Cottle v. Tomlinson , 192 Ga. 704 ( 1941 )

1. All previous verbal negotiations respecting a sale are merged in the subsequently written contract, and it is not permissible to prove a prior or contemporaneous parol agreement which has the effect of varying the terms of the written contract; but it is permissible to prove a subsequently executed parol agreement whereby the purchaser paid the consideration called for in the written contract, even though a portion of the consideration for the subsequent parol agreement may have been paid to the vendor before the execution of the written contract.

2. Where the owner of land encumbered by a security deed conveys a portion of the land in consideration of the purchaser agreeing to pay the entire secured indebtedness, and thereafter, for the benefit of the purchaser, obtains a reamortization of the loan whereby the time for paying the indebtedness is extended, and the purchaser makes all payments called for under the new loan agreement, the vendor can not thereafter claim a breach of the contract because the purchaser failed to make the payments in accordance with the terms of the loan at the time the deed was executed.

3. A waiver or estoppel of the right to declare a forfeiture resulting from a breach of a condition subsequent contained in a deed to land arises only when the grantor does some act inconsistent with his right of forfeiture, and where it would be unjust for him thereafter to insist upon a forfeiture. Mere willingness of the grantor to indulge the grantee by allowing him to meet the conditions of the deed after the date expressed in the deed will not defeat the grantor's right to declare a forfeiture, in the absence of an offer by the grantee to meet the conditions of the deed.

4. Where the consideration in a deed is expressed merely by way of recital, it is permissible to show by parol testimony that the true consideration is in fact different from that expressed in the instrument; but where the consideration is so expressed as to make it one of the terms and conditions of the deed, one of the parties thereto can not, under the guise of inquiring into its consideration, alter the terms of the instrument.

5. A ground of a motion for new trial complaining of the admission of documentary evidence can not be considered unless the form or the substance of the document objected to is set forth in the motion or is attached thereto as an exhibit.

No. 13808. SEPTEMBER 11, 1941. Mrs. Carrie E. Cottle owned a 192-acre tract of land in Worth County, Georgia, on which the Land Bank Commissioner, Columbia, South Carolina, held a deed to secure a debt of $2500. This deed was executed in 1934, and the principal indebtedness bore interest at the rate of four per cent. and was payable in ten annual instalments of $250 each, the first payment on the principal falling due on November 1, 1938. On October 10, 1938, Mrs. Cottle conveyed 100 acres of the tract to Tomlinson by warranty deed. The sole consideration for the deed was the assumption by the grantee of the $2500 debt to the Land Bank Commissioner, and the deed contained the following provision: "The consideration of this instrument is this contract to pay said deed to secure debt and note evidencing same upon its due date. It is especially agreed between the parties hereto, and as before stated said payment is the consideration of this instrument, and upon the failure of the said party of the second part to pay said indebtedness upon its due date the title herein conveyed shall revert to and vest in the party of the first part; in other words, the party hereby agrees to assume and fulfil the contract made by the party of the first part with the Land Bank Commissioner, and upon his failure to do so title to this land shall end and will revert to the party of the first part, her heirs and assigns." On February 29, 1940, Mrs. Cottle filed the instant suit to obtain possession of the premises, based upon the ground that the grantee had breached his contract by failing to pay the indebtedness to the Land Bank Commissioner. In the petition it was alleged, that the defendant failed and declined to make the payment of $350, $250 principal and $100 interest, which fell due on November 1, 1938; that he also failed and declined to make the payment of $340 principal and interest, which fell due on November 1, 1939; that by reason of the defendant's failure to make the 1939 payment in accordance with the terms of his deed it became necessary for the plaintiff to arrange for its payment, which she did by paying the $90 interest due and getting a reamortization of the loan, by the terms of which the balance of $2250 should be paid at the rate of $112.50 per year for twenty years, beginning on November 1, 1940; that the defendant is insolvent; that, although he has made no payment of any of the consideration expressed in the deed from the plaintiff to him, the defendant persists in remaining upon the land and farming and operating the same and in leasing the timber for turpentine purposes, although title reverted to and revested in the petitioner by and upon the breach of the condition subsequent expressed in the deed; and that on or about February 15, 1940, and before the filing of this suit, the plaintiff demanded possession of the premises, which the defendant refused. The plaintiff prayed, for appointment of a receiver to take charge of and rent the land, that the defendant be required to deliver to the court the deed executed to him by the plaintiff; and for general relief and process.

The defendant in his answer admitted substantially all of the allegations of the petition, except those in which it was alleged that he had failed to comply with the terms of his deed. In paragraph 15(a) of the answer the defendant alleged that he paid in full the $250 principal and $100 interest which fell due on the debt to the Land Bank Commissioner on November 1, 1938, by making the following payments to the plaintiff: $76 on or about August 1, 1938, $124 on or about October 10, 1938, and $198 on or about October 14, 1938; "and it was then and there agreed between defendant and plaintiff through her agent [plaintiff's husband], that she was to remit the Land Bank Commissioner said sum of $350, which was due on November 1, 1938, and defendant avers on information and belief that plaintiff did remit and pay said sum." In paragraph 15(b) the defendant alleged, that he became seriously ill in October, 1939, and was worried about making the payment to the Land Bank Commissioner which was to fall due on November 1, but the plaintiff assured him of her sympathy and co-operation, and it was agreed between them that the defendant's peanuts, which were grown on the land in dispute, would be sold and that from the proceeds thereof the plaintiff would remit the amount due the Land Bank Commissioner; that in pursuance of this agreement the peanuts were sold, and the plaintiff received from the sale approximately $173.32, from which amount she paid the Land Bank Commissioner $90, this being the amount due and required by the Land Bank Commissioner as of November 1, 1939; that by reason of said facts there had been no default in the payments to the Land Bank Commissioner; and that further the defendant had executed a turpentine lease for $136.50, and from this sum had paid $120.94 to the Land Bank Commissioner for credit on the principal of the debt, and to the extent of this sum he had actually made payment on the indebtedness in advance of the due date. By amendment of his answer the defendant made substantially the following allegations: On or about October 18, 1939, the date defendant went to a hospital for treatment, the plaintiff agreed with defendant to apply all the proceeds from the peanuts then on his land toward the payment of the instalment of $250 principal and $90 interest which was to become due on the security deed on November 1, 1939, and that she would endeavor to secure leniency on said payment during the illness of the defendant. In accordance with this agreement the plaintiff explained to C. A. Alford, local representative of the Land Bank Commissioner, that the defendant was sick and needed more time in which to pay the loan, paid the $90 interest due from the proceeds of defendant's peanuts, and made application in her own name for new and easier terms for the payment of the debt. The Land Bank Commissioner thereupon granted the application upon the terms of reamortization alleged in the plaintiff's petition. After the defendant returned home from the hospital, the plaintiff advised him of the new terms for paying the loan, congratulated him upon the success in securing these terms, and expressed complete satisfaction with the entire situation. Thereafter the defendant went to the office of the local representative of the Land Bank Commissioner and signed an "assumption of loan agreement," whereby he assumed and became liable for the payment of the debt in accordance with the newly obtained terms. Thereafter, relying upon the assurances of the plaintiff that the arrangements were satisfactory to her, the defendant made valuable improvements on the land and expended considerable time and money in preparing to farm the land in 1940. By reason of the above-stated facts the plaintiff is now estopped from claiming or enforcing the right to a forfeiture under the terms of the deed from her to the defendant, and by her actions the plaintiff has waived her right to enforce a forfeiture. In his answer he alleged that the plaintiff became dissatisfied with the manner in which he was performing his agreement only when he refused to lease his timber to the plaintiff's brother in law, and leased it to a third person.

The plaintiff demurred to and moved to strike paragraph 15(a) of the answer, on the ground that it sought to vary the terms of the deed by parol, in that two of the payments were alleged to have been made before the execution and delivery of the deed. She demurred to the allegations of the answer with reference to the satisfaction of the 1939 instalment by payment of the interest and obtaining an extension of the time of payment for the remainder of the principal, on the ground that it was thereby sought to set up by parol a new and distinct contract in lieu of the contract expressed in the deed. She demurred to the portion of the answer seeking to set up a waiver or estoppel, upon the ground that it was irrelevant and immaterial and stated no defense to the suit. The court overruled the demurrer, and the plaintiff excepted pendente lite.

Upon the trial the evidence was in conflict on all material issues. The jury returned a verdict for the defendant. A motion for new trial was overruled. The plaintiff excepted, assigning error on that ruling and on the ruling excepted to pendente lite. 1. The plaintiff conveyed a tract of land to the defendant by warranty deed dated October 10, 1938. The entire consideration for the instrument was the assumption by the defendant of a $2500 debt to the Land Bank Commissioner, secured by a loan deed to this tract and some other land owned by the plaintiff. The deed was explicit in stating that the defendant should pay the debt on its due date, and that if he failed to do so the title to the land should revert to the plaintiff. A payment of $100 interest and $250 principal was to fall due on this debt on November 1, 1938, about twenty days after the execution of the deed to the defendant. The plaintiff in her petition alleged that the defendant failed to make this payment. In paragraph 15(a) of his answer the defendant alleged that he made the payment due on November 1 by paying to the plaintiff $76 on or about August 1, 1938, $124 on or about October 10, 1938, and $198 on or about October 14, 1938, "and it was then and there agreed" that the plaintiff should remit the sum of $350 to the Land Bank Commissioner, and the plaintiff did so remit that sum. The plaintiff attacked this paragraph by demurrer on the ground that it appeared therefrom that two of the payments were made before the execution of the deed, that the deed shows that these two payments were not made as a payment on the price of the land, and therefore that the defendant was thereby attempting to vary the terms of the deed by parol. While this paragraph leaves much to be desired in the way of clarity, we do not think it can be construed as being an attempt to vary the terms of the deed. As stated by the demurrant, it does not appear that the alleged payments were made with a view to paying for the land. In fact there is nothing in the pleadings to show why they were made. While it is true that all previous verbal negotiations respecting a sale are merged in the subsequently written contract, and it is not permissible to prove a prior or contemporaneous parol agreement which has the effect of varying the terms of the written contract (Arnold v. Malsby, 120 Ga. 586,48 S.E. 132; Capps v. Edwards, 130 Ga. 146 (3), 60 S.E. 455;Carroll v. Hutchinson, 2 Ga. App. 60 (2), 58 S.E. 309), the pleadings here involved do not show an attempt to violate this rule. It does not appear that the executed parol agreement relied upon was entered into previously to or contemporaneously with the execution of the deed. The effect of the allegations is that after the execution of the deed the defendant made a third payment of $198, "and it was then and there agreed" that the plaintiff would remit to the Land Bank Commissioner the $350 payment due on November 1, the consideration flowing to the plaintiff being the $198 given her at that time and two sums of money previously paid to her. The defendant further alleged that the plaintiff made the payment in pursuance of this agreement. Thus in effect the defendant alleged that he made the payment assumed by him in the deed, by making payment through the plaintiff, under an agreement entered into subsequently to the execution of the deed. It follows that this portion of the answer was not subject to the attack made, and that the court did not err in overruling the demurrer. See Ober Sons Co. v. Drane,106 Ga. 406 (2, 3) (32 S.E. 371).

2. The plaintiff also attacked the portions of the answer dealing with the payment due the Land Bank Commissioner on November 1, 1939, on the ground that the defendant sought thereby to vary the terms of the deed. This attack is not well founded. The defendant alleged that he made the $90 interest payment due on that date, and explained his failure to make the $250 payment on the principal by alleging that the plaintiff, for his benefit and under a parol agreement with him, arranged for a reamortization of the principal of the loan, by the terms of which the principal became payable in twenty annual instalments of $112.50, the first payment falling due on November 1, 1940. The plaintiff could have required the defendant to pay the loan in accordance with the terms of the loan deed as it stood at the time she executed the warranty deed to the defendant, but she waived this right by obtaining easier terms for the defendant to make payment of the debt. This new arrangement was entirely consistent with the terms of the deed, except as to the time within which the defendant should satisfy the indebtedness; and the plaintiff could and did waive that, if the allegations of the answer be true. Jordan v. Rhodes, 24 Ga. 478; Moody v.Griffin, 60 Ga. 459; Code, § 38-507.

3. A further contention made by the answer is that the plaintiff has waived her right to declare a forfeiture, even if it be true that the defendant has failed to make any payment whatever upon the land. By the terms of the deed time was declared to be of the essence. However, the allegations of the answer are sufficient to show a waiver of the time stipulated in the contract. The plaintiff expressed her willingness to treat the contract as still of force after the time for performance had passed, and, according to the answer, had no intention of declaring the contract at an end until February, 1940, when a disagreement arose between the parties with respect to the use of the timber on the land for turpentine purposes. The plaintiff was willing to indulge the defendant by allowing him further time in which to make the payments called for under his deed, but she made no agreement to grant this indulgence for any particular time. See, in this connection, Lee v. Wilmington Savings Bank, 31 Ga. App. 327 (120 S.E. 689). There is nothing in the pleadings to indicate that the plaintiff ever intended to waive the payments which were past due. On the contrary, her forbearance of the right to declare a forfeiture immediately upon the defendant's alleged breach of the contract was apparently based upon the hope that she might thereby be able to collect these payments. These facts are insufficient to show a waiver of the right to declare a forfeiture. A different question would have been presented if the defendant had offered to do equity by tendering the amount due to the plaintiff before he received notice to vacate the land, or even in the answer itself. See Jordan v. Rhodes, 24 Ga. 478;Moody v. Griffin, 60 Ga. 459; Turner v. Chambers,160 Ga. 93 (127 S.E. 610). The defendant alleged that he had expended certain sums in making improvements and preparing to cultivate the land in 1940; and it is contended that these facts are sufficient to support an estoppel against the plaintiff. "A waiver or estoppel arises only when the grantor does some act inconsistent with his right of forfeiture, and where it would be unjust for him thereafter to insist upon a forfeiture." City ofBarnesville v. Stafford, 161 Ga. 588 (131 S.E. 487). As we have stated, the action of the plaintiff in expressing her willingness to allow the defendant to make the payments after their due date was not inconsistent with her right to declare a forfeiture. She did not represent that her forbearance would be continued for any particular length of time, and the defendant in preparing the land for cultivation should have known that he might be called upon to make the payments at any time. Neither can it be said that it would be unjust to allow the plaintiff to declare a forfeiture. By virtue of the plaintiff's forbearance the defendant had the use of the land in 1939 without making any payment thereon. Because the plaintiff was willing to allow him further grace after failure to meet the second instalment due under his contract, the defendant insists that he was entitled to the use of the land for another year, without showing any willingness on his part to pay the plaintiff. We know of no rule of law which places such a penalty upon forbearance. It follows that the court erred in refusing to strike the portions of the answer seeking to show a waiver or estoppel.

4. The motion for a new trial assigns error on the admission of certain testimony of the defendant, over the objection that it was sought thereby to vary the terms of the deed. The substance of the testimony objected to was, that, while he was renting the land in 1938, he agreed to purchase the land for $2500, with the understanding that the rent paid for that year would be applied on the purchase-price. He testified with reference to the verbal negotiations which preceded the purchase of the land, in order to show that he would not agree to buy the land until the plaintiff had agreed to apply the rent paid that year on the purchase-price. Where the consideration in a deed is expressed merely by way of recital, it is permissible to show by parol testimony that the true consideration is in fact different from that expressed in the instrument; but where the consideration is so expressed as to make it one of the terms and conditions of the deed, one of the parties thereto can not, under the guise of inquiring into its consideration, alter the terms of the instrument. Roberts v. Investors Savings Co., 154 Ga. 45 (113 S.E. 398); Stonecypher v. Georgia Power Co., 183 Ga. 498 (189 S.E. 13); Simmons v. International Harvester Co.,22 Ga. App. 358 (2) (96 S.E. 9). There is a line of cases where parties have been permitted to establish and enforce contemporaneous oral agreements relating to and made in connection with written contracts. Brinson v. Franklin,177 Ga. 727 (171 S.E. 287); Indiana Truck Corporation v.Glock, 46 Ga. App. 519 (168 S.E. 124). However, as stated inStonecypher v. Georgia Power Co., supra, "these were instances in which the oral agreement was separate from and independent of the written contract, and where the terms of the oral agreement did not vary or contradict those of the written one. But where both agreements constitute parts of the same contract, or where the oral agreement, though separate and distinct, varies or contradicts the terms of the written instrument, it is unenforceable." In the instant case the consideration was not merely stated by way of recital, but was made the essence of the contract. The entire consideration flowing to the plaintiff was the assumption by the defendant of an indebtedness of $2500, which he obligated himself to pay promptly when due. Under the terms of this deed the defendant became obligated to make a payment of $250 on the principal of the indebtedness on November 1, 1938. Under his testimony it was the duty of the plaintiff to make this payment. Clearly by the testimony objected to it was sought to vary the terms of the deed, and therefore it was inadmissible. For the reason stated in this division of the opinion, the portion of the charge in which the court instructed the jury on the contention of the defendant with reference to this parol agreement was erroneous, as contended in ground 5 of the motion for new trial.

5. Special grounds 2 and 3, complaining of the admission of certain documentary evidence, are too incomplete to present any question for decision. The first of these grounds fails to set forth either the form or substance of the document objected to. While the other ground describes the instrument objected to with more particularity, it fails to give enough of the substance thereof to show that it was subject to the ground of objection urged. See, in this connection, Yates v. State, 127 Ga. 813 (2) (56 S.E. 1017, 9 Ann. Cas. 620); Callaway v. Beauchamp,140 Ga. 207 (2) (78 S.E. 846); Grier v. State, 158 Ga. 321 (4) (123 S.E. 210); Skipper v. Alexander, 172 Ga. 246 (6) (158 S.E. 32).

Judgment reversed. All the Justices concur.