Not So Innocent -- Summary Judgment Overturned for Property Purchaser Claiming to Be Bona Fide Purchaser for Value

The Georgia Supreme Court reversed summary judgment in favor of Barrow & Byrd Properties, Inc. (B&B) in the recent case Montgomery v. Barrow.  B&B purchased 223 acres of land from the estate of Cauley Barrow in Taylor County in 2004.  Cauley's son, Robert Barrow died in 2000.  However, the executors of Robert Barrow's estate (the "Executors") claimed that the property had been owned by Robert Barrow from 1975 until 2000, and therefore that the property belonged to Robert Barrow's estate, not Cauley Barrow's.  The executors of Robert Barrow's estate filed a quiet title action claiming that Robert Barrow owned the land pursuant to four unrecorded warranty deeds.  B&B claimed that it was a bona fide purchaser for value without notice of the unrecorded deeds.  The trial court granted summary judgment to B&B, but the Supreme Court reversed, holding that there was sufficient evidence to create a genuine issue of fact as to whether B&B had notice of the unrecorded deeds. 

The court noted that there is a presumption of good faith which attaches to a purchaser for value and which remains until overcome by proof.  However, the court noted, circumstances which would place a man of ordinary prudence fully upon his guard, and induce serious inquiry, are sufficient to constitute notice of a prior unrecorded deed, and a younger deed, taken with such notice, acquires no preference by being recorded. 

At trial, Homer Barrow, one of the owners of B&B, testified that the attorney for the Executors told him that the Executors had said that they had unrecorded deeds to the property.  Homer Barrow asked the attorney to produce the deeds repeatedly and they were not brought forth, and eventually the Executors said they were destroyed by fire.  Not until the filing of the lawsuit did the unrecorded deeds surface, when copies were attached to the complaint.  Also, a witness gave hearsay testimony that Robert Barrow had told him before his death that Homer Barow had offered to buy the property from him.  Furthermore, the evidence showed that the owners of B&B were locals and familiar with the land and its history, and that Robert Barrow had lived on the land after Cauley Barrow's death and had farmed it until his own death in 2000.  All of this evidence taken together led the court to conclude that triable issues of material fact existed whether B&B was actually a bona fide purchaser without notice, such that summary judgment for B&B could not stand.