Court Opinion

ID: 9616495
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:47:21.675403+00
Date Added: 2024-06-11T09:56:51.964703
License: Public Domain

Gunter, Justice,
dissenting.
The appellant here, Mrs. Yancey, brought an action in the trial court against Edward Harris, her son-in-law, which sought to have the title to realty adjudged to be in *326her rather than Harris, the then record title holder. Mrs. Yancey also joined Siegel and Zimmerman as additional defendants, because Harris had executed and delivered a security deed to the realty to Siegel who had assigned the security deed to Zimmerman. She sought to have the security deed declared null and void "on account of the notice of petitioner’s rights in said property imputed to defendants Siegel and Zimmerman by Ga. Code Ann. Sec. 85-408.”
The trial judge, after the completion of Mrs. Yancey’s evidence to the jury, directed a verdict in favor of Siegel and Zimmerman, directed a verdict against Harris, and his judgment ordered Harris to execute and deliver a quitclaim deed to Mrs. Yancey conveying all of Harris’ right, title and interest in and to the realty. Mrs. Yancey has appealed, contending that the trial judge erroneously directed a verdict in favor of Siegel and Zimmerman.
The evidence showed that the property was purchased in 1966 from Daniel K. Bennett who executed and delivered a warranty deed to Edward Harris that was properly recorded. The warranty deed to Harris was subject to a first-lien security deed to a lending institution.
Mrs. Yancey’s testimony was to the effect that though title had been taken in the name of Harris, she and her husband, now deceased, had made all of the payments on the property including the original down payment and the monthly payments to the first-lien holder. She contended that Harris merely held the legal title to the property, that the equitable title was in her and her husband until her husband’s death, that since her husband’s death the equitable title was totally in her, and that Harris had no legal right to execute and deliver a security deed creating a second lien on her property. She further contended that she and her husband had been in possession of the property since 1966 when it was purchased from Bennett and that her possession was sufficient to give her priority of title over the second-lien security deed made to Siegel and now held by Zimmerman.
Siegel’s testimony was to the effect that he had made a loan to Harris that was secured by the second-lien *327security deed based on Harris’ record title plus the fact that Harris had told him that his mother-in-law occupied the property and paid rent. He testified that he had inspected the property, knew that Mrs. Yancey occupied it, but that he did not ask her by what authority she was occupying the property.
Mrs. Yancey’s entire case is based on a statutory provision which says: "Possession of land is notice of whatever right or title the occupant has.” Code Ann. § 85-408.
However, Mrs. Yancey’s claimed equitable title is dependent solely upon a deed from Bennett to Harris executed, delivered and recorded in 1966. At the time the Yanceys allegedly purchased the property from Bennett, they permitted the record title to be placed in the name of Harris, their son-in-law. Mrs. Yancey is in the position of claiming her title under the deed from Bennett to Harris and at the same time denying the title of Harris and Harris’ grantee in a security deed. Where third parties who do not have actual notice are involved, I do not understand that one can claim title under a deed and at the same time deny its terms; namely, that the Bennett deed in this case conveyed title to Harris.
I think Mrs. Yancey was estopped to deny the second-lien interest acquired by Siegel and Zimmerman from her son-in-law; under the facts of this case, Mrs. Yancey and her deceased husband had, by allowing title to have been placed in Harris, created a legal situation whereby Harris could encumber the property; and Mrs. Yancey’s possession in these circumstances was not notice to a purchaser from Harris that she claimed title and that Harris had no title to the property.
There was no evidence that Siegel or Zimmerman had any "actual notice” of Mrs. Yancey’s claim of title; and Mrs. Yancey’s possession, under the circumstances of this case, did not establish constructive notice that would defeat the second-lien encumbrance created by Harris.
In the case of Parker v. Barnesville Savings Bank, 107 Ga. 650, 656 ( 34 SE 365) (1899), a wife asserted title to land purchased with her funds where the legal title had been taken in the name of her husband. This court said: "In no event would he in any sense become part owner of *328the land or be in a position, as against her, to deny a resulting trust as to all lands purchased with her money. But the same rule cannot be extended to a bona fide purchaser from the husband, who had no notice of the equity of Mrs. Parker. .. This doctrine proceeds upon the idea that the equity of the innocent purchaser is superior to that of the cestui que trust, who stands silently by and permits such purchaser to act to his prejudice, or who is guilty of laches in not sooner asserting a mere secret equity. It follows that as soon as a purchaser from the husband acquires his legal rights, the cestui que trust loses all claim to the property so purchased; and such purchaser cannot be compelled to litigate with, or in any way recognize, the cestui que trust as having any rights or interests in the premises. Indeed, the only footing the latter has, after a sale, is the limited privilege of showing that the purchaser was not acting bona fide, but had notice of and therefore bought subject to the secret equity. A petition for relief on any other ground is not maintainable; for, after a bona fide sale, the holder of the secret equity is effectually cut off from asserting any claim whatsoever... A mortgagee who in good faith parts with his money, in ignorance that a person other than the holder of the legal title has a secret equity in the mortgaged property, stands precisely in the attitude of a bona fide purchaser and is entitled to the same protection ... In the present case, when the bank, without notice, acquired its mortgages (and no notice to it is charged in the petition), the wife was completely cut off from asserting, as against it, her secret equitable claim of ownership. As owner, she has no footing in court, unless she can show that the bank had notice of and took subject to her equity.”
It is true that in that case, possession of the land was not asserted as "notice” to the mortgagee. But, in my view, that would not prevent the principle asserted in that case from being applied in the case at bar. Mrs. Yancey’s "secret equity” is claimed under a deed to Harris which did not disclose the fact of his trusteeship, or the existence of her "secret equity.” She and her deceased husband participated in the execution and delivery of the deed to Harris to the extent that they permitted the title to be *329taken in his name and recorded in the public deed records, thereby displaying to the world Harris’ ownership even though they simultaneously went into possession of the property. Under such circumstances, I do not believe that possession by Mrs. Yancey was notice, actual or constructive, of her "secret equity” as against a transferee for value from Harris, the record title holder.
I think the evidence demanded the verdict in favor of Siegel and Zimmerman, and I would affirm the judgment below.
I respectfully dissent.