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Bagwell v. Henson

Court of Appeals of Georgia
Apr 28, 1971
183 S.E.2d 485 (Ga. Ct. App. 1971)

Summary

In Bagwell, the question was which party was entitled to condemnation proceeds: the holder of a prior unrecorded option to purchase the property or the holder of a subsequent recorded voluntary deed without knowledge of the option.

Summary of this case from Pettie v. RBC Mortg. Co. (In re Jackson)

Opinion

45948.

ARGUED FEBRUARY 1, 1971.

DECIDED APRIL 28, 1971. REHEARING DENIED JUNE 17, 1971.

Condemnation of land. Hall Superior Court. Before Judge Kenyon.

Smith, Smith Lawson, R. Wilson Smith, Jr., for appellant.

Robert E. Andrews, for appellees.


1. The motion to dismiss is denied.

2. (a) An option to repurchase which is personal to the parties to a bill of sale does not violate the rule against perpetuities.

(b) Where the terms of the option do not require another procedure, it may be exercised by giving oral notice, and tender of payment is not a condition precedent thereto.

(c) The equity of a purchaser for value under a contract of sale is superior to that of a volunteer to whom the owner subsequently transferred the property by a deed of gift.

3. The property having been taken by the condemning authority and the money paid into court, in a contest between the appellee who had made timely exercise of his option to repurchase and a subsequent holder under a deed of gift, the holder of the contract to repurchase is entitled to prevail as to that part of the fund which represents the excess of the value of the property on condemnation over the purchase price stated in the option.


ARGUED FEBRUARY 1, 1971 — DECIDED APRIL 28, 1971 — REHEARING DENIED JUNE 17, 1971.


L. O. Henson, a tenant who maintained a used car lot on property belonging to Hubert Bagwell, after placing certain buildings on the land fell in arrears in his rent and delivered a bill of sale of the buildings to Bagwell as payment of the debt, the instrument stating that Bagwell agreed that at any time in the future that Henson wished to repurchase the buildings and improvements he might do so for $750 plus interest from date "and Hubert Bagwell agrees to make Henson Motor Sales a bill of sale to same." During the summer of 1965, Henson offered to repurchase the buildings and Bagwell suggested they "wait until after Urban Renewal." Nothing further was done. Henson moved off the property. Bagwell gave the real estate and improvements to his sister in October 1965, by a deed reciting a consideration of love and affection. He subsequently died. Condemnation proceedings were begun against Kathleen Bagwell in December 1968. Henson intervened, claiming ownership of the buildings, and after a pre-trial order holding that the only issues involved were ownership and value as between Henson and Miss Bagwell, the jury returned a verdict in favor of Henson for $5,000 on which error is here enumerated.


1. The fact that the notice of appeal is improperly styled is not ground for dismissal. Franklin v. Sea Island Bank, 120 Ga. App. 654 (1) ( 171 S.E.2d 866). Nor will the fact that the judgment appealed from is designated as having been dated October 15, 1970, be held insufficient because such judgment was entered on October 22. Harrison v. State, 120 Ga. App. 812 ( 172 S.E.2d 328); Code Ann. § 6-809 (d). The motions to dismiss are denied.

2.(a) The main thrust of the appeal is that the option to repurchase in the bill of sale is void as against the rule against perpetuities because it does not limit the time within which it may be exercised. Treating the option to repurchase only as an interest in land the point is well taken. Gearhart v. West Lumber Co., 212 Ga. 25 (2) ( 90 S.E.2d 10); Smith v. Aggregate Supply Co., 214 Ga. 20 (1) ( 102 S.E.2d 539); Turner v. Peacock, 153 Ga. 870 ( 113 S.E. 585). The rule against perpetuities applies equally to real estate and personal property. 70 CJS 574, Perpetuities, § 1; In re Woods' Trust Estate, 181 Kan. 271 ( 311 P.2d 359). But where the promise to resell is considered as a covenant personal to Bagwell and Henson, as the language here indicates, it is limited to lives in being, and therefore is enforceable between them. Kershner v. Hurlburt (Mo.) 277 S.W.2d 619; Roemhild v. Jones, 239 F.2d 492, and see Wadley Lumber Co. v. Lott, 130 Ga. 135 (1) ( 60 S.E. 836). The language of the option giving the right to repurchase the buildings suggests that it is not intended to be a condition of the estate granted but rather the personal undertaking of Bagwell to hold the title to the buildings subject to the debtor's right to repurchase on payment of the debt with interest. This construction is preferable because it is in favor of the validity of the instrument and also, assuming it depends in part on evidentiary issues, is the one which would uphold the jury verdict.

(b) An option to purchase property must be exercised according to the terms stated therein. When it is not otherwise specified in the document, this may be done orally, and it is no defense that the purchase money was not paid at the time the notice was given. The obligations to pay and to convey the property are such, when not otherwise stated, that they may be simultaneously executed. Snead v. Wood, 24 Ga. App. 210 (1) ( 100 S.E. 714). The effect of such notice is to metamorphose the option, optionor and optionee into a contract of sale, vendor and vendee. Chatham Amusement Co. v. Perry, 216 Ga. 445 (1) ( 117 S.E.2d 320) and cit. There is evidence in this case sufficient to authorize the jury to find that at the time the condemning authority showed an intention of taking over the property in 1965 Henson informed the then owner, Hubert Bagwell, of his intention to repurchase the buildings and offered to pay for them in accordance with the terms of the option, and that Bagwell said only that they should wait "until after Urban Renewal." Henson moved from the property, and the deed of gift was made to the appellant between that time and the time of the actual filing of the petition to condemn three years later. Accordingly, at that time Henson was in the position of a bona fide purchaser under an executory contract of sale.

(c) There is no evidence that the deed to Miss Bagwell was taken at a time when she had any knowledge of Henson's prior exercise of the right to repurchase. The question, then, is one of the respective priorities between a prior executory contract to purchase property (the legal result of Henson's exercise of the option to Bagwell at a time when Bagwell owned the property) not recorded, and a subsequent recorded deed to the property with improvements which, however, was purely voluntary and lacked a valuable consideration, to an innocent third party without notice. Had Bagwell's sister been a bona fide purchaser for value there is no doubt that this deed would take priority. But in a contest between a prior unrecorded instrument based on a valuable consideration and a subsequent voluntary conveyance, even in the absence of notice, the prior instrument prevails. Langdale Co. v. Day, 119 Ga. App. 210 (1) ( 166 S.E.2d 646). The exercise of an option to repurchase represents a sort of equitable ownership ( Barron v. Anderson, 204 Ga. 7 ( 48 S.E.2d 846)) which may be enforced even against a third party who takes with notice or without consideration. Crawford v. Smith, 151 Ga. 18 ( 105 S.E. 477). "The equity under trust or contract for value is superior to that of a mere volunteer." Code § 37-108. As stated in Hughes v. Cobb, 195 Ga. 213, 235 ( 23 S.E.2d 701): "The evidence disclosed that the defendant claimed under a deed of gift. Therefore, being a donee, she stands in the shoes of her grantor." To the effect that Miss Bagwell is not entitled to that part of the condemnation money representing the value of the buildings erected by Henson and which he exercised his option to repurchase, as against a mere volunteer, see also Fletcher v. Fletcher, 158 Ga. 899 (6) ( 124 S.E. 524) where A sold land to B and B gave the land to C; thereafter, B having failed to pay the consideration contracted for, A was held to have a right of possession superior to that of C.

3. That part of the fund paid into court by the condemnor which represented the proportionate value of the buildings was properly awarded by the jury to Henson; Henson, of course, having a concomitant duty to pay the full purchase price to the appellant as a condition precedent to taking down the money. On this latter question the seventh enumeration of error, to the effect that the court erred in not crediting appellant with the purchase price of $750 plus interest from January 31, 1955, the date of the bill of sale from Henson to Bagwell, is well taken. By the condemnation proceeding the fund has been substituted for the property, and this proportion of it belongs to the appellant.

Judgment affirmed with direction that the fund representing the value of the buildings be divided as indicated in the third division of this opinion. Bell, C. J., concurs. Pannell, J., concurs in the judgment.


Summaries of

Bagwell v. Henson

Court of Appeals of Georgia
Apr 28, 1971
183 S.E.2d 485 (Ga. Ct. App. 1971)

In Bagwell, the question was which party was entitled to condemnation proceeds: the holder of a prior unrecorded option to purchase the property or the holder of a subsequent recorded voluntary deed without knowledge of the option.

Summary of this case from Pettie v. RBC Mortg. Co. (In re Jackson)
Case details for

Bagwell v. Henson

Case Details

Full title:BAGWELL v. HENSON et al

Court:Court of Appeals of Georgia

Date published: Apr 28, 1971

Citations

183 S.E.2d 485 (Ga. Ct. App. 1971)
183 S.E.2d 485

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