In the event that the plaintiff fails to make the payment pursuant to paragraph (1) of this subsection within the time allowed in the decree, the defendant shall have the right to pay to the plaintiff the value of the land and the mesne profits in accordance with paragraph (2) of this subsection. In all cases in which a setoff of improvements is sought in excess of mesne profits, the jury shall have the right to fix the time from which mesne profits shall be allowed.
(Ga. L. 1897, p. 79, § 1; Civil Code 1910, §§ 5587, 5588, 5589, 5590; Code 1933, §§ 33-107, 33-108, 33-109, 33-110.)
Cross references.- Setoff of improvements by one in bona fide possession, § 13-7-10.
JUDICIAL DECISIONSANALYSIS
General Consideration
Section constitutional.
- O.C.G.A. § 44-11-9, regulating the rights of setoff by a bona fide holder of property, and procedures thereunder, is constitutional. Mills v. Geer, 111 Ga. 275, 36 S.E. 673 (1900); Bellinger v. Thompson, 112 Ga. 111, 37 S.E. 110 (1900); Ayer v. Chapman, 147 Ga. 715, 95 S.E. 257 (1918).
O.C.G.A. § 44-11-9 contemplates that defendant in ejectment, who has made permanent improvements, may set them off against a successful plaintiff in such action. Mid-State Homes, Inc. v. Johnson, 218 Ga. 397, 128 S.E.2d 197 (1962).
No set-off allowed.
- Where the defendant in a dispossessory action was the tenant of an aunt, who held a life estate in the property in question, the trial court correctly ruled that the individual was a tenant at sufferance, that a dispossessory action would lie, and that the tenant was not entitled to a set-off, under O.C.G.A. § 44-11-9 for improvements. Fallin v. Rule, 194 Ga. App. 865, 392 S.E.2d 314 (1990).
Section strictly construed.
- O.C.G.A. § 44-11-9, while in conformity with what has become recognized equitable principles, is nevertheless contrary to the early common-law rule and by its terms, the right to an equitable setoff is greatly enlarged and extended. Accordingly, the words "permanent improvements bona fide placed thereon" must be given a strict rather than liberal and general interpretation. Tennessee, Ala. & Ga. Ry. v. Zugar, 193 Ga. 386, 18 S.E.2d 758 (1942).
Value of all improvements recoverable.
- O.C.G.A. § 44-11-9 wrought a great change in providing that the value of all improvements as described can be recovered. If the recovery for permanent improvements did not exceed the mesne profits, it is obvious that the purposes of O.C.G.A. § 44-11-9 would fail in many, if not most, instances. Since the passage of O.C.G.A. § 44-11-9, all improvements might be recovered. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
When one sought the aid of equity in recovering land, the court was allowed to make compensation for improvements a condition of relief; judgment ordering landowners to pay for improvements on their property was affirmed where the testimony at trial amply supported the trial court's conclusion that the improvements on the land were placed in good faith. Gay v. Strain, 261 Ga. App. 708, 583 S.E.2d 529 (2003).
Valuation of improvements and accounting for mesne profits.
- In an action by remainderman, where the improvements were made during the pendency of a precedent life estate by the defendant bona fide in possession under an adverse claim of title, the value of the improvements is to be estimated at the time of the bringing of the action, and the defendant need only account for mesne profits accruing subsequently to the falling in of the life estate. Hawks v. Smith, 141 Ga. 422, 81 S.E. 200 (1914); Burns v. Richardson, 145 Ga. 430, 89 S.E. 418 (1916); Ayer v. Chapman, 147 Ga. 715, 95 S.E. 257 (1918).
Plaintiff may not recover as mesne profits the increased income from defendant's improvements.
- Where the defendant in an action to recover land is in bona fide possession under adverse claim of title, the mesne profits are to be assessed upon the value of the property as it stood when the defendant's title accrued, and the plaintiff may not recover the increased income as mesne profits from improvements the defendant made in good faith. Norris v. Richardson, 151 Ga. 31, 105 S.E. 493 (1921); Winn v. Rainey, 153 Ga. 641, 113 S.E. 8 (1922).
Sale of recovered land to provide for improvements.
- O.C.G.A. § 44-11-9 authorizes an allowance to a defendant, in the same ejectment case in which the plaintiff recovers, of any excess in value of the defendant's improvements on the land involved over the mesne profits and in proper cases provides for a sale of the recovered land by a commissioner and a division of the proceeds between the parties in the ratio or proportion that the value of the land itself bears to the amount of said excess of value of improvements over the mesne profits. Smith v. Bailey, 183 Ga. 869, 189 S.E. 905 (1937).
Under O.C.G.A. § 44-11-9 permanent improvements may be setoff against remaindermen who recover land. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
Where improvements placed pursuant to agreement with one tenant no recovery from cotenant.
- Party in possession of premises, seeking to recover the value of the improvements erected upon the property in question in virtue of a contract with owner of undivided one-half interest who agreed to make a will giving the possessor fee simple title to the entire property if the possessor would repair it and render certain personal services to partial owner, cannot recover for such improvements as against administrator of deceased owner of other undivided one-half interest. Bowles v. White, 206 Ga. 343, 57 S.E.2d 187 (1950).
Recovery for improvements placed by tenant of adverse possessor.
- A tenant who leases land from a bona fide possessor under adverse claim of right, may setoff, in an action brought against the tenant by the true owner, the value of permanent improvements that the tenant placed on the property. Moate v. Rives, 146 Ga. 425, 91 S.E. 420 (1917).
Improvements by adverse possessor who neither ousted nor notified tenant in common.
- The right of a defendant in adverse possession to setoff the value of improvements does not apply where a tenant in common was not ousted, nor given notice of adverse possession by the defendant, and where there is no contract transferring title from plaintiffs to defendant. Smith v. Smith, 141 Ga. 629, 81 S.E. 895 (1914).
Permanent improvements by tenant of holder of void deed.
- Permanent improvements having been made by the tenant of the holder of a void deed, as a part of the terms of a rental contract which was ratified and adopted by the owner, the holder of such void deed is not entitled to receive credit for the value of such permanent improvements placed upon the premises by such tenant, in an accounting for such rents and profits. Yudelson v. Northwestern Mut. Life Ins. Co., 193 Ga. 518, 18 S.E.2d 833 (1942).
Party in possession under bond for title, or verbal agreement to buy land, is not a bona fide holder under adverse claim of title, and may not setoff the value of permanent improvement. Puckett v. Heaton, 153 Ga. 69, 111 S.E. 402 (1922).
Setoff of mortgagee's improvements generally.
- The right of a mortgagee in possession to setoff the improvements placed upon property is not controlled by O.C.G.A. § 44-11-9 where the action is not for the recovery of land, but is an equity case for an accounting by a trustee. However, the equity rule does not differ essentially from the statutory rule. That section allows the setoff for improvements only if placed thereon by the mortgagee personally or other bona fide claimants under whom the mortgagee claims, and the equity rule provides that the plaintiff will be compelled to reimburse the occupant for expenditures. Either of these rules would require a disbursement by the party to be reimbursed. Yudelson v. Northwestern Mut. Life Ins. Co., 193 Ga. 518, 18 S.E.2d 833 (1942).
Mortgagee may not recover for improvements made without mortgagor's consent.
- As to permanent improvements, a mortgagee in possession is not authorized, without the consent of the mortgagor, to make such improvements and thereby increase the burden on the mortgagor upon a redemption of the premises. Yudelson v. Northwestern Mut. Life Ins. Co., 193 Ga. 518, 18 S.E.2d 833 (1942).
Recovery of mesne profits not barred by possession in receiver.
- The fact that the property was in possession of the receiver as property of defendant's grantor will not itself prevent a recovery of mesne profits. Acme Brewing Co. v. Central R.R. & Banking Co., 115 Ga. 494, 42 S.E. 8 (1902).
Mesne profits recoverable.
- In an ejectment action, the trial court erred in adopting the special master's finding that concluded that the ejector was entitled to recover the property but had no right to recover mesne profits because a plaintiff in an ejectment action may seek recovery of mesne profits, such as rental income from the land. Small v. Irving, 291 Ga. 316, 729 S.E.2d 323 (2012).
Defendant may not claim as assets to avoid bankruptcy improvements conveyed by him.- The right to setoff the value of permanent improvements against a demand for mesne profits is one which inures to the successor in title of the person by whom such improvements were made while the latter was in adverse possession. Thus, if a defendant in a bankruptcy proceeding conveys property to a spouse, with mention in the deed as to impending claims on the land, defendant cannot cite improvements made on the property as defendant's own assets to avert bankruptcy. R.P. Brown & Co. v. Glover Grocery Co., 287 F. 709 (5th Cir. 1923).
One holding in good faith not guilty of trespass.
- If it be true that notice of an adverse claim is not inconsistent with the good faith of a holder of land, it would seem, a fortiori, that one holding in good faith would not be guilty of a willful trespass in exercising the rights of ownership. Tennessee, Ala. & Ga. Ry. v. Zugar, 193 Ga. 386, 18 S.E.2d 758 (1942).
Barbed wire fence as improvement. See Calhoun v. Babcock Bros. Lumber Co., 198 Ga. 74, 30 S.E.2d 872 (1944).
Cited in Lytle v. Scottish Am. Mtg. Co., 122 Ga. 458, 50 S.E. 402 (1905); Boyett v. Edenfield, 144 Ga. 109, 86 S.E. 222 (1915); Hammock v. Kemp, 148 Ga. 672, 97 S.E. 852 (1919); Coniff v. Hunnicutt, 157 Ga. 823, 122 S.E. 694 (1924); Lanier v. Graham, 179 Ga. 744, 177 S.E. 574 (1934); Cook v. Pollard, 50 Ga. App. 752, 179 S.E. 264 (1935); Blackshear Mfg. Co. v. Carter, 180 Ga. 828, 181 S.E. 155 (1935); Burden v. Gates, 188 Ga. 284, 3 S.E.2d 679 (1939); Jones v. Federal Land Bank, 189 Ga. 419, 6 S.E.2d 52 (1939); Burden v. Gates, 190 Ga. 300, 9 S.E.2d 245 (1940); Behr v. City of Macon, 194 Ga. 334, 21 S.E.2d 169 (1942); Owen v. Miller, 209 Ga. 875, 76 S.E.2d 772 (1953); Ross v. Lowery, 249 Ga. 307, 290 S.E.2d 61 (1982); Beavers v. Weatherly, 250 Ga. 546, 299 S.E.2d 730 (1983); Archer v. Newkirk, 167 Ga. App. 54, 306 S.E.2d 52 (1983); Courtesy Leasing, Inc. v. Christian, 266 Ga. 187, 465 S.E.2d 443 (1996).
Good Faith and Notice
Defendant must show improvements bona fide placed thereon.
- In order to entitle the defendant in an ejectment action, claiming to be a bona fide holder, to the provisions in defendant's favor contained in O.C.G.A. § 44-11-9, defendant must show that defendant is not only a bona fide holder, but that the improvements upon the property have been bona fide placed thereon. Zugar v. Tennessee, A. & G. R. Co., 65 Ga. App. 658, 16 S.E.2d 149 (1941), rev'd on other grounds, 193 Ga. 386, 18 S.E.2d 758 (1942).
"Bona fide" assumes absence of notice of adverse claim.
- The words "bona fide" as used in the sense of a bona fide holder, or bona fide purchaser, carry as their technical, primary connotation the absence of notice or knowledge of an outstanding adverse claim. Tennessee, Ala. & Ga. Ry. v. Zugar, 193 Ga. 386, 18 S.E.2d 758 (1942).
"Adverse claim of title," under O.C.G.A. § 44-11-9, need not be evidenced by any writing. Walton v. Sikes, 165 Ga. 422, 141 S.E. 188 (1927).
Clear and definite notice nullifies claim for improvements.
- Since O.C.G.A. § 44-11-9 must be taken as using the words "bona fide placed thereon" in their primary technical sense, clear and definite notice of an adverse claim, as by an action in ejectment, as distinguished from imperfect notice, will nullify the right of the holder to claim that the improvements were bona fide erected. However, it is unquestionable that mere notice or knowledge of an adverse claim does not destroy the bona fide character of a reasonable and honest claim by one in possession. Tennessee, Ala. & Ga. Ry. v. Zugar, 193 Ga. 386, 18 S.E.2d 758 (1942).
Distinction exists between personal and presumed notice.
- A distinction is drawn between personal notice, proven either by positive or presumptive evidence, and notice which is a mere legal presumption, and which does not, as a consequence, necessarily affect the conscience of the party. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
Good faith unimpeached by mere constructive notice.
- When the controversy is between the record owner of land and a defeated occupant seeking pay for improvements, constructive notice of the adverse title will not impeach the good faith of the occupant in putting betterments on the land, and this can be done only by proof that the occupant had actual notice of the successful title when the improvements were made. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
When conveyance has been properly recorded, record is constructive notice of its contents, and of all interests, legal and equitable, created by its terms. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
Recordation of deed not necessarily conclusive as to good faith.
- In an action for land, where the defendant seeks, under O.C.G.A. § 44-11-9, to setoff valuable improvements, the fact that the plaintiff's deed was duly recorded is not necessarily conclusive, as against the defendant, on the question of good faith. McKaig v. Hardy, 196 Ga. 582, 27 S.E.2d 11 (1943).
The fact that the plaintiff may have had a title deed or record at the time the defendant took possession of the lot does not necessarily show lack of good faith on the part of the defendant. Claxton v. Claxton, 214 Ga. 715, 107 S.E.2d 320 (1959).
Purchaser need not make every possible search to determine if the purchaser's title is bad. Norris v. Richardson, 151 Ga. 31, 105 S.E. 493 (1921).
Payment of valuable consideration raises presumption of good faith. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
Improvements placed pending action may not be setoff.
- Where, pending an action to recover land, the defendant places improvements on it, defendant is not entitled to set them off under O.C.G.A. § 44-11-9. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
The value of improvements placed upon land by a defendant pending an action brought by another to recover it from defendant cannot be setoff against the land itself, under O.C.G.A. § 44-11-9. Zugar v. Tennessee, A. & G. R. Co., 65 Ga. App. 658, 16 S.E.2d 149 (1941), rev'd on other grounds, 193 Ga. 386, 18 S.E.2d 758 (1942).
Where a defendant enters upon land in good faith under an adverse claim of title, and, after an action is brought against defendant by one who has actual title to the property, erects improvements upon the land, it cannot be held that defendant has bona fide placed improvements thereon, so as to entitle defendant to setoff the value of such improvements against the land. Zugar v. Tennessee, A. & G. R. Co., 65 Ga. App. 658, 16 S.E.2d 149 (1941), rev'd on other grounds, 193 Ga. 386, 18 S.E.2d 758 (1942).
A person who enters onto land in the good faith belief that the person has title, but before the person makes improvements, is sued by the actual title holder is not entitled to setoff improvements the person makes subsequent to the actions commencement, if the person is made aware beforehand of the defects in title and the character of the plaintiff's title. Richards v. Edwardy, 138 Ga. 690, 76 S.E. 64 (1912).
Except against claim for mesne profits.
- Defendants who improve land, pending an action may not set up the value of such improvements, except to extinguish the claim for mesne profits. Hinesley v. Stewart, 139 Ga. 7, 76 S.E. 385 (1912).
Defendant's faith in own title, as against adverse one of which defendant was aware, is not enough to confer the right to reimbursement. Harper v. Durden, 177 Ga. 216, 170 S.E. 45 (1933).
Notice of improvement by another bona fide possessor.
- A plaintiff who has title to land and sees another who is a bona fide possessor place valuable improvements on the property, and does not give notice of title, is not subsequently estopped from asserting title. Kemp v. Hammock, 144 Ga. 717, 87 S.E. 1030 (1916); Green v. Ellis, 145 Ga. 241, 88 S.E. 976 (1916).
Good faith of possessor of land is generally an issue for the jury to consider, and possessor's knowledge of an opposing claim of title is a circumstance to be considered in this determination. Moate v. Rives, 146 Ga. 425, 91 S.E. 420 (1917).
Knowledge considered by jury to determine good faith.
- One may be the possessor of land in good faith though aware of an opposing claim, where such knowledge would not of itself impute bad faith, if one enters in full confidence of title or the title of one under whom one immediately claims. But knowledge of an opposing claim of title is a circumstance to be considered by the jury in determining one's good faith. Claxton v. Claxton, 214 Ga. 715, 107 S.E.2d 320 (1959).
Pleadings
Defendant's plea must allege value of premises. Moore v. Carey, 116 Ga. 28, 42 S.E. 258 (1902).
Plea must include value of profits and improvements.
- A plea under O.C.G.A. § 44-11-9 must set forth the value of the land, the value of the permanent improvements claimed to have been placed thereon, and the amount of mesne profits admitted to be due, because the verdict must contain a finding with reference to all three. A plea which fails to set forth the facts from which the jury can find the value of the land and the value of the mesne profits, as well as the value of the permanent improvements, is not a sufficient plea under the act, and should on proper and timely motion be stricken because of its insufficiency. Bridges v. Henry, 210 Ga. 415, 80 S.E.2d 173 (1954).
Jury Instructions
Charge that good faith not necessarily destroyed by error of judgment or lack of diligence.
- It is error to refuse a request to charge the jury that under O.C.G.A. § 44-11-9 "the good faith of the purchaser or the defendant who has possession is not necessarily destroyed by error of judgment or the failure to exercise all possible diligence." Walton v. Sikes, 165 Ga. 422, 141 S.E. 188 (1927).
Charge as to obligation of true owner.
- The court errs in charging the jury as follows: "One who enters upon land under a conveyance from one not in possession, and, so far as appears, not having any color of title, enters and improves the premises at his peril. The true owner is under no obligation to account to him for taxes paid or for the cost of improvements over and above the mesne profits accruing." Walton v. Sikes, 165 Ga. 422, 141 S.E. 188 (1927).
Timing and value of improvements question for jury.
- Where the evidence demands a finding by the jury that valuable permanent improvements were erected on the land while defendant's predecessor in title was in actual possession under a claim adverse to that asserted by the plaintiffs, and would authorize, but does not demand, a finding by the jury that defendant placed such improvements on the land after it had been given to him and that the value of such improvements was in excess of the stipulated rental value of the property, it makes an issue of fact which it is the province of the jury to settle, and the trial judge errs in directing a verdict in favor of the plaintiffs for the premises sued for and for mesne profits. Parker v. Parker, 214 Ga. 509, 105 S.E.2d 742 (1958).
Judge may limit jury to facts disclosed during trial.
- The phrase "take into consideration all the facts and circumstances of the case as they have transpired here in your presence" does not limit the jury to a consideration only of the facts and circumstances of the case as they happened on the trial of the case, but does properly limit the jury to a consideration of the facts and circumstances of the case as they were disclosed to the jury on the trial of the case. Sheridan v. Haggard, 95 Ga. App. 792, 99 S.E.2d 163 (1957).
Remedies
Election of remedies only after verdict.
- The time for making an election does not arrive until after the verdict is rendered and the decree of the court has been entered. Acme Brewing Co. v. Central R.R. & Banking Co., 115 Ga. 494, 42 S.E. 8 (1902).
Election of remedies must be made available.
- In an ejectment action, a trial court erred by adopting the recommendation of the special master that title be vested in the ejector and that the ejectee have a judgment against the ejector in the amount of $60,000 because the trial court deprived the ejector of the ejector's statutory right to elect to recover the property within a period of time to be fixed by the trial court's decree as set forth in O.C.G.A. § 44-11-9. Small v. Irving, 291 Ga. 316, 729 S.E.2d 323 (2012).
No damage remedy if improvements admittedly exceed profits.
- A plaintiff cannot take a money verdict where plaintiff admits that the value of the improvements exceeds mesne profits. Acme Brewing Co. v. Central R.R. & Banking Co., 115 Ga. 494, 42 S.E. 8 (1902).