¶1
The opinion of the Court w¡as delivered by
Mr.' Justice Fraser.
¶2
In the view that this Court takes of this case, very few words are necessary to determine it.- The Copeland Company were conducting a mercantile business at Clinton, S. C. The stores occupied by the company were the individual property of the .defendant J. W. Copeland, who '.was the president and the person who conducted the negotiations between the parties. The plaintiffs claim that by a parol agreement W. H. Workman, on behalf of himself and others, bought the stock of goods and made a lease of the storehouses for a period of five years. Before the end of' the first year Mr. Copeland sold the storehouses to his codefendant. The codefendant denied the lease, and. demanded increased rent after the expiration of a year. This •suit was brought for specific performance.
¶3
Appellant’s argument says:
“There is only one question, Was if error to refuse specific performance of this contract; it being one in parol to give a lease of buildings for a longer time than one year?”
¶4 *226
Due consideration will show clearly how impossible it is tOi grant the -relief demanded. The plaintiff W. H. Workman in his testimony stated:
“It never occurred to me to'have the lease put in writing till after he talked about selling. I did not know that a verbal lease for fivei years was not good till later oh, when some of them claimed it was no.t good, when he began to talk about wanting the building.”
¶5
1,2
There being no agreement for a written lease, the Court -cannot require Mr. Copeland to execute a written lease. The Courts may require a person to perform a contract he has made. There was no agreement for a written lease, and the Court is powerless to require one. It is equally clear that a parol lease for five years is void under the statutes, and the .Court cannot enforce a parol contract that the statutes- say is void.
¶6
There are other insuperable obstacles in the plaintiffs’ way, but this is enough. ' . .
¶7
Det the report of the special referee and the decree of the trial Judge be repotted.
¶8
The judgment appealed from is affirmed.
Mr. Ci-iiee Justice Gary and Mr, Justice Watts concur.
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Status
Disposition: Af'firmed
Case posture Disposition Af'firmed.' Posture Before MOORE, J. Laurens, November, 1920. Affirmed.Action by W.H. Workman and Workman Co. against J.W. Copeland, Sr., and D.E. Tribble Co. Judgment for defendants and plaintiffs appeal.
REPORT OF REFEREE
The above stated case was referred to me as Special Master and the reference was held at Laurens, South Carolina, September 9, 1920, at which was taken the testimony herewith reported.
At the conclusion of plaintiff's testimony the defendants made a motion to dismiss the complaint for a failure of proof to establish any cause of action stated therein. This motion was fully argued before me at the hearing.
For the purpose of the motion not only must the testimony of plaintiffs be taken as true, but all inferences to be drawn from the facts testified to on behalf of plaintiffs must be solved in their favor. For the purpose of this motion therefor I find as a fact that Mr. Workman entered into a contract with Mr. Copeland as agent for the Copeland Company for the purchase of stock of merchandise for the price mentioned in the testimony, and also at the same time that he entered into a contract with Mr. Copeland individually for the lease of these buildings for a period of five years; but that that lease was a parol lease for a longer period than one year. I find also that the lease of those buildings was an inducement to Mr. Workman's entering into this contract, and that under the testimony if it had not been for the fact that he thought he would get possession of the buildings for five years that he would not have purchased the stock of goods. Now, those being the facts and that being the agreement, the question is: can it as a matter of law be enforced? The first objection to the enforcement of that agreement is that Sec. 3502 of the Code provides that no parol lease shall give a tenant a right of possession for a longer term than twelve months from the time of entering.
In that connection it appears, and it is admitted, that the plaintiff does not claim the right to remain in possession under the lease which Copeland Company had, but claims his right under the agreement with Mr. Copeland, which has been referred to, and claims the right to stay in possession for five years. The Supreme Court has held in construing this Section that a parol lease for a longer term than one year is void, and that at the expiration of the year that the tenancy becomes a tenancy at will unless the parties by their conduct treat it as a tenancy from year to year. It appears from the testimony in this case conclusively that the lessor elected to treat his as a tenancy at will and it seems to me that under this Section that this lease at the expiration of one year terminated, and the contract for five years' lease is void under this Section.
The next proposition contended for by defendants is that the lease is void under Sections 3735 and 3737 of the Code as to the Statute of Frauds for the reason that it is not in writing. As to this plaintiffs' position is that the contract for the purchase of the goods and for the lease of the property was an entire contract and that it would be inequitable to require the plaintiffs to take the stock of goods and not require the defendant to execute a lease for the five years. The testimony shows that in selling the stock of goods Mr. Copeland was acting as agent for Copeland Company, a corporation, and that in making the lease he was acting for himself individually. Under these circumstances I can not see how there can be an entire contract, where there were two separate contracts made by two separate entities which had no legal connection with each other.
The plaintiffs also contend that this lease should be taken out of the operation of the Statute of Frauds on account of part performance. As to this I hold the mere possession alone is not sufficient for this purpose; and even
if it were, the possession in this case is referable to the valid portion of the contract by which the plaintiffs became entitled to the premises for a period of one year. I do not think that the payment of rent operates to take the case out of the Statute for the reason that the rent was paid at the end of each month and not at the beginning of the term. In other words, if at the time Mr. Copeland made this lease with the plaintiff for five years he had been paid the rental in advance for the term, then it would obviously be a fraud upon plaintiff to claim that the lease was invalid; but I do not think this principle applies where the rent is not paid in advance but is only paid at the end of each month the store is occupied.
The defendant also contends that this lease can not be enforced because, even if it could be held valid as a parol lease, there is no written assignment of the lease. The testimony shows that the contract was made by Mr. Workman with Mr. Copeland for five years — a verbal contract; that afterwards it was assigned by parol to Stanton Johnson, who undertook to carry on the business as a partnership, and that thereafter the business was incorporated as Workman Company, by whom it is still carried on. Workman Company must therefore claim their right to the possession under the original lease to Mr. Workman and by successive transfers to them, and there is no evidence of any of these transfers being in writing.
It seems to me that Workman Company would have to establish their legal right to possession, and in order to do this it would be necessary not only to show an original valid lease but an assignment to them which complied with the provisions of Section 3736 of the Code, and for this reason also I do not think the action can be maintained.
It is my opinion, therefore that the action can not be maintained for the three reasons stated and that the defendant's
motion to dismiss should be granted, and I recommend that the complaint in this action be dismissed.
Respectfully submitted,
E.M. BLYTHE,
October 11, 1920. Special Master.
DECREE OF JUDGE MOORE.
This action was commenced on the ____ day of March, 1920, by the above named plaintiffs against the said defendants for the specific performance of an alleged verbal contract for the leasing for the term of five years of two store rooms, Nos. three and five, in the building, situated in the town of Clinton, in said County and State, belonging at the time to the defendant, J.W. Copeland, and made by the said J.W. Copeland to the said W.H. Workman.
The defendants answered the complaint, setting up a general denial and pleading the Statute of Frauds. See Sections 3736 and 3737, and also the Landlord and Tenants Act, known as Sec. 3502 of the Code of 1912, Vol. 1.
The cause was referred to E.M. Blythe, Esqr., as Special Referee, who held a reference and after introduction of the plaintiff's testimony, upon defendant's motion, granted an order dismissing the action for want of sufficient proof, without taking any testimony on behalf of defendants.
The plaintiff filed exceptions to this report, and the cause came on to be heard before me at the November term of the Court upon the report of the Referee and the exceptions thereto.
The case is one of considerable importance, not only on account of the interest of the parties, but because of its novel impression, the exact points presented not having yet been decided in this State.
The Referee substantially found that the testimony on behalf of plaintiff was to the effect, —
1st. That on February 20th, 1919, the defendant, J.W. Copeland, acting as the executive head of the J.W. Copeland
Company, a corporation, negotiated a sale of the stock of merchandise belonging to the said The J.W. Copeland Company at the price of $11,009.11, and delivered the same to the defendant, W.H. Workman, who paid the said purchase money, and at the same time the said J.W. Copeland agreed to lease the said store rooms to the said W.H. Workman for the term of five years from the 20th of February, 1919, at the monthly rental of $41.66 per month to be paid at the end of each month thereafter.
2nd. That when the said stock of goods were delivered the said W.H. Workman took possession of the store rooms in which the goods were found and conducted the said business as successor of the J.W. Copeland Company and paid the monthly rent at the end of each month until February 20th, 1920, when the defendants, D.E. Tribble
Company, gave notice that the monthly rental would be raised to $75.00 per month, and that the tenancy would be one at will of the defendants.
3rd. That the plaintiff, W.H. Workman, would not have purchased the said stock of goods unless he had thought that J.W. Copeland would lease him the store rooms for the term of five years, in which to conduct the said mercantile business, and that the said W.H. Workman by parol assigned the said lease and the stock of goods to the partnership known as Stanton Johnson, and that subsequently Stanton Johnson by parol assigned the said lease and stock of goods to the Workman Company, a corporation.
As a matter of law, the Referee held that:
1st. The alleged lease being verbal, Sec. 3502 of Vol. 1 of the Code declares all such leases shall give the tenant no right of possession after expiration of twelve months from time of entry upon the premises, and after said time the estate of the tenant is one at will only.
2nd. That under Sections 3736 and 3737 of Vol. 1 of the Code no action could be brought upon a parol contract
for any interest in lands, nor could any action be maintained upon any lease assigned by parol to the claimant.
3rd. That the lease in this instance lying only in parol and assigned to W.H. Workman Company by parol, the facts proven in the case were not sufficient as part performance to take the case out of the operation of the Statute of Frauds; that the contracts for the sale of the goods and for the lease were separate and distinct contracts and not interdependent; that J.W. Copeland acted in a dual capacity in selling the goods of the J.W. Copeland Company and in leasing the store rooms, and that the intention of W.H. Workman to obtain a lease for five years was an inducement or motive of the latter's action for purchasing the stock of goods, but that the same was a collateral matter, not forming a part of the contract for the sale and purchase of the stock of goods, and that the acts of part performance are not solely referable to the alleged lease for five years.
In addition to what the Referee has so well said, it is further to be noted that, assuming the truth of the testimony that J.W. Copeland promised to lease the store rooms for the term of five years, still it does not clearly and unequivocally appear from the testimony that W.H. Workman did promise to take and lease the stores and pay the rent thereon for the term of five years; on the contract, the inference that he did not so agree is borne out by the fact that W.H. Workman was taking the initiative in the whole matter, in order to set up his two nephews, Stanton Johnson, in the mercantile business, and there is no evidence of a binding agreement by plaintiffs, or Workman, or Stanton Johnson to become lessees of the premises for any specified term. There is, therefore, want of mutuality of contract. W.H. Workman could have vacated the stores at any time and upon so doing was immune from suit for the recovery of the rent for the remainder of the supposed five years term, and after he transferred the stock of goods to his
assignees, J.W. Copeland had no remedy by way of distress for rent in arrears. There was, therefore, want of mutuality of remedy for the collection of the rent. Fleming v. Riegel , 90 S.C. 190 ; Cabeen v. Gordon , 1 Hills Chan., 56; Campbell v. V.C. Co. , 68 S.C. 440 ; Davis v. Pollock , 36 S.C. 544 ; Hellams v. Patton , 44 S.C. 454 .
So far as concerns the matter of alleged part performance of the contract, the test is that the acts of part performance must be solely referable to the alleged verbal contract for the term in question. The price paid for the goods was reasonable and possession of the stores and monthly rental paid at the end of the month are referable to the legal lease for the term of one year from the time of entry, and these acts afford no basis for a claim of part performance of a parol contract for lease for five years. Crawford v. Crawford , 77 S.C.; Poag v. Sandifer , 5 Rich. Eq., 36 Cyc. 662.
The ground of equitable interference by way of enforcement of parol contracts which have been partly performed is that the lessor or vendor would work a fraud upon the lessee or purchaser by ejecting him from the premises after the purchase or rental money had been paid and after improvements had been made upon the property. In the case at law there is no claim that improvements were made by the lessee upon the leased property, nor was there any payment upon the lease except for the time occupied up to February 20th, 1920. If the plaintiffs should be ejected from the premises as tenants at will after said date, they would have lost nothing, having obtained the stock of goods at a fair price and having enjoyed the use and occupation of the rooms at a fair rental for the period of twelve months from the time of entry, which was a legal term under the law, and the only legal terms by way of a parol lease.
In the case of Koch v. As. , 137 Ill., 297 , and Jennings v. Miller , 48 Or., 201 , and Decenbach v. Rima , 77 P. 391,
which were cases of parol leases, the Court refused specific performance. In the case of Wallace v. Scroggings , 18 Or., 502 , relied upon by the plaintiffs, substantial improvements were made upon the property leased during the term of the alleged parol lease.
In this and other States, the Courts, in case of parol contracts for the purchase of land, have generally held that payment of the purchase money, possession and substantial improvements were sufficient to take the case out of the Statute of Frauds, for the reason that the vendor would be stopped and would perpetuate a fraud upon the vendee, if the vendor should eject the vendee from the premises after he had taken possession of the land, paid the purchase money and made substantial improvements thereon. 3 Pom. Jur., Section 1409; Mims v. Chandler , 21 S.C. 480 ; Boozer v. Teague , 27 S.C. 363 ; Martin v. Patterson , 27 S.C. 321 ; Hunter v. Mills , 29 S.C. 17 ; Peay v. Seigler , 48 S.C. 496 .
It is true that there are some cases in our own Courts which do not mention the elements of improvements, but in those cases the purchaser had possession for considerable time and cultivated the lands, and specific performance was granted upon the payment of the purchase money and the possession of the lands because the acts performance could be referred to no other contract than that of an absolute purchase. Rapley v. Klugh , 40 S.C. 134 ; Watts v. Witt , 28 S.C. 356 ; Sweetman v. Edwards , 28 S.C. 68 ; Robert v. Smith , 21 S.C. 455 .
But in case of parol leases for a longer term than twelve months from time of entry, the greater reason and that weight of authority in this State, and elsewhere, is that the party seeking specific performance must clearly prove the possession under parol contract, the payment of the stipulated rent and the erection of improvements commensurate with the term of the parol lease, in order to obtain the aid of equity in enforcing a parol lease for a longer term than one year.
Furthermore, the plaintiffs cannot recover against the defendant, J.W. Copeland, for the reason that he conveyed the premises in question to his co-defendants on February 20th, 1920, before the commencement of this action. For the reasons stated above, the plaintiffs cannot obtain specific performance against D.E. Tribble Company, since they are bona fide purchasers of the premises from J.W. Copeland, without notice of the equities claimed. It is true that W.H. Workman notified D.E. Tribble before the execution of the conveyance in general terms that he had a five-year lease on the store rooms in question, but such alleged lease not being in writing and no notice or knowledge being had by defendants, D.E. Tribble or D.E. Tribble Company, of the alleged acts of part performance, these defendants had the right to rely upon the Statute declaring such naked parol lease for more than one year void and unenforceable. W.H. Workman did not give D.E. Tribble any information as to the elements of his alleged parol lease nor the equities of his claim for the term of five years. W.H. Workman was the original source of the information and Tribble was not required to seek information from any other source, and had the right to rely upon the law that parol leases for a longer term than twelve months from time of entry created a tenancy at will only and gave the tenant no right of possession after that time: 2 pom. Eq.; Sec. 754.
Wherefore, it is considered by the Court, ordered, decreed and adjudged that the exceptions to the report of the Referee be overruled, and that the said report be confirmed and the complaint dismissed with costs.
ERNEST MOORE,
December 11, 1920. Presiding Judge. Source: CourtListener
