Prothro v. Walker

1. "Where parties, in the course of the execution of a contract, depart from its terms and pay or receive money under such departure, before either can recover for failure to pursue the letter of the agreement, reasonable notice must be given the other of intention to rely on the exact terms of the agreement. Until such notice, the departure is a quasi new agreement." Code, § 20-116.

(a) The question as to whether or not there has been a mutual intention, and in fact a mutual departure from the terms of an original contract, as contemplated by the above Code section, is ordinarily one of fact for determination by the jury. Southern Feed Stores v. Sanders, 193 Ga. 884, 887 (20 S.E.2d 413); Mauldin v. Gainey, 15 Ga. App. 353 (5) (83 S.E. 276); Craig v. Craig, 53 Ga. App. 632, 635 (2) (186 S.E. 755).

2. Where it appears that two cancelled checks were admittedly endorsed by the deceased, and admittedly represented payment of, and acceptance by a deceased lessor, of annual rent on the premises in dispute, on dates a few days later than that called for by the terms of the lease contract, it was not error to admit such checks in evidence for the express purpose of showing a course of dealing between the deceased lessor and the defendant lessees, over the objection urged that such evidence constituted testimony arising out of a transaction with a deceased, such as is prohibited by the provisions of the Code, § 38-1603. This is true for the reason that the above mentioned Code section deals with the competency of a witness to testify against a deceased, and not with the question as to whether or not such evidence was admissible as declarations or entries of a deceased person, as provided for under § 38-309, as follows: "The declarations and entries by a person, since deceased, against his interest, and not made with a view to pending litigation, shall be admissible in evidence in any case." In any event, the admission of the checks into evidence was not harmful to the plaintiff in error, for the reason that such checks could represent nothing more than additional physical evidence of facts which had already been admitted to be true, and it is conceded by counsel for the plaintiffs in error that the admitted facts with reference to the checks are circumstances tending to show a course of dealing between the deceased and the defendants, which circumstances have a bearing on the ultimate question of mutual departure from the strict terms of the lease contract.

3. "The law does not favor forfeitures, and provisions in contracts as to forfeiture must be strictly construed." DeLamar v. Fidelity Loan Investment Co., 158 Ga. 361 (a) (123 S.E. 116); Hicks v. Beacham, 131 Ga. 89 (62 S.E. 45).

4. Applying the foregoing rulings to the facts of the instant case, this court can not say as a matter of law that the lower court was unauthorized to find — after due consideration, not only of the admitted facts tending to show a mutual departure from the original terms of the lease contract, but also all the attendant circumstances such as the duration of the contract, the frequency of the admitted departures, the character of the premises leased, and the nature of the business conducted thereon — that there existed between the lessor and the lessees a mutual intention to waive the stipulation in the lease calling for forfeiture of the lease upon failure of the lessee to pay the annual rent promptly on September 1 of each year.

(a) Accordingly, until reasonable notice had been given by the lessor of his intention to demand thereafter strict compliance with the original terms of the agreement, such mutual departure constituted a quasi new agreement, complete in itself, and identical with the original lease contract, except for the stipulation requiring prompt payment of the annual rent under penalty of a forfeiture of the lease; and, in order for the lessor or his privies to effect a forfeiture of the lease under the terms of the original contract, it must first be shown that the quasi new agreement was made inoperative by reason of such reasonable notice having been given to the lessees.

5. Since the plaintiffs do not make it appear that the reasonable notice, required in order to effect a forfeiture of the lease under the terms of the original contract, was given to the lessees, and since the lease was continued in full force and effect by reason of tendering the annual rent, due on September 1, 1945, on September 5, 1945, which tender was permissible under the quasi new agreement, the executors of the deceased lessor's will could not maintain against the defendant lessees a dispossessory proceeding, which was brought on the theory that the lease contract had been cancelled, and upon the sole ground that the lessees were, therefore, illegally holding over. Accordingly, the lower court did not err in entering judgment in favor of the defendant lessees, and in decreeing specific performance of the option to purchase in favor of the lessees in their cross-action filed to the dispossessory proceeding.

Judgment affirmed. All the Justicesconcur.

No. 15728. FEBRUARY 5, 1947. REHEARING DENIED MARCH 20, 1947. STATEMENT OF FACTS BY JENKINS, CHIEF JUSTICE. The executors of the will of W. B. Harris instituted dispossessory proceedings against C. R. Walker et al. The defendants gave bond and filed a counter-affidavit, which included grounds for specific performance. By agreement of the parties all issues of law and fact were tried without the intervention of a jury. The facts developed by the evidence are in substance as follows: On August 25, 1943, W. B. Harris executed to the defendants a lease contract, in which a certain tract of land on which was operated a peach orchard was rented for a period of one year beginning November 1, 1943, at an annual rental of $500, payable on September 1, 1944; and in which there was a provision that, upon "failure to pay same promptly, when due, said party of the first part has the right at his option to declare this lease void, cancel the same, and take possession of the premises." The lease further provided that the lessees should have the right to "renew this contract, under the same terms and conditions as above expressed, at the expiration of each year, for an additional year, until the expiration of five years from the date of this agreement." It also conveyed an option to purchase the premises, for a stated sum, "at any time during the continuation of this lease." It was shown by evidence of two checks properly endorsed by the deceased, and it is conceded by all parties concerned, that the rent due on September 1, 1944, had been paid and accepted by the deceased on September 5, 1944; and that the rent due on September 1, 1945. had been paid and accepted by the deceased on October 2, 1945. On September 4, 1946, the executors of the will of W. B. Harris (lessor) notified the defendants that, since the rent which became due on September 1, 1945, had not been paid, they had elected to exercise the right under the lease to cancel and terminate the same. On September 5, 1946, the defendants tendered the annual rent covering the full year ending November 1, 1946, to one of the executors, who accepted it and gave a receipt therefor, but who subsequently returned the check to the defendants on the ground that the lease had been terminated prior to the expiration of the full year ending November 1, 1946, and therefore the payment did not represent the correct amount due. The trial court found that "there has been established a deviation from the terms of the lease agreement providing for payment of the rental on September 1st; and that, by reason of the failure of the plaintiffs to give notice to the defendants of adherence anew to the provisions of the agreement, the purported declaration of termination, cancellation, and voidance given by plaintiffs to defendants was not effective, and the lease agreement was not terminated." The court entered judgment in favor of the defendant lessees, and on the cross-action decreed specific performance of the option to purchase. The plaintiffs assign error on the order overruling the amended motion for new trial, based upon the general grounds, and on a special ground which complains of the admission in evidence of the two checks above referred to.