Court Opinion

ID: 3404715
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:18:39.567532+00
Date Added: 2024-06-11T14:03:10.751748
License: Public Domain

The court did not err in overruling the general demurrer and entering judgment to that effect for the reasons set out in the body of the opinion.
         DECIDED JULY 16, 1949. REHEARING DENIED JULY 29, 1949.
Georgia Better Foods Incorporated and W. J. Folsom (defendants in error here) brought a petition against Mrs. Helena J. Shippen seeking a declaratory judgment. The petition was based on a lease whereby the defendant leased to W. J. Folsom the premises known as the Pershing Hotel, on Peachtree Street in the City of Atlanta. After the transfer, Georgia Better Foods Inc., operated the same business which was operated by W. J. Folsom under his lease, the business being a commercial and apartment hotel. The written lease was executed on May 17, 1943, for a term of 20 years. On August 6, 1947, with the consent of the defendant, Folsom transferred the lease to Morton Bright and William S. Hart, who in turn transferred it to Georgia Better Foods Inc. Under the transfer from Folsom he was not released from any obligation recited in the lease, and it is stipulated that the transferees became sublessees of the premises with liabilities thereof. There is attached to the petition a notice from the authorities of the City of Atlanta requiring that certain structural repairs, improvements, and changes be made to meet the requirements of the ordinances of the City of Atlanta. This notice was given to Mrs. Helena J. Shippen, the defendant. It contains fourteen specifications of defects in violation of various ordinances of the building code of the City of Atlanta. By negotiations between the parties to this suit and the City of Atlanta authorities, several of the specifications were eliminated from the requirements. There was attached to the petition as an exhibit an agreement between the defendant, Mrs. Shippen, of the first part, and W. J. Folsom, the original lessee, referred to as the party of the second part, and Georgia Better Foods Inc., referred to as the party of the third part. This agreement provided substantially that all the parties to the contract considered it expedient that the requirements of the City of Atlanta *Page 814 
with reference to the structural repairs, improvements, and changes should be met as to the premises in question; and that the plaintiffs were, by the agreement, authorized to proceed to meet the requirements of the City of Atlanta and to pay for the same; and that the plaintiffs were, under the agreement, obligated to present to the court a petition for a declaratory judgment to determine whether the liability for the cost of the structural repairs, improvements, and changes was to be upon the plaintiffs or the defendant. In the event the appellate courts determined that the defendant was liable, then she was to pay such costs, together with six percent interest. The compliance with the requirements of the City of Atlanta under this agreement was to proceed without prejudice to either party. The petition in the instant case was filed in the Superior Court of Fulton County. Demurrers both general and special were filed on behalf of the defendant. The court, after consideration of the amended petition on demurrer, overruled the general demurrer without passing on the special demurrers. We set forth the judgment overruling the general demurrer. From this judgment we think that we can get a clear understanding of several of the contentions involved, and the view of the trial court in overruling the general demurrer.
That judgment reads: "To the original petition filed by the plaintiffs the defendant filed her general demurrer. After the plaintiffs had filed an amendment to their petition, the defendant renewed her general demurrer to the petition as amended.
"The plaintiffs seek, by asking for a declaratory judgment, the construction of the duties and responsibilities as between the plaintiffs and defendant on a written lease from the defendant, as lessor and owner, and the plaintiff, W. J. Folsom, as the original lessee and the plaintiff, Georgia Better Foods Inc., as assignee of the lease. The dispute between the parties grows out of certain ordinances and regulations enacted by the City of Atlanta subsequent to execution of the lease, wherein the city authorities directed certain structural alterations and installations on the hotel property which is the subject-matter of the lease. As to certain items of alterations and installations on the hotel property, the plaintiffs, as lessees, contend that the duty and obligation for making the same is placed upon the lessor; *Page 815 
and, on the contrary, the lessor contends that the duties and obligations as to bearing the expense of these alterations and installations properly fall on the plaintiffs as lessees.
"The case as argued turns upon the construction of a written lease, dated May 17, 1943, wherein the defendant leased to the plaintiff Folsom what was then known as Pershing Point Apartments and now described as Pershing Point Hotel and the personal property described in the lease, for a term of twenty years.
"This lease on other features was before this court on a prior occasion, and the case on appeal may be found in 200 Ga. 58. The question now involved was not in the former case.
"It seems to the court that the parties themselves defined the nature of their relationship in the lease. In paragraph 17 of the lease it is stated: `It is further agreed that nothing herein shall be construed so as to create any other relation between the lessor and lessee than that of landlord and tenant.' The court can assume that when the parties thus stated the nature of their relationship they did so in the light of the definition of that relationship as is defined in Code section 61-103, and also that they had in mind the provisions of Chapter 85-8 of the Code dealing with estates for years. It would seem, from reading the entire lease and the many provisions therein, that the parties, in addition to describing their relationship as being that of landlord and tenant, endeavored to make it clear that the lease did not convey an estate for years to the lessee. Some of these provisions are:
"1. Lessee at his own expense is `to maintain the premises, including the furniture, carpets, rugs and fittings, in as good or better condition throughout the term of this lease as at the time of the beginning of the lease. Lessor shall have access to said premises at all reasonable times for the purpose of seeing that the premises are being maintained by the lessee as agreed herein.'
"2. `The lessor shall pay all taxes and assessments levied against said property by any government agency, except that if the assessment for al valorem taxes shall be increased and such increase be due to the improvements made on said property by lessee or added furnishings placed in said property by said lessee, the lessee shall be liable to lessor for such increased taxes occasioned by such acts of the lessee.' *Page 816 
"3. `The lessee shall not sell or assign this lease until the lessee has complied with the provisions of paragraph 4 of this lease and that in no event shall lessee sell or assign or transfer this lease until after the expiration of five years from the commencement of said lease.'
"It may be pointed out that the pleadings show that Folsom did assign the lease within five years and the same was consented to by the defendant.
"4. `If the lessee shall be adjudged a bankrupt, this lease shall terminate and any right which the lessee may have thereunder shall form no part of the lessee's bankrupt estate, and the same principle shall be applied in the event of a receivership caused by the insolvency of the lessee.'
"5. `In case the building on said premises shall be totally destroyed by fire or other casualty, this lease shall terminate and all of the rights of the parties hereto accruing after such destruction shall cease. In case the building shall be partially destroyed by fire or other casualty, lessor agrees to take immediate steps to repair and restore the premises and building in as good condition as said premises and building were before such partial destruction.'
"6. `That the rights of the lessee hereunder shall at all times be and remain subordinate and inferior to the interest of any holder of any bona fide loan in force at the time of the signing of this contract.'
"7. `The parties hereto agree to replace said pipes (used in plumbing) as they are needed as soon as it is reasonably possible, the lessor agreeing to furnish, at her expense, the said pipes, and the lessee agreeing to install said pipes at his own expense.'
"8. `Lessee agrees to hold lessor harmless against injury or damage to persons or property by lessee, his agents or employees, or any other person or persons because of his occupancy of the premises and whether the damage resulted from structural defect or otherwise, except the lessor will be responsible for any injury or damage resulting from the condition of the roof or the outside walls of the building.'
"9. `Lessor shall have the right to go upon said premises and remove all the furniture, rugs, lamps, fittings and repair parts *Page 817 
stored in the banquet room, basement and workshop on said premises.'
"10. `It is understood and agreed that lessor is to keep the roof and the outside walls of the building in good repair and that the lessor reserves for her own use said roof.'
"It appears from the plaintiff's petition that one of the matters required under the orders of the building inspector was the construction and installation of an exit stairway to the roof.
"The defendant contends that under the fifth paragraph of the lease the lessee was obligated to make structural repairs by reason of the agreement that the lessee was under the duty of `exercising diligence in fully observing all ordinances of the City of Atlanta, the laws of the State of Georgia, and laws of the United States.' The court is of the opinion that this provision does not include the enactment of future ordinances or resolutions which require structural changes or alterations having for its effect the enforcement of safety standards against fire.
"The court is therefore of the opinion that the petition, as amended, is good as against a general demurrer, and it is therefore ordered and adjudged that the general demurrer of the defendant to the petition of the plaintiffs and the renewed general demurrer of the defendant to the amended petition be and is hereby overruled."
The original petition was amended by striking paragraph 11 and substituting in lieu thereof the following paragraph: "That in the meantime, petitioner, Georgia Better Foods Inc., has invested its funds in the acquisition of said lease and has invested large sums of money in improving the furnishings in said hotel, including the purchase of a large amount of carpet, furniture, drapes, refrigerating equipment, and in painting the property, all of which, together with certain expense incurred by petitioner, W. J. Folsom, more particularly referred to in paragraph 4 of said lease, inured in a large measure to the benefit of the defendant, Mrs. Helena J. Shippen, under the percentage of receipts clause of said lease, as is indicated by the fact that for the fiscal year of said lease ending May 31, 1947, petitioner, W. J. Folsom, paid the defendant, not only the $2000 monthly rental, but excess rent in the amount of $24,546.70, and that for the fiscal year of said lease ending May 31, 1948, petitioner, *Page 818 
Georgia Better Foods Inc., paid defendant, not only the stated monthly rental of $2000 from the date it acquired said lease, but excess rent for said year in the sum of $35,140.56, with which payment defendant expressed extreme satisfaction with the operation of said hotel under the management and direction of petitioner, Georgia Better Foods Inc." The contract in question was set forth as an exhibit to the petition. We will mention such other portions of the petition and the exhibit as we may think pertinent when they arise during the course of the opinion.
(a) We think this a proper case for a declaratory judgment.
(b) The contract between the defendant as owner and the plaintiffs as subtenants (not following numerical order), among other things, provides: (1) The contract itself states that no relation other than that of landlord and tenant is created. (2) The lease carries a provision for a stipulated rental of $2000 per month and a percentage of the gross receipts. (3) The owner retained the ownership of furniture, carpets, and equipment with the right to remove certain parts thereof at any time she saw fit. (4) The owner reserved the right to have access to the books and records of the tenant. (5) The particular use to which the property could be put was limited to that of a hotel and apartment. (6) The owner remained obligated to pay taxes. (7) All furniture, fixtures and equipment placed on the premises by the tenant became the property of the owner. (8) In the event of bankruptcy or insolvency of the tenant, the lease was terminated, and the lease was not to become a part of the tenant's estate. (9) In the event of total destruction of the building by fire or other casualty, the lease was terminated. (10) In the case of partial destruction, the owner obligated herself to make the necessary repairs and restore the property to as good a condition as existed before such partial loss; and in the meantime the rent would abate in proportion to that part of the property which could be occupied. (11) The property could be mortgaged by the owner and the lease would be subservient to the mortgage. (12) The owner reserved for her own use the entire roof of the building, and in addition she *Page 819 
reserved the right to put a sign on the premises. (13) In the event the building was taken under eminent-domain proceedings, the lease would terminate. (14) The owner reserved certain space in the banquet room, basement, and workshop where the furniture, carpets, lamps, fittings, and repair parts were stored. (15) It was further provided that, in the event of default on the part of the tenant in the payment of rent and such default continued for a period of 30 days, or in the event the tenant refused to perform any obligation or covenant under the provisions of the contract, the owner had the option of canceling and terminating the lease and taking possession of the property. (16) Certain space in the basement occupied by a transformer belonging to the Georgia Power Company was excluded from the lease.
(c) Code § 85-805 provides: "A tenant for years is bound for all repairs or other expenses necessary for the preservation and protection of the property." This is the general rule as to responsibility of a tenant for years. Section 61-111 provides: "The landlord must keep the premises in repair and shall be liable for all substantial improvements placed upon them by his consent." This Code section expresses the general rule as to the obligation of the landlord where there is no tenancy for years. Unless there is some express provision in the lease contract, these general principles of law are applicable as between the parties. However, the lease contract in its entirety, and in view of the facts and circumstances concerning the situation, will be looked to in determining the intention of the parties to the contract. When we seek to view the intention of the parties to the lease contract here under consideration, we feel that we can reach no other conclusion than that the relation between the defendant and the plaintiffs was that of landlord and tenant respectively, notwithstanding the fact that the lease was for a term of twenty years. The parties so contracted in the lease. Besides, the owner or lessor imposed so many restrictions and reservations upon the tenant that, under all the facts and circumstances in view of these restrictions and reservations, it is not only lawful that the defendant be required to pay for these structural repairs, improvements and changes, but it would be inequitable and unjust not to require her to *Page 820 
bear them. As the trial court said in its opinion, the petition set forth that one of the requirements of the City of Atlanta was the construction and installation of an exit stairway to the roof. The defendant reserved the roof of the building for her exclusive use. Not only that, but she received as a rental $2000 per month and a percentage of the gross receipts. For the fiscal year ending May 31, 1947, she received, in excess of the stipulated monthly rental of $2000, the sum of $24,546.70. And for the fiscal year ending May 31, 1948, she received, in addition to the $2000 monthly rental, an excess rental of $35,140.56. It is further alleged in the petition that the defendant expressed extreme satisfaction with the operation of the hotel.
(d) This court has had before it recently the cases ofMidtown Chain Hotels Co. v. Bender, 77 Ga. App. 723 (49 S.E.2d 779), and Evans Theatre Corp. v. DeGive InvestmentCo., 79 Ga. App. 62 (52 S.E.2d 655), and the Supreme Court had before it the case of Kanes v. Koutras, 203 Ga. 570
(47 S.E.2d, 558). Counsel for both the plaintiffs and the defendant cite these cases in support of their respective contentions. We will not here engage in any lengthy discussion of these cases. We find nothing in them, under their facts as compared with the facts in this case, to convince us that the trial court erred in overruling the general demurrer in the instant case.
(e) Distinguished counsel for the defendant calls our attention to the provisions of Code § 61-111, supra, and cites many authorities as to the construction of the word "repair" as contained in that section. He cites Chastain v. Reserve Loanc. Co., 43 Ga. App. 91 (158 S.E. 448), which states in substance: A landlord is under no duty in absence of an express agreement to do so to repair a patent defect in the premises where its existence was known to the tenant at the time of the rental contract, and subsequent notice by tenant of the existence of such defect would not place upon the landlord any duty of inspection or repair. It is argued that the absence of structural changes was known to the tenant. Counsel in this connection calls our attention to paragraph 5 of the lease, which reads as follows: "Lessee is to use the within premises for a hotel and apartment purposes, and at his own expense is to maintain the premises." He further calls our attention to *Page 821 
paragraph 14 of the lease, which reads in part as follows: "It is agreed that the leased premises are in a condition satisfactory for the purposes herein contemplated, and the same are accepted without warranty or representation as to their condition on the part of the lessor." Counsel calls our attention to the case ofGavan v. Norcross, 117 Ga. 356, 361 (43 S.E. 771), wherein the court stated that "The word `repair' means to renew or to restore an existing thing — not to make a new one." In the sentence following that quoted above, the court said: "A covenant to repair ordinarily does not bind the landlord to rebuild, though there are cases in which the word `repair,' aided by the context, has been held to mean `rebuild.' Where the contract requires the tenant to keep the premises in repair, and return them in the same condition as when received, or other language is employed showing an intention to make either party rebuild, such duty will be imposed, even though the word `rebuild' is not used." This decision of the Supreme Court is a very interesting one, and we think by analogy illustrates the issue here — the issue as to whether the landlord or the tenant is to be liable under the lease contract here involved — "when we take the four corners of the lease," the expression of counsel for the defendant in his brief, and by its terms and the facts and circumstances concerning it endeavor to grasp the intention of the parties to the lease. It must be kept in mind that the structural repairs, improvements, and changes required by the city to keep the hotel operating were based on ordinances of the City of Atlanta enacted subsequently to the date of the execution of the lease. Of course, in many instances these ordinances require extensive structural changes and repairs or improvements, deemed necessary since the disastrous misfortune of the Winecoff Hotel fire. On this issue this court is of the opinion that the trial court expressed the law applicable here under the particular facts of this case. It said: "The defendant contends that under the fifth paragraph of the lease the lessee was obligated to make structural repairs by reason of the agreement that the lessee was under the duty of `exercising diligence in fully observing all ordinances of the City of Atlanta, the laws of the State of Georgia, and laws of the United States.' The court is of the opinion that this provision *Page 822 
does not include the enactment of future ordinances or resolutions which require structural changes or alterations having for its effect the enforcement of safety standards against fire."
Counsel, after having discussed the cases of Kanes v.Koutras, and Midtown Chain Hotels Co. v. Bender, supra, moves on to call our attention to and discuss certain other paragraphs of the lease, as follows: paragraph 7, with reference to changes in taxes or assessments increased on account of structural improvements made by the tenant and giving the tenant the discretion of making these improvements, structural or otherwise; and the provisions of paragraph 10, to the effect that the tenant in his discretion may make structural changes in the hotel or basement at his own expense, of fire-resistant material; and counsel calls our attention particularly to a provision in paragraph 10 which authorized the tenant to make changes in the hotel or apartment rooms at his pleasure, the owner having no power to control the changes in the hotel or apartment rooms except regarding the number of rooms. Counsel also refers to paragraph 11, to the effect that the provisions of that paragraph impose constant responsibility of the tenant to the owner even if the lease is assigned; and the provisions of paragraph 15, to the effect that the tenant is required to keep in good order and repair the elevators, motors, and other machinery; and the provisions of paragraph 16, to the effect that the tenant agrees to hold the lessor harmless to person or property because of the occupancy of the premises, whether the damage results from structural defects or otherwise; and to the provisions of paragraph 9, providing that the tenant can sell or exchange furniture at his pleasure and discard it if it is worn out, provided he gets as good or better to put on the premises. With these provisions of the lease specifically stressed, counsel for the defendant draws the conclusion that every intention and possible construction of the lease require therein that what is necessary to be done is to be the responsibility of the tenant. We cannot agree with this conclusion, though ever so ably and enthusiastically presented by distinguished counsel.
Counsel cites many foreign decisions, certain authorities of the appellate courts of this State, and various treatises of high *Page 823 
authority in support of his contentions. Included among the authorities relied upon, counsel calls our attention to Code § 20-702, that the "intention of parties must be sought"; and our attention is called also to Code § 20-703.
In the reply brief counsel for the defendant discusses at some length the case of Evans Theatre Corp. v. DeGive InvestmentCo., supra. We have read with interest, and we feel with benefit, the many authorities cited by counsel for both parties in this case. It is our opinion that the court did not err in overruling the general demurrer to the petition. Therefore the judgment of the lower court is
Affirmed. MacIntyre, P. J., and Townsend, J., concur.