Neely v. Sheppard ( 1938 )

We have carefully considered every ground of the motion f or a rehearing and the authorities cited. We have concluded that the motion should be denied, and feel that the original opinion sufficiently deals with the various questions argued, with two or three exceptions.

1. Is an option to purchase real estate such a. contract as the statute of frauds requires to be in writing? The English statute of frauds applied to any contract for the sale of lands, "or any interest in or concerning them." 25 R.C.L. 531, § 116. The portion of this statute which has been adopted in Georgia contains the identical language quoted. Code, § 20-401(4). In 27 C. J. 193, § 130, it is stated that in some States, however, the words "or any interest in or concerning them" have been omitted, and that "as a consequence many verbal agreements concerning real estate or creating an interest therein which would come within the terms of the English statute can be enforced in such States." The cases cited for this statement have been examined, and appear to support it. While, as recognized in the original opinion in this case, a contract granting to another and option to purchase land does not convey an interest in the land, it is nevertheless a contract "concerning land." We fully appreciate the difference between an option and a contract for time sale and purchase of land (Black v. Maddox, 104 Ga. 157,30 S.E. 723), but the difference is not such as to remove time option agreement from the operation of time statute of frauds. While time facts in Lyons v. Bass, 108 Ga. 573, cited in time original opinion, may disclose an oral contract of purchase and sale as distinguished from an option, it appears from the decision that the agreement was construed to be one of time latter class, the ruling as stated in the headnote being as follows: "An agreement resting wholly in parol, whereby one promises to sell to another an interest in land upon tender within a given time of a specified amount, is within the statute of frauds." This language would seem to define an option, and to indicate an opinion by this court that such a contract relating to land falls under the statute of frauds. Time decision was so construed and followed by time Court of Appeals inRobinson v. Odom, 35 Ga. App. 262 (4) (133 S.E. 53). In 27 C.J. 217, § 196, it is said Options. A contract by which the owner of property agrees with another person that the latter shall have a right to buy or lease the property at a fixed price within a certain time is a contract for the sale of real estate within the meaning of the statute of frauds, and must be in writing." This statement was based on the ruling inGranger Real Estate Exch. v. Anderson (Tex.Civ.App.), 145 S.E. 262. There are several other decisions to the same effect by various courts. Haskell v. Merrill (Tex.Civ.App.),242 S.W. 331; Past v. Garcia (Tex.Civ.App.), 295 S.W. 239; Watkins v.Arnold (Tex.Civ.App.), 60 S.W.2d 476; Lowther v. Scheirich, 195 Ky. 177 (241 S.W. 834); Barchus v. Johnson, 151 La. 985 (92 So. 566); Cerratov. Megaro, 96 N.J. Eq. 722 (126 A. 531); Hilker v. Curdes,77 Ind. App. 466 (133 N.E. 851). Movant cites the case of Hughes v.Antill, 23 Pa. Super. 290, as supporting his contention that an option is not within the statute of frauds. There is another decision which by its language sustains the view that since an option does not grant an interest in the realty, it is not affected by such statute: Richenbach v. Ruby, 127 Or. 612 (271 P. 600, 61 A.L.R. 1441). We have examined the statutes of Pennsylvania and Oregon, however, and find that neither of them contains the expression "concerning them," that is concerning lands, or other language of similar import. The same we also find to be true of the statutes of Texas, Kentucky, Louisiana, New Jersey, and Indiana, these being the states represented by the several decisions cited together, supra. But the fact that the laws of these States omitted the words "concerning them" can only add force to such decisions on the question under consideration, since even without such language it is held that an option to buy real estate is a contract required by the statute to line in writing. If there are other decisions upon the question, we have not discovered them, nor have they been brought to our attention. It thus appears that regardless of the ruling made by this court in Lyons v. Bass, supra, the authorities generally hold that such an option is a contract required by the statute of frauds to be in writing. Even without precedent, it would seem to be clear that a contract granting to another an option to buy land is an agreement concerning land, and therefore within the statute.

It is contended that we improperly analogized an option and a contract of purchase and sale. We intended to do so only to the extent of holding that both are within the statute of frauds, and that the plaintiff is in no better position than if he were relying upon an oral contract of the latter class. Although a contract of tenancy may, like an option, "concern" lands without conveying an interest therein, where the term of the tenancy is less than five years (Code, § 61-101), agreements of that nature are governed by different statutes based upon, though modifying, a different portion of the statute of frauds. Code, § 61-102; Cody v. Quarterman,12 Ga. 386, 398; Atwood v. Norton, 31 Ga. 507; Steininger v. Williams,63 Ga. 475; Baxley Hardware Co. v. Morris, 165 Ga. 359 (140 S.E. 869) ; 25 R.C.L. 530, § 116; 27 C.J. 210, § 179.

2. The movant contends that although he was already in possession as a tenant at the time he made the agreement to rent the property for another year, beginning October 1, 1935, and he did not make a new entry under the latter contract, the fact that he remained in possession for several months in the new term was sufficient with the other circumstances to render the option feature of the new agreement enforceable in equity, despite the statute of frauds. Discussing here only the question of remaining in possession as distinguished from entering, we will advert to a few of the decisions relied on by the movant in this connection. It would too greatly prolong this opinion to discuss each of the cases cited. We must therefore content ourselves with referring only to those which would seem to be most nearly in point. In Steininger v. Williams,63 Ga. 475, which involved only a contract of tenancy, the court, after holding that an oral contract of such a nature for not more than one year is valid under the Code, though made before the year begins, went on to say: "Besides, Steininger was in possession under the contract two months, and paid rent thereon, according to plaintiff's evidence, and therefore the contract was executed . . . It was part performance. and to break it would operate to the injury of plaintiff, depriving her of opportunity to rent." Accordingly, the decision seems to hold that even if the contract was within the statute of frauds, the facts that the tenant remained in possession under the contract for two months and paid the rent thereon would be sufficient to avoid the statute. But to avoid it in favor of whom? The tenant there was seeking to invalidate the agreement, and it was said that for him to break it would operate to the injury of the landlord, depriving her of opportunity to rent. Furthermore, even if that decision should be construed as holding anything contrary to the views we have expressed in the instant case, it is also in conflict with the earlier unanimous decisions in Printup v. Mitchell, 17 Ga. 558, andGraham v. Theis, 47 Ga. 479 (2), 483, in each of which it was held in effect that the party relying upon the agreement must show that he has performed some act upon the faith of it, with the result that he will be prejudiced if the agreement is not performed. In the Printup case it was said that "chancery will sometimes grant relief, especially where possession has been given and retained by the vendee." The court also quoted from Buckmaster v. Harrop, 7 Ves. 341 (Eng., 1802), as follows: "The vendor had no prejudice. He had done nothing to entitle him to say the non-execution was a fraud upon him. Had he let Barlow into possession, that would be an act by which he might have had a prejudice." (Italics ours.) The aider unanimous decisions must be given precedence, in case of conflict. Code, § 6-1611. In the recent case of FirstJoint Stock Land Bank of Montgomery v. Sasser, 185 Ga. 117 (195 S.E. 143), the statute of frauds was not involved, no question in reference thereto having been raised. Compare Bridges v. Williams, 148 Ga. 276 (supra). We do not construe the decision in Ledbetter v. Goodroe, 177 Ga. 616 (170 S.E. 866), as holding anything contrary to the older decisions which are deemed to be controlling in the instant case. Nor was this statute involved in Roland v. Floyd, 53 Ga. App. 282 (185 S. P. 580), the question dealt with in that case being whether an oral contract of tenancy for the period of not more than one year, to begin in the future, was valid. The Court of Appeals held, of course. that the agreement was valid, regardless of any question of part performance on the part of the tenant. Even if the decision in Williams v. Garrison,21 Ga. App. 44 (2) (93 S.E. 510), should be construed as supporting the movant's contention, it is not controlling as authority. Code, § 2-3009. Movant also refers to Eaton v. Whitaker, 18 Conn. 222 (44 Am. D. 586). The decision in that case showed that "there was both the delivery of possession and a continued occupancy" under the contract.

But it is insisted that the movant was led to remain in possession by reason of the option agreement. The movant testified that he told his landlord that he "could not operate the place" another year unless certain improvements were made, and that the landlord, instead of promising the improvements, granted him the option. The fact that the defendant remained in possession under these circumstances was not the equivalent of entering into possession. It amounted only to non-action. It has been held by this court that "mere non-action is not performance, either partial or complete, and will not, therefore, take a parol contract out of the statute of frauds." Augusta Southern Railroad Co. v. Smith KilbyCo., 106 Ga. 864(2) (supra); Hawkins v. Studdard, 132 Ga. 265(7) (supra). See also Simonton v. Liverpool, London Globe Ins. Co.,51 Ga. 76.

3. The movant also insists that he made improvements. He testified: "I have made no improvements on the property, no more than paint and such as that. I have done no more than I have done in previous years"; also, "I made no improvements on the property as all I had was an option contract to buy and could not improve somebody else's property when I only had an option." In Farr v. West, 152 Ga. 595 (110 S.E. 724), it was meld that "valuable improvements," as related to specific performance" "mean improvements of such character as add permanent value to the freehold, and such as would not likely be made by one not claiming the right to the possession and enjoyment of the freehold estate. Improvements of a temporary and unsubstantial character will not amount to such part performance as, when accompanied by possession alone, will take the contract out of the operation of the statute of frauds." In Marshall v.Hicks, 159 Ga. 871 (2) (127 S.E. 273), it was held: "The erection of improvements on the rented premises by the tenant will not amount to such part performance where such improvements were not made in pursuance of the rental agreement that the tenant should make them. The erection of such improvements by the tenant as an independent act, not a part of the contract, does not become a part performance thereof, merely because the doer of the act was led so to act by his belief or understanding that the parol contract would be performed by time other party." See also Vickersv. Robinson, 157 Ga. 731 (6) (122 S.E. 405) ; Swan Oil Co. v. Linder,123 Ga. 550 (51 S.E. 622). Under these authorities the defendant has no valid claim of part performance based on improvements. All that the defendant ever did as acts toward the performance of the contract was to pay the rent as before, and tender the purchase-money after time dispossessory warrant was issued and the present suit filed. We can not escape time conclusion that time facts were insufficient to render the statute of frauds unapplicable, and that the verdict was unauthorized.

In the original opinion it was stated that "we do not mean even to intimate that the facts would justify such a decree if the plaintiff had been out of possession and had taken possession as a tenant under the parol agreement." That question is, of course, not involved inn the instant case; but as a further precaution against the possibility of implications thereon, the writer, speaking f or himself alone, wishes to interpolate the following interrogations: Since a mere option conveys no interest in the land, and contemplates no entry or right of entry, if there had been an entry in this case in pursuance of the oral agreement of the dual nature indicated, should it not as a matter of law be considered as an entry made solely under the portion of the agreement relating to tenancy? Could it be said that such an entry was in performance of anything to be done under the option agreement?

Judgment adhered to. All the Justices concur, except Russell, C.J., who dissents.