Opinion
38795.
DECIDED JUNE 1, 1961. REHEARING DENIED JUNE 20, 1961.
Dispossessory proceedings. Cobb Superior Court. Before Judge Henderson.
Hicks Henderson, Claud M. Hicks, G. Robert Howard, for plaintiff in error.
Reed, Ingram Flournoy, Raymond M. Reed, contra.
Under the facts of this case where a lease of premises for five years grants an option to renew on the same terms for two additional five-year periods upon the giving of sixty days' written notice to the lessor, the lessee is entitled to the rights to the premises under the original lease for the second five-year renewal period without the execution of a new lease, especially where the right in the tenant to the first five-year renewal period had been granted by the lessor upon proper notice and without the requirement that the tenant execute a new lease.
DECIDED JUNE 1, 1961 — REHEARING DENIED JUNE 20, 1961.
S.C. Hicks, on April 25, 1950, leased to G. C. Wilson certain premises for a period of five years. The lease provided as follows: "Lessee may sublet said premises, and is hereby granted an option to renew this lease under the same terms specified herein for two additional five-year periods, by giving sixty (60) days written notice to lessor." Mrs. Hugh R. Reece became the sole heir at law of G. C. Wilson and the beneficiary under his will at the time of his death in January, 1954. George H. Gentry, at the times mentioned hereinafter, was the sublessee of said premises. Within the time specified in the lease, the lessee gave written notice to the lessor that she desired to exercise the option for the first of the two five-year renewal periods covered by the lease. No action was taken by the lessee to enforce the rights under the first option and no new lease was tendered to the lessee or executed. Within the time specified in the lease, the lessee gave notice in writing to the lessor that she desired to exercise her option for the second of the two five-year renewal periods provided for in the lease. After the lessee gave notice of a desire to exercise the option for the second five-year renewal period, lessor notified the lessee and the sublessee that he considered that they were holding over beyond their term and gave notice to vacate the premises within 60 days from receipt of the notice. Upon refusal of the demand for the premises plaintiff filed a dispossessory warrant against the lessee and the sublessee on the ground that they were holding over and beyond their term. The defendants filed their counter-affidavit and bond and later amended the affidavit. The amendment to the affidavit alleged that Mrs. Hugh R. Reece remained in possession of the property and made the monthly payments as provided in the lease for the five-year period covered by the first option until June, 1960, and that the tender of the $75 payment for July, 1960, rent was refused. The affidavit further alleged: "3. On February 10, 1960, the defendant Mrs. Hugh R. Reece, again exercised the option to renew and extend the second of the two five (5) year options by giving written notice by letter dated February 10, 1960, which was received by S.C. Hicks, attached hereto as Exhibit "B" and made a part hereof. During the terms of said lease, the defendant Mrs. Hugh R. Reece, sublet the premises to George H. Gentry for the same period of time contained in her lease contract. . . 4. Defendants further show that the notices required for the first and second term were given more than sixty (60) days prior to the expiration of each respective term and plaintiff is estopped to deny his obligations under the said lease contract. Defendants have complied with all terms of the contract and have made all monthly payments until the refusal by plaintiff to accept same and now stand ready, willing and continue to tender the payment of all payments due under said contract. 5. The first knowledge or information defendants had of any contention on the part of plaintiff of not honoring the original renewal notice given in 1955 was some (5) years later and was by letter dated February 24, 1960, wherein plaintiff for the first time after receiving the rent due during these years contended that the notice given in 1955 was not honored and this notice was received by Mrs. Hugh R. Reece from Claud M. Hicks, Attorney for S.C. Hicks, as per letter as attached hereto marked Exhibit `C' and made a part hereof."
The evidence and stipulations show the facts recited above. The court, trying the case without a jury, rendered a judgment in favor of the defendants and the plaintiff excepted.
The trial court's judgment was right for four reasons:
1. The question involved here has been ruled on in Save-Way Oil Co. v. Thomas, 100 Ga. App. 181 ( 110 S.E.2d 681). The rationale of that case and this is that the original lease provides for the exercise of options to renew for two five-year terms. The question is not whether the word "renew" or the word "extend" is used but whether the parties intended a present devise or that a new lease be executed at the end of each five-year term. In the case above cited and in this one the original lease provided for an option as to each of the two renewal periods of five years. If a new lease had been contemplated the provision for the second option would not have been put in the original lease as to the option for the second renewal term because such an agreement in the original lease would not have been necessary. Indeed, the first lease with all of its provisions would have been superseded by a new lease and the new lease and the new lease would have had to include an option for the second renewal period.
2. Even if a new lease had been in the contemplation of the parties, and if after due notice the landlord was obligated to execute a new lease and refused, the tenant would have an equitable right to a new lease and would not have to resort to a petition for specific performance for the reason that the tenant's right to specific performance can be asserted as a defense to a dispossessory proceeding. Pritchett v. King, 56 Ga. App. 788 ( 194 S.E. 44).
3. The landlord honored the first notice under the original lease provision and did not require a new lease, and this conduct is an estoppel against the landlord to assert his right to a new lease for the second renewal term as pleaded by the tenant.
4. The most cogent reason why a new lease was not necessary under the facts of this case is one which has evidently been overlooked through the years. Our interpretation of the Supreme Court's ruling in Slater v. Kimbro, 91 Ga. 217 ( 18 S.E. 296, 44 ASR 19), speaking through Judge Bleckley, is that with or without a notice from the tenant exercising an option of extension or renewal, and even if a renewal contract is contemplated, the landlord cannot deny the tenant the renewal term unless the landlord tenders a renewal contract to the tenant and the tenant refuses to execute it. This ruling seems to take precedence over the ruling in Walker v. Brooks Simmons Co., 44 Ga. App. 470, 471 ( 161 S.E. 659) and any others to the contrary. The Walker case differs from this case, let it be noted, in that, in that case there was no notice and it was simply held that in the absence of notice to exercise a renewal option the mere holding over and paying rent did not effect a contract for a renewal term.
Judgment in favor of the tenant affirmed. Bell and Hall, JJ., concur.