2020 Georgia Code
Title 51 - Torts
Chapter 6 - Fraud and Deceit
§ 51-6-4. Fraud by Acts or Silence; Estoppel to Assert Title

1. A fraud may be committed by acts as well as words.
2. One who silently stands by and permits another to purchase his property, without disclosing his title, is guilty of such a fraud as estops him from subsequently setting up such title against the purchaser.

(Orig. Code 1863, § 2908; Code 1868, § 2915; Code 1873, § 2966; Code 1882, § 2966; Civil Code 1895, § 3823; Civil Code 1910, § 4419; Code 1933, § 105-304.)

- For comment on Cohen v. Pullman Co., 243 F.2d 725 (5th Cir. 1957), holding that an oral agreement to sell land which is unenforceable because of the statute of frauds cannot be the basis for recovery of damages in fraud and deceit as the purpose of the statute of frauds is to prevent persons from being liable for nonperformance of such claimed promises, see 20 Ga. B. J. 427 (1958).

ANALYSIS

• General Consideration
• Applicability to Specific Cases

This section is based upon equitable duty of disclosure. Reeves v. B.T. Williams & Co., 160 Ga. 15, 127 S.E. 293 (1925); Reynolds v. Huckeba, 231 Ga. 792, 204 S.E.2d 149 (1974).

Record title is no defense to this rule. Markham v. O'Connor, 52 Ga. 183 (1874).

This section only operates in favor of a bona fide purchaser without notice. Brown v. Tucker, 47 Ga. 485 (1873); Meetze v. Potts, 6 Ga. App. 189, 64 S.E. 672 (1909); Broadway Apt. Co. v. Barnett, 30 Ga. App. 562, 118 S.E. 601 (1923); Shaw v. Green, 180 Ga. 760, 180 S.E. 732 (1935).

One who silently stands by and permits another to purchase one's property, without disclosing one's title, is not guilty of such a fraud as estops one from subsequently setting up such title against a purchaser with notice. Shaw v. Green, 180 Ga. 760, 180 S.E. 732 (1935).

Former Code 1933, § 38-115 (see now O.C.G.A. § 24-14-27) limited former Code 1933, § 105-304 (see now O.C.G.A. § 51-6-4) to purchasers without notice. Fuller v. Calhoun Nat'l Bank, 59 Ga. App. 419, 1 S.E.2d 86 (1939).

This section is inapplicable when a party had actual knowledge of the rights of the other party who remained silent or when such party relied upon their own investigation or was not shown to have placed any reliance on the statement, action or inaction of the one claimed to be estopped. Anderson v. Manning, 221 Ga. 421, 144 S.E.2d 772 (1965).

Constructive fraud at least may be implied from a failure to speak, when one uses silence for the purpose of gaining an unconscionable advantage. Reynolds v. Huckeba, 231 Ga. 792, 204 S.E.2d 149 (1974).

In order to raise estoppel by conduct or matters in pais, party to whom representation or concealment is made must have been ignorant, actually and permissibly, of the truth of the matter; if one knew or under all the circumstances ought to have known the facts, the representation, silence, or concealment is wholly unavailing. Carmichael v. Texas Co., 52 Ga. App. 751, 184 S.E. 397 (1936).

Principle stated in this section does not depend for its operation upon existence or absence of mere constructive notice, nor will such record, a recorded deed, necessarily constitute convenient means of acquiring such knowledge, within the meaning of former Code 1933, § 38-115 (see now O.C.G.A. § 24-14-27). This latter section should be construed in harmony with the former. Roop Grocery Co. v. Gentry, 195 Ga. 736, 25 S.E.2d 705 (1943); Anderson v. Manning, 221 Ga. 421, 144 S.E.2d 772 (1965).

Recorded deed was not necessarily such convenient means of acquiring knowledge of title, within the contemplation of former § 24-4-25 (see now O.C.G.A. § 24-14-27), as to abrogate the effect of former Code 1933, § 105-304 (see now O.C.G.A. § 51-6-4) on one who remained silent while a third party represented to another that the party owned certain property which in actuality belonged to the aphonic one. Anderson v. Manning, 221 Ga. 421, 144 S.E.2d 772 (1965); Pressley v. Maxwell, 242 Ga. 360, 249 S.E.2d 49 (1978).

Heirs of defrauder are estopped by this section. Caraker v. Brown, 152 Ga. 677, 111 S.E. 51 (1922).

Silence of preceding administrator at illegal sheriff's sale will not bind present administrator. Sellars v. Cheney, 70 Ga. 790 (1883).

Use of property by husband for business purposes will estop the wife to claim title thereto. Ford v. Blackshear Mfg. Co., 140 Ga. 670, 79 S.E. 576 (1913).

- Mere knowledge of warehouseman that assignee would expect the goods to be of certain weight will not operate as an estoppel. Citizens & S. Bank v. Union Whse. & Compress Co., 157 Ga. 434, 122 S.E. 327 (1924).

- While the broad statement that the conduct of the defendant constituted fraud would be insufficient without an allegation of circumstances from which the court might determine whether the pleader reached the right conclusion in saying that a fraud was committed, still it is not essential to state more facts than may be necessary to carry conviction of the existence of fraud. Wall v. Wall, 176 Ga. 757, 168 S.E. 893 (1933).

Burden of proof is upon party relying upon representation as estoppel to show that one acted upon the representation in good faith and in ignorance of the real facts. Elliott v. Keith, 102 Ga. 117, 29 S.E. 155 (1897); Stonecipher v. Kear, 131 Ga. 688, 63 S.E. 215, 127 Am. St. R. 248 (1908).

Burden of showing absence of notice or knowledge rests on such purchaser relying on alleged estoppel. Carmichael v. Texas Co., 52 Ga. App. 751, 184 S.E. 397 (1936).

Cited in McCune v. McMichael, 29 Ga. 312 (1859); Burton v. Black, 32 Ga. 53 (1861); Roberts v. Davis, 72 Ga. 819 (1884); Mercier v. Copelan, 73 Ga. 636 (1884); Veal v. Robinson, 76 Ga. 838 (1886); Brooks v. Matthews, 78 Ga. 739, 3 S.E. 627 (1887); McLennan v. Graham, 106 Ga. 211, 32 S.E. 118 (1898); Norman v. McMillan, 151 Ga. 363, 107 S.E. 325 (1921); Warner v. Hill, 153 Ga. 510, 112 S.E. 478 (1922); Varn v. Bloodworth, 157 Ga. 300, 121 S.E. 380 (1924); Jackson v. Lipham, 158 Ga. 557, 123 S.E. 887 (1924); Peacock v. Horne, 159 Ga. 707, 126 S.E. 813 (1925); May v. Yearty, 34 Ga. App. 29, 128 S.E. 67 (1925); Watkins Co. v. Rivers, 37 Ga. App. 559, 140 S.E. 770 (1927); Burton v. Parris, 168 Ga. 407, 148 S.E. 11 (1929); Union Cent. Life Ins. Co. v. Smith, 184 Ga. 158, 190 S.E. 651 (1937); Lankford v. Holton, 195 Ga. 317, 24 S.E.2d 292 (1943); Jackson v. Moultrie Prod. Credit Ass'n, 76 Ga. App. 768, 47 S.E.2d 127 (1948); Westbrook v. Beusse, 79 Ga. App. 654, 54 S.E.2d 693 (1949); Olson v. Newsom, 236 Ga. 480, 224 S.E.2d 358 (1976); Ringer v. Lockhart, 240 Ga. 82, 239 S.E.2d 349 (1977); Georgia Farm Bureau Mut. Ins. Co. v. First Fed. Sav. & Loan Ass'n, 152 Ga. App. 16, 262 S.E.2d 147 (1979); In re North Am. Acceptance Corp. Sec. Cases, 513 F. Supp. 608 (N.D. Ga. 1981); McGaha v. Kwon, 161 Ga. App. 216, 288 S.E.2d 289 (1982).

If owner of property stands silently by and permits another to mortgage it, the owner will be estopped to assert the owner's title thereto as against the mortgage. Dunson v. Harris, 45 Ga. App. 450, 164 S.E. 910 (1932).

Presence and conduct of plaintiff at judicial sale did not estop the plaintiff from claiming title to the segregated and uninventoried property of that sale which, it appears without dispute, actually belonged to the plaintiff, since the jury could have found that the particular property was not actually sold, and was not intended to be sold as part of the stock of goods. Brooks v. Guthrie, 42 Ga. App. 296, 155 S.E. 793 (1930).

- While a jury would have been authorized to find that even if the deed from the husband to the wife was based upon a valuable consideration, so that its record constituted constructive notice, if she, nevertheless, witnessed the security deed to the creditor with knowledge of its contents; and that the creditor, in ignorance of the true title, relied upon such security deed as conveying a good title from the grantor, and extended credit on the faith thereof, the wife would be estopped from asserting title of the jury so believed. Roop Grocery Co. v. Gentry, 195 Ga. 736, 25 S.E.2d 705 (1943).

The fact that a deed from a husband to his wife, under which a wife claimed title, may have been based upon a valuable consideration and duly recorded would not necessarily prevent a subsequent purchaser, by security deed, from relying upon the principle of estoppel, if he was in fact ignorant of the true title. Roop Grocery Co. v. Gentry, 195 Ga. 736, 25 S.E.2d 705 (1943).

- In a quiet title action brought by executors of a landowner's estate, the trial court erred in granting summary judgment to a purchaser of the property because genuine issues remained as to whether the purchaser had notice that the landowner owned the property by virtue of unrecorded deeds. There was also a genuine issue as to whether the executors were precluded by estoppel under O.C.G.A. § 51-6-4 from claiming title. Montgomery v. Barrow, 286 Ga. 896, 692 S.E.2d 351 (2010).

- In an action brought by the purchasers of a lot seeking to cancel the developer's security deed based upon alleged fraud, the trial court properly granted summary judgment to the developer as, even if the developer knew of the sale of the lot to the purchasers, such sale did not estop the developer from the developer's claim against the lot pursuant to the developer's security deed; however, the trial court did err by denying the equitable subrogation claim asserted by the purchasers' lender since exercising subrogation did not prejudice the developer in any manner. Byers v. McGuire Props., 285 Ga. 530, 679 S.E.2d 1 (2009), overruled on other grounds by SRM Group, Inc. v. Travelers Prop. Cas. Co. of Am., 308 Ga. 404, 841 S.E.2d 729 (2020).

RESEARCH REFERENCES

Am. Jur. 2d.

- 37 Am. Jur. 2d, Fraud and Deceit, § 194 et seq.

- 37 C.J.S., Fraud, § 28 et seq.

- Failure to perform the duty to make disclosures which rests upon one because of trust or confidential relation as fraud for which equity, in an independent suit, will relieve against a judgment, 5 A.L.R. 672.

Fraudulent misrepresentation or concealment by a contracting party concerning title to property or other subjects which are matters of public record, 33 A.L.R. 853; 56 A.L.R. 1217.

Estoppel of one not a party to a transaction involving real property by failure to disclose his interest in the property, 50 A.L.R. 668.

Quantum of proof in civil case on issue involving fraudulent, dishonest, or criminal misappropriation of property, 62 A.L.R. 1449.

Permitting record title to real property to stand in another's name as estopping owner to avail himself of statute or rule requiring authority to contract regarding real estate to be in writing, 78 A.L.R. 588.

Public records as notice of facts starting running of statute of limitations against action based on fraud, 137 A.L.R. 268.

Duty of vendor of real property to disclose to purchaser condition of building thereon which affects health or safety of persons using same, 141 A.L.R. 967.

Liability of vendor of structure for failure to disclose that it was built on filled ground, 80 A.L.R.2d 1453.

Fraud predicated on vendor's misrepresentation or concealment of danger of possibility of flooding or other unfavorable water conditions, 90 A.L.R.3d 568.

Real estate broker's liability to purchaser for misrepresentation or nondisclosure of physical defects in property, 46 A.L.R.4th 546.

• 51-7-1. Right of action for false arrest.
• 51-7-2. Malice defined.
• 51-7-3. Lack of probable cause defined; question for jury.
• 51-7-4. Arrest under civil process of person exempt from such arrest.

• 51-7-20. False imprisonment defined.
• 51-7-21. Effect of good faith on liability for imprisonment under warrant.
• 51-7-22. False imprisonment by several persons.

• 51-7-40. Right of action for malicious prosecution.
• 51-7-41. Accrual of right of action.
• 51-7-42. Inquiry before committing court or magistrate as prosecution.
• 51-7-43. Lack of probable cause defined; question for jury.
• 51-7-44. Inference of malice from lack of probable cause; rebuttal of inference.
• 51-7-45. Evidence in determination of probable cause.
• 51-7-46. Immunity of grand jurors from action for malicious prosecution; liability of person instigating presentment.
• 51-7-47. Measure of damages.

• 51-7-60. Preclusion of recovery for detention or arrest of person suspected of shoplifting under certain circumstances.
• 51-7-61. Activation of antishoplifting device as constituting probable cause for detention; notice of such device to be posted.
• 51-7-62. Actions for false arrest and false imprisonment for individuals suspected of film piracy.

• 51-7-80. Definitions.
• 51-7-81. Liability for abusive litigation.
• 51-7-82. Defenses.
• 51-7-83. Measure of damages.
• 51-7-84. Notice of claim asserted; when action must be brought.
• 51-7-85. Exclusive remedy.

- Personal liability of municipal officers for special damages resulting from official acts performed in oppressive or malicious manner, § 36-33-4.

- For annual survey of trial practice and procedure law, see 41 Mercer L. Rev. 391 (1989). For survey of 1995 Eleventh Circuit cases on trial practice and procedure, see 47 Mercer L. Rev. 907 (1996).

Malicious Prosecution, 7 POF2d 181.

Abuse of Process - Debt Collection, 7 POF2d 413.

Malicious Prosecution - Good Faith Reliance on Advice of Counsel in Bringing Suit, 26 POF2d 275.

Wrongful Attachment, 36 POF2d 149.

Compensatory Damages for False Imprisonment, 13 POF3d 111.

Civil Consequences of Criminal Conduct, 51 Am. Jur. Trials 337.

- Liability of better business bureau or similar organization in tort, 50 A.L.R.4th 745.

ARTICLE 1 FALSE ARREST

Law reviews.

- For annual survey on law of torts, see 61 Mercer L. Rev. 335 (2009). For annual survey on trial practice and procedure, see 61 Mercer L. Rev. 363 (2009).