Baker v. Jellibeans, Inc., 40590

• Decision Date: 18 April 1984
• Docket Number: No. 40590,40590
• Parties: BAKER v. JELLIBEANS, INC.
• Court: Georgia Supreme Court

Page 874

314 S.E.2d 874

252 Ga. 458

BAKER v. JELLIBEANS, INC.

No. 40590.

Supreme Court of Georgia.

April 18, 1984.

George A. Pindar, Atlanta, James H. Neal, Riverdale, for James G. baker.

Nicholas C. Moraitakis, Eve A. Applebaum, Marshall E. Siegel, David Minkin Law Office, Atlanta, for Jellibeans, Incorporated.

HILL, Chief Justice.

In this suit for specific performance of an option to purchase realty, the trial court granted specific performance to the plaintiff-purchaser, Jellibeans, Inc. The defendant-seller, James G. Baker, appeals.

In August, 1979, Jellibeans agreed to purchase three adjacent lots, known as 3833, 3847, and 3861 Roswell Road in Atlanta, from Baker for $900,000. Their agreement consisted of three documents: (1) a purchase agreement involving the immediate transfer of lots 3833 and 3847 for the sum of $725,000, financed by a promissory note, secured by a deed of trust, at 10% interest, to be paid in 91 equal monthly installments of $11,397.71 each; ¹ (2) an option to purchase lot 3861 to be exercised no later than August 15, 1982, for $175,000, to be paid by $25,000 cash at closing, with the remaining balance financed by a promissory note, secured by a deed of trust, at 10% interest, to be paid in 55 equal monthly installments of $3,411.02; and (3) a lease agreement for a term ending at the execution of the option, on part of lot 3861 for parking so that lots 3833 and 3847 would comply with applicable zoning regulations concerning parking.

On August 12, 1982, Jellibeans notified Baker of its intention to exercise the option on lot 3861 by a letter, receipt of which was acknowledged by Baker. Closing was set for September 1, 1982, but on August 21, 1982, Jellibeans learned that Baker would not attend. When Jellibeans discovered that Baker was attempting to sell lot 3861, this suit for specific performance was filed. The trial court entered summary judgment in favor of Jellibeans. Baker appeals, urging numerous defects in the option, primarily that it is too vague and indefinite to be specifically enforced.

1. We start from this premise: People should do what they say they will do; and the law will require competent adults to do what they voluntarily promise to do (or pay damages for the breach) where there is consideration for the promise, unless some other rule of law prevents the performance of that which has been promised. Pursuant to this premise, it has been found that where part of a contract has been performed by the parties, it is inequitable for the remainder not to be performed. Scott v. Lester, 242 Ga. 730, 732, 251 S.E.2d 257 (1978). Similarly, where one contract has been performed or substantially performed by the parties, it would be inequitable for a second contract, on which the first contract was dependent, not to be performed.

In this case the purchase agreement, option and lease were all executed simultaneously on August 8, 1979. While they are similar in many respects, the agreements do not refer to each other. In fact, the option contains a clause stating: "This Agreement contains the entire understanding of the parties hereto with respect to the transactions contemplated hereby."

Relying on this clause and the fact that the agreements are not cross-referenced, Baker argues that the option must stand on its own merits, without considering the other two agreements, and that the option is too vague and indefinite to be enforceable. We do not agree. OCGA § 24-6-3(a) (Code Ann. § 38-502) emphatically states: "All contemporaneous writings shall be admissible to explain each other." Thus, there is no merit to Baker's contention that the other agreements cannot be considered to establish the terms of the option.

Nor does Baker's reliance on the "entire agreement" clause in the option command a different result. OCGA § 24-6-3(b) (Code Ann. § 38-502) also provides: "Parol evidence shall be admissible to explain all ambiguities, both latent and patent." This is so despite an "entire agreement" clause in the contract. Wood v. Phoenix Insurance Co., 199 Ga. 461, 469, 34 S.E.2d 688 (1945). Contemporaneous written agreements are perhaps one of the surest ways to establish the intent of the parties in entering into each of those agreements. Insofar as Baker argues that the purchase agreement should not be considered because it concerns other lots, we are unpersuaded. It is clear that all three contracts encompass an overall agreement for the sale of three contiguous lots, and together constitute the subject of the whole agreement between the parties.

Williams v. Bell, 126 Ga.App. 432, 435, 190 S.E.2d 818 (1972), cited by Baker, is inapposite because there the land purchase agreement did not contain plans or specifications for the contruction of a house on the lot being sold. Under the parol evidence rule, such evidence is inadmissible to add to, take from, or vary a written contract, OCGA § 13-2-2(1) (Code Ann. § 20-704), but parol evidence is admissible to explain ambiguities and to aid in the construction of contracts. Kellos v. Parker-Sharpe, Inc., 245 Ga. 130, 132, 263 S.E.2d 138 (1980).

Baker also argues, however, that the option is unenforceable because it fails as a complete memorandum to satisfy the requirements of the Statute of Frauds. Baker correctly states that the option is subject to the provisions of the Statute of Frauds. OCGA § 13-5-30 (Code Ann. § 20-401) provides: "To make the following obligations binding on the promisor, the promise must be in writing and signed by the party to be charged therewith or some person lawfully authorized by him: ... (4) Any contract for sale of land, or any interest in, or concerning lands; ..." He...