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A bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no notice. A grantee in a security deed who acts in good faith stands in the attitude of a bona fide purchaser, and is entitled to the same protection. But a forged deed is a nullity and vests no title in a grantee. As such, even a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a forged deed, or those holding under such a grantee, because the grantee has no title to convey. O.C.G.A. §§ 23-1-19, 23-1-20.
Appellant Jerry Brock ("Brock") commenced this action against his ex-wife, Joyce Brock ("Joyce"), and appellee Yale Mortgage Corporation ("Yale") to, among other things, quiet title in the Suwanee residence he and Joyce once shared (the "property"); set aside a forged quitclaim deed purporting to transfer Brock's interest in the property to Joyce; and set aside a subsequent deed to secure debt Joyce executed in Yale's favor or limit the deed to a one-half undivided interest in the property. The trial court granted Yale's motion for summary judgment, declaring that Yale holds a valid security interest in the entire property and authorizing foreclosure. Brock appeals, arguing that even if Yale is a bona fide purchaser for value, it did not acquire a valid security interest in the entire property by virtue of such status; Yale's status as a bona fide purchaser for value is a question of fact; and, contrary to the trial court's conclusion, he did not ratify Yale's loan transaction with his then wife.
Did the trial court err in concluding that Yale held a valid security interest in a one-half undivided interest in the property?
The supreme court held that Yale’s security interest extended to a one-half undivided interest in the property. Brock acquired the property as tenants in common under a warranty deed transferring the property to him and Joyce as grantees. The security deed under which Joyce purported to convey legal title to the entire property to Yale effectively vested Yale with a security interest in the one-half undivided interest in the property she indisputably held and was free to convey. Yale could not acquire a valid security interest in the entire property by virtue of its status, if any, as a bona fide purchaser for value. A bona fide purchaser for value, or a security deed holder occupying such position, obtained good title notwithstanding a forgery in the chain of title. Factual questions existed regarding whether Brock ratified the forged quitclaim deed under his divorce settlement agreement with Joyce. There was an ambiguity in the settlement agreement, and a factual issue existed regarding the parties' intention.