Garden of Eden, Inc. v. Eastern Sav. Bank

• Decision Date: 18 July 1979
• Docket Number: Nos. 34863,34864,s. 34863
• Citation: 257 S.E.2d 897,244 Ga. 63
• Parties: GARDEN OF EDEN, INC. v. EASTERN SAVINGS BANK et al. EASTERN SAVINGS BANK v. GARDEN OF EDEN, INC., et al.
• Court: Georgia Supreme Court

Page 897

257 S.E.2d 897

244 Ga. 63

GARDEN OF EDEN, INC. v. EASTERN SAVINGS BANK et al.

EASTERN SAVINGS BANK v. GARDEN OF EDEN, INC., et al.

Nos. 34863, 34864.

Supreme Court of Georgia.

Argued May 15, 1979.

Decided June 20, 1979.

Rehearing Denied in No. 34863 July 18, 1979.

Turem & Kirschner, Atlanta, for appellant in No. 34863.

Andrew R. Kirschner, Atlanta, for appellant in No. 34863 and appellees in No. 34864.

Morris, O'Brien, Manning & Brown, Atlanta, for appellees in No. 34863.

Glenn A. Delk, Joseph R. Manning, Atlanta, for appellees in No. 34863 and appellant in No. 34864.

Peterson & Young, Atlanta, for appellees in No. 34863.

Donald E. O'Brien, Atlanta, for appellant in No. 34864.

Fred T. Isaf, Atlanta, for appellees in Nos. 34864 and 34863.

HALL, Justice.

This lawsuit was brought by Garden of Eden, Inc. against Eastern Savings Bank and others to enforce an alleged three-year lease of space in an apartment complex in which Garden operates a nursery school. On motions for summary judgment the trial court found that no lease existed, but that Eastern, the property owner, was not entitled to summary judgment on Garden's count two which alleged misrepresentation. Both parties appeal.

Garden had previously occupied these premises, but its lease was terminated by letter when Eastern Bank acquired the complex by foreclosure. There is no contention that this termination was ineffective. Garden remained in occupancy, however, with the acquiescence of Eastern's managing agent, Management Enterprises, Inc. Mr. Kaplan, the principal in Garden, and Mr. Young, with Management, negotiated concerning a new lease to be executed between Garden and Eastern. In a nutshell, Garden claims that these negotiations resulted in a lease. Eastern claims that they did not, and that at all times Garden was informed that final acceptance of the proposed lease would have to come from Eastern and that Young was empowered to do only preliminary negotiation for Eastern's consideration.

After some negotiation, Garden's attorney drew a proposed lease. He provided three signature lines: One for Garden as "tenant"; one for Management Enterprises, Inc. as "agent"; and one for Eastern Bank, as "lessor."

Mr. Kaplan acknowledged in his deposition that although in earlier negotiations he had formed the impression that Young had the power to speak for Eastern and perhaps even to sign the lease for Eastern, nonetheless by the time he affixed his own signature to the lease for Garden (and he was the first to sign) he knew that he had no lease unless Eastern subsequently signed.

Garden concedes that Eastern never signed the lease. Garden also concedes that the Statute of Frauds would seem to nullify any alleged unwritten contract on these facts. Garden argues, however, that this "contract" is enforceable by it against Eastern because Mr. Kaplan thought he had reached a meeting of the minds with Mr. Young, and thought that Young was a general agent authorized to enter such contracts for Eastern. Subsequently, Management maintained the property and began cashing checks which Kaplan tendered as rent, and Garden argues that this constituted part performance removing this contract form the Statute of Frauds. See Code Ann. §§ 20-401, 20-402(3). Eastern asserts that the checks were due as payment for Garden's tenancy-at-will while no lease was in effect.

1. The evidence showed that after Kaplan signed as tenant, not even an authorized signature by Management for itself as agent had been affixed to the document, (and certainly no signature by anyone at all for Eastern.) Mr. Young testified on his deposition that the young woman who acted as courier in picking up the document from Mr. Kaplan had purportedly signed it for Management, but that this act was totally unauthorized.

Even assuming, however, that hers had been an authorized signature For Management on the "agent" line of the document, this would still not create for Garden the lease contract it seeks. No one ever purported to sign this contract for the lessor, Eastern.

One seeking to hold the principal liable for the undertaking of his agent on a lease for over a year must show that the agent had written authority to act for the principal. Code § 4-105; Deal v. Dickson, 232 Ga. 885, 886, 209 S.E.2d 214 (1974). See Dover v. Burns, 186 Ga. 19, 20, 196 S.E. 785 (1938); Baxley Hardware Co. v. Morris, 165 Ga. 359, 140 S.E. 869 (1927); Byrd v. Piha, 165 Ga. 397(2), 141 S.E. 48 (1927); Nalley v. Whitaker, 102 Ga.App. 230, 115 S.E.2d 790 (1960). Nothing said in Whiteway Neon- Ad, Inc. v. Opportunities Industrialization Center of Atlanta, Inc., 243 Ga. 114, 252 S.E.2d 604 (1979) is contrary to this rule. Whiteway concerned sealed instruments.

It is uncontested that Young's contract with Eastern was oral. Young and Eastern denied that Young had any authority to accept for Eastern any commercial lease contracts. Mr. Kaplan admitted that he never specifically asked the extent of Mr. Young's authority. Mr. Young never signed the contract in any capacity.

The contention that a lease contract was created here by Young as agent of Eastern is without merit.

2. The claim of part performance is similarly defective. The ambiguous payment and acceptance of $600, when this amount was due as payment of a reasonable sum for Garden's occupancy of the premises as tenant-at-will, is not adequate part performance of the asserted lease. The mere fact that part performance under a lease might have been attempted by Garden, by one or several acts of paying $600, which occasioned no loss to it and no benefit to Eastern does not serve to take this transaction outside the Statute of Frauds. Alodex Corp. v. Brawner, 134 Ga.App. 630, 215 S.E.2d 527 (1975); Forest Services, Inc. v. Fidelity & Cas. Co. of N. Y., 120 Ga.App. 600, 171 S.E.2d 743 (1969...