In West View, the lessee sought, inter alia, to have a lien impressed against the leased premises to secure the landlord's obligation to pay for improvements made by the lessee.Summary of this case from Mead Corporation v. Abeles
SUBMITTED MARCH 12, 1951.
DECIDED MAY 15, 1951.
Specific performance. Before Judge Atkinson. Chatham Superior Court. January 4, 1951.
John L. Westmoreland, John L. Westmoreland Jr., Jenkins Oliver, Robert J. Travis, and J. Ralph McClelland Jr., for plaintiff in error.
Brannen, Clark Hester and Ernest J. Haar, contra.
1. The petition as amended was sufficient to state a cause of action for (a) the consolidation of the dispossessory and distress-warrant proceedings with the equitable action, (b) a money judgment, (c) an accounting, and (d) general equitable relief.
2. The allegations in such petition were insufficient to authorize the granting of a legal or equitable lien on the property of the lessor.
3. The court erred in overruling the defendant's special demurrer to the prayer for specific performance.
No. 17423. SUBMITTED MARCH 12, 1951. — DECIDED MAY 15, 1951.
The exception here is to an order overruling general and special demurrers to an equitable petition.
Thunderbolt Yacht Basin, Incorporated, filed an equitable petition in Chatham Superior Court against West View Corporation, a corporation having its principal office in Fulton County, which will hereinafter be referred to as the defendant, and against Bryan Williams, Bailiff of the Municipal Court of Savannah. The petition as amended in substance alleged: The plaintiff operates a yacht basin and marine general repair basin and railway at Thunderbolt, Georgia, on property of the defendant, and since December 31, 1948, has been a tenant at will of the defendant under an agreement with the defendant, whereby during the tenancy at will, though the agreed rental was to be $450 per month, no rent was to be paid until a final accounting between the parties, either "at the time of the sale of said property, or at such time when petitioner would be able to purchase the property, and as against said rentals petitioner was to receive credit, and in the event that the rental agreement was terminated, for any reason, together with the agreement above referred to, your petitioner was to be allowed thirty (30) days in which to remove his [its] personal property from the premises"; and thereupon an accounting was to be had between the parties and the amounts due either party were to be then paid. The plaintiff was to receive credit for all improvements made upon the property and all expenditures made by it for maintenance and repairs on said property, consisting of 22 acres of land fronting on the Wilmington River, together with enumerated buildings. Under this agreement, the plaintiff was to maintain, repair, and keep in good condition all the equipment, buildings, tanks, grounds, and marine railway on the premises, and when the rental agreement was terminated the agreed rental due as of the date of the termination was to be deducted from the amounts of expenditures made by the plaintiff and the balance paid to the plaintiff, 30 days' notice of which termination was to be given to the plaintiff. Under this parol agreement, the plaintiff had expended $31,090.35, as shown by an itemized statement attached to the petition. The plaintiff had fully performed its agreement and, as a result of the improvements made to the real estate, "it has an equitable interest in said property," and as long as the amount of improvements made by the plaintiff exceeded the amount of rental due, it was to remain in possession of the property without the payment of any sum, until a sale should have been made and an accounting had, and upon a final accounting any accrued rental was to be deducted from the amount of the equitable interest the plaintiff held in the property.
On June 7, 1950, the defendant by letter demanded that the plaintiff pay $7700 as accrued rental, and notified the plaintiff that, by reason of such default in the payment of rent, the tenancy was terminated and possession of the property was demanded. On June 8, 1950, the defendant filed in the Municipal Court of Savannah (a) a dispossessory warrant, claiming that the plaintiff had failed to pay the rent due, and (b) a distress warrant for nonpayment of rent, both proceedings relating to the property covered by the lease. Subsequently to the filing of the original petition, counter-affidavits and bonds were filed in both proceedings, and by operation of law the two actions in the municipal court have been "referred" to Chatham Superior Court. The defendant has failed and refused to make an accounting and settlement of the amount due, and upon an accounting the plaintiff will be entitled to $23,309.35.
The prayers of the petition as finally amended were: (a) that the plaintiff have judgment in the sum claimed; (b) for an accounting; (c) for an injunction restraining the defendant from interfering with the plaintiff's business; (d) for a decree establishing the equitable interest of the plaintiff in the leased premises; (e) for a decree of specific performance of the agreement by the defendant; (f) for a consolidation of the dispossessory and distress-warrant actions with this action; (g) that any judgment in favor of the plaintiff be declared a special lien against the leased premises; (h) for further equitable relief.
The defendant demurred generally to the petition as amended on the grounds: (a) the petition fails to set forth a cause of action either at law or in equity; (b) the plaintiff is not entitled to any of the relief prayed; (c) a complete and adequate remedy exists at law; (d) the Superior Court of Chatham County does not have jurisdiction of this case, because there is no substantial relief prayed against a resident of Chatham County. The defendant also filed special demurrers attacking various paragraphs of the petition and several of the prayers for relief. The court overruled all of the demurrers.
1. (a) A proceeding to dispossess one from the possession of land, wherein a counter-affidavit and bond have been filed and the papers returned to the superior court of the county of the defendant's residence for trial of the issues raised, is, until disposed of, a pending proceeding within the exception provided in Code § 3-202, which is as follows: "All petitions for equitable relief shall be filed in the county of the residence of one of the defendants against whom substantial relief is prayed, except in cases of injunctions to stay pending proceedings, when the petition may be filed in the county where the proceedings shall be pending, provided no relief is prayed as to matters not included in such litigation." Bedgood v. Carlton, 145 Ga. 54 (1) ( 88 S.E. 568). The defendant, a resident of Fulton County, having sued out dispossessory and distress warrants against the plaintiff in the Municipal Court of Savannah, upon the plaintiff filing counter-affidavits and bonds, and by operation of law the cases having been transferred to Chatham Superior Court (the Municipal Court of Savannah having no jurisdiction to try the issues made by the counter-affidavits — Ga. L. 1915, p. 124, sec. 3; Ga. L. 1927, p. 455, sec. 2), where they are now pending — the defendant has submitted itself to the jurisdiction of Chatham Superior Court as to all matters included in the litigation which it instituted. DeVore v. Baxter, 150 Ga. 188 (2) ( 103 S.E. 242); Mansfield v. Gray, 153 Ga. 414 (1) ( 112 S.E. 646); Vickers v. Robinson, 157 Ga. 731 (1) ( 122 S.E. 405).
(b) A landlord is liable for all substantial improvements placed upon the premises by his consent. Code, § 61-111. In a tenancy at will, where under the lease agreement the lessee agrees to make certain permanent improvements on the premises, the cost of which the lessee can apply against the monthly rentals, until he is reimbursed, and where, in pursuance of the contract, the lessee does make the improvements agreed upon, the character of the tenancy is not changed, but the lessor would be estopped to terminate the tenancy by giving the statutory notice. Sikes v. Carter, 30 Ga. App. 539 (3, 4) ( 118 S.E. 430). In such a situation, the lessor cannot, without payment for repairs and improvements made by the lessee pursuant to the agreement, or tender thereof, dispossess the lessee as a tenant holding over. Petty v. Kennon, 49 Ga. 468; Richards v. Plaza Hotel, 171 Ga. 827 ( 156 S.E. 809); Tanner v. Campbell, 182 Ga. 121 ( 184 S.E. 705). Compare Harvey v. Atlanta Lowry National Bank, 164 Ga. 625 ( 139 S.E. 147); Parham v. Kennedy, 60 Ga. App. 52 ( 2 S.E.2d 765).
(c) Equity has jurisdiction over matters of account growing out of privity of contract or where a multiplicity of suits will render a trial difficult, expensive, and unsatisfactory at law. Code, § 37-301. The facts alleged in the instant petition were sufficient to state a cause of action for an accounting. United Cigar Stores Co. v. McKenzie, 140 Ga. 270 ( 78 S.E. 1006); Smith v. Hancock, 163 Ga. 222 ( 136 S.E. 52); Gibson v. Smith, 187 Ga. 532 ( 1 S.E.2d 435).
(d) Suits between the same parties, which arise under the same contract, involve the same pleas, and upon which the same verdict may be rendered, may be consolidated. Code, § 3-112. In keeping with the spirit and purpose of equity, all other pending litigation in the same court between the same parties, in which the same subject matter is involved, may be consolidated with an equitable proceeding, to avoid the necessity of numerous trials. Pope v. United States Fidelity Guaranty Co., 193 Ga. 769 (3) ( 20 S.E.2d 13). Under the facts here pleaded, the dispossessory-warrant and distress-warrant proceedings have been converted into ordinary cases for possession and rent, and they are now pending in the same court in which this proceeding is filed. The issue in those two actions is the same, to wit: does the defendant in those cases owe any rent to the plaintiff therein? The instant case involves the same lease contract, the same parties, and the same claims for rent, and the plaintiff's petition asserts a defense to these claims on the ground that, upon an equitable accounting, it will be found that the plaintiff in this case does not owe the defendant any sum as rent, but that on the contrary the defendant is liable to the plaintiff, and the lease contract has not terminated. See Griggs v. Wilbanks, 96 Ga. 744 ( 22 S.E. 327); Cooper v. Bowen, 140 Ga. 45 ( 78 S.E. 413); Beavers v. Mabry, 195 Ga. 169 ( 23 S.E.2d 672).
(e) In the original petition as filed, it was prayed that the proceedings in the Municipal Court of Savannah be enjoined, but in a subsequent amendment it was alleged that, upon the giving of counter-affidavits and bonds, these cases had been transferred by operation of law to Chatham Superior Court and are now pending therein. There is no prayer that these actions be enjoined or stayed, but in substance the petition sets up legal and equitable defenses to these proceedings, and seeks (a) to consolidate the dispossessory and distress warrant actions, (b) a money judgment, (c) an accounting, and (d) general equitable relief.
Applying the foregoing rulings, the petition, as against the general demurrers, stated a cause of action for the relief enumerated above, and it was not error to overrule the general demurrers.
2. The plaintiff in paragraph 8 of its petition alleges that, as the result of its improvements to the rented premises, it has an "equitable interest" in the property of the defendant, and among the prayers it prays that any judgment rendered in its favor be established by proper decree as a special lien against the property. The defendant by special demurrer challenges these allegations and prayers, on the ground that, under the facts alleged in the petition, the plaintiff is not legally or equitably entitled to any lien against its property.
We know of no statute in this State which gives a tenant a lien for improvements, permanent or otherwise, made on leased premises, where the improvements were made by virtue of an agreement or without an agreement. Nor has counsel for the plaintiff cited any authority to sustain its claim in this regard. As a general rule, the failure of the landlord to comply with his agreement to pay the tenant at the expiration of the lease for improvements made by the tenant during the term of the lease entitles the tenant only to an action for the value of the improvements, or for damages. Speers v. Flack, 34 Mo. 101 (84 Am. D. 74). It has been held that, in the absence of an agreement between the parties that the value of improvements made by the lessee will constitute a lien against the lessor's property, the lessee cannot claim a lien against such property, though the lessor agrees to pay for such improvements at the expiration of the lease. Gardner v. Samuels, 116 Cal. 84 ( 47 P. 935, 58 Am. St. R. 135). Under the allegations in the instant petition, the plaintiff, in the event of recovering a judgment against the defendant, is not entitled to have such judgment declared a special lien against the property of the defendant, and it was error for the court to overrule grounds 4, 6, and 11 of the defendant's demurrer filed August 31, 1950.
3. Ground 9 of the defendant's demurrer filed August 31, 1950, challenges the plaintiff's prayer for specific performance, on the ground that the alleged oral agreement between the parties is too vague, general, indefinite, and uncertain to form the basis of any decree of specific performance. The plaintiff prays for the "specific performance of said agreement by the defendant," without specifying what particular agreement it wants performed. In its petition, the plaintiff alleges that it was agreed that a final accounting would be had between the parties, either (a) at the time of the sale of the property, (b) at such time as the plaintiff would be able to purchase said property, or (c) at the termination of the tenancy. Since the plaintiff is seeking to recover the sum expended in improving the premises, and the tenancy under the allegations in the petition has now been terminated, the prayer for specific performance could only have reference to the agreement as to the plaintiff purchasing the property. The allegations as to a description of the property and the terms of the sale are insufficient to authorize a decree of specific performance. See Prater v. Sears, 77 Ga. 28; Davidson v. Bartow Investment Co., 138 Ga. 673 ( 75 S.E. 980); Georgia Southern Florida Ry. Co. v. Taylor, 142 Ga. 350 ( 82 S.E. 1058); Elliott v. Cline, 184 Ga. 393 ( 191 S.E. 372). The plaintiff's prayer for specific performance should have been stricken.
All other grounds of special demurrer which were not rendered inapplicable by reason of amendments to the petition have been considered, and we are of the opinion that they were properly overruled.
Judgment affirmed in part and reversed in part. All the Justices concur.