Summary
holding that where co-owners entered into lease agreement with lessees providing for exclusive possession of property without execution by or authorization of other co-owner, lease was not binding on lessees who did not take possession of the leased property and lessors were not entitled to recover rent from lessees
Summary of this case from FDL, Inc. v. Simmons Company (S.D.Ind. 2003)Opinion
23539.
ARGUED SEPTEMBER 12, 1966.
DECIDED OCTOBER 6, 1966. REHEARING DENIED OCTOBER 20, 1966.
Certiorari to the Court of Appeals of Georgia — 113 Ga. App. 416 ( 148 S.E.2d 183).
Thurmond, Hester, Jolles McElmurray, Cornelius B. Thurmond, Jr., for appellants.
Hull, Towill Norman, R. Lawton Jordan, Jr., Congdon Williams, for appellees.
1. Where one cotenant, without authority from his cotenants, executes a lease under seal for such cotenants, the latter are not bound, and until they become bound, the contract signed by the other cotenant for them lacks the element of mutuality between them and the lessee, and the lessee's holding is to be considered as a tenancy at will.
2. A tenant in common with another can not give to another exclusive possession of the jointly owned property, except by such joint owner's consent.
ARGUED SEPTEMBER 12, 1966 — DECIDED OCTOBER 6, 1966 — REHEARING DENIED OCTOBER 20, 1966.
Mrs. Jane R. Goodman, Mrs. Lillian R. Simon, Mrs. Bobby R. Moss and Mrs. Rose S. Harkins brought suit against A. A. Friedman and H. E. Friedman, trading as A. A. Friedman Company, in Richmond Superior Court on a certain lease contract. During the pendency of the suit Mrs. Harkins died and the Georgia Railroad Bank Trust Company qualified as her executor and was made a party plaintiff in her stead. The suit was to recover rent for the ground floor of a described building in the City of Augusta for the period of time extending from January 12, 1961, to January 12, 1962, though under the terms of the lease the building was rented for ten years. The suit on which the plaintiffs predicated their right to recover was solely upon the premise that they had fully performed the lease contract. The petition, among other allegations, contained the averments: "that plaintiffs are the owners of the property hereinafter described . . ."; "that plaintiffs have duly performed all the conditions of said lease on their part."
The contract attached as an exhibit and a part of the petition contained the provisions: "the leased premises shall be in the exclusive possession of the tenant . . .; the lessee is hereby granted the privilege of subletting the leased premises in whole or in part . . ."; and that the lessee would have the right to install a whole new front on the building, removing the front that then existed.
The defendants never took physical or manual possession of the building but the plaintiffs gave them the keys to the building and, at the suggestion of the plaintiffs made through their agent, undertook almost immediately after the contract was entered into to sublease the building to another, but did not succeed. Before the time arrived for the defendants to enter the building they refused to take possession because, as they contended, the building was not safe for occupancy. The plaintiffs made repairs on the building but the defendants were never satisfied that it was in satisfactory condition and refused to enter into possession. The defendants having failed and refused to pay the rent, the plaintiffs instituted the suit on the rental contract. The defendants filed an answer in which they alleged they were constructively evicted from the building because the plaintiffs never placed it in a state of repair necessary to the use for which it was rented.
The defendants also filed a cross action praying specific performance of the contract. Later they amended their answer, struck the cross action and the admission contained in their original answer that the plaintiffs were the owners of the building. The amendment alleged: that the lease sued upon was executed by Dora S. Rubenstein (the predecessor in title of Mrs. Goodman, Mrs. Simon and Mrs. Moss) and Rose S. Harkins as lessors on March 23, 1960; that on that date Rose S. Harkins did not own any interest in the real estate described in the lease; that Rose S. Harkins by deed dated November 17, 1954, had conveyed all her interest in the real estate to Harkins Realty Company, a Georgia corporation; that on the date of the lease the real estate was owned jointly by Dora S. Rubenstein and Harkins Realty Company, as tenants in common; that in 1961 the Harkins Realty Company changed its name to Harkins Corporation; that because of these facts the defendants became tenants in common with the Harkins Corporation of the property described in the lease, with Harkins Corporation being entitled to joint possession with the defendants. Having filed this amendment, the defendants renounced the lease on the ground that the plaintiffs did not have authority to lease the building or power to perform its covenants and that for this reason it was invalid; they so informed the plaintiffs and had the record of the lease canceled. The plaintiffs did not specifically reply to the amendment, but filed an amendment in which the defendants' allegations as to ownership of the rented building were in substance admitted. The plaintiffs' amendment reads: that among the assets of Rose S. Harkins which passed to her executor is her interest in the lease agreement between Dora S. Rubenstein and Rose S. Harkins, as lessors, and the A. A. Friedman Company; that on June 30, 1964, the Harkins Corporation was dissolved as a corporation and all its assets, including any interest it might have had in the leased premises, passed to its stockholders; that all of the interest of the Harkins Corporation in and to the leased premises passed under the resolution of dissolution of the corporation to the Georgia Railroad Bank Trust Company and on July 2, 1964, the trustees of the corporation executed and delivered to the Georgia Railroad Bank Trust Company a deed conveying all of the corporation's interest in the premises.
The case proceeded to trial. There was conflicting evidence as to the condition of the building, but the evidence as to the ownership of the building, both at the time the lease contract was executed and during the period for which the plaintiffs asserted the right to collect rent, was not in dispute and conclusively showed the title to the rental premises was not in the plaintiffs but that the building was owned by the Harkins Corporation and Dora S. Rubenstein, as tenants in common. The plaintiffs introduced a deed dated July 2, 1964, from the Harkins Corporation and its directors and trustees conveying to Georgia Railroad Bank Trust Company, as executor of the will of Rose S. Harkins, a one-half undivided interest in the leased property, reciting the corporation's acquisition of the one-half interest from Rose S. Harkins to Harkins Realty Company, later the Harkins Corporation, by deed dated November 17, 1954, reciting the dissolution of the Harkins Corporation on June 30, 1964, reciting the acquisition by Georgia Railroad Bank Trust Company, as executor of Rose S. Harkins, of all other outstanding stock in the Harkins Corporation, and that the assets of the estate of Rose S. Harkins were ample to pay all outstanding debts of the Harkins Corporation, the deed being filed for record July 23, 1964, and recorded. A witness for the defendants testified in substance that he was a licensed attorney; that he made a title examination of the rented premises on March 23, 1964, and found: that on March 23, 1960, there was a one-half interest in the property owned by the Harkins Corporation (then Harkins Realty Company) and a one-half interest owned by Dora S. Rubenstein; that on the 10th of April, 1964, a one-half interest was in the name of the Harkins Corporation and a one-half interest was held by three individuals, Mrs. Goodman, Mrs. Simon and Mrs. Moss. There was no evidence that the Harkins Corporation authorized or ratified the rental contract or was advised of its execution or existence.
The verdict was in the plaintiffs' favor, the defendants' motion for new trial complaining that the verdict was not supported by evidence and on several other grounds was overruled. The Court of Appeals affirmed the trial court's judgment overruling the motion for new trial and this court granted the defendants' certiorari.
1. In the present suit upon a lease or rental contract the plaintiffs had the burden of proving that they performed the contract according to its terms, or for some legal reason such performance on their part was as a matter of law excused. Code § 20-1101; Bennett v. Burkhalter, 128 Ga. 154 ( 57 S.E. 231). The plaintiffs recognized this principle and alleged in the petition that they had "duly performed all the conditions of said lease on their part."
It is further a rudimentary principle that where the plaintiffs contract to perform covenants that are impossible, not because of an act of God or the conduct of the defendants, the failure to perform such covenants is as fatal to the plaintiffs' right to recover as a breach of the contract for any other reason. In Northington-Munger-Pratt Co. v. Farmers' Gin c. Co., 119 Ga. 851 (7) ( 47 S.E. 200, 100 ASR 210), this court held: "If the vendor sold to a third person and thereby disabled itself to convey according to the terms of the contract, it would be liable in damages." Field v. Martin, 49 Ga. 268 (2); Cooley v. Moss, 123 Ga. 707 (1) ( 51 S.E. 625); Mobley v. Lott, 127 Ga. 572 ( 56 S.E. 637).
The lease contract sued upon contained the provisions: "the leased premises shall be in the exclusive possession of the tenant . . . ; the lessee is hereby granted the privilege of subletting the leased premises in whole or in part . . ."; and that the lessee would have the right to install a whole new front on the building, removing the front that then existed. While the petition as originally drafted contained the averment that the plaintiffs were the owners of the rented building, a later amendment alleged that one of the plaintiffs, Mrs. Harkins, through her executor, Georgia Railroad Bank Trust Company, acquired her interest in the building subsequent to execution of the lease contract and after the expiration of the period during which the rent sued for accrued. The plaintiffs introduced into evidence a deed dated July 2, 1964, from the Harkins Corporation to Georgia Railroad Bank Trust Company, which instrument recited that Harkins Corporation (then Harkins Realty Company) acquired a one-half interest in the leased property from Rose S. Harkins by deed dated November 17, 1954; that Harkins Corporation was dissolved on June 30, 1964; that Georgia Railroad Bank Trust Company, as executor of Rose S. Harkins, acquired all other outstanding stock in the Harkins Corporation.
Thus, from the plaintiffs' pleadings and proof it appears that when the lease contract was entered into between Mrs. Harkins and Mrs. Rubenstein and the defendants, Mrs. Harkins did not own an interest in the building and Mrs. Rubenstein (the predecessor in title of Mrs. Goodman, Mrs. Simon and Mrs. Moss) owned the building as a tenant in common with the Harkins Corporation. The lessor Mrs. Rubenstein did not, so far as the record reveals, have any authority from the Harkins Corporation, which is not mentioned in the lease, to execute the contract.
"Ordinarily, a tenant in common who has not been authorized by his cotenants cannot execute a lease of more than his own interest in the common property that will bind them without subsequent ratification; and this is true even though the tenant in common attempting so to lease is in possession of the whole property. In this respect, a tenant in common has, by virtue of his relationship as such, no authority to act as agent for his cotenant in leasing the common property to third persons, and the law will not infer one cotenant's authority to lease the other's interest, simply because a leasing was contemplated. . . In the absence of authority from his cotenants one tenant in common cannot bind his cotenants by an agreement to lease the common property to third persons." 86 CJS 518, Tenancy in Common, § 113. The rule is stated in Roberts v. Burnett, 164 Ga. 64 (9) ( 137 S.E. 773): "Where one cotenant, without authority from his cotenants, executes a lease under seal for such cotenants, the latter are not bound: and until they become bound; the contract signed by the other cotenant for them lacks the element of mutuality between them and the lessee, and the lessee's holding is to be considered as a tenancy at will." Morgan v. Maddox, 216 Ga. 816, 819 ( 120 S.E.2d 183); Motor Aid v. Ray, 53 Ga. App. 772 ( 187 S.E. 120). The lease was under seal. In the Roberts case, supra (Headnote 10), this court held: "Ratification of such an instrument, to be binding upon the principal, must also be under seal, and can not be by words or conduct. McCalla v. American Freehold c. Co., 90 Ga. 113 ( 15 S.E. 687); Overman v. Atkinson, 102 Ga. 750 ( 29 S.E. 758)."
Under the foregoing authorities it is apparent that not only did the plaintiffs fail to perform the contract provisions that the leased premises shall be in the exclusive possession of the tenant and that the lessee defendants have the right to sublet the rented building, but that the plaintiffs did not, as tenants in common with the Harkins Corporation and in the absence of that corporation's consent, have the authority or power to perform these important covenants of the contract. For any such authorization to be valid it would have to have been in writing and under seal. Roberts v. Burnett, 164 Ga. 64 (10), supra.
For the reasons stated, the plaintiffs failed to prove their case as laid in the petition in that there was not performance of the contract on their part.
2. The plaintiffs insist the defendants were estopped to plead a deficiency or defect in the former's title because they had accepted the lease and entered into possession under its terms. From the record the contrary appears. The evidence is without dispute that the lease was executed and delivered to the defendants sometime prior to the beginning of the stipulated rental period and that when the time came for the defendants to go into possession, they refused and have continuously refused ever since to enter the building as the plaintiffs' tenants or to occupy the same at all. The refusal was on the ground that the building was not in such state of repair as to be fit for occupancy or to measure up to the condition contemplated by the lease contract. Whether the defendants were right in this position or not is immaterial because, while they were unaware that one of the plaintiffs owned no interest in the property and the remaining plaintiffs owned no interest in the property and the remaining plaintiffs were tenants in common with the Harkins Corporation at the time the lease was executed or when the day arrived for them to take possession, this is an admitted fact and appears from the amendment to the plaintiffs' petition and the plaintiffs' proof to which there has been a previous reference both in the statement of facts and the preceding division of this opinion.
Code § 61-107 reads: "The tenant may not dispute his landlord's title nor attorn to another claimant while in possession." It is thus apparent that the chief requisite and most essential ingredient of the estoppel therein provided is that the tenant be in possession when he denies the validity of his landlord's title. "The estoppel against the tenant's denying the landlord's title continues until the tenant surrenders the possession. After possession has been restored, the estoppel ends. While the fact of his having become the tenant of the landlord may be in the nature of an admission, of greater or less probative value, against the former tenant, tending to establish the fact that he did not himself claim title, but recognized it as being in his former landlord, yet after the tenancy has ended and the possession has been restored, the quasi admission may be explained, and is not conclusive." Powell, Actions For Land (1946) 436, 437, § 370.
In making the broad statement that the tenants had the right to refuse possession we realize they could have gone into possession of an undivided occupancy only of the property under the lease and at the same time become tenants at will of the Harkins Corporation, but as stated they could not have gone into exclusive possession as provided by the contract itself.
Counsel for the plaintiffs ably argue in this court that possession does not mean manual use or occupancy but the right to possess and enjoy the occupancy of the rented premises. Counsel's words are: "Possession means control of and dominion." It has been stated and held by this court: "As applied to lands, the word `possession' is more nearly synonymous with the word `occupancy.' In its prime sense it denotes the corporeal control of property, a state of actual occupancy, evidenced by things capable of being seen by the eye or of being ascertained by the use of the primary senses." Powell, Actions for Land (1946) 337, § 292; Burgin v. Moye, 212 Ga. 370, 374 ( 93 S.E.2d 9). However, should counsel's view be adopted, "the word `dominion' denotes complete ownership or a right to the property." Everly v. Creech, 139 Cal.App.2d 651 ( 294 P.2d 109). Moreover, in this case the contract sued upon expressly stipulated that possession of the defendants was to be exclusive possession of the rented premises and no mere right to enter the premises and enjoy a more limited possession could possibly constitute a waiver under our law, that is, a waiver to question the lessors' title.
It is true that in some cases when the landlord has had no title and the tenant has entered into possession and enjoyed the full occupancy and benefit of the contract he is estopped to deny the landlord's title. The pronouncement of this principle is found in Lynch v. Poole, 138 Ga. 303, 305 ( 75 S.E. 158), where this court held: "The petitioner also invokes the doctrine of estoppel in aid of his contract. The doctrine of estoppel in pais is predicated upon a change of position to the hurt of one of the parties acting on the representations or conduct of the other. If the petition had alleged that the defendants retained possession of, and occupied, the premises for the time for which rent is claimed, the defendants, having received the full benefit of the contract for the contract time, would be estopped from denying the authority of the agent to make the contract. Harrison v. Wilson Lumber Co., 119 Ga. 6 ( 45 S.E. 730). But the petition contains no such allegation." In this case as in the Lynch case, the petition was based upon no right of the plaintiffs to recover except by compliance on their part with the terms of the lease contract.
In the present case it would have been impossible for the defendant lessees to have entered into exclusive occupation by virtue of the lease although they might have been given full possession on the one part by the lease and on the other by the cotenant corporation accepting them as tenants at will, but there is nothing in the record to indicate this would have occurred or that any such exclusive possession could have been enjoyed by virtue of the lease, or the behest of the cotenant corporation, or through a combination of these two factors. This is not a case in which it could be said that the tenants either went into physical possession or had a right of possession as guaranteed by the contract.
The estoppel of the Code section is also applicable only where the defendant is still in possession as the plaintiff's tenant. In the present case when both the plaintiffs' and the defendants' pleadings set up a want of title in the plaintiffs and showed their ownership to be that of tenants in common with the Harkins Corporation, the defendants renounced any right to occupancy or possession of the building and, as stated above, the evidence was that the defendants had continuously and steadfastly refused to go into actual possession of the building. Therefore, at that time they did not occupy the status of a tenant in possession under any view of the law.
For another reason the principle of estoppel does not apply in this case. It was held in Tison v. Yawn, 15 Ga. 491 (7) ( 60 AD 708), and Williams v. Higgason, 205 Ga. 349, 354 ( 53 S.E.2d 473), that where the recognition of the lessor's title is superinduced by misrepresentations on his part as to the state of his title there is no estoppel under Code § 61-107. In this case it clearly and indisputably appears from the record that the plaintiffs entered into the lease contract with the defendants without disclosing that one of their number had no title and that the other plaintiffs were tenants in common with a corporation which was not a party to the contract. The lease warranted benefits and privileges such as: exclusive possession of the rented property; the right to occupy the same for 10 years with the privilege of renewing the lease for 5 years and the right to sublease the property. These covenants of themselves in effect stated that the plaintiffs had title to the rented building, and it further appears from the record that they did not disclose the status of their ownership until after the lease was executed, the period for which the rent was claimed had expired, and the case was pending in the trial court. It can not, with reason, be concluded that had the defendants not acted on the faith of the covenants they would have accepted the lease or the keys to the building.
It is held in Larey v. Taliaferro, 57 Ga. 443 (1): "When one, in trading property, says he will warrant it to be sound in every respect, his declaration may amount to a representation as well as to a warranty." In Jordan v. Harber, 172 Ga. 139 (4) ( 157 S.E. 652), is the pronouncement: "Fraud may exist as much in intentional concealment of material facts, as in false statements in regard to facts. One is as fraudulent as the other, if it is used as a means of deceiving the opposite party." Snellgrove v. Dingelhoef, 25 Ga. App. 334, 335 ( 103 S.E. 418). That rule is applicable in this case.
No estoppel arose under any provision of our law.
Judgment reversed. All the Justices concur, except Duckworth, C.J., who dissents.