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Lawskills.com Georgia Caselaw
GAY v. AMERICAN OIL COMPANY.
42503.
Action on lease. Toombs Superior Court. Before Judge Spivey.
EBERHARDT, Judge.
Where a lease provided for payment of rentals by checks to be mailed to the lessor on the first of each month, and the lessor irrevocably assigned a portion of the rentals to a bank to be applied on a note and constituted the bank her agent for collection of the assigned rentals, and by reason of the lessee's failure to attach proper postage to the envelope addressed to the lessor containing a check for the unassigned portion of the rental for one month, the lessor sought to declare a forfeiture of the lease and dispossess the lessee, the forfeiture, if there was one, was waived by the acceptance of payment of the assigned rental for that and subsequent months by the bank, as well as by the retention by the lessor of a check for the unassigned portion without cashing it.
Mrs. Bertye Palmer Gay leased to American Oil Company certain premises for the operation of a gasoline sales and service station for a term of ten years, at a monthly rental of $225 in advance on the first of each month. She irrevocably assigned to The Citizens & Southern National Bank $188.73 of each monthly rental and authorized the bank to collect it. The lessee acknowledged the assignment and agreed to make payment directly to the bank of its assigned portion of the rentals. The lease provided that payment might be made by mailing checks and that the date of mailing should be considered the date of payment. On April 29, 1966, lessee mailed one check for $188.73 to the bank and another to Mrs. Gay for $36.27 to cover the May rent. By accident or inadvertence the envelope containing Mrs. Gay's check was not stamped, and on arrival at the Post Office in Vidalia it was not delivered, but a notice was placed in her box informing her that a letter addressed to her was being held for the payment of five cents postage due. She refused to pay the postage and the letter was returned. Her attorney then informed American by letter that because of the default in making payment on the first of May for the May rental Mrs. Gay was terminating the lease, and he demanded possession on her behalf. American replied to the letter, asserting that there had been no default, that the rental had been mailed April 29 and through some accident or inadvertence the envelope had not been stamped and that on its return the check had been remailed to Mrs. Gay on May 5. She received and kept, but refused to cash, this check and refused others sent for subsequent months.
Her attorney then wrote to American asserting that there had been a breach of the lease, calling attention to the fact that no grace period was provided for late payment of rentals, and again demanded possession.
American refused to yield possession and a dispossessory warrant was sued out, to which a counter affidavit with bond and security were filed.
Upon a hearing of the matter before the judge without a jury the lease, assignment of rentals, the correspondence between American and Mrs. Gay's attorney and between her attorney and The Citizens & Southern National Bank, and between American Oil and the bank (by which it appeared that the bank had accepted the May payment of $188.73 made by American to it and similar payments made in June, July, August and September, and had applied them on a note from Mrs. Gay to the bank, for which the assignment of rentals had been given as security) were introduced in evidence and upon a consideration of these, along with a stipulation of the parties as to the facts, the court held that there had been no forfeiture of the lease and found against the issues made by Mrs. Gay in the dispossessory warrant proceeding. From that order and judgment Mrs. Gay appeals.
We affirm. It is true that the lease here calls for payment of rentals on the first of each month in advance and that no grace period for late payment is provided. But there are circumstances which avoid any forfeiture, or which amount to a waiver if one has occurred.
While it is common knowledge that in the volumes of mail handled by large business concerns a letter will occasionally get mailed without having affixed thereto the proper postage and that this occurs from inadvertence or accident, we do not find it necessary to decide the issue upon this equitable defense--which may well have been authorized under Code 37-201.
There are other considerations appearing from the evidence and from the stipulation of facts which fully support the findings and judgment of the trial court. Mrs. Gay had irrevocably made the bank her agent for the collection of the assigned rentals by the terms of the assignment. Acting under the assignment the bank collected for the month of May the sum of $188.73, and a like amount for each month thereafter, and she is bound by these acts of her agent. Code 4-302. The acts of her agent in making these collections of rentals and accepting them are her acts. Thus, she cannot assert her rights and collect rentals under and upon the terms of the contract and at the same time declare a forfeiture of it for non-payment. Just as one who elects to rescind must restore to the other party any benefits received under the contract (Code 20-906), if Mrs. Gay wished to declare a forfeiture of the lease for non-payment it was incumbent upon her to return immediately upon receipt thereof any and all payments of rental received by her or her agent after the happening of the event giving her the right to declare it. Acceptance and retention of rentals by the lessor or her agent after the alleged breach or forfeiture constituted a waiver and reinstated the lease. "If [the lessor] receives rent accruing subsequently to the issuance of the dispossessory warrant, and accepts it as being a payment under the original lease contract, he affirms that the lease contract is still in existence. By his own acts he admits the continuance of the lease, and waives any prior forfeiture. A landlord who recognizes a lease as a subsisting, operative contract should not, in equity or in good morals, be permitted to insist upon a past forfeiture, if there has been one. And it has been held, both in England and in this country, that a landlord by acceptance from his tenant of rent accruing after a breach of the condition in the lease, with knowledge that the breach had been committed, waives the right to declare the lease forfeited on account of the breach." Guptill v. Macon Stone Supply Co., 140 Ga. 696, 698 (79 SE 854, AC 1915A, 1249). Accord: McCranie v. Rigsby, 172 Ga. 860 (159 SE 233); Oastler v. Wright, 201 Ga. 649 (40 SE2d 531); Shiflett v. Anchor Rome Mills, Inc., 78 Ga. App. 428, 431 (2) (50 SE2d 853). Cf. Allen v. Allen, 154 Ga. 581 (115 SE 17), where the rent accepted had accrued before the institution of the dispossessory proceeding.
Once the forfeiture, if there had been one, was relieved, the landlord was in no position to assert it, and refusals by her of the tender of future rentals did not and could not adversely affect the rights of the lessee. Yates v. Farmer, 102 Ga. App. 570 (117 SE2d 211).
The irrevocable making of the bank her agent for the collection of the assigned portion of the rentals may well have been a requirement of the lender in taking security for the loan made to Mrs. Gay. If she could refuse the tender of rentals made to the bank it would have impaired the security. But nevertheless, the assignment was her act, and she procured from the lessee an acceptance of it. If there was a forfeiture and she wished to assert it, it was incumbent upon her to obtain from the bank a release of the assignment and the appointment of it as agent to collect the rentals, with notice of the release to the lessee, and, standing on the forfeiture, refuse the tender of rentals in order to avoid a waiver, for the acceptance of even a part payment is a recognition of and reinstatement of the lease. However, she has her remedy for collection of the balance, if it was not tendered or paid, by way of distraint or by a simple action at law to recover the unpaid portion; but it is not by way of asserting a forfeiture and dispossessing the tenant.
Judgment affirmed. Felton, C. J., and Hall, J., concur.
Alvin L. Layne, Alston, Miller & Gaines, Carl H. Cofer, for appellee.
Paul W. Calhoun, Jr., B. P. Jackson, Jr., for appellant.
ARGUED JANUARY 3, 1967 -- DECIDED JANUARY 11, 1967.
Friday May 22 19:18 EDT


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