Goldberg v. Varner

Where A as lessor, through a real-estate agent, leased to B and C as lessees certain described real estate for a period of five years, at a rental of $50 per month, and it was provided in paragraph 15 of the lease that the real-estate agent was to receive a commission of five per cent, on the rentals arising under the lease, or under any new lease between the lessor and the lessees, or any renewals thereof, "which is now by the lessor, with the assent of the lessees, assigned to the said agent, their successors, representatives or assigns. Any person who may acquire an interest in said premises shall take notice hereof;" and where, subsequently to making the lease, A sold the property to D and D, during the term of the lease, sold the property to E; and where the respective owners of the property during the term of this lease paid the five per cent. commission on the rents to the real-estate agent; and where prior to the expiration of the lease the real-estate agent undertook to renew the lease or make a new lease on the same property between E, the present owner, as lessor, and B, one of the former lessees, at a rental of $55 per month for a period of five years; and where E refused to accept such lease, and made a lease herself of the same property to B for a period of five years at a rental of $55: Held:

1. That the contract between E, the present owner of the property, and B, one of the former lessees, was not a renewal contract, but was a new lease.

2. The provision contained in paragraph 15 of the former lease contract was not a covenant running with the land, and E, the present owner, not being a party to that contract, is not now bound thereby.

3. Under the facts of the present case and the law applicable thereto, the plaintiff was not entitled to recover.

4. The trial judge did not err in overruling the plaintiff's motion for a new trial; and it follows that the appellate division of the civil court of Fulton county did not err in affirming that judgment.

DECIDED JULY 12, 1945. S. A. Goldberg, trading as Allan-Goldberg Co., brought this suit against Helen S. Varner and alleged that, on December 14, 1938, he obtained the execution of a lease contract between Andrews-Point Co. as lessor and Mrs. Robert Collins and Mrs. Ludwig Krueger as lessees for the rental of certain property located at 115 Clairmont Ave., Decatur, Georgia, for a term of five years, beginning February 1, 1939, and ending January 31, 1944, at a rental of $50 per month, a copy of the lease contract being attached to the petition as Exhibit A; that Andrews-Point Co. sold the property and transferred the lease to L. A. Dean, H. W. Dean, and J. S. Dean; and that on June 10, 1942, the Deans sold the property and transferred the lease contract to Helen S. Varner, the defendant; that under the terms of said lease contract, the plaintiff was to receive five per cent. commission on the rental paid under said lease contract or any renewal, or any new lease contract between the lessor and lessees; that the plaintiff continued to collect the rents on said premises and to receive a commission of five per cent. thereon up to and through January, 1944; that before the expiration of the lease the plaintiff negotiated a renewal of the lease contract for a period of five years between the same lessees and Mrs. Helen S. Varner at a monthly rental of $55 per month and notified Mrs. Varner of the same; that she refused to accept a new lease contract coming through the plaintiff, but executed one between the same lessees and herself as lessor for a period of five years, beginning February 1, 1944, at a monthly rental of $55 per month; that the plaintiff is entitled to his commissions of five per cent. for the months of February, March, April, May, June, July, August, and September, 1944, in the sum of $22, this being the amount for which he sues. It was alleged that, under the provisions of paragraph 15 of said lease, the plaintiff had an interest in the lease contract or in any new lease contract between the same lessor and lessees or any renewals, and that the defendant was put on notice of said provisions when she purchased said property and accepted the transfer of the lease contract of June 10, 1944. The defendant filed an answer in which she denied that the plaintiff was entitled to recover any amount against her.

The case was tried before the judge without the intervention of a jury on an agreed statement of facts, and it appeared therefrom that the plaintiff, a real-estate agent, acting for Andrews-Point Co., on December 14, 1938, negotiated a lease for a period of five years beginning February 1, 1939, and ending January 31, 1944, wherein Andrews-Point Co. was owner and lessor and Mrs. Robert Collins and Mrs. L. C. Krueger were lessees; that Andrews-Point Co., subsequently to the date of the lease, sold the property to L. A., H. W., and J. S. Dean, and thereafter on May 15, 1942, said Deans sold the property to Mrs. Helen S. Varner, the defendant, and Mrs. Varner was the owner of the property when the lease expired on January 31, 1944. The plaintiff collected the rents on the property under said lease from February 1, 1939, to January 31, 1944, and remitted the same to the respective owners during that period. On January 14, 1944, he communicated with Mrs. Varner with reference to renewing said lease with Mrs. Krueger at $55 per month, which he contended he had a right to do under paragraph 15 of the lease which he had negotiated with Andrews-Point Co., said paragraph being as follows: "It is agreed by all parties to this contract that this lease agreement is made by and through Allan-Goldberg Realty Co., as agents for the owners of the property, and the parties hereto agree that the said agents, their successors or assigns, in consideration of services rendered in procuring this contract and of services to be rendered under the same, shall have the first month's rent collected, in cash, plus five per centum of the gross rentals to arise hereunder or under any new leases between the lessor and the lessee or any renewals hereof, which is now by the lessor, with the assent of the lessee, assigned to the said agent, their successors, representative, or assigns. Any person who may acquire an interest in said premises, shall take notice hereof."

Mrs. Varner refused to accept a lease negotiated by Allan-Goldberg Realty Co., and proceeded herself to make a lease direct with Mrs. Krueger. The rents have been paid by Mrs. Krueger to Mrs. Varner for the months involved in this suit, and no commissions have been paid thereon to Allan-Goldberg Realty Co. The trial judge found that the plaintiff was not entitled to recover, and rendered a judgment for the defendant. The plaintiff made a motion for a new trial, which was overruled, and the exception here is to the judgment of the appellate division of the civil court of Fulton County affirming the judgment overruling the motion for a new trial. The original lease was made by Andrews-Point Co. as lessor to Mrs. Robert Collins and Mrs. Ludwig Krueger as lessees for a period of five years. During the term of this lease the property was sold by Andrews-Point Co. to the Deans, and then was sold by the Deans to Mrs. Varner, the defendant herein. The plaintiff was paid the amount of his commissions on the rents by the respective owners of the property during the period of this lease. The last lease was between different parties and was for a different amount from the first lease contract. It was made by Mrs. Varner as lessor to Mrs. Ludwig Krueger as lessee, and was not a renewal of the first lease. But the plaintiff contends that, under paragraph 15 of the original lease contract, he is entitled to collect commissions on the rents under the last contract, although it may not be a renewal, but is a new lease. He would not be so entitled, unless the commission clause contained in paragraph 15 of the former lease contract is a covenant running with the land. For a covenant to be one running with the land it must have relation to the land or the interest or estate conveyed. It is stated in 14 Am. Jur. 497, § 20: "It is essential, however, to the creation of a covenant running with the land that it attach to, or be annexed to, some interest or estate therein and that it relate to or concern the land or estate conveyed and the use, occupation, or enjoyment thereof as indicated above. In other words, if a covenant is not in its nature and kind a real covenant, the declaration of the parties in the instrument that it shall run with the land can not create a real covenant. In the event that the act to be performed is merely collateral to the land and does not relate to the property demised, then the assignee is not charged, though named in the covenant. The covenant is merely personal, and does not affect the land demised. Unless the agreement of the parties contains some element of a covenant which runs with the land, it can not be enforced at law, and a future grantee will hold the land free and clear. If no interest passes and no possession attends the conveyance, the covenant obviously does not run with the land. It has accordingly been held in many jurisdictions that a covenant or agreement which deals simply with the use of the land is not a covenant running therewith, where such a covenant creates no interest in the land conveyed." It was held in Grant-Jeter Co. v. American Real Estate Co., 159 Ga. 80 (125 S.E. 73), that, "An agreement between the owner of an apartment house and a real-estate agent, by which the owner did ``give, grant, and sell' to said agent (a corporation), ``its successors and assigns, the sole and exclusive right for the present leases, and for a period of five (5) years, beginning September 1, 1923, to rent, manage, and supervise' said property, and did ``confer upon said agent full and general power to make leases in his name, and in the name of his successors and assigns, with tenants and prospective tenants for said premises, . . to purchase supplies for said premises, to collect the rentals thereon, to hire and discharge janitors, . . and in general to manage and supervise said property,' did not constitute a covenant running with the land, nor did it confer upon the agent an easement in the property, nor was it such a restrictive agreement relating to the use and enjoyment of the land as equity treats as one going with the land into the hands of a purchaser with notice; but such agreement is of a collateral nature to the land, and is a personal obligation of the maker, which will not bind or pass to assignees even where they are expressly named and take with notice of such agreement." It is stated in the opinion in that case that, "To constitute a covenant running with the land, there must first be an interest or estate therein granted, the covenant must relate to the interest or estate granted, and the act to be done must concern the interest created or title conveyed. If the covenant is of a collateral nature to the land, and is incapable in law of attaching to the interest or estate granted, it is a personal obligation, and will not bind or pass to assignees, even where they are expressly named," and, after stating that rent is an incorporeal hereditament, the court said: "But there is a vast difference between rent and the right of an agent to lease, under contract with the owner, real estate of the latter, to purchase supplies for its maintenance, collect the rents, pay the same over to the landlord. and receive a commission on the rents so collected for his services in discharging these duties. Such an agreement is not one in the nature of an easement, or one running with the land; and does not bind a purchaser from the owner of the land."

The agreement contained in paragraph 15 of the lease contract in this case is not a covenant running with the land and is not now binding on Mrs. Varner, who was not a party to that lease. The plaintiff was not entitled to recover and the trial judge properly so held. It follows that he did not err in overruling the motion for a new trial, and the appellate division of the civil court of Fulton County did not err in affirming that judgment.

Judgment affirmed. Felton and Parker, JJ., concur.