Title to real property needs to be “cleared” when there is a “cloud” on title that brings into question the marketability of the subject title. If title is not marketable, it can not be conveyed in an arms-length transaction where the buyer expects to receive “good and marketable” title. Before you look at the two methods of clearing title, one must ask the question, what is a “cloud on title”? The Supreme Court of Georgia in the 1893 case Thompson v. Etowah Iron Co. adopted the test established by California in the case Pixley v. Hugg-gins that asks, “[w]ould the owner of the property, in an action of ejectment brought by the adverse party, founded upon the deed, be required to offer evidence to defeat a recovery?” Contemplated by this question is the scenario where two different owners claim to own the equitable, and possibly the legal, interest. However, the court went on to hold “that a conveyance, in itself not enough to constitute a cloud, may, in connection with alleged extrinsic facts, become a cloud.” The court elaborated that the extrinsic facts it referenced would be facts, for example, that establish someone other than the true owner is in possession of the property, such as a former occupant, or anything else that would in connection with the paper at issue give the holder of the paper perceived or apparent legal title to the real property. This would mean that the question is not isolated to two different equitable owners fighting over who owned the property and, as such, was able to possess the property, leaving the other to be ejected. Thus, it is a question of fact.
Given the common law framework for clouds on title, how do you address them legally in Georgia? There are two acts one can possibly employ to remove a cloud on title. The first is the Quiet Title Act of 1966 codified in O.C.G.A. 23-3-40 et. seq. and the other is the Declaratory Judgment Act codified in O.C.G.A. 9-4-1 et. seq. The action under 23-3-40 is the common law bill of Quia Timet. It is an in rem action. In Georgia, one can bring a Quia Timet action to cancel any instrument that 1) has answered the object of its creation, 2) is a “forgery or other iniquitous deed,” or 3) “though not enforced,” either casts a cloud over or creates future risk of liability or annoyance of the complainant’s title. See O.C.G.A 23-3-40. A “conventional” Quia Timet action is one not against the whole world, and, as such, cannot be heard by a jury. A Special Master will be appointed in such a case. A Quia Timet action against the whole world is entitled to a jury trial, and since it is an in rem action, venue is proper in the county the property lay rather than in the county the Defendant(s) reside in.
The second method to possibly remove a cloud on title is a Declaratory Judgment action. This is an action where a person seeks a declaration from a court that the subject deed is cancelled. However, there are limits as to who can bring a declaratory judgment action. You must be an “interested party” in order to bring the action. See In Re Doe, 262 Ga. 389 (1992). So, the first question is, are you an “interested party”? The facts will answer the question. The problem with this action is that if you are trying to have a deed declared void, or whatever, and you are not a party to the deed, you can not attack the validity of the deed because you are not a party to it and are not, therefore, an “interested party.” A deed is a contract. The parties to the contract have direct rights and responsibilities relative to one another. A non-party to the deed is a stranger and has no legal basis to question the terms of the contract and try to make a case the terms are good or bad, satisfied or unsatisfied, or anything else. O.C.G.A 9-2-20(a) states “[a]n action on a contract “shall” be brought in the name of the party in whom the legal interest in the contract is vested….” Thus, if you are not a party to the deed you seek to invalidate through a declaratory judgment, you will not be successful.