State v. Davison , 198 Ga. 27 ( 1944 )

I concur in what is said in division 1 of the majority opinion. I can not concur in the ruling made in division 2, nor in the judgment of affirmance.

In order to determine whether or not the instrument under consideration had the effect of creating and vesting an estate for years in the lessee, Sigma Nu Fraternity Home Association, we look first to the terms of the lease. The lease provides: "The term for which the Association is granted the use of the said lot under this agreement is one year from the date hereof, but with the said renewal granted to the said Association for periods of one year, for a maximum of 99 years." The lease further provides that the same is automatically extended from year to year unless the lessee, ninety days before the expiration of any yearly term, gives to the Regents written notice of intention to terminate the lease. It is argued that this provision amounts to a lease for only one year, and can not amount to the creation of an estate for years, because the period covered by the lease is less than five years. In Walker v. Wadley, 124 Ga. 275 (52 S.E. 904), this court said: "A lease contract wherein the owner of land demises the premises for one year, with an option to the tenant during that year to extend the lease upon `notice of intention to take this option,' and a further option of increased rental, notice of acceptance of which to be given by the tenant at a stated time preceding the commencement of such additional term, is a lease for ten years at the election of the lessee, absolute for the first year and optional with the lessee as to future continuance under the terms and conditions prescribed in the lease contract." See alsoSterchi Bros. v. Mitchell, 49 Ga. App. 826 (176 S.E. 537).

The instrument now under consideration is a lease for 99 years at the election of the lessee, absolute for the first year and optional with the lessee as to future continuance under the terms and conditions prescribed in the lease contract. It does not follow, however, that simply because the lease is for a period of more than five years, an estate for years is created and becomes vested in the lessee. We are aware of the fact there is dictum to the effect that a leasing for five years or more does, without more, vest an estate for years in the lessee; notably inSchofield v. Jones, 85 Ga. 816 (supra), and Anderson v.Kokomo Rubber Co., 161 Ga. 842 (supra). In the Schofield case, the language was purely obiter, and in the Anderson case, the language seems to be obiter, but if not, the decision is by a divided court. In the earlier case of Johnson v. Brice,151 Ga. 472 (supra), this court had under consideration a lease contract covering a period of fifteen years, and in a full-bench decision, in which all the Justices concurred, said: "The court did not err in holding that the contract between Brice and A. R. Hardison was one of landlord and tenant, and that it did not create an estate for years." See also Griffith v. Smith,155 Ga. 717 (supra).

The Code, § 61-101 provides: "When the owner of real estate grants to another simply the right to possess and enjoy the use of such real estate, either for a fixed time or at the will of the grantor, and the tenant accepts the grant, the relation of landlord and tenant exists between them. In such case no estate passes out of the landlord, and the tenant has only a usufruct. which he may not convey except by the landlord's consent and which is not subject to levy and sale; and all renting or leasing of such real estate for a period of time less than five years shall be held to convey only the right to possess and enjoy such real estate, and to pass no estate out of the landlord, and to give only the usufruct, unless the contrary shall be agreed upon by parties to the contract and so stated therein." There is no language in this Code section that can be construed to mean that a leasing for five years or more does, without more, vest an estate for years in the lessee. This provision of the law is simply that a lease for less than five years can not create an estate for years unless expressly agreed upon and stated in the contract or lease. If the period of rental is for more than five years, whether or not an estate for years is created and vests in the lessee, must depend upon the language of the lease contract and the intention of the parties. Under the very terms of this Code section, no estate for years can be created or become vested in the lessee, regardless of the number of years involved, when "simply the right to possess and enjoy the use of such real estate is granted or conveyed." The Code, § 85-803, provides: "An estate for years carries with it the right to use in as absolute manner as a greater estate, but not to the injury of the property or the person entitled either in remainder or reversion; the acts of omission and commission prescribed as grounds of forfeiture of an estate for life shall operate to the same effect as against a tenant for years." From what has been said above, since the period covered by the lease in the instant case is for more than five years, whether the lessee holds an estate for years, or merely a usufruct in the property, must be determined by a consideration of the quantity and quality of the lessee's right under the lease agreement. It will be observed that the statute herein cited provides that the properties owned or held by the University System may be sold, leased, "or other wise disposed of . . provided, that the Board of Regents shall first determine that such property can no longer be advantageously used in the University System." The resolution of the Regents, in which it was declared that the property could not be longer advantageously used in the University System contained this language; "And that the leasing of this land as now contemplated is for the best interest of the University System." This language clearly indicates that the Regents had no intention of parting with the title to or control of this property. The lease agreement provides that the property can be used for one purpose only, to wit: The construction of a fraternity chapter house; provides both a minimum and maximum cost for the house; obligates the fraternity to abide by the rules and regulations of the Regents; prohibits the sale or rental of the property to anyone except another fraternity existing and operating at the University of Georgia; requires the lessee to keep the buildings "in repair so that the premises will present a good appearance and not detract from the appearance of the properties and other buildings of the University of Georgia;" obligates the lessee to pay for all services rendered or furnished, except the payment of taxes, which is significantly omitted. The evidence discloses that the property is completely surrounded by property of the University of Georgia, except on one side where the boundary is a railroad right of way. There is no ingress or egress other than over the property of the University. Can it be said that a lease, conveying the privilege of occupying and using premises under such strict supervision, prohibitions, and regulations rises to the dignity of an estate in land? We think not.

So far as we have been able to ascertain, all cases decided by this court or the Court of Appeals, in which leasehold estates for more than five years have been held to create estates for years, have been upon lease contracts in which a full right of control and possession was conveyed, and the restrictions contained in the lease now under consideration did not appear. Certainly it can not be said that the prohibitions appearing in this lease contract appeared in any of the cases cited in the majority opinion.

The majority opinion refers to certain isolated sentences in the contract as indicating an intention to convey more than a usufruct, as follows: "The Association may transfer, sell, and convey to any other fraternity existing and operating at the University of Georgia at any time during this lease all rights of the Association in said lot and premises," and "other than herein before stated, the Association shall have no right to sell, lease, or convey the said premises." It will be readily observed that these provisions are in no sense conveying or granting provisions of the contract. If no transferable interest in the property has been conveyed to the lessee by the terms of the contract, then there is nothing to transfer or convey. When we look to what was actually conveyed by the terms of the contract, we fail to find any transferable interest conveyed by the granting clause. These terms could mean nothing more than that the lessee had a limited right to transfer the lease itself. What has just been said may also be said with reference to the quoted provisions of the loan agreement. We think further that such provisions were simply meant to make doubly sure that the buildings erected should be and remain the property of the University System. In so far as the one-dollar consideration referred to in the majority opinion is concerned, we think it would be "at least somewhat unusual" for the University of Georgia to convey an estate for years to this property, located on the University campus, for so small a consideration. We think, however, that the building to be erected was a part of the rental, and it will be noted that the contract did not merely extend the right or privilege to erect the building, but this was a requirement of the contract.

So far as the provision of the loan agreement providing for the sale of the property at public outcry, referred to in the majority opinion, is concerned, it will be remembered that the lease contract provides that the rights of the lessee can be conveyed only to a fraternity existing and located at the University of Georgia. In other words, there would be a public sale at which the public could not bid or buy.

We think that the contract, "looking to its four corners," conveys to the fraternity corporation simply a usufruct, which is not subject to levy and sale. In our opinion it was error to overrule the motion for new trial.

I am authorized to say that Chief Justice Bell concurs in this dissenting opinion.