Paulk v. Ellis Street Realty Corp. , 79 Ga. App. 36 ( 1949 )

The construction of an unambiguous contract is a question of law for the court.

DECIDED MARCH 18, 1949. REHEARING DENIED MARCH 30, 1949. The plaintiffs in error, C. J. Paulk and Mrs. E. J. Stone, herein referred to as the plaintiffs, brought suit in the Superior Court of Fulton County against the defendants in error, Ellis Street Realty Corporation, and 552 Apartment Hotel Inc., herein referred to as the defendants. The petition alleges substantially: that certain owners of property located at 120-126 Ellis St. N.W., Atlanta, on which is situated a building known as the Regal Hotel, leased the same in March, 1941, to one Hubert Gilbert; that on April 26, 1947, these owners transferred this property to the defendant, Ellis Street Realty Corporation, and on August 26, 1947, transferred their interest in the lease to it; that said Gilbert assigned said lease to the defendant, 552 Apartment Hotel Inc.; and that on July 18, 1945, the defendant, 552 Apartment Hotel Inc., leased the property to the plaintiffs for hotel or apartment purposes with the right to use part of the premises on the street floor for the operation of stores, luncheonettes, restaurant, shops, or other similar establishments for a term beginning on the date of said lease and ending April 30, 1951.

Paragraph 10 of said lease, a copy of which is attached to the petition and made a part thereof, provides that the lessor and/or the owners of the leased premises agree to make and keep in good repair and in leak-proof condition the roofs of the buildings located on the property, and the lessees agree to make all other repairs. Contained in said lease is the following: "Lessees agree that they will deliver the premises at the expiration of the lease in as good order and repair as when first received, natural wear and tear excepted. This shall not require the Lessees to restore damages done by fire, storm, lightning, earthquake, or by condemnation, eminent domain, order of any police, fire marshal or other governmental authority or subdivision thereof." The lease also contains a provision as follows: "The Lessor is not to make or be called upon to make any repairs or improvements of any sort whatsoever upon said premises during the term of this contract, except as to the roof as herein set out and subject to the provisions of paragraph 12."

Paragraph 12 of the lease is here fully set forth and is as follows: "12. In the event the leased premises are destroyed or rendered untenantable for the purposes for which leased, by fire, storm, lightning, earthquake, or other casualty, or by condemnation, eminent domain, order of any police, fire marshal or other governmental authority or subdivision thereof (Federal, State, municipal or otherwise), the obligation of the Lessees to pay rental shall cease from such time, and this lease shall be at an end from such time, except for the purpose of enforcing rights which may have then accrued thereunder. The rental shall be accounted for between the Lessor and the Lessees up to the time of such injury or destruction of said premises, the Lessees paying up to said date and the Lessor refunding the rents collected beyond said date. Should any part of said premises be rendered untenantable for the purposes for which leased by any of said agencies, the rental shall abate in the proportion which the injured part bears to the whole leased premises, and it is agreed that the owner's obligation to restore such part so injured, as speedily as practicable, as embodied in lease agreement between Dr. E. D. Richardson, et al., as owners, and Lessor herein, and when the premises so damaged are restored, the full rent shall recommence and the lease shall continue according to its terms."

The lease to Hubert Gilbert hereinbefore referred to, which was transferred by the owners to the defendant, Ellis Street Realty Corporation, and which was assigned by Gilbert to the defendant, 552 Apartment Hotel Inc., commences on May 1, 1941, and leases said premises for 10 years. The quotations from paragraph 10 and paragraph 12 of the lease to the plaintiffs herein are substantially contained in the lease from Hubert Gilbert to the defendant, 552 Apartment Hotel Inc. The petition also alleges: that on January 9, 1948, the building inspector for the City of Atlanta served notice on the defendant, Ellis Street Realty Corporation, that said building was a nuisance and was so declared to be a nuisance under section 65-102 of the Code of the City of Atlanta, of 1942; that said notice also listed items which made the building a nuisance; that most of said items amounted to structural improvements rather than repairs and consisted of changes and alterations in the building which the plaintiffs were operating as the "Regal Hotel," and which the city demanded be made in order to abate the nuisance said building had been declared to constitute; that the plaintiffs demanded of both defendants that these repairs and structural improvements be made at their expense; that both failed and refused to make said repairs and structural improvements; that because of said failure the General Council of the City of Atlanta, on April 5, 1948, revoked the permit of the plaintiffs to operate the hotel on the leased premises; that this resulted in the plaintiffs having to move out all of their tenants, to close the hotel, and to discontinue its operation; and that this failure on the part of the defendants constituted a breach of the lease.

The plaintiffs' action is in two counts, the first praying for a declaratory judgment to determine whether their cause of action, if any, is against the defendant, Ellis Street Realty Corporation, or the defendant, 552 Apartment Hotel Inc., or both of said defendants, and for a judgment against such defendant or defendants as are liable. Count two does not pray for a declaratory judgment. It also differs from count one, in that it alleges certain negotiations in an effort to settle the controversy with the defendant, and it alleges a different measure of damages from that contained in count one. A copy of the ordinance relied upon by the city to declare the premises a nuisance, is attached to the petition and is the same as that set forth in Midtown Chain Hotels Co. v. Bender, 77 Ga. App. 723 (49 S.E.2d 779), and Kanes v. Koutras, 203 Ga. 570 (47 S.E.2d, 558).

The trial court sustained the demurrers of both defendants and the plaintiffs excepted. A proper construction of paragraph 12 with the other quoted portions of the lease itself discloses that the parties contemplated just such a condition as arose here. It is clear that the lessees were not required under the terms of the lease to make such structural improvements as were provided for by the order of the proper authorities of the City of Atlanta. The foregoing quoted part of the lease, requiring the lessees to make such repairs as necessary in order to return the property in as good order and repair as when first leased, natural wear and tear excepted, does not contemplate any improvements required by order of the police, fire marshal, or other governmental authority. On the other hand, the lessor, under the terms of a foregoing quoted portion of the lease, "is not to make or be called upon to make any repairs orimprovements of any sort whatsoever upon said premises during the term of this contract, . . subject to the provisions ofparagraph 12." (Italics ours.) Paragraph 12 of the lease is set forth fully herein. However, by deleting portions thereof not applicable to the conditions here, and by setting forth only the portions thereof applicable to this case, said paragraph is as follows: "In the event the leased premises are . . rendered untenantable for the purposes for which leased by . . order of any police, fire marshal, or other governmental authority or subdivision thereof (Federal, State, municipal or otherwise), the obligation of the lessees to pay rental shall cease from such time and this lease shall be at an end from such time, except for the purpose of enforcing rights which may have then accrued thereunder. . ." In the instant case, such an order of the municipal government of the City of Atlanta terminated the lease. The deleted provisions of paragraph 12 are not applicable to the instant case. The obligation of the lessor to restore the premises anticipates a damage by fire, storm, lightning, earthquake, or other casualty.

In the absence of a contractual provision to the contrary, it is the obligation of the landlord in this State to keep the premises in repair, where the relationship of landlord and tenant exists. See Code, § 61-111. However, in the instant case, most of the requirements of the city constituted structural improvements rather than repairs. Notwithstanding this fact, the provisions of the contract of lease itself plainly provide that the lessor shall not be required to make improvements except as provided in paragraph 12 of the lease; and this paragraph excepts from the obligation of the lessor such improvements as are required by order of any police, fire marshal, or any governmental authority, by merely providing that, in case the premises become untenantable by reason thereof, the lease terminates.

In holding that the landlord was not required to make such structural improvements, the Supreme Court in Kanes v.Koutras, supra, held as follows: "It is possible that the expense of making the 13 structural repairs called for by the city would be so great as to cause the lessor to prefer to allow the building to remain idle rather than to be put to such expense. A landlord in many instances does not desire to make any repairs to a building either before he rents it to a tenant or during the tenant's occupancy." We quote further from the Kanes case, as follows: "The allegations of the petition setting forth the refusal of the lessor to make the structural repairs, together with the prohibition against using the building for hotel purposes and the revocation of the petitioner's license to operate a hotel therein, were sufficient to authorize the tenant to discontinue the payment of rent and thus to terminate the lease." In the Kanes case there was no provision in the lease authorizing its termination upon the premises becoming untenantable by reason of municipal or other governmental authority. It was there held that the landlord was not liable to make the structural improvements because the tenant took the property under the terms of the lease "as is." Express provision for the termination of the lease contract, as in the instant case, is stronger authority for the termination of the lease than the "as is" provision of the lease in the Kanes case.

In Midtown Chain Hotels Co. v. Bender, supra, the lessor performed the structural improvements required by the city and sued the tenant for their cost. In that case this court held that the owner was not entitled to recover, because there was no obligation on the part of the tenant to add these structural improvements to the property of the landlord. That case, however, is no authority that the landlord would have been required to perform the structural improvements had he elected not to do so.

None of the authorities cited in the very able and comprehensive briefs of counsel for the plaintiffs is controlling in the instant case, for the reason that here the language of the lease itself controls.

In the light of what has been said, it is not necessary for this court to determine whether or not the petition states proper subject-matter for a declaratory judgment; whether or not the same shows sufficient privity of contract or of estate between the plaintiffs and the defendant, Ellis Street Realty Corporation, to support a cause of action in favor of the plaintiffs against it, or whether or not the rental contract between the parties established an estate for years or the relationship of landlord and tenant. The sole question for our determination is whether or not, under the terms of the lease, the defendants or either of them were required to perform the structural improvements, and the failure so to perform the same constitutes a breach of the lease contract, giving rise to a cause of action for damages. For the reasons herein set forth, neither of the defendants was so obligated, and the resultant action of the City of Atlanta effected the termination of the lease.

The contract is plain and unambiguous. It was the duty of the trial judge to construe it. See Code, § 20-701, Hening v.Whaley, 18 Ga. App. 208 (89 S.E. 166). His construction was proper. It follows that the demurrers should have been sustained and the petition dismissed.

Judgment affirmed. MacIntyre, P. J., and Gardner, J., concur.