Lamons v. Good Foods Inc.

A contract in parol creating the relationship of landlord and tenant, when made for a greater time than one year, has the effect of a tenancy at will. Code, § 61-102. It may be terminated by the landlord at will by giving two-months notice, or by the tenant at will by giving one-month notice. Code, § 61-105. While part performance of such a contract may be sufficient to protect the rights of the party performing under such a contract, it must be performance of the terms and obligations of the contract; and performance of other acts independent of and not required by the terms of the contract will in no case be sufficient.

No. 14436. MARCH 10, 1943. The petition alleges that during October, 1941, the plaintiff entered into a verbal agreement with the defendant to lease property known as No. 1490 Peachtree Street in the City of Atlanta, for a monthly rental of $100, payable $50 on the 1st and 15th, for a term of years expiring coincidentally with a lease existing between the defendant and the owner of the premises; that by reason of the defendant's inability to give possession of the entire premises during November, 1941, the plaintiff paid as rental for that month $50, which was agreed to by the defendant; that, acting upon the representations of the defendant, "in order to make the said house available for her purposes she went upon the premises and made improvements thereon in the nature of sanding floors, installing special shades and curtains, and, in addition thereto, purchased furniture and fixtures at an expense to her of approximately three thousand ($3,000) dollars, which said furniture and fixtures, shades and curtains were put in the house in order that she might rent the rooms therein," all of which was known to the defendant. The petition further alleges that the premises "in toto" have never been turned over to petitioner in accordance with the agreement, although she has carried out her part of the contract; that the basement and a number of garages as well as a room in the main building occupied by Mr. Davis were all to be surrendered to her under the terms of the lease contract, but she has never been given possession thereof; that rent for the month of November, 1941, has been paid, and $50 was paid on or about December 15, 1941; that the plaintiff is ready and able to pay the monthly rental of $100 as provided by the lease contract for the premises leased to her under the contract, but, by reason of the fact that she has not been given possession of the portion of the premises above set out, she should not be required to pay the full $100 per month; that she refused to sign a written lease tendered to her on or about December 4, 1941, because it contained a clause to the effect that either party might cancel the same at will on giving thirty-days notice; that on December 18, 1941, the plaintiff received from defendant's attorneys written notice stating that under the lease contract with her the defendant had the right to terminate the lease upon sixty-days notice, that the defendant had decided to exercise this right, and that the plaintiff was thereby notified to vacate the premises after sixty days therefrom. The petition prayed for specific performance, or, as an alternative in the event that this relief was not available, for damages to the extent of the plaintiff's expenditures recited in the petition; for injunction restraining the defendant from putting the notice to vacate into effect; and for general relief.

The defendant's answer admitted the execution of the verbal lease of the premises which the plaintiff admitted had been in her possession, but denied that under the lease she was entitled to that portion of the premises which her petition shows has never been surrendered to her. The answer further denied that the defendant had knowledge of the plaintiff's expenditures, and averred that none of the alleged expenditures were required by terms of the lease contract, and that the defendant had not benefited in any respect by virtue of such expenditure. Upon the trial the plaintiff introduced a number of witnesses to show that she had purchased furniture to equip the house for taking roomers, at a cost to her of nearly the amount alleged in the petition; that the furniture thus purchased would have a very small resale value; that the defendant knew of her purchase of the furniture; and that she had paid into court an amount equal to the rent required by the lease contract. The plaintiff testified that her contract with the defendant for the lease of the premises was verbal; that there was no agreement or intention to reduce the contract to writing; and that it was for the same period of time as that embraced in the lease from the owners to the defendant. The plaintiff introduced the lease from the owners to the defendant, which was in writing, dated October 1, 1941, and leased the premises involved for a term of five years. She testified, that her lease with the defendant was for a period of five years; that when she took possession she had some floors fixed, and furnished the house as alleged in the petition; and that she had been denied possession of the portion of the premises as set out in the petition; that there was nothing in the lease contract obligating her to redecorate or otherwise improve or repair the premises; and that she assumed that the owner would make such repairs. At the conclusion of the plaintiff's evidence, on the defendant's motion a judgment of nonsuit was entered, and the plaintiff excepted. Both the petition and the evidence show that the contract between the parties to this suit was in parol, and was for a period of five years. Such a contract is clearly defined by the Code, § 61-102. While it is there provided that a contract creating the relationship of landlord and tenant, if in parol, is valid for one year, it is further declared that if for more than one year it "shall have the effect of a tenancy at will." The contract of the parties to this action stands upon the same footing as a tenancy at will, and the rights of the parties under that contract are determined by the law applicable to a tenancy at will. It is declared in the Code, § 61-105: "Two months' notice is necessary from the landlord to terminate a tenancy at will. One month's notice is necessary from the tenant." The defendant landlord was authorized under the law to terminate the tenancy by giving the two-months notice required by the statute. In giving the notice alleged in the petition, the defendant was simply exercising a right conferred upon it by the law.

But the plaintiff contends that although the lease contract was for a period of more than a year, and being in parol it would ordinarily be outlawed by the statute, nevertheless it has been brought under exception 3 of the Code, § 20-402, by such performance of its terms on the part of the plaintiff as to render it a fraud of the defendant if performance is denied. To sustain this contention it was alleged, and the allegations were supported by evidence, that the tenant, in reliance upon the contract, purchased considerable furniture and fixtures and made some improvement upon the building. It is one thing for the tenant to make these expenditures in reliance upon the contract, but it is a distinctly different thing under the law for her to incur these expenses pursuant to the terms of a contract imposing an obligation upon her to make such expenditures. In the first case, any expenditures she might have made may be chargeable to her lack of ability to properly interpret her rights under the contract as the law fixes those rights, but they can not be charged to any term or obligation of the contract or to any misdeed of the defendant. The meaning of the contract which she has is clearly and precisely defined by the law. The part performance that will protect a tenant under a contract in parol like the one here under consideration must be performance of duties and obligations imposed upon the tenant by the terms of the contract. Marshall v. Hicks, 159 Ga. 871 (127 S.E. 273); Neely v. Sheppard, 185 Ga. 771 (196 S.E. 452). Even though the plaintiff in the present case made the expenditures which she claims, and even though they would not have been made but for the contract, since under her own testimony they were made, not in pursuance of the terms and obligations of the contract, but because of her reliance upon the contract, they did not amount to such part performance as would take the contract out of the statute of frauds. The rule of part performance is confined to part performance of the contract. Any other rule would place it altogether in the hands of the parties to nullify the plain provisions of law. Graham v. Theis,47 Ga. 479. The plaintiff's evidence when given its most favorable interpretation shows only that despite the fact that she had a contract creating a tenancy at will only, she chose to run the risk of making heavy expenditures in the hope that she would be permitted to continue in possession thereof. Under this evidence the plaintiff was entitled to none of the relief sought, and the court did not err in rendering a judgment of nonsuit.

Judgment affirmed. All the Justices concur.