DECIDED MARCH 10, 1950. REHEARING DENIED MARCH 25, 1950.
Damages; from Fulton Civil Court — Judge Robert Carpenter. July 12, 1949. (Application to Supreme Court for certiorari.)
Alton T. Milam, Gordon A. Smith, Robert G. Smith, for plaintiffs in error.
James C. Howard, Dunaway, Riley Howard, contra.
Where the evidence showed a written contract whereby, for an expressed consideration of $90 per month, one of the defendants, acting through the other defendant, leased to the plaintiffs certain machinery and equipment for a period of twelve months, unmixed with fraud as to the subject-matter of the written agreement, parol evidence, though admitted without objection, to the effect that the defendant also agreed, as part of the expressed consideration, to allow the plaintiffs to use the premises where the machinery and equipment were then located, falsely representing himself to be the owner of the premises, was without probative value to vary the terms of the written instrument. Accordingly, the trial judge, hearing the case without the intervention of a jury, erred in considering such parol evidence and in rendering judgment for the plaintiffs for damage alleged to have been sustained because of being dispossessed by the true owner of the premises.
( a) The case is distinguishable from those where the oral contemporaneous agreement relied upon is alleged to have been the inducement or consideration for a written contract having its own separate and distinct terms.
DECIDED MARCH 10, 1950. REHEARING DENIED MARCH 25, 1950.
Howard U. Vaughan and Joseph Berman brought suit against Roy R. Cooper and George T. Edwards in the Civil Court of Fulton County, alleging that they had been damaged by the defendants in the sum of $5634.30, by reason of the following facts: On October 10, 1945, the plaintiffs were desirous of obtaining a business location for conducting a meat market and poultry business, and on that date a concern, McBride and White, was retiring from business at 479 Mitchell Street, S.W. in Atlanta, Georgia, and upon being contacted referred the plaintiffs to the defendants. The defendant Cooper informed the plaintiffs that the business property, together with the equipment used in connection with the business operated by McBride and White, belonged to the defendant Edwards, all of which could be leased by the plaintiffs for a monthly rental of $90. On October 16, 1945, the plaintiffs entered into an agreement with the defendant Edwards, represented by the defendant Cooper, whereby the plaintiffs leased the said premises known as 479 Mitchell Street, Atlanta, Georgia, for a period of twelve months from October 16, 1945, at $90 per month, which sum included the hire of the said equipment and the rental for the said real estate. The plaintiffs entered into a written agreement for the hire of the said personal property, a copy of which was attached to the petition as Exhibit "A" and made a part thereof. This agreement is shown to be between George T. Edwards and the plaintiffs, dated October 16, 1945, and recites that for the sum of $90 per month payable in advance, Edwards has leased to the plaintiffs, for a period of twelve months, certain described machinery and equipment located at 479 Mitchell Street, S.W., in Atlanta, Georgia. Paragraph marked "Eighth" provided: "It is further expressly understood and agreed that any verbal claims or agreements respecting the said property shall be and hereby are waived and that all agreements between the parties are embodied in this indenture."
It was alleged that the agreement for the use of the building was verbal, and that the entire consideration to be paid for the use of the real estate and the personal property was set out in the written lease agreement for the personal property. The plaintiffs went into possession on October 16, 1945, and remained in possession of the premises at 479 Mitchell Street, S.W. and paid the contract price for the lease of the real estate and personal property for a period of four months. The plaintiffs then learned that the defendant Edwards was not the owner of the said premises, and the plaintiffs were ordered to vacate the said premises by the true owner. The said premises were never at any time owned by the defendant Edwards. The petition then sets out the earnings of the plaintiffs, acting as partners, and the items of damage by reason of being forced to vacate the premises and their inability to obtain another location, and alleges that the defendant Cooper in all the matters complained of acted for and on behalf of the defendant Edwards as his agent. It was alleged that the said Cooper and the said Edwards, acting through his agent, servant and employee Cooper, well knew that Edwards did not own the said real estate and had merely a lease thereon which expired on February 14, 1946, and that the said false representations were made to the plaintiffs by the said Cooper and the said Edwards, acting by and through the said Cooper, for the purpose of inducing the plaintiffs to rely upon the false representations, that they had no reason to believe them false, relied upon them and were thereby deceived, and as a result injured and damaged as set out in the petition. Damages were prayed in the sum of $5634.30.
The defendants filed an answer denying all allegations of the petition except that they were defendants.
Upon a hearing before the Hon. Robert Carpenter, Judge of the Civil Court of Fulton County, presiding without the aid of a jury, the evidence, so far as material to a decision of the case, was as follows:
Joseph Berman testified: "We [he and Howard Vaughan] leased the premises from Mr. Cooper, who was his representative. It [the lease] is a definite agreement between Mr. Edwards, Mr. Vaughan and myself for the use of this equipment, which also included the use of the space to have the equipment in and the use of it, this document being marked plaintiff's exhibit 1 by the reporter for identification. . . We had an oral lease for the use of this property for one year. We were supposed to pay $90 a month for the use of the property and the equipment. In other words, my testimony is that while this agreement as to the personal property called for $90 a month that I had an oral agreement for the use of the premises known as 479 Mitchell Street without additional rent being paid. . . I also had a conversation with Mr. Cooper in which he said that Mr. Edwards was the owner of the property, . . I relied on what Mr. Cooper told me concerning the situation. After I went in there I paid the rent to Mr. Cooper made out to Mr. Edwards. At all times I had my relations with Mr. Cooper. . . I had the oral lease for the use of the premises at the same time we signed this written agreement for the use of the equipment in that particular space. In other words, the two agreements were simultaneous. I kept the premises there for four months, paying my rent to Mr. Edwards through Mr. Cooper, as I testified. . . At the time I received this notice [from the true owner to vacate] I spoke with Mr. Cooper about it, and at that time I found out that he was representing Mr. Edwards as Mr. Edwards not being the owner. Mr. Cooper told me that then, and that was the first time he had made that known to me. At the time the original agreement was made I asked Mr. Cooper if Mr. Edwards was the owner, and at that time he represented Mr. Edwards as the owner. [The witness then detailed items of loss because of the ouster.] . . I say I had an oral contract for lease with Mr. Cooper as the agent of Mr. Edwards for one year from the time he signed the lease on the equipment in the building. The rental was $90 per month which included the equipment and the space used. The oral part was about the space. The equipment was supposed to be in there for the use of that also. We had an oral contract for one year. . . $90 a month included the rental of the space and equipment. . . The use of the space was nothing more than an oral agreement, but $90 a month was for both the use of the space and equipment. I had an oral agreement for the use of the space and equipment. I had an oral agreement for the use of the space without naming a separate and distinct consideration for the use of the space, that being included in the lease. There was no written agreement as to the use of the space. . . We were allowed the use of the space for the consideration of $90 a month, also the equipment. I said I had a conversation in the presence of somebody named White who told us Mr. Edwards was the owner of the building, being the sub-lessor for the building. Mr. White told us Mr. Edwards was the owner of the building. As to Mr. Cooper's not telling me at that time that Mr. Edwards was the owner of the building — he didn't say he was not the owner and he didn't say he was the owner, either, and he was standing there. . . I took Mr. Cooper's non-voice in the matter. . . He didn't say he didn't own it. . . I asked Mr. Cooper if Mr. Edwards was the owner of the building, and he said he did, he was the owner. I asked him that when we signed the lease. . . He said Mr. Edwards was the owner of the space we were leasing and the equipment. . . He said Mr. Edwards was the owner of the building. Put it that way. That was the only investigation I made as to who owned the building."
Howard U. Vaughan testified: "I remember signing that agreement [the written agreement]. . . I was there, but things like that I couldn't understand, and I left that up to Mr. Berman because he was more qualified to look after it than I was. . . We got a notice to move out of the building in January, I believe, to vacate by the first of February, and we did vacate the premises. . . At the time we were operating this business it was earning around a hundred dollars a week. . . The $90 included the equipment and building." The witness also testified as to items of loss because of being forced to move.
James C. Howard Jr. testified that he was a practicing attorney and had searched the title records as to the ownership of the property at 479 Mitchell Street, S.W. and that his search revealed nothing on record to show that anybody by the name of Edwards owned the property at any time during the years 1940 to 1946, inclusive.
Roy Rosser Cooper testified: "All the agreements I made with either of these parties was made before that lease was drawn, and after they got into the premises they called me and said they had to fix the plaster, the health inspector made them paint it and fix it. I told them the landlord wouldn't do a thing in the world to it, and I would see if Mr. Edwards would consent to do some of it, but the lease was drawn and we sent it to them and they signed it and Mr. Edwards signed it, and that was the extent of my part of the agreement. . . I did not at anytime represent to either Mr. Berman or to Mr. Vaughan that Mr. Edwards owned the premises known as 479 Mitchell Street, S.W., in Atlanta, Georgia. . . You ask if the $90 per month was for rent on the building and the equipment or whether it was for what is recited in this contract. It was for exactly what was recited in that contract. It was for nothing about the building. They were to use the space where the equipment was. The equipment was already there. As to whether there was any agreement as to the period of time they were to use the space for the equipment — there wasn't any drawn out. I didn't have any right to sublease or enter into any lease contract for the use of the premises with anyone, and I did not do so. I tried to help them find a location when this was terminated, so they could use the equipment in there. I did not at any later time make any representations to Mr. Berman or Mr. Vaughan as to the ownership of that building. I never at any time made any representations as to the ownership of the property to either Mr. Berman or Mr. Vaughan. I did as to the equipment or personal property that was in the premises. I told him that it belonged to Mr. G. T. Edwards, and it did at the time, and I was his bookkeeper. . . This is Mr. Edwards' signature on this lease contract. I witnessed it when he signed it. . . He told me it was all right to lease the personal property there. . . As to whether I told these folks they could have the premises and equipment for $90 — I told them they could use that space. The space wouldn't have been any good without the equipment. I just leased it to them like they wanted it. . . I didn't say they could use that space as long as they leased it. That wasn't brought up. . . You ask if, when I went down to get Mr. Edwards to sign this agreement, I didn't tell Mr. Edwards at that time that I had leased the place over there and the equipment to them for a total of $90 a month. No, I didn't tell him anything. I just let him read the lease. He read it over, and he said that was satisfactory, and he signed it. . . I was to send the check to the landlord for the rent, but it was Mr. Edwards' money. . . Absolutely, I knew Mr. Edwards never did own that building over there, and I never told anyone under the sun that he did own it."
Joseph Berman, recalled, testified: "Mr. Cooper did represent to me that Mr. Edwards was the owner of the building there at 479 Mitchell Street. That was before this agreement was entered into and when he went to sign it up, approximately that time. He did tell me we could stay there for a period of 12 months during the period for which we leased this personal property, $90 included the use of the space and the equipment."
Roy Rosser Cooper, recalled, testified: "There was only one agreement between Mr. Edwards and these two gentlemen, and that agreement was in black and white. . . After Mr. Berman and Mr. Vaughan removed themselves from the premises at 479 Mitchell Street, S.W., I did not deny them the right to remove this property as set out in this written agreement with them to any new premises. I tried to help them find a place to move this property and to continue their business using this property. You ask if I didn't agree that they could use this property in this space. My agreement was canceled. They didn't want my agreement. They wanted it in black and white, and this paper was drawn. . . You say they got the privilege of using the equipment in the premises for $90 a month — they were using it. As to whether it was with my permission and consent — I didn't have any consent. I didn't tell them to get out of there and take the equipment with them. I didn't have any authority to tell them to get out."
There was in evidence the contract between the parties, executed on a stock form lease contract for personal property, and being in substance as hereinbefore stated in setting out the petition. In the contract it was recited that the lessor would continue to pay the gas and light bills, to be reimbursed by the lessees each month. Also in evidence were several receipts from the lessor for "rent" and gas and light bills paid by the plaintiffs as "Savoy Market."
The presiding judge entered judgment for the plaintiffs for $2500 and costs. The defendants filed a motion for new trial on the usual general grounds, and by amendment added three special grounds in elaboration of the general grounds. The court overruled the motion, and the exception here is to that judgment.
The plaintiffs in error contend that there was only one valid contract, the written agreement for the lease of machinery and equipment, that the alleged oral agreement for the use of the space occupied by the machinery and equipment was without consideration, and that the court, in rendering judgment for the plaintiffs, in effect erroneously permitted the oral testimony of the plaintiffs to add to or rewrite the written agreement. Counsel for the defendants in error invoke the rule that one contract may be the consideration or inducement for another. We now examine the two separate and distinct principles of law respecting the probative value of parol evidence as relating to contracts.
The Code, § 20-704 (1), provides: "Parol evidence is inadmissible to add to, take from, or vary a written contract. All the attendant and surrounding circumstances may be proved, and if there is an ambiguity, latent or patent, it may be explained; so if a part of a contract only is reduced to writing (such as a note given in pursuance of a contract), and it is manifest that the writing was not intended to speak the whole contract, then parol evidence is admissible." This principle has been followed in numerous cases in the appellate courts of this State, some of the most recent being Stonecypher v. Georgia Power Co., 183 Ga. 498 ( 189 S.E. 13); Cottle v. Tomlinson, 192 Ga. 704 ( 16 S.E.2d 555); Shubert v. Speir, 201 Ga. 20 (2) ( 38 S.E.2d 835); Johnson v. Young, 79 Ga. App. 276 ( 53 S.E.2d 559). This rule fixes the finality of a written contract which is unmixed with fraud respecting the subject-matter. It is moreover a rule of substantive law, and though parol evidence be erroneously admitted without objection it is without probative value to vary the terms of a written contract. Cleghorn v. Shields, 165 Ga. 362 (2) ( 141 S.E. 55). "However, all prior or contemporaneous parol agreements between the same parties are not necessarily merged into the written contract. A distinct collateral oral agreement, not inconsistent with the written one, is not so merged. 13 C. J. 593, — 616. It is a well-settled rule that one contract may be the consideration of another, the inducement to the execution thereof; and where an independent parol agreement has been made as the inducement to the making of a written contract, the former may be proved and enforced, though not referred to in the latter." Indiana Truck Corporation v. Glock, 46 Ga. App. 519 (1) ( 168 S.E. 124). As early as Spier v. Lambdin, 45 Ga. 320, it was said that a written contract for the sale of a lease of a school building and its grounds was, under the allegations of the petition, a consideration for making an independent contract by which the seller agreed not to teach school in the locality, and such independent contract might be proved by parol since it formed no part of the written contract but stood on its own terms. See also Neuhoff v. Swift Co., 54 Ga. App. 651 (2-a, b) ( 188 S.E. 831); Langenback v. Mays, 205 Ga. 706 ( 54 S.E.2d 401); 20 Am. Jur. 992, § 1140; 32 C. J. S. 970, § 997. This principle was recognized in Stonecypher v. Georgia Power Co., supra, and Cottle v. Tomlinson, supra, but where the court held that the facts showed only one contract, the oral contemporaneous agreement sought to be enforced varying the terms of the written contract.
It will be noted from an examination of the cases that where parol evidence is inadmissible under the first line of cases to vary the terms of a written contract there is only one contract between the parties, and that where it is admissible under the second line of cases two contracts are involved. This distinction should remove much of the difficulty in determining whether or not a contemporaneous oral agreement is enforceable. Where it is enforceable it is not inconsistent with the written agreement. It is separate and distinct from the written contract. In such circumstances no further performance is sought or damages claimed for non-performance under the written contract. That contract stands on its own terms. Any relief under the oral agreement alleged in the present case would have to be based on the theory that it was the inducement or consideration for the execution of the written contract and, therefore, a binding legal obligation, and not that it was the consideration for the leasing of the machinery and equipment, the real consideration for which was the $90 expressed in the written agreement.
Having in mind the principal stated in the second line of cases hereinbefore cited, counsel for the defendants in error seek to have it applied to the evidence in the present case, asserting that "The consideration for the lease of the real estate was the execution of the written lease for the equipment and fixtures." The written contract expressed as a good and sufficient consideration for the lease of the equipment and fixtures the payment of $90 per month. It was, as stated by counsel for the defendants in error in another part of their brief, "complete unto itself and can have no effect or bearing upon any other agreement that might have been entered into by the parties." Hence, the only complaint that can be made is that the plaintiffs were deprived of some right inherent in the oral lease of the premises or space, the right not to be evicted. The evidence on behalf of the plaintiffs is not, however, of this tenor, but throughout the record the contention is that they were to receive for the $90 per month, not merely the lease of the equipment and machinery, but also the lease of the premises. There is not one statement in the evidence that the written contract was the inducement or consideration for the alleged oral contract or that the alleged oral agreement was the inducement or consideration for the written contract. It is in no wise shown that the execution of the written contract was contingent upon anything else. The position of the plaintiffs in their testimony merely amounts to saying that the written contract does not express all that they were to get for $90, and that it should also express an additional benefit, to wit, the lease of the premises. Obviously, this is nothing more or less than an attempt to vary the terms of a written contract by parol testimony and can not be done. It follows that the court erred in entering judgment for the plaintiffs.
The contention of counsel for the defendants in error that, assuming that there was no consideration for the lease of the premises, the oral agreement would not be void and the plaintiffs would be entitled to recover, is not under the facts of the case well taken. It is true, as pointed out by counsel, that a contract of rental for a period not exceeding 12 months may be parol (Code, § 61-102), that when one enters into possession of premises there is an implied obligation to pay a fair and reasonable rental (Code, § 61-103; New v. Quinn, 31 Ga. App. 102 (4), 119 S.E. 457), and that even though no rent is paid the agreement would not be void and the landlord could sue and recover rent. Southern Bell Tel. c. Co. v. Harris, 117 Ga. 1001 ( 44 S.E. 885); Kirkland v. Odum, 156 Ga. 131, 135 ( 118 S.E. 706). However, "where no time is specified for the termination of the tenancy, the law construes it to be for the calendar year [Code, § 61-104]. Wills v. Harrell, 118 Ga. 906 (2), 45 S.E. 794." Goettee v. Carlyle, 68 Ga. App. 288 (5) ( 22 S.E.2d 854). The calendar year is from January 1st through December 31st. Byrne v. Bearden, 27 Ga. App. 149 (1) ( 107 S.E. 782). The plaintiffs entered into possession on October 16, 1945, and were dispossessed at the end of four months or on February 17, 1946. They paid no rent. While there are in the record several receipts for "rent" and gas and light payments, it is not shown that the recited $90 was for rent of the premises, and it must be taken that this amount was in payment of the contract price for the lease of the equipment and machinery. The testimony of Cooper was that the plaintiffs were merely allowed to use the space occupied by the equipment and machinery without any specific lease agreement, and there was no testimony that specific payments were made for the leased premises, it being contended merely that the $90 consideration was for the equipment and machinery and the premises, whereas we have held above that, properly construed, it was only for the lease of the machinery and equipment as shown by the written agreement. After December 31, 1945, the plaintiffs were merely tenants by sufferance, the record disclosing nothing that would authorize a finding that this tenancy had been converted into a tenancy at will by either the defendants or the real owner of the realty. Willis v. Harrell, supra; Stanley v. Stembridge, 140 Ga. 750, 755 ( 79 S.E. 842); Crawford v. Jones, 27 Ga. App. 448 ( 108 S.E. 807). As such they were not entitled to any notice before dispossession. Willis v. Harrell, supra; Minor v. Sutton, 73 Ga. App. 253, 256 ( 36 S.E.2d 158); Haynie v. Murray, 74 Ga. App. 253, 256 ( 39 S.E.2d 567); Code, § 61-301.
It is also urged by counsel for the defendants in error that G. T. Edwards was fraudulently represented to be the owner of the premises, and that notwithstanding the written contract parol testimony should be allowed to show that the $90 consideration was not only for the lease of the machinery and equipment but also for the premises. We are unable to understand wherein such fraud can be said to vitiate the written contract. The representations, if any, related only to the ownership of the real estate, and not to the subject-matter of the written agreement, the machinery and equipment, the title to which was conceded to be in the defendant Edwards, and it is not claimed that the contents of the written instrument were misrepresented to the plaintiffs. Since it is held that no valid lease for the premises was obtained, it follows that fraudulent representations respecting such ownership were not harmful to the defendants in error.
Judgment reversed. Gardner and Townsend, JJ., concur.
ON MOTION FOR REHEARING.
The defendants in error have filed a motion for rehearing in which they contend that this court overlooked the following evidence: "We had an oral agreement for the use of the property for one year. . . In other words, my testimony is that while this agreement as to personal property called for $90 per month that I had an agreement for the use of the premises without additional rent being paid," this being testimony by one of the plaintiffs, and also the following testimony by the defendant Cooper: "They were to use the space where the equipment was. The equipment was already there. They did in fact use it four months." The indicated omitted language is as follows: "We were supposed to pay $90 a month for the use of the property and the equipment." It is contended that the quoted evidence was sufficient to authorize the trial judge to find that there were two agreements, one for the use of the personal property and another for the use of the premises where it was located. But what was the consideration for the oral lease? It is nowhere contended that it was the written contract for the lease of the personal property. The whole tenor of the testimony for the plaintiffs was, as stated in the opinion rendered, that the $90 expressed as the consideration for the lease of the personal property was also for the use of the premises. Thus it is sought by oral testimony to change the terms of a written contract and this can not be done. The quoted testimony of one of the plaintiffs does not show to the contrary. If a written contract does not in fact express the real agreement between the contracting parties, the remedy, if any, is reformation in a proper proceeding for that purpose. It was nowhere shown that Cooper had any authority to lease the premises. A written agreement was entered into at the special request of the plaintiffs, according to his uncontroverted testimony, and this instrument, which related only to the use of the personal property, was then taken to the home of his employer and there signed by him.
In renewing their contention that the parol testimony having been admitted without objection should be taken into consideration, it is pointed out that Cleghorn v. Shields, 165 Ga. 362 (2) ( 141 S.E. 55), which we cited as showing that the question here is one of substantive law, was rendered with two Justices dissenting, and it is asserted by movants that this court is not bound by it and should follow certain cited cases where it is held that where parol evidence of the kind there under consideration was admitted without objection it is entitled to consideration. We regard the Cleghorn case as stating sound law, but in any event it is well settled that this court is bound by such a decision of the Supreme Court. Without discussing the cases decided by this court and cited by the movants, it is sufficient to say that any ruling therein made, if contrary to that in the Cleghorn case, must yield thereto. In Walters v. Americus Jewelry Co., 114 Ga. 564 ( 40 S.E. 803), the parol evidence was admitted, not for the purpose of changing the terms of a written contract, but to determine whether the contract was one of rental or purchase. In Barber v. Housing Authority of Rome, 189 Ga. 155 ( 5 S.E.2d 425), the parol evidence was admitted for the purpose of clarifying a description of property. The inapplicability of these two cases is obvious.
It is further submitted that this court overlooked the fact that the parties operated under their parol agreement for four months. As hereinbefore pointed out, it was not shown that Cooper had any authority to lease the premises. It appears that his employer had a lease on the premises, but only an unexpired period of about four months remained, and that he, being ill, was retiring from the chicken business. It further appears that, without objection, Cooper allowed the personal property to remain and be used in the space it had occupied until the true owner of the premises notified the plaintiffs to vacate. Nevertheless Cooper was without authority to lease the premises, and though occupying the space the plaintiffs were not even tenants at will. But as pointed out in the opinion, even if it could be said, as contended by the plaintiffs, that the use of the premises created an obligation to pay reasonable rent, then, since no time was specified, the right of possession ceased at the end of the calendar year, and after that they occupied no better position than tenants by sufferance and were not entitled to any notice to vacate. They were, in fact, given notice by the true owner.
All grounds and matters in the motion having been considered, the motion for rehearing is
Denied. Gardner and Townsend, JJ., concur.