2020 Georgia Code
Title 44 - Property
Chapter 5 - Acquisition and Loss of Property
Article 2 - Conveyances
§ 44-5-36. Purchaser's Remedies for Loss of Land Due to Title Defect

If the purchaser loses part of his land from a defect of title, he may claim according to the relative value of the land so lost either a rescission of the purchase contract or a reduction of the price.

(Orig. Code 1863, § 2599; Code 1868, § 2601; Code 1873, § 2643; Code 1882, § 2643; Civil Code 1895, § 3544; Civil Code 1910, § 4124; Code 1933, § 29-202.)

- For article surveying developments in Georgia real property law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 219 (1981).

ANALYSIS

• General Consideration
• Applicability
• Remedies

Cited in Ruff v. Copeland, 137 Ga. 56, 72 S.E. 506 (1911); Roberts v. Groover, 156 Ga. 386, 119 S.E. 696 (1923); Riehle v. Bank of Bullochville, 158 Ga. 171, 123 S.E. 124 (1924); Holliday v. Ashford, 163 Ga. 505, 136 S.E. 524 (1927); Ashford v. Holliday, 169 Ga. 237, 149 S.E. 790 (1929); Dorsett v. Roberds, 172 Ga. 545, 158 S.E. 236 (1931); Washington Mfg. Co. v. Wickersham, 201 Ga. 635, 40 S.E.2d 206 (1946); Norris v. Coffee, 206 Ga. 759, 58 S.E.2d 812 (1950); Farrar v. Vanpelt, 96 Ga. App. 244, 99 S.E.2d 738 (1957); Pennington v. Wynne, 149 Ga. App. 151, 253 S.E.2d 830 (1979); Ware v. Durham, 246 Ga. 84, 268 S.E.2d 668 (1980); McClure v. Turner, 165 Ga. App. 380, 301 S.E.2d 304 (1983); Safeco Title Ins. Co. v. Citizens & S. Nat'l Bank, 190 Ga. App. 809, 380 S.E.2d 477 (1989).

Applicability

No application to purchaser's attorney.

- Statute clearly deals with the rights of a purchaser against the vendor, not purchaser's attorney. Durham v. Ware, 153 Ga. App. 701, 266 S.E.2d 342, aff'd, 246 Ga. 84, 268 S.E.2d 668 (1980) (see O.C.G.A. § 44-5-36).

- An attorney at law employed to examine title to real estate who negligently fails to report an existing title imperfection is liable to the client for the actual damages sustained as a result of the attorney's negligence. Durham v. Ware, 153 Ga. App. 701, 266 S.E.2d 342, aff'd, 246 Ga. 84, 268 S.E.2d 668 (1980).

- When a certain tract of land is described in a contract of sale by definite boundaries, and it later appears that the vendor has no title to a portion of the tract contained within the described boundaries, this is a defect in the vendor's title rather than a deficiency in quantity. Lawton v. Byck, 217 Ga. 676, 124 S.E.2d 369 (1962), later appeal, 218 Ga. 858, 131 S.E.2d 176 (1963).

When a certain tract of land was described in a contract of sale by definite boundaries, and it later appeared that the vendor had no title to a portion of the tract contained within the described boundaries, this was a defect in the vendor's title, as contemplated by former Code 1933, § 29-202 (see O.C.G.A. § 44-5-36), rather than a deficiency in quantity, as contemplated by former Code 1933, § 29-201 (see O.C.G.A. § 44-5-35). Lunsford v. King, 132 Ga. App. 749, 209 S.E.2d 27 (1974); Etheridge v. Fried, 183 Ga. App. 842, 360 S.E.2d 409 (1987).

- When a purchaser of land sought to have delivered up and marked as "satisfied" certain notes given by the purchaser for deferred payments, on the ground that title to certain of the land so purchased had failed, the issue as to whether or not it was a sale by the tract or by the acre was not involved; in such a case the applicable law was that contained in former Code 1933, § 29-202 (see O.C.G.A. § 44-5-36), and not the provision of former Code 1933, § 29-201 (see O.C.G.A. § 44-5-35). Miller v. Minhinnette, 185 Ga. 490, 195 S.E. 425 (1938).

- When a purchaser under a bond for title did not hold possession of all the land described in the bond, and was sued on notes representing the unpaid purchase price, the purchaser was permitted to set up as a defense the fact that the purchaser held possession of only a part and that the vendor cannot make title to the other part, and that, as a consequence of the defect in the title, the purchaser was entitled to a reduction in the purchase price, former Code 1933, § 29-201 (see O.C.G.A. § 44-5-35) having no application. Pope v. Williams, 70 Ga. App. 834, 29 S.E.2d 808 (1944).

- When a purchaser lost only a part of the land from a defect in title, the purchaser's remedy was fixed by this section; it would seem that § 44-5-67 did not apply unless all the land was lost. McConnell v. White, 91 Ga. App. 92, 85 S.E.2d 75 (1954).

Remedies

Breach of contract as to title to portion of land entitles purchaser to rescission.

- Contract of sale of a tract of land described therein as measuring a certain number of feet in width and in depth binds the obligor to make title to the entire tract so described, and if the obligor has no title to a portion of the land, this is a material breach of the contract, entitling the purchaser to a rescission of the contract of sale at the purchaser's election. Coppage v. King, 96 Ga. App. 192, 99 S.E.2d 541 (1957).

- Expression "relative value" means relative value with the purchase price as a base value of the whole, for the reason that, when rescission is not sought, the only remedy is a reduction in purchase price. Any other interpretation might result in the recovery by a purchaser of more than the purchase price, if the land lost was worth more at the time of the breach of contract or bond than the whole land originally bargained for. McConnell v. White, 91 Ga. App. 92, 85 S.E.2d 75 (1954).

- When a lot of land is sold by number tract, and one of the boundaries is misrepresented, whereby the purchaser fails to get some of the land the purchaser bought, the deduction to be made from the agreed price, in an action for the purchase money, is generally in proportion to the value of the tract with the boundaries as represented, and its value with the true boundaries, computing value as at the time when the sale was made. Woodstock Village v. Fowler, 154 Ga. App. 82, 267 S.E.2d 558 (1980).

- In actions for recovery for deficiency in land, the measure of damages generally is the pro rata part of the purchase money paid or to be paid for deficiency with interest. It is not less than this. However, if a part of such property may be of greater value than other portions, this is not necessarily a fixed rule. Halliburton v. Collier, 75 Ga. App. 316, 43 S.E.2d 339 (1947).

Measure of damage for breach by insurer under policy insuring title against encumbrances or encroachments is the difference between the value of the property when purchased with the encumbrance or encroachment thereon, and the value of the property as the value would have been if there had been no such encumbrance or encroachment. Beaullieu v. Atlanta Title & Trust Co., 60 Ga. App. 400, 4 S.E.2d 78 (1939).

- Purchaser's right to recover damages is not defeated by constructive knowledge of prior recorded deed. Lunsford v. King, 132 Ga. App. 749, 209 S.E.2d 27 (1974); Mansell v. Pappas, 156 Ga. App. 272, 274 S.E.2d 588 (1980), aff'd, 165 Ga. App. 568, 302 S.E.2d 114 (1983).

- When a vendor agrees to sell a designated tract of land to another and points out to the latter its boundaries, and the purchaser relies upon the representations of the vendor as to the boundaries, and where such boundaries include lands to which the vendor has no title, in consequence of which the purchaser loses the land, the purchaser, when sued on the notes given for the purchase money, can set off at law the value of the portion of the land so lost against the purchase money. This would be true whether the misrepresentations were designedly made by the vendor to deceive the purchaser, or were innocently made, if the vendee relied upon such misrepresentations in making the purchase and was thereby damaged. Halliburton v. Collier, 75 Ga. App. 316, 43 S.E.2d 339 (1947).

If the vendors are unable to put the title to any portion of the lands described by metes and bounds in the vendees and put the vendees in undisturbed possession thereof, the vendees in an action by the vendors for the purchase price may set off the value of that portion to which title and possession cannot be given by the vendors. McConnell v. White, 91 Ga. App. 92, 85 S.E.2d 75 (1954).

- There was a defect in title of a lot conveyed to an insured as the builder that conveyed the lot did not have superior title to a portion of the lot. Wilkinson Homes, Inc. v. Stewart Title Guar. Co., 271 Ga. App. 577, 610 S.E.2d 187 (2005).