 226, 91 S.E.2d 509 (1956); Ayers v. Carden, 212 Ga. 510, 93 S.E.2d 694 (1956); W.L. Schautz Co. v. Duncan Hosiery Mills, Inc., 218 Ga. 729, 130 S.E.2d 496 (1963); Todd v. Conner, 220 Ga. 173, 137 S.E.2d 614 (1964); DOT v. Brooks, 254 Ga. 303, 328 S.E.2d 705 (1985); Anderson v. Streck, 190 Ga. App. 224, 378 S.E.2d 526 (1989); Dime Savs. Bank v. Sandy Springs Assocs., 261 Ga. 485, 405 S.E.2d 491 (1991); Tower Fin. Servs., Inc. v. Smith, 204 Ga. App. 910, 423 S.E.2d 257 (1992); Farris v. Nationsbanc Mtg. Corp., 268 Ga. 769, 493 S.E.2d 143 (1997).   RESEARCH REFERENCES   ALR.    - Pledgee of corporate stock as security for an antecedent debt as a bona fide purchaser within the rule which protects such purchasers against the equities of third persons, 9 A.L.R. 1619.    Right of one who, with knowledge of outstanding equity, derived his interest in real property from or through a bona fide purchaser, to same protection as latter, 63 A.L.R. 1362.    Bona fides of purchaser of bill or note on an executory consideration, 100 A.L.R. 1357.   What constitutes notice to subsequent purchaser of real property of option to purchase contained in unrecorded lease, 17 A.L.R.2d 331.   Motor vehicle certificate of title or similar document as, in hands of one other than legal owner, indicia of ownership justifying reliance by subsequent purchaser or mortgagee without actual notice of other interest, 18 A.L.R.2d 813.   Rights as between purchaser of timber and subsequent vendee of land, 18 A.L.R.2d 1150.   Relative rights in real property as between purchasers from or through decedent's heirs or devisees and unknown surviving spouse, 39 A.L.R.2d 1082.   Extension of time or forbearance to sue as consideration constituting mortgagee bona fide purchaser, 39 A.L.R.2d 1088.   Knowledge or notice of inadequacy of consideration for conveyance in chain of title as affecting bona fide status of purchaser, 42 A.L.R.2d 1088.   Relative rights as between purchaser of chattel from one who had previously bought it with stolen money, and victim of the theft, 62 A.L.R.2d 537.   Right to reformation of contract or instrument as affected by intervening rights of third persons, 79 A.L.R.2d 1180.   Right to follow chattel into hands of purchaser who took in payment of preexisting debt, 11 A.L.R.3d 1028.   Right of vendee under executory land contract to lien for amount paid on purchase price as against subsequent creditors of or purchasers from vendor, 82 A.L.R.3d 1040.