Davis v. Auerbach

1. The will did not expressly authorize the executor to lease the property of the estate, and a lease made by him without an order of court is not valid unless it was ratified by the legatees and devisees under the will.

2. The acceptance by the defendant of a prorated portion of the rent paid under the lease, for the month in which the trade was made, did not amount to a ratification of the lease by him; but the petition showed ratification by the executor and the beneficiaries of the estate.

3. The allegations of the petition setting out a long course of conduct and dealings between the executor and the plaintiff, which was ratified and confirmed by the beneficiaries of the estate, are sufficient to authorize a jury to find that the executor and the beneficiaries of the estate would be estopped from attacking the validity of the lease.

(a) If the executor and those claiming benefits under the will are estopped from assailing the lease, the defendant as their grantee and privy in estate would likewise be estopped if he had full knowledge and notice of the facts from which the estoppel arose.

4. The petition stated a case for the application of the Declaratory Judgment Law.

DECIDED JANUARY 8, 1949. REHEARING DENIED FEBRUARY 11, 1949. C. N. Davis filed a petition in the superior court against Abe Auerbach seeking a declaratory judgment adjudicating that a certain lease made to the plaintiff by R. A. Sims, executor of the estate of Mattie T. Markley, was valid and binding and was superior to a deed made subsequent thereto by said executor to the defendant. The lease was made under a provision in the will of Mattie T. Markley as follows: "It is my will and desire that for the purposes of distribution my executors covert my estate into cash and to that end I hereby give them full power and authority to sell at either public or private sale all the property of which I die seized and possessed, without the order of any court; and I wish such sale and distribution to be made as early after my death as the same can be done without detriment to the best interest of the legatees herein named."

Other allegations of the petition are briefly stated as follows: The testatrix died in 1929, the will was thereafter duly probated and the executors named therein duly qualified. R. A. Sims, the surviving executor, has not been discharged and has managed the properties of said estate since 1929, both as executor of the estate and as agent of all of the beneficiaries under the will. It was decided and agreed by the beneficiaries and the executor that the property now involved, a brick store known as No. 784 Marietta Street, Atlanta, Georgia, would not be sold immediately, but would be held and managed by said executor, and leased by him on such terms and conditions as he and the other beneficiaries thought advisable. The said store has been occupied by the plaintiff under leases made by said executor for several years, and the plaintiff is now occupying the premises under a lease dated July 1, 1945, for a term of 5 years, with a renewal privilege for a like period at an increased monthly rental, with the full knowledge and consent of said beneficiaries who have accepted the rents accruing under said leases and have ratified and confirmed them.

Late in 1947 the defendant purchased said property from the executor through MacIntyre Realty Company on a contract of sale stating that it was "subject to lease with C. N. Davis," and in making said purchase the rents for December, 1947, were prorated, the defendant receiving a part thereof. Before the sale was made to the defendant he was fully advised of the lease held by the plaintiff and had inquired of the plaintiff as to whether he intended to exercise the renewal privilege for an additional five-year period, and had tried to persuade the plaintiff to waive or forego that option. Neither the executor nor any of the heirs of the estate repudiated or disaffirmed the lease in any manner, and the defendant "was told by the seller prior to his purchase that the lease was a valid contract of the seller and the persons he represented and would have to be recognized by the purchaser." The seller entered into the agreement to sell with defendant and consummated it "with the full understanding and belief that defendant would recognize said lease contract with plaintiff, and the sale would not have been made except for this understanding." The defendant was not a purchaser without notice of the facts respecting the lease, and he "agreed to take subject to this lease with the plaintiff," without disclosing to the executor, the plaintiff or any of the beneficiaries his intention to repudiate the lease. "The said purchaser [the defendant] purchased this said property under a contract wherein he took said property expressly subject to the lease to plaintiff, and with the understanding at all times that the lease would be honored and not repudiated, the seller . . did insist and contract that this lease be recognized by the purchaser." After purchasing the property the defendant for the first time took the position that the lease was void because the executor had no authority to make it, and the defendant has threatened to take action to dispossess the plaintiff from the premises and has refused all rents since December 31, 1947.

It appears also from the petition that before the closing of the sale to the defendant, and at his instance and request, the legatees and devisees under the will executed a written statement in part as follows: "This instrument shall operate to confirm and ratify sales and conveyances heretofore made by said executor or executors, and to authorize future sales by him in the exercise of the powers conferred upon him in said will until the administration of said estate is fully completed and distribution has been made of all the assets of said estate. This instrument is executed with the understanding that it will be relied upon by purchasers of property of the estate from said executor."

The plaintiff alleged and contended that the lease held by him was valid and binding because authority of the executor to lease the property was clearly implied from the provisions of the will; that if authority to make the lease can not be implied from the will, it is still valid because the beneficiaries under the will, both expressly and impliedly, ratified the action of the executor in making the lease, and the executor, the beneficiaries and the defendant in privity with them are estopped from denying the authority of the executor to make the lease; and that the lease was valid because the purchase by the defendant of the property from the executor was made expressly subject to the lease, and with both actual and constructive knowledge of the plaintiff's rights thereunder.

The trial court sustained a general demurrer to the petition on the ground that neither the executor nor the beneficiaries had the authority to lease the property under the terms of the will. The plaintiff excepted to that judgment. 1. "The general rule is that an executor can not bind his testator's estate by his contracts, except such as are authorized by law or the terms of the will." Walton v. Reid,148 Ga. 176 (96 S.E. 214). "As a general rule an executor or administrator has no authority to lease his decedent's realty, unless authorized to do so by virtue of testamentary or statutory provisions or an order of court." 33 C. J. S., Executors and Administrators, § 297, p. 1329. A provision in a will authorizing an executor to sell the property of the estate at either public or private sale, without the order of any court, and providing that "I wish such sale and distribution to be made as early after my death as the same can be done without detriment to the best interest of the legatees herein named," does not expressly authorize the executor to lease the property, and a lease made without an order of court is not valid unless ratified by the legatees and devisees under the will.

2. "The doctrine of ratification is not applicable against a person as to an act of one who did not assume to act in his name or under authority from him." Greene v. Golucke, 202 Ga. 494 (43 S.E.2d 497), and cit. Under the ruling in the case cited, the acceptance by the defendant of a prorated portion of the rent paid under the lease, for the month in which the trade was made, did not amount to a ratification of the lease by him; but the petition alleged enough to show ratification of the lease by the executor and the legal and equitable owners of the estate all of whom are sui juris. Lane v. Tarver, 153 Ga. 570 (113 S.E. 452).

3. Although estoppels are not generally favored (Code, § 38-114), and an estoppel can not be the basis of title to land (Alsobrook v. Taylor, 181 Ga. 10, 181 S.E. 182; Latham v. Fowler, 199 Ga. 648, 653, 34 S.E.2d 870), an equitable estoppel is based on the "ground of promoting the equity and justice of the individual case by preventing a party from asserting his rights under a general technical rule of law, when he has so conducted himself that it would be contrary to equity and good conscience for him to allege and prove the truth." 21 C. J., § 1117. Bragan v. Lumbermen's Mut. Cas. Co., 59 Ga. App. 862,864 (2 S.E.2d 189); Frost Motor Co. v. Pierce,72 Ga. App. 447, 453 (33 S.E.2d 910). And "where the facts relied on to establish the estoppel do not unequivocally show an estoppel in pais, the jury, and not the judge, should determine whether the facts constitute such an estoppel." Tune v.Beeland, 131 Ga. 528 (3) (62 S.E. 976). Under the allegations of the petition setting out the long course of dealings between the executor and the plaintiff, under the lease made by the executor to the plaintiff, and the ratification and confirmation of the lease by the beneficiaries of the estate by conduct over a period of years, and by the written statement executed by them, we think the jury would be authorized to find, if the allegations are sustained by satisfactory proof, that the executor and the beneficiaries under the will would be estopped from attacking the validity of the lease. If the executor and those claiming benefits under the will are estopped from assailing the lease, the defendant as the grantee of the executor would likewise be estopped if he had full knowledge and notice of the facts from which the estoppel arose as alleged in the petition.

"Grantee is in privity with his grantor to the extent that he is bound by an estoppel in pais against the grantor if he had notice of the facts from which the estoppel arose at the time of the grant." 19 Am. Jur., Estoppel, § 158, p. 815. "An estoppel of a grantor by conduct to assert title to property extends to his grantee. . . Where a grantee at the date of his purchase knew of the existence of the facts which operate as a bar to the claim of his grantor, this knowledge will bar him; and this is the case where he has knowledge which would have put him on inquiry, such as would have led to a knowledge of the facts." 31 C. J. S., Estoppel, § 133, p. 401. No Georgia case directly in point has been brought to our attention. Several cases hold that an estoppel in pais, operating against a person relative to an interest in land, will not extend to his grantee who acquires the land for a valuable consideration, in good faith, and withoutany notice of the grounds of the estoppel. See Thornton v.Ferguson, 133 Ga. 825, 830 (67 S.E. 97, 134 Am. St. Rep. 226);Coursey v. Coursey, 141 Ga. 65 (80 S.E. 462); Dunaway v.Windsor, 197 Ga. 705, 709 (30 S.E.2d 627). As a necessary corollary to this rule we think that an estoppel in pais operating against the owner of land does extend to this grantee who purchases with notice of the grounds of the estoppel. "A grantee who accepts a deed to the property granted is estopped to deny the truth of a recital that the grantor had previously granted an easement or interest in the property to another person." Toland v. Brewster, 144 Ga. 236, 239 (86 S.E. 1089).

A lease for five years or more (as in this case) which does not by its own terms interpret the intent of the parties to pass a lesser interest will be presumed, as under the common law, to convey an estate for years. Warehouses Inc. v. Wetherbee,203 Ga. 483 (46 S.E.2d 894). See also Anderson v. KokomoRubber Co., 161 Ga. 842, 846 (132 S.E. 76). A lease, whether it conveys an estate for years or not, is ordinarily a conveyance of an interest in land. See the definitions of the word "Conveyance" under "Lease" in 24 Words and Phrases, Perm. Ed. "If, after notice that another has made a contract for the purchase of land, a third person cuts in, buys it, and takes a conveyance, such person stands in the place of his vendor; and a court of equity, if it would decree a specific performance of the contract against the latter, will render a like decree against the former." Grooms v. Grooms, 141 Ga. 478 (81 S.E. 210), and cit; Collier v. Moore, 31 Ga. App. 227 (120 S.E. 441).

As against a general demurrer the well-pleaded allegations of fact in the petition will be taken as true. Pray v. Pace,16 Ga. App. 389 (85 S.E. 452). Under these allegations the lease is valid as between the plaintiff and the executor and heirs of the estate. The defendant purchased with full knowledge of the lease, after being told that it "would have to be recognized by the purchaser," and after he had "agreed to take subject to the lease," according to the allegations of the petition, and we think that the doctrine of estoppel in pais or by conduct would extend to and operate against the defendant under the well-pleaded facts as set forth in the petition. For these reasons the court erred in sustaining the general demurrer.

4. The petition stated a case for the application of the declaratory judgments law under the ruling in Greene v.Golucke, supra.

Judgment reversed. Sutton, C. J., and Felton, J., concur.