Hennon v. Gresham

1. In a petition which seeks specific performance of a parol contract to purchase land, where partial payment accompanied with possession is relied on as sufficient part performance to justify a decree under the Code, § 37-802, it is necessary that it be clearly alleged that both the partial payment made and the possession taken were done with reference to such parol contract relating to the purchase.

2. When the owner of land and a third party enter into a verbal contract under the terms of which the former rents to the latter certain land, and in the same contract grants him an option to purchase same, an entry in pursuance of the oral agreement of the dual nature indicated will be considered as an entry made solely under the portion of the agreement relating to tenancy.

No. 14550. JUNE 11, 1943. This was a petition brought by Hennon against the executrix of C. H. Gresham and certain others who were his heirs at law and legatees. It was alleged that on April 5, 1940, the plaintiff and C. H. Gresham both signed an instrument in writing as follows:

"This contract and lease agreement entered into this April 5, 1940, by and between C. H. Gresham, party of the first part, and Jeff Hennon, party of the second part, both of Floyd County, Georgia.

"Witnesseth: Party of the first part has this date leased or rented to party of the second part 60 acres of land and being a part of the C. H. Gresham farm in said State and county, and being on the east side of the Gresham farm adjoining the old Fimore Johnson farm. Said lease to run for years 1940, 1941 and 1942, for annual rental of $175 per year, and the party of the first part acknowledges receipt of $25 to apply on the rental of 1940, the balance to be paid out of the first cotton ginned on said place, and the following years of 1941 and 1942 to be paid out of the first cotton ginned each year. It is made a part of this contract that if the party of the second part buys said farm at any time during the term of this lease, the said Gresham, party of the first part, is to put a loft in the barn now on said farm, and the payments that may have been paid on the rental contract are to be applied on the purchase-price of farm at such time as the party of the second part purchases said farm.

"Signed in duplicate this April 5, 1940."

In other paragraphs it was alleged, that a certain definitely described tract of land was intended by the parties to be the subject-matter of the writing; that in the agreement respecting the right to buy the land the purchase-price was to be $2250, of which sum $550 had been paid; that at the time of the signing of the instrument Gresham had a loan on that and other land, a loan deed thereto being held by the Federal Land Bank of Columbia, with yearly installments falling due thereon of approximately $130, and plaintiff was to pay the balance of $1700, without interest, by paying a sum equal to the yearly installments due on said loan to said bank and the balance in cash at the end of the installment payments; that plaintiff notified the executrix that he elected to purchase the land and stood ready to carry out his contract; that recently there has been sued out against him a dispossessory warrant, under which a part of his goods and chattels have been removed; that on account of his financial condition he is unable to give bond and retain possession; that he is ready and willing to carry out the terms of his agreement with C. H. Gresham; and that the defendant should be compelled to permit him to comply therewith and retain possession. He prayed that the defendants be required to specifically perform the agreement; that they be enjoined from further interfering with his goods and chattels, or possession of the lands; and for general relief.

An amendment to the petition was allowed, apparently without objection, material parts of which are as follows: Instead of the statement in the petition that he had paid $550 of the purchase-price, the amendment placed this at $698. On or about April 5, 1942, petitioner and C. H. Gresham entered into a verbal contract and agreement whereby Gresham was to rent to petitioner the sixty acres of land described in the petition, for the years 1940, 1941, and 1942, and petitioner was to pay an annual rental therefor of $175, with the right and option to buy said land for $2250, it being further agreed that if petitioner exercised this option at any time during said three-year period, all amounts paid by him as rent should be applied on the purchase-price thereof, and the balance due, after so deducting said payments, to be paid by paying a sum equal to the yearly installments due by Gresham to the Federal Land Bank of Columbia, of approximately $130 per annum, as alleged in the petition. Gresham put petitioner in possession, and he has remained in possession, and instead of paying merely the $550 stipulated in the contract as the total rental for the years 1940, 1941, and 1942, he has paid, as itemized in the amendment, an aggregate of $698, and that the same was paid as a part of the purchase-price of the land and was received as such. After the verbal contract and agreement was made, and for the purpose of carrying the same into effect, Gresham brought to petitioner, while he was at work, the agreement in writing which he signed, thinking and believing its legal effect was simply to put in writing what the parties had mutually contracted and orally agreed to, and that under its terms he had the right and option to buy said land upon the terms and conditions agreed upon between them, and that any sums he might pay during said three year period were to be applied as part payment of the purchase-price. A reasonable rental of said land is $100 per year; the additional sum of $75 was the consideration for the option to buy the same, and to be applied on the purchase-price. Said writing is simply a part of the contract and agreement, and does not fully and completely reflect the mutual intention of the parties. At the time the dispossessory warrant was issued, petitioner was in possession under his contract and agreement to purchase, and not as a tenant. Petitioner repeatedly discussed the agreement with Gresham, and after his death with his wife, who is executrix of his estate, and at no time did they or either of them ever dispute petitioner's right to buy said land, or the validity of the contract, but at all times assumed that petitioner was buying the land and that it would become his upon completion of the terms of the contract. He would never have entered upon the land and made the payments had he not believed that he had a legal and binding contract with Gresham whereby he could exercise his option to buy in accordance with the terms of the oral agreement. There was an unambiguous verbal contract between him and Gresham, and the scrivener who undertook to reduce the verbal contract to writing was either mistaken as to the terms of the contract, or was unable clearly to reflect the contract in writing and to put the same in such form as to be legally binding on the parties, both of whom signed the contract under a mutual mistake as to the legal effect; and petitioner could not understand its legal effect, on account of his lack of education and legal knowledge. He has partially performed the terms of said contract by paying the sums alleged, and stands ready and willing and offers to comply and fully execute the remaining terms thereof, by paying the installments due on the loan to the bank. He went to the representative of the Federal Land Bank of Columbia who had extended the loan to Gresham on this land, to be repaid in yearly installments, and offered to pay the installments as they became due; but the defendants refused to allow him to pay the same. Their refusal to comply with the terms of said contract is a fraud on petitioner, in that he is deprived of money paid by him to be applied as part of the purchase-price of said land; and the defendants have not paid or offered to repay to him any part thereof, but they seek to dispossess him without regard to the contract.

The petition was demurred to on general grounds. The demurrer also asserted as a defense the statute of frauds. The demurrer was sustained and the action was dismissed. The plaintiff excepted. 1. If the plaintiff has a case, it is because of the oral agreement set up in his amendment, since the writing signed by the parties lacks at least one vital essential, to wit, a definite description of the land, or at least a key to its identification. Douglass v. Bunn, 110 Ga. 159 (35 S.E. 339); Tippins v. Phillips, 123 Ga. 415 (51 S.E. 410). There is no prayer to reform it, even if it be conceded that the petition contains sufficient averments to authorize reformation. The oral contract was of a dual nature. It provided that Gresham would rent the land to Hennon for a certain term for a stated sum, and contained a provision that Hennon might purchase it on stipulated terms. The Code, § 37-802, declares: "The specific performance of a parol contract as to land shall be decreed, if the defendant admits the contract, or if it be so far executed by the party seeking relief, and at the instance or by the inducements of the other party, that if the contract shall be abandoned he can not be restored to his former position. Full payment alone accepted by the vendor, or partial payment accompanied with possession, or possession alone with valuable improvements, if clearly proved in each case to be done with reference to the parol contract, shall be sufficient part performance to justify a decree." Here partial payment and possession are relied on. In such a case it is required that the possession be held with reference to the parol contract to be enforced, to wit, the contract to purchase. What as to this does the petition show? The amendment recites that Gresham put the plaintiff "in possession of said land, and that he has remained in possession thereof since said time." The date next preceding the quoted words is April 5, 1942 [1940?]. Sub-paragraph 2 (g) of the amendment to the petition is as follows: "That at the time said dispossessory warrant was issued, petitioner was in possession of said land under his said contract and agreement to purchase the same, and not as tenant." Subparagraph (k) is in these words: "Petitioner shows that he would never have entered on said land or made any of said payments had he not believed he had a legal and binding contract with the said C. H. Gresham, whereby he could exercise his option and buy said land in accordance with the terms of said oral agreement."

2. We have shown that the contract was of a dual nature. In one part it was an agreement to rent, in another an option to purchase. He entered in pursuance of the oral agreement of the dual nature indicated. Under these circumstances it can not be said that his entry of possession was in performance of any thing to be done under the option agreement. An option to purchase land does not in and of itself confer upon the holder any right of entry. An agreement by which one person rents land to another does give to the tenant the right to the use and occupancy, and with it the right of entry. If the same person under the same contract holds an option to purchase and also the right to enter as a tenant, the law will presume that he entered under that portion of the dual agreement which gave him the right to enter. An averment therefore that he entered possession under the contract must be construed to mean that his possession was that of a tenant. Thus his amended petition lacks one of the averments necessary to bring the plaintiff within the terms of the Code, § 37-802, when he relies on partial payment accompanied by possession as sufficient part performance to justify a decree for specific performance of a parol contract relating to the purchase of land. Compare Neely v. Sheppard, 185 Ga. 771, 788 (196 S.E. 452). The demurrer was properly sustained.

Judgment affirmed. All the Justices concur.