Trust Co. of Ga. v. S. & W. Cafeteria

• Decision Date: 05 March 1958
• Docket Number: No. 36980,No. 1,36980,1
• Citation: 97 Ga.App. 268,103 S.E.2d 63
• Court: Georgia Court of Appeals
• Parties: TRUST COMPANY OF GEORGIA, Executor, etc. v. S. & W. CAFETERIA, etc

Page 63

103 S.E.2d 63

97 Ga.App. 268

TRUST COMPANY OF GEORGIA, Executor, etc. v. S. & W. CAFETERIA, etc.

No. 36980.

Court of Appeals of Georgia, Division No. 1.

March 5, 1958.

Syllabus by the Court

Both counts of the petition set forth a cause of action. The trial judge did not err in overruling the defendant's general demurrer.

S. & W. Cafeteria of Atlanta, Inc., instituted a suit against Trust Company of Georgia, as executor and trustee under the will of J. Bulow Campbell, in the Superior Court of Fulton County.

The petition alleged: that the plaintiff is a corporation organized and existing under the laws of Georgia; Trust Company of Georgia is a banking corporation organized under the laws of Georgia, with authority to act and serve as executor and trustee, maintains its principal office in Fulton County and is subject to the jurisdiction of this court; Trust Company of Georgia is the duly appointed executor of and trustee under the will of J. Bulow Campbell, who died a resident of Fulton County, Georgia; as executor of and trustee under the will of J. Bulow Campbell, deceased, Trust Company of Georgia is the owner of certain improved real estate in the City of Atlanta, Fulton County, Georgia, situated on the east side of Peachtree Street, between Ellis and Cain Streets, which is rented to the plaintiff as hereinafter alleged; on August 18, 1942, the defendant entered into a written lease agreement with the plaintiff by the terms of which it rented to the plaintiff the aforesaid real property 'for a term beginning at midnight on March 31, 1943, and ending on the first day of February, 1979'; each of the parties has an original signed copy of the agreement, which contains a description of the aforesaid real estate, and which is incorporated herein and made a part hereof by reference, the same as if physically attached hereto; profert is made; the plaintiff has been in possession of the aforesaid premises under the lease agreement since the effective date thereof, has paid to the defendant the rental specified, and has otherwise complied with the requirements of the agreement; by the terms of the lease agreement, it is provided that the defendant, as landlord, shall pay all taxes and assessments which may be assessed against the leased premises; the provision in this respect is in paragraph 12, which reads as follows: 'during the period of this lease the landlord agrees to pay all taxes and/or assessments which may at any time be assessed against said premises, including said building or buildings, and additions thereto located on said leased premises, but not including the furniture, trade fixtures and stock of merchandise and other property of the tenant located therein'; pursuant to the aforesaid terms of the lease agreement, the defendant has paid all ad valorem tax assessments and levies against the leased premises of the City of Atlanta of Fulton County and of the State of Georgia, from the date of said lease through the year 1955; for and during the year 1956, a joint city-county board of tax assessors was authorized by law to appraise, value, and assess all real property within the City of Atlanta and Fulton County for city, county and State ad valorem taxes for the year 1956; pursuant to a plan of reappraisal, revaluation and reassessment of all real property in the City of Atlanta and Fulton County for 1956, county and State ad valorem tax purposes, the said joint board revalued and reassessed all real property in the city and county, resulting in an increase in the assessable value of most of the real property within the city and county; in the aforesaid revaluation and reassessment program, the real property covered by the lease agreement was revalued and reassessed for 1956 city, county and State ad valorem taxes, resulting in an assessable valuation in excess of that upon which such taxes were based in previous years; being dissatisfied with the increased assessable valuation as aforesaid, the defendant negotiated with the said board in an effort to effect a reduction of such valuation and did succeed in such effort, but not to the extent of reducing the assessable valuation below that of previous years; in an attempt to avoid its obligation under the lease agreement to pay all city, county and State ad valorem taxes on the leased premises for the year 1956, and to improperly pass a portion thereof on to the plaintiff, the defendant entreated the said taxing authority, by representing that the plaintiff had a leasehold estate, and the defendant only a reversionary estate, in the rented premises, to break down the assessable valuation of the rented premises and the resulting assessments and taxes thereon between the parties, and to attribute only a portion of such value, assessment and tax to the defendant's reversionary estate and the remaining portion to the plaintiff's leasehold estate; following the aforesaid revaluation, and in reliance upon the said representation and entreaty of the defendant, the said joint board of the City of Atlanta and Fulton County, in assessing the leased premises, undertook to and did break the fee down into leasehold and reversionary estates; did divide the aforesaid assessable valuation of the premises between such estates and assess each, the former to the plaintiff and the latter to the defendant, on the basis of such division, for 1956 ad valorem taxes of the city, county and State; the taxes for 1956 resulting as aforesaid, upon the leasehold and reversionary estates were taxes properly assessable and assessed against the leased premises as contemplated by the lease agreement and were, taken together, the proper city, county and State ad valorem taxes resulting from application of the lawful tax rates to the assessable valuation of the leased premises; the plaintiff demanded in writing of the defendant, following notice to it of the aforesaid revaluation and assessments, that it pay and discharge such assessments and taxes in accordance with the terms of the lease agreement; the defendant refused, in response to the plaintiff's said demand, to assume or pay the taxes assessed and imposed as aforesaid on the leased premises; by the terms of paragraph 22 of the said lease agreement, the plaintiff is given the right to pay any taxes 'affecting the demised premises for which it (defendant) is responsible,' if the same is not paid when due or within ten days after notice in writing thereof is given to the defendant, and the defendant agrees to reimburse the plaintiff 'forthwith the amount so paid'; pursuant to the aforesaid authorization in the lease contained and to protect its lease agreement and its rights thereunder, the plaintiff did, on September 26, 1956, after more than ten days following the aforesaid notice in writing to the defendant, pay the said taxes assessed upon the leasehold estate in the amount of $5,312.54 to the City of Atlanta and in the amount of $3,031.99 to Fulton County; the taxes paid by the plaintiff as aforesaid, together with those assessed against the reversionary estate of the defendant, comprise together the lawful city, county and State ad valorem taxes assessed at the established and lawful rates upon the aforesaid reappraised and reassessed value of the leased premises, and are, together, the city, county and State ad valorem taxes for the year 1956 upon the leased premises; following its payment of the aforesaid city, county, and State taxes, the plaintiff made demand of the defendant that it reimburse the plaintiff therefor, which demand it refused and continues to ignore; payments by the plaintiff of the taxes as aforesaid were payments for the use and benefit of the defendant; were made for the protection of the plaintiff's right under the lease agreement, and it would be against equity and good conscience for the defendant to retain the benefit resulting from the reduction of its tax liability as herein alleged.

Count 2. Paragraphs 1 through 6 of count 1 of the petition are incorporated herein the same as if set forth verbatim; by the terms of the said lease agreement, it is specifically provided that no leasehold or other estate shall be created in the plaintiff, paragraph 28 of the agreement reading as follows: 'This lease shall create the relationship of landlord and tenant between the landlord and tenant; no estate shall pass out of landlord and tenant has only a usufruct not subject to levy and sale'; paragraphs 7 through 12 of count 1 of the petition are incorporated herein, the same as if set forth verbatim; with full knowledge that the plaintiff had only a usufruct in the leased premises, in an attempt to avoid its obligation under the lease agreement to pay all city, county and State ad valorem taxes on the leased premises for the year 1956, and to improperly pass a portion thereof on to the plaintiff, the defendant entreated the said taxing authority, by representing that the plaintiff had a leasehold estate, and the defendant only a reversionary estate, in the rented premises, to break down the assessable valuation of the rented premises and the resulting assessments and taxes thereon between the parties, and to attribute only a portion of such value, assessment and tax to the defendant's reversionary estate and the remaining portion to the plaintiff's leasehold estate; paragraph 14 through 16 of count 1 of the petition are incorporated herein, the same as if set forth verbatim; the defendant refused, in response to the plaintiff's said demand, to assume or pay the taxes assessed and imposed as aforesaid upon the leased premises, setting forth in its refusal and as its basis therefor, a written opinion under date of September 17, 1956, from its attorney; copy of said attorney's opinion is hereto attached and made a part hereof as Exhibit A; in refusing the plaintiff's demand as aforesaid, neither the defendant nor its attorney disclosed the circumstances under which the purported leasehold...