Real Property - T. Daniel Brannan, Stephen M. Lamastra, and William J. Sheppard

• Jurisdiction: Georgia,United States
• Citation: Vol. 48 No. 1
• Publication year: 1996
• topic: Contracts,Civil Procedure,Real Estate

Real Propertyby T. Daniel Brannan^* Stephen M. LaMastra^** and

William J. Sheppard^***

I. Introduction

This article surveys case law and legislative developments in the Georgia law of real property from June 1, 1995 to May 31, 1996. The authors do not endeavor to chronicle every case decided in the survey period but, instead, focus on cases and other developments of general significance. This article discusses several significant cases decided during the survey period and the single meaningful alteration in Georgia statutes relating to real property.

II. Title to Land

In Gansereit v. Gansereit,¹ the Georgia Court of Appeals reaffirmed the long-standing rule that Georgia courts have no "power or authority to set aside an instrument transferring title to real property in another state."² In that case, Ernest J. Gansereit, a New Jersey resident, brought an action in the DeKalb County Superior Court against his brother, Raymond F. Gansereit, to recover eight thousand dollars allegedly due under a promissory note. Raymond filed a counterclaim seeking to set aside a deed from the brothers' parents to Ernest. Raymond alleged that Ernest had exercised undue influence over their parents in convincing them to sell their New Jersey residence for a fraction of its true market value.³ The trial court entered judgment in favor of Ernest for the amount due under the promissory note and dismissed Raymond's counterclaim on the basis that the court had no authority to set aside the sale of the property in New Jersey; Raymond appealed.⁴

On appeal, Raymond argued that Georgia courts have authority to set aside a New Jersey deed based on the doctrine that states must give full faith and credit to the law of other states.⁵ The court of appeals rejected that argument as being without merit.⁶ The court acknowledged that a court generally has authority to adjudicate personal rights and equities between parties with regard to realty outside the court's jurisdiction.⁷ However, the court concluded that actions directly involving title to real property located in New Jersey must be decided in that state.⁸ Because Raymond Gansereit's claim was not based upon in personam principles, the court found that it had no authority to grant the relief requested.⁹

The supreme court held in Wilcox County School District v. Sutton¹⁰ that property may still be used for school purposes even when the school building located thereon has been demolished.¹¹ The property at issue in that case was located in Rochelle, Georgia (the "City") and had been conveyed by the City to the Wilcox County Board of Education in 1950. The deed evidencing that transfer contained a provision stating that the "property would revert to the City 'if said property is abandoned for school purposes.'"¹² When the Wilcox County School District announced a plan that included demolition of the school building existing on the property,¹³ a group of residents and taxpayers of Wilcox County brought suit against the school district and various school officials seeking an injunction against the demolition and a declaration that the title to the property on which the building stood had reverted to the City.¹⁴

The trial court granted plaintiffs' request for an injunction and set aside the demolition contract.¹⁵ The trial court also held that a jury trial was necessary to determine whether the property had been abandoned "for school purposes" so that title to the property had reverted to the City. The school district appealed that decision.¹⁶

In deciding to grant plaintiffs' injunction, the trial court had concluded, based on a deed executed in 1900 by an individual to the City, that the property was the subject of a charitable trust. The deed stated "that the City was to hold the property in fee simple 'for the purpose of erecting and maintain thereon a public school building.'"¹⁷ The appellate court noted that the deed made no reference to a trust or to trustees and expressed no intent that a trust be established.¹⁸ Based on those facts, the court of appeals rejected the trial court's finding that the quoted language was sufficient to create a trust.¹⁹ The court of appeals held that the language of the deed merely "specified the purpose for which [the property] was being conveyed."²⁰

The appellate court next addressed whether the property had been abandoned for school purposes. In deciding the meaning of the phrase "school purposes," the court of appeals relied on the Georgia Supreme Court's decision in Board of Education of Appling County v. Hunter.²¹ In Hunter, the phrase "school purposes" was held to mean '"any activity that is necessary in the proper maintenance and operation of a school under our present school system.'"²² The court in Sutton found that the undisputed evidence before the trial court was that the property continued to be part of the campus of the consolidated county school complex.²³ Under that circumstance, the appellate court held that the evidence demanded the conclusion that the property was still in use for school purposes and had not reverted to the City as a matter of law.²⁴

In Evans v. Lipscomb,²⁵ Melo Evans filed an action seeking equitable re-partitioning of property located in Cherokee County.²⁶ Glen Lipscomb and Herbert Childers purchased the land as tenants in common on October 8, 1949. Between 1949 and 1986, Lipscomb and Childers sold approximately fifty acres of the land. In 1986, Lipscomb and Childers executed an agreement (the "1986 Agreement") dividing the remaining land along an "old logging road" running through the property. However, Lipscomb and Childers failed to designate in their agreement which party retained which portion of the divided property. On July 21, 1987, and again on March 22, 1991, Lipscomb and Childers executed quitclaim deeds to clarify that issue. Both sets of quitclaim deeds purported to convey "50 acres, more or less."²⁷

After execution of the second set of quitclaim deeds, Lipscomb commissioned a survey of his tract. The survey showed that Lipscomb had actually received only twenty-one acres upon the 1986 division of the property with Childers. Childers also commissioned a survey of his tract in 1992. The survey showed that Childers received just over fifty-one acres as a result of the 1986 agreement. On April 22, 1992, Childers conveyed the western parcel of his property to Evans.²⁸

Thereafter, Lipscomb and his son requested that Childers and Evans consent to a more equitable redivision of the property. Both Childers and Evans refused. Following Mr. Lipscomb's death, the executor of Lipscomb's estate filed an action against Evans seeking equitable reformation of the 1986 Agreement and subsequent quitclaim deeds to reflect the parties' intention to divide the remainder of the property evenly. Evans filed a motion for summary judgment, asserting that the action was barred by the expiration of the applicable statute of limitation. The trial court denied the motion, and Evans appealed.²⁹

On appeal, the executor urged that he was seeking reformation of the corrective quitclaim deed executed in 1991.³⁰ On that basis, he asserted that the action was timely filed within the seven-year limitation period applicable to actions to reform written instruments transferring title to realty.³¹ The executor argued that, because neither the 1986 agreement nor the 1987 quitclaim deed accurately described the land the parties intended Lipscomb to receive, Lipscomb had neither legal nor colorable title to his portion of the property only as a result of that 1991 deed.³² The supreme court rejected that argument, finding that Lipscomb's title was perfected when he entered into possession of the intended portion of the property. Because possession occurred in July 1986, the cause of action to reform the written instrument accrued at that time.³³

The executor also argued that even if the cause of action to reform the 1986 Agreement accrued in 1986, it was tolled for some period of time due to mutual mistake or fraud. The appellate court also rejected that argument.³⁴ "As a general rule, the statute of limitation does not commence to run against an equitable action for reformation of a written instrument based on mutual mistake or fraud until the mistake or fraud has been, or by the exercise of a reasonable diligence should have been, discovered."³⁵ In this case, the record contains no explanation for Lipscomb's failure to conduct a survey before or after the execution of the 1986 Agreement. The court also concluded that "a visual inspection of the property should have made [Lipscomb] aware of the disparity in the two parcels."³⁶ Based on those facts, the court concluded that Lipscomb had, as a matter of law, failed to act with the due diligence required to toll the running of the statute of limitation. Because Lipscomb did not file the lawsuit until December 1994, the court concluded that the action was barred by the expiration of the statute of limitation.³⁷

Another case decided during the survey period involves an issue relevant to developers and contractors of subdivisions in Georgia.³⁸ In Frazier v. Deen,³⁹ residents of Lake Park "C" Addition to Section One (the "Subdivision") brought an action against the developers and the builder of certain houses in the Subdivision seeking to avoid changes in the restrictive covenants for the Subdivision. The original restrictive covenants required "that garages and carports be entered from the side or rear of the house,"⁴⁰ but specifically provided that the developers could amend the terms. On May 26, 1994, the developers sold their last eight lots in the Subdivision to the builder defendant. Later that year, the builder requested an amendment to the protective covenants to allow front-entrance garages on three of the lots it had purchased so that larger houses could be constructed on them. The developers agreed and amended the covenants applicable to the Subdivision. Plaintiffs filed an action...