GA Code § 44-5-66 (2021)
2021 Georgia Code|Title 44 - Property|Chapter 5 - Acquisition and Loss of Property|Article 3 - Covenants and Warranties|§ 44-5-66. Action for Breach of Warranty - Measure of Damages

 Upon a breach of a covenant of warranty of title to land, the damages awarded should be the purchase money with interest thereon from the time of sale unless the jury determines, under the circumstances of the case, that the use of the premises was equal to the interest on the money and determines that an equitable setoff should be allowed. However, if valuable improvements have been made on the premises, the interest should be allowed.   (Orig. Code 1863, § 2889; Code 1868, § 2897; Code 1873, § 2948; Code 1882, § 2948; Civil Code 1895, § 3804; Civil Code 1910, § 4400; Code 1933, § 20-1412.)   Law reviews.   - For article surveying recent legislative and judicial developments in Georgia's real property laws, see 31 Mercer L. Rev. 187 (1979).   JUDICIAL DECISIONS   Damages assessed at time of breach.    - Covenant of warranty, if breached at all, is at least technically breached when the covenant is entered into and the damages are therefore to be assessed in accordance with the conditions as the conditions existed at that time. Teems v. City of Forest Park, 137 Ga. App. 733, 225 S.E.2d 87 (1976).    General measure of damages on warranties of title to land is the same as on warranties of title to chattels in basing the recovery on the original consideration with interest, except that the jury is permitted to allow an equitable setoff of the value of the use of the premises against the interest on the purchase price, if they think, under all the circumstances, that the value of the use equals the interest. Cook v. Pollard, 50 Ga. App. 752, 179 S.E. 264 (1935).    When the purchaser lost all title the purchaser received from the intermediate and immediate grantors (the warrantors), and purchased the outstanding title from the true owner, the measure of damages would be the purchase price paid to the warrantors sued with interest, and not the amount paid for the outstanding title by the purchaser, as in cases of the removal of an encumbrance. West v. Lee, 57 Ga. App. 873, 197 S.E. 75 (1938).    On a breach of warranty of title to land, the measure of damages is the purchase money, with interest. Teems v. City of Forest Park, 137 Ga. App. 733, 225 S.E.2d 87 (1976).   Grantor liable only to immediate grantee for expenses of defense of title.    - Grantor of land is liable to the grantor's immediate grantee, who has been evicted, for the purchase money, with interest, and expenses incurred by the grantee in defending the title; but not for expenses incurred in a series of suits for breach of warranty by remote grantees, holding under, but not immediately from, the original grantee. Smith v. Williams, 117 Ga. 782, 45 S.E. 394, 97 Am. St. R. 220 (1903).   Limitation on amount recoverable from remote warrantor.    - After a warrantee sued a remote warrantor, the warrantee could not recover more than the consideration the warrantee had paid, with interest. Smith v. Smith, 243 Ga. 56, 252 S.E.2d 484 (1979).    Attorney fees are not allowed in a suit to recover damages if there is no allegation of deceit or fraud in the sale. Smith v. Williams, 117 Ga. 782, 45 S.E. 394, 97 Am. St. R. 220 (1903).    There is no authorization for an award of attorney fees under O.C.G.A. § 44-5-66. Cary v. Guiragossian, 270 Ga. 192, 508 S.E.2d 403 (1998).    Trial court did not err when the court granted summary judgment to a title insurer as to liability on the insurer's breach of warranty of title claim against a builder, but denied summary judgment as to attorney fees and litigation expenses, as neither O.C.G.A. § 44-5-66 nor the warranty deed authorized attorney fees; since the insurer did not allege fraud or deceit, in order to prevail on the insurer's bad faith claim for attorney fees under O.C.G.A. § 13-6-11, the insurer had to prove that the builder acted in bad faith when it sold the property to the insureds. Wilkinson Homes, Inc. v. Stewart Title Guar. Co., 271 Ga. App. 577, 610 S.E.2d 187 (2005).   Partial failure of title.    - When a partial failure of title occurs, damages are fixed by a pro rata valuation. Rowan v. Newbern, 32 Ga. App. 363, 123 S.E. 148 (1924).   Who has right to recover.    - Right to recover for a breach of warranty cannot exist in an intermediate warrantor and the last warrantee at the same time. Smith v. Smith, 129 Ga. App. 618, 200 S.E.2d 504 (1973).    Statute does not apply to an ousted donee of realty. Smith v. Smith, 243 Ga. 56, 252 S.E.2d 484 (1979) (see O.C.G.A. § 44-5-66).    This statute was not intended to, and does not, cover situations where the property is received as a gift by deed or otherwise. The donee of realty takes with such gift the warranty which the donee's donor had and stands in the shoes of the donee's donor as to such warranty. To hold otherwise would give no recourse to an ousted donee against a remote grantor simply because the donee received the property as a gift by deed or devise without a monetary consideration. Smith v. Smith, 243 Ga. 56, 252 S.E.2d 484 (1979) (see O.C.G.A. § 44-5-66).   Value if deed is of gift with covenants of warranty.    - If the deed is one of gift, but the deed contains covenants of warranty, the value of the land at the time of the gift, with interest thereon, is the criterion of damages for breach of the warranty. Smith v. Smith, 243 Ga. 56, 252 S.E.2d 484 (1979).    Cited in Lowery v. Yawn, 111 Ga. 61, 36 S.E. 294 (1900); Whitlock v. Mozley & Co., 142 Ga. 305, 82 S.E. 886 (1914); Neal v. Medlin, 36 Ga. App. 796, 138 S.E. 254 (1927); Jackson v. Franklin, 179 Ga. 840, 177 S.E. 731 (1934); Chance v. Buxton, 163 F.2d 989 (5th Cir. 1947); Lee v. Austin, 209 Ga. 715, 75 S.E.2d 426 (1953); Echols v. Thompson, 211 Ga. 299, 85 S.E.2d 423 (1955); Claxton v. Claxton, 214 Ga. 715, 107 S.E.2d 320 (1959); Smith v. Smith, 129 Ga. App. 618, 200 S.E.2d 504 (1973); Sachs v. Swartz, 233 Ga. 99, 209 S.E.2d 642 (1974); Moss v. Twiggs, 260 Ga. 561, 397 S.E.2d 707 (1990).   RESEARCH REFERENCES   Am. Jur. 2d.   - 20 Am. Jur. 2d, Covenants, Conditions, and Restrictions, §§ 52, 65 et seq., 134 et seq.   C.J.S.   - 17A C.J.S., Contracts, §§ 561, 562, 600 et seq, 610 et seq., 652, 665.   ALR.    - Reduction of claim under contract as affecting right to interest, 89 A.L.R. 678.    Compensation as alternative relief upon denial of rescission to purchaser of land, 175 A.L.R. 686.   Right to recover, in action for breach of contract, expenditures incurred in preparation for performance, 17 A.L.R.2d 1300.   Vendor and purchaser: marketability of title as affected by lien dischargeable only out of funds to be received from purchaser at closing, 53 A.L.R.3d 678.   Effect of doubtful construction of will devising property upon marketability of title, 65 A.L.R.3d 450.   Measure and element of damages recoverable from vendor where there has been a mistake as to amount of land conveyed, 94 A.L.R.3d 1091.