Hotel Candler Incorporated v. Candler , 198 Ga. 339 ( 1944 )

In a motion for rehearing counsel for the plaintiff in error have earnestly and ably reargued their case, insisting that the acts done were sufficient to take the agreement without the statute of frauds. The entire record, the briefs, and the authorities therein cited, and others as well, have been re-examined. In our opinion the only room for argument arises from the allegation in the petition that, under the stipulation in the lease agreement, the "lessee shall carry also sufficient liability insurance to protect the owner from any liability to any one for injuries of any sort that may happen on the premises for which owner might be liable, and shall furnish lessor with proper certificate of such insurance;" and that the petitioner "renewed its liability and compensation and hold-up insurance policies on said business for a period of another year." On this subject, the proof was that "the plaintiff's liability insurance, compensation insurance, and hold-up insurance all expired . . on March 14, 1944," and "the manager of plaintiff did renew said policies of insurance" for another year. If, in the absence of a special demurrer, the court should construe the latter-quoted words as showing a compliance with the obligation contained in the clause first quoted, and as a part performance of the contract, still, the judgment dismissing the suit was correct. "The part performance referred to in the statute is something substantial and is generally essential to the performance of the contract."Bentley v. Smith, 3 Ga. App. 242 (59 S.E. 720). It is not every part performance of the contract that will take it without the statute of frauds. It is only where there has been such part performance as would render it a fraud of the party refusing to comply if the court did not compel a performance. "Specific performance of a contract (if within the power of the party) will be decreed, generally, whenever the damages recoverable at law would not be an adequate compensation for the nonperformance." Code, § 37-801. Section 37-802 declares in part: "The specific performance of a parol contract as to land shall be decreed, if the defendant admits the contract, or if it be so far executed by the party seeking relief, and at the instance or by the inducement of the other party, that if the contract shall be abandoned he can not be restored to his former position."

It is not averred that the owner is insolvent. If he is able to respond in damages for a breach of this covenant, the complainant is not remediless. The mere breach of a covenant, without more, is not a fraud under such circumstances. Where the law requires a contract to be in writing, a court of equity will enforce an agreement otherwise made only where "the parties have so acted upon and by virtue of the contract as that it would be a fraud to permit the defendant to repudiate it." Haisten v.Savannah c. R. Co., 51 Ga. 199; Nowell v. Monroe,177 Ga. 648, 652 (171 S.E. 136); Neely v. Sheppard, 185 Ga. 771,776 (196 S.E. 452). See also Burnett v. Blackmar,43 Ga. 569.

The owner of certain land and timber entered into a parol contract with another, whereby the latter was to begin immediately to cut the timber at a designated price to be paid therefor. It was held: "The fact that the purchaser of the standing trees in the instant case had expended money in procuring hands whereby to cut and remove the trees, and had purchased an ox with which to move the trees, and had also cut a part of the trees upon the land in question, was not such part performance as took the contract out of the operation of the statute. For, if by the employment of hands and the purchase of the ox, injury was incurred for which the owner of the land is liable, the purchaser could be compensated by damages." Baucom v. Pioneer Land Co.,148 Ga. 633 (2) (97 S.E. 671). It would seem that the cutting of the trees was a part performance of the contract, but this court enjoined the purchaser from entering upon the lands and cutting the timber. In doing so, it must have been held that it was not such part performance "as would render it a fraud of the party refusing to comply." So here it must be ruled that, if the securing of liability insurance to protect the owner was a part performance of the contract, it was not such as that the refusal of the owner to comply with the oral contract would render it a fraud on the other party. For that expenditure he can be fully compensated in damages, and where such is the case, he does not need the equitable remedy of specific performance. In Justicesof the Inferior Court v. Croft, 18 Ga. 473, it was ruled: "When there is a mere breach of a personal contract . . and it is not shown that irreparable injury will result, unless the contract be specifically performed, a court of equity will not decree such specific performance."

It is only in those instances, where, when land is involved,the agreement was in writing, that it has been held that, if the agreement is full and fair in its terms and capable of being enforced, equity will decree specific performance, whether damages be adequate or not. Forsyth v. McCauley, 48 Ga. 402,404. As to parol contracts involving land, the governing rule has been laid down as follows: "Equity will decree the whole performance of an agreement which is within the statute of frauds, whenever there has been such a part performance as that the whole performance is necessary to prevent a fraud; and the whole performance is necessary to prevent a fraud in a case where the parties have proceeded so far on the faith of the agreement, that they can not be restored to their statu quo nor adequately compensated in damages by avoiding the agreement and leaving them to their action for damages." Chastain v. Smith, 30 Ga. 96.

So, regardless of whether or not the allegations in the petition, that the contract required the lessee to carry liability insurance to protect the lessor from legal liability, and the further allegation that the complainant renewed its liability, compensation, and hold-up insurance on said business, show that an act was done under the contract, this is not a sufficient reason for a reversal of the trial court in sustaining the demurrer.

Rehearing denied.