McLeod v. Clements
297 Ga. 371
Ga.2015Background
- In 1971 H.E. McLeod, Jr. granted a written right to maintain a water line and use well water free to H.E. McLeod Sr., his wife, Michael McLeod, and appellant (McLeod). The pipes and a post were visible on the well property from 1971 onward.
- The well property passed from McLeod Jr. to Michael McLeod, then to Ryan and Melissa Reeves in 1996; the Reeveses’ recorded deed contained a separate 1996 “Special Agreement” obligating water service to the house occupied by appellant and Mrs. McLeod Sr. while they occupied it, with payment for electricity/maintenance; the 1971 instrument was not mentioned in that deed.
- Appellant later recorded the 1971 agreement (after the 1996 deed to the Reeveses). The well property changed hands several times and was ultimately purchased by appellee Clements in 2007; Clements’ deed referenced only the 1996 Special Agreement. Clements attested he knew of the 1996 agreement and the visible pipes, but not the 1971 agreement.
- Appellant continued to receive water until around 2008; after service was cut off, appellant sued to compel water based on the 1971 agreement. Appellee moved for summary judgment seeking to be freed from both the 1971 and 1996 agreements; the trial court granted summary judgment as to the 1971 agreement only.
- The Court of Appeals affirmed the trial court’s ruling that, even assuming the 1971 instrument was a covenant running with the land, it did not bind appellee because it was recorded outside appellee’s chain of title and appellee lacked actual or constructive notice. The Court of Appeals declined to follow a statement in Wardlaw suggesting covenants bind subsequent owners “with or without notice.”
Issues
| Issue | Plaintiff's Argument (McLeod) | Defendant's Argument (Clements) | Held |
|---|---|---|---|
| Whether Wardlaw’s statement that covenants running with the land bind subsequent owners “with or without notice” remains controlling | Wardlaw means such covenants bind subsequent owners regardless of notice | Wardlaw’s language was dicta or misstates the notice rule; bona fide purchasers without notice are protected | Wardlaw’s imprecise statement is dicta as read in context and does not create an exception to the bona fide purchaser rule; no error in Court of Appeals’ rejection of that language |
| Whether appellee is bound by the 1971 water agreement (assuming it is a covenant running with the land) | The visible pipes and the fact the 1971 agreement was recorded show notice; appellant contends the covenant should bind successive owners | Appellee lacked actual or constructive notice of the 1971 agreement because it was recorded outside his chain of title and the visible evidence is explained by the 1996 agreement in his chain of title | Appellee had neither actual nor constructive notice of the 1971 agreement; trial court and Court of Appeals correctly held appellee not bound by the 1971 agreement |
Key Cases Cited
- Wardlaw v. Southern Railway Co., 199 Ga. 97 (1945) (discusses covenants running with the land and includes language about binding subsequent owners “with or without notice”)
- Burk v. Tyrrel, 212 Ga. 239 (1956) (bona fide purchaser protected where no actual or constructive notice of easement)
- Gamble v. Brooks, 170 Ga. 662 (1930) (recorded deed in purchaser’s chain of title provides constructive notice)
- Farris v. Nationsbanc Mortgage Corp., 268 Ga. 769 (1997) (bona fide purchaser for value is protected against outstanding interests not of which purchaser has notice)
- Little v. Fleet Finance, 224 Ga. App. 498 (1997) (explains that statements unnecessary to decision are dicta and lack precedential force)