Laurence v. Mayor of Savannah , 71 Ga. 392 ( 1883 )

Hall, Justice.

The Mayor and Aldermen of the city of Savannah hold in their hands a fund arising from the sale of a lot in said city, which had been conveyed by the city to the person under whom both complainants and respondents, the Laurences on the one part and the Murpheys on the other, claim. This conveyance was upon condition that the feoffee should, at specified times, pay to the city a stipulated amount as ground rent; and in case of a failure therein for a given number of days after the payment of such rent became due, then the lot and premises were to revert to the grantor, who reserved the power of re-entry; this right of re-entry was to be exercised by giving written notice thereof, posted on the premises, and at the expiration of ten days thereafter the lot, with its improvements, was to be considered as absolutely re-vested in the grantor, and the estate thereby created, “ was determined to all intents and purposes as fully as if the same had not been bargained for or purchased.”

In Swoll vs. Oliver et al., 61 Ga., 218, this court determined that where “the city, by its proper officer, posted a notice of re-entry on the lot according to the teims of the deed, such act would constitute a re-entry thereon, and after the expiration of ten days, would defeat the title of the purchaser.” ' In this case the contest was between a purchaser from the city, who bought after the re-entry had been made, and parties claiming under the original purchaser-; the only question made in this court was as to the title of the respective claimants, and the title of the last purchaser was maintained by the decision rendered. In the case at bar, the question is entirely different. Neither party questions that the title of the purchaser is defeated by the re-entry. The re-sale of the property brought an amount largely in excess of the claims of the city. The respondents contend that the city, under the circumstances, had an absolute property in this excess, and might dispose of it as it saw proper. The complainants, on the other hand, maintain that this right of re-entry was reserved to enable the city to collect its demands in an expeditious and summary way; that it is a substitute for the power in a mortgage to sell for its satisfaction by the mortgagee, in lieu of a sale under a regular foreclosure, and if there is a surplus after paying the debt, the mortgagee, in one instance, and the original grantor in the other, holds such surplus in trust, for the mortgagor or grantee. More precisely stated, this arrangement provides a more expeditious mode of collecting rents as they fall due than is given by any other legal remedy for that purpose; it is a substitute for such remedies. The court below held with the respondents, and upon demurrer and motion, dismissed the bill at the hearing, for want of equity.

We cannot concur in this decision, but think it should have been just the opposite, and that the demurrer and motion upon this ground should have been overruled. The city authorities seem to have taken this view of the matter; their custom seems to have been to satisfy their demand and to account to the true owner for the excess. The right reserved by the city was only a pledge or security for the debt that might be due to it. Casborne vs. Scarfe, 1 Atk., 603. The true ground of relief against penalties, conditions, and forfeitures, is from the original intent of the case, where the penalty, etc., is designed only to secure money; and the court can give, by way of recompense, all that was expected or desired. Peachy vs. The Duke of Somerset, 1 Strange, 447. To the same effect is Sloman vs. Walter, 1 Bro. C. C., 418. Each of these cases will be found with copious and accurate annotations and references to the cases, English and American, bearing upon the question in 2 White and Tudor Lead. Cas., Equity, part 2, p. 746 to the end of the volume. The right to redeem and continue the lease, even after forfeiture and re-entry, exists whenever the lessee will pay what is due, and if the .lessor declines to receive it when tendered, the amount will be ordered paid into court, and he will be enjoined from ousting the tenant. “ From a very early period, equity would, at any indefinite time, after a tenant had incurred a forfeiture and been ejected for non-payment of rent at a particular time, under a stipulation in a lease, relieve him upon his paying to the lessor the rent accrued due, interest and costs, upon this principle, that as the right of entry was intended merely as a security for the rent, the lessor thereby received full compensation, and was put in the same situation as if the rent had been paid to him when it was originally due.” 2 White and T. Lead. Cas., Eq., part 2, marg. p. 788. This principle was fully recognized by parliament, and is embodied in statute 4 Geo. 2, ch., 28, which limits the right of redemption to six months after recovery in ejectment by the lessor. Ib., 788, 789. In Bowser vs. Colby, 1 Hare, 128, 129, it was decided that “a court of equity would relieve a lessee from a forfeiture by non-payment of rent where there is a proviso that in that case the lease shall be void, as well as where there is a power of re-entry. The legal effect in the one case is, that if. the landlord re-enters the lease is determined, in the other case it is determined without his reentry. The contract of the parties is, that in the one case the lease shall not be at end by the mere nonpayment of rent, unless the landlord shall re-enter, and then it shall be at an end; and in the other case the nonpayment of rent shall alone determine the lease. In both cases the same consequence is to follow, though from different acts. In both the contract is the same, in this sense, that there aré certain acts to take place which are to determine the lease altogether.” Prior to this enactment of parliament, when a lease had been forfeited for non-payment of rent, the only relief that could, be given was by creating a new lease. Since that statute, however, this form of relief has been dispensed with, and the original lease has been allowed to continue. 2 W. and T., pt. 2, 790. There is nothing in our own legislation in conflict with this just and equitable policy.

In this case, the city, by the re-sale of the lot, gets not only the amount then due, but also secures its future rents ; it gets all that it ever contracted for, and by returning to the original lessee what is over and above the amount due at the time of the re-sale, he gets nothing more than he was entitled to under his contract.

As between the other parties to this suit, the city is a mere, stake-holder. The equities, if any exist between them, as well as their legal rights, can be settled by the court on the final hearing of the cause, and upon the evidence adduced at that time. The complainants in this bill have a right to be heard. They make, by their pleadings, a clear case; they are entitled to participate in this surplus fund to the extent to which they show their interest in the same.

Judgment reversed.