2020 Georgia Code
Title 44 - Property
Chapter 14 - Mortgages, Conveyances to Secure Debt, and Liens
Article 2 - Mortgages
§ 44-14-39. Effect of Defective Record as Notice

A mortgage which is recorded in an improper office or without due attestation or probate or which is so defectively recorded as not to give notice to a prudent inquirer shall not be held to be notice to subsequent bona fide purchasers. A mere formal mistake in the record shall not vitiate it.

(Orig. Code 1863, § 1961; Code 1868, § 1949; Code 1873, § 1959; Code 1882, § 1959; Civil Code 1895, § 2729; Civil Code 1910, § 3262; Code 1933, § 67-111.)

- For article, "Eleventh Circuit Survey: January 1, 2013 - December 31, 2013: Casenote: The Decline and Fall of Constructive Notice," see 65 Mercer L. Rev. 1203 (2014).

JUDICIAL DECISIONS

Duty of mortgagee.

- O.C.G.A. § 44-14-39 makes it the duty of a mortgagee to see that the mortgage is duly attested for record; and if the mortgagee fails in this regard, then the mortgage is postponed to younger liens. Andrews v. Mathews, 59 Ga. 466 (1877); Richards & Bro. v. Myers & Marcus, 63 Ga. 762 (1879); New England Mtg. Security v. Ober & Sons, 84 Ga. 294, 10 S.E. 625 (1890); Cottrell & Sons v. Merchants' & Mechanics' Bank, 89 Ga. 508, 15 S.E. 944 (1892); Southern Iron & Equip. Co. v. Voyles, 138 Ga. 258, 75 S.E. 248, 41 L.R.A. (n.s.) 375, 1913D Ann. Cas. 369 (1912).

- Where a deed which appears on its face to be entitled to record is filed for record in the office of the clerk of the superior court of the county in which the land lies, it takes effect, as against third persons without notice, from the time it is so filed. The actual recording is the duty of the clerk, and O.C.G.A. § 44-14-39 does not contemplate that an erroneous performance shall operate to defeat the grantee who has properly filed the deed. Thomas v. Hudson, 190 Ga. 622, 10 S.E.2d 396 (1940).

- Although a mortgage on realty may have been properly attested by two witnesses, yet where it is so imperfectly recorded as to show attestation by one witness only, such record is no record and is no notice to third persons without notice, under O.C.G.A. § 44-14-39. Brown v. Aaron, 20 Ga. App. 592, 93 S.E. 258 (1917).

- The record of a mortgage, made without due attestation or probate, will not be held to be constructive notice to a subsequent bona fide purchaser under O.C.G.A. § 44-14-39. Donalson v. Thomason, 137 Ga. 848, 74 S.E. 762 (1912); Winn v. Herring-Hall-Marvin Safe Co., 33 Ga. App. 419, 126 S.E. 879 (1925).

Memorandum of trust indenture could not provide constructive notice of the existence of a mortgage and could not give rise to inquiry notice since the debtor did not sign the memorandum, the memorandum did not fall into any of the recognized categories of documents that could be recorded under the Georgia Code, and the memorandum was not properly attested. Detention Mgmt., LLC v. UMB Bank, NA (In re Mun. Corr., LLC), 501 Bankr. 119 (Bankr. N.D. Ga. 2013).

- After a jury entered a special verdict finding that the corporation had notice of an earlier deed securing property in the corporation's declaratory judgment action to determine the priority of its deed over the earlier deed, the corporation's motion for a new trial was properly granted on the ground that the recordation of the earlier deed was so defective as to provide no notice under O.C.G.A. § 44-14-39; the trial court did not abuse its discretion in granting a new trial, even though its grant of judgment notwithstanding the verdict was improper on the ground that evidence supported the jury's verdict, because the evidence, construed in the corporation's favor as required under O.C.G.A. § 5-5-20, did not absolutely demand a verdict that the corporation had actual notice of the earlier deed. Page v. McKnight Constr., 282 Ga. App. 571, 639 S.E.2d 381 (2006).

- Where a purchaser buys land without notice of any mortgage thereon, and gives negotiable notes therefor, which are negotiated by the payee, so as to cut off any defense, before the purchaser receives notice of the prior lien, and the price paid is a full and fair consideration, such person will be deemed to be a bona fide purchaser, and as such entitled to protection, under O.C.G.A. § 44-14-39. Donalson v. Thomason, 137 Ga. 848, 74 S.E. 762 (1912).

- Actual payment of the purchase money, or what is equivalent thereto, before notice of a defectively recorded mortgage, is necessary to the protection of a subsequent purchaser under O.C.G.A. § 44-14-39. If there has been a partial payment (or what is equivalent) of the purchase money before notice, the purchaser will be entitled to protection to that extent; but appropriate equitable pleadings are necessary for this purpose. Donalson v. Thomason, 137 Ga. 848, 74 S.E. 762 (1912).

- Due filing for record of a valid mortgage affords good constructive notice of the instrument as to subsequent purchasers even though the entry is erroneously indexed and the record erroneously made on the wrong books. NCR Co. v. Sikes, 94 Ga. App. 391, 94 S.E.2d 782 (1956).

- The actual recording is the duty of the clerk, and O.C.G.A. § 44-14-39 does not contemplate that an erroneous performance of such duty shall operate to defeat the grantee who has properly filed the deed, and this is true even though it be assumed, as alleged by the petition, that the prudent inquiry and search by the attorney for the purchaser of the record books would not have disclosed the record of the mortgage. NCR Co. v. Sikes, 94 Ga. App. 391, 94 S.E.2d 782 (1956).

- The theory of the rule is that if any injury is done by a failure to record a paper, or by the improper recording of it, the clerk will be liable to the injured party for a breach of duty, and the filing puts the world on notice as to the contents of papers filed for record, whether they are recorded or not. This law, however, can only apply where there is a proper filing of the paper to be recorded and a filing under circumstances where an improper filing and indexing, and an improper recording could be charged to be a breach of duty on the part of the clerk. Buchanan v. Georgia Acceptance Co., 61 Ga. App. 476, 6 S.E.2d 162 (1939).

- The recording of bills of sale in a court other than in the residence of the maker at the time of its execution is equivalent to no record. It will remain valid against persons executing it, but will be postponed to all liens, created or obtained or purchased, made prior to legal record thereof. Commercial Bank v. Pharr, 75 Ga. App. 364, 43 S.E.2d 439 (1947).

- A retention of title contract or a mortgage may be valid between the parties even though it is unattested or improperly attested and not recorded and not entitled to be recorded because of such improper attestation. Central Bank & Trust Co. v. Creede, 103 Ga. App. 203, 118 S.E.2d 844 (1961).

- The record of a mortgage defectively attested or probated amounts to no record of it. If the mortgage afterwards be attested so as to entitle it to record, it must be recorded anew in order for it to be constructive notice under O.C.G.A. § 44-14-39. The entry of the name of the new attesting official upon the old record is improper and will not suffice. Donalson v. Thomason, 137 Ga. 848, 74 S.E. 762 (1912).

- An affidavit, probating a mortgage, taken before the attorney of the mortgagee, who is a Notary Public, is not a legal affidavit, and a mortgage recorded on such probate is not legally recorded. Nichols v. Hampton, 46 Ga. 253 (1872).

- A mortgage attested by a notary public, who is an officer of the corporation to which it is given, is not properly executed, and therefore not admissible for record; and a record of such a mortgage is not constructive notice to persons dealing with the mortgagor. Barrow v. E. Tris Napier Co., 16 Ga. App. 309, 85 S.E. 267 (1915).

- The lien of a mortgage filed in the office of the clerk of the superior court of the county where the land lies, though not properly recorded, is superior to that of common-law executions entered on the docket after the filing of the mortgage. Merrick v. Taylor, 14 Ga. App. 81, 80 S.E. 343 (1913).

- The record of a security deed on insufficient attestation or probate is equal to no record at all, under O.C.G.A. § 44-14-39. In re Hammett, 286 F. 392 (N.D. Ga. 1923).

- The same rules govern the priority of conditional bills of sale, as affected by registration under O.C.G.A. § 44-14-39, as govern the registration of mortgages. Phillips & Crew Co. v. Drake, 13 Ga. App. 764, 79 S.E. 952 (1913).

A retention title contract signed by the purchaser in the purchaser's trade name personally and in own individual name is entitled to record where it otherwise meets the requirements of O.C.G.A. § 44-14-39, and after being duly recorded constitutes constructive notice of the right and interest of the vendor therein as against the purchase of the property at a judicial sale on execution issued against the purchaser in the individual capacity. NCR Co. v. Sikes, 94 Ga. App. 391, 94 S.E.2d 782 (1956).

An attachment lien is superior to the lien of an unrecorded conditional sale contract executed before the issuance and levy of the attachment. Rhodes v. Jones, 55 Ga. App. 803, 191 S.E. 503 (1937).

- Fact that the records were perhaps not indexed or otherwise set up so that one could thereby locate the record of retention title transaction under the name of the individual signing the instrument did not amount to a defective recording of an otherwise valid instrument so as to allow the same to be excluded from evidence. NCR Co. v. Sikes, 94 Ga. App. 391, 94 S.E.2d 782 (1956).

- O.C.G.A. § 44-14-39, as it appeared prior to 1889, was necessarily repealed insofar as it conflicted with the Act of 1889 (Ga. L. 1889, p. 106), O.C.G.A. § 44-2-2. Buchanan v. Georgia Acceptance Co., 61 Ga. App. 476, 6 S.E.2d 162 (1939).

Cited in A.O. Blackmar Co. v. NCR Co., 64 Ga. App. 739, 14 S.E.2d 153 (1941); McEntyre v. Burns, 81 Ga. App. 239, 58 S.E.2d 442 (1950); B.F. Avery & Sons Co. v. Davis, 226 F.2d 942 (5th Cir. 1955); Sullivan v. Sullivan, 286 Ga. 53, 684 S.E.2d 861 (2009).