GRIST v. FOSTER

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Docket Number

36377.

Attorney(S)

E. Wycliffe Orr, Ernest J. Yates, Ralph Simpson, for appellant. Bob Reinhardt, for appellee.

Judges

CLARKE, Justice.

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Smart Summary

Factual and Procedural Background

Grist filed suit to enjoin Foster from conveying certain lands to third parties and sought specific performance of a contract to purchase the land, which Grist contended arose from an oral option granted by Foster. Foster, a Texas resident, acquired title to the property in 1977, and Grist took possession, claiming possession under an oral lease that included an option to purchase. Subsequently, the parties entered into a written lease for five years which made no mention of any option to purchase.

Foster moved to dismiss the complaint on jurisdictional grounds and on the basis that Grist's claim was barred by the statute of frauds. The trial court found no jurisdiction and ruled for Foster on the statute of frauds issue. On appeal, Foster no longer disputed jurisdiction, narrowing the appeal to the statute of frauds question.

Legal Issues Presented

Whether Grist's claim for specific performance of an oral contract to purchase real estate is barred by the statute of frauds.
Whether Grist's possession and improvements on the property constitute sufficient part performance to overcome the statute of frauds under Code Ann. § 37-802.

Arguments of the Parties

Appellant's Arguments (Grist)

Grist contended that the oral lease included an option to purchase the property.
He argued that his possession of the land and the valuable improvements made in reliance on the option to purchase constituted sufficient part performance to justify specific performance despite the statute of frauds.

Appellee's Arguments (Foster)

Foster denied the existence of any oral contract to sell the property.
Foster maintained that the statute of frauds barred Grist's claim.
Initially challenged jurisdiction, but later conceded jurisdiction of the Cook County Superior Court.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Taylor v. Cureton, 196 Ga. 28, 30 (25 S.E.2d 815) (1943)	Possession and improvements must be made "by virtue of and in the faith of the oral contract" to take the case out of the statute of frauds.	The court applied this principle to find that possession under a lease cannot be relied upon as possession in faith of an oral option to purchase.
Hennon v. Gresham, 196 Ga. 197 (26 S.E.2d 252) (1943)	Possession under an oral lease cannot be simultaneously asserted as possession in reliance on an oral option to purchase.	Used to support the conclusion that Grist's possession under the lease does not support the oral option claim.
Brown v. Hayes, 33 Ga. Sup. 136	A tenant taking possession under a rental contract cannot claim possession was taken in reliance on a seller's promise to convey.	Confirmed that Grist's possession under the lease precludes claiming possession in reliance on the alleged oral option.
Neely v. Sheppard, 185 Ga. 771 (196 S.E. 452) (1938)	Possession must clearly show acts unequivocally referring to the alleged oral contract to overcome the statute of frauds.	Supported the trial court's ruling that Grist's possession did not meet the requirements of the statute of frauds exception.

Court's Reasoning and Analysis

The court acknowledged that equity generally will not enforce oral contracts for the sale of real estate due to the statute of frauds, except in cases of sufficient part performance as codified in Code Ann. § 37-802. The court examined whether Grist's possession and improvements on the property were made in reliance on an oral option to purchase, which would remove the claim from the statute of frauds.

Because Foster denied the oral contract and Grist did not show full payment, the court focused on whether possession and improvements could constitute part performance. The court found that Grist's possession was under a written lease and did not arise from the alleged oral option. Precedents established that possession under a lease cannot be simultaneously considered possession in reliance on an oral purchase option.

Accordingly, Grist failed to prove that his possession and improvements unequivocally referred to the oral contract necessary to overcome the statute of frauds. The trial court correctly ruled against Grist on this ground.

Holding and Implications

Judgment affirmed.

The court upheld the trial court’s dismissal of Grist’s claim for specific performance based on an oral contract, holding that possession under a lease does not satisfy the statute of frauds exception for part performance. The direct effect is that Grist’s claim is barred, and Foster is not restrained from conveying the property. The opinion sets no new precedent beyond reaffirming established principles regarding the statute of frauds and part performance.

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GRIST v. FOSTER.

CLARKE, Justice.

Grist sued to enjoin Foster from conveying certain lands to third parties and seeking specific performance of a contract to purchase which he contends grew out of an oral option granted by Foster to Grist. The sequence of events leading up to the present action began when Foster, a Texas resident, acquired title to the real estate in 1977, and Grist took possession of the land. Grist contends that this possession came about as a result of an oral lease from Foster to Grist and that the oral lease included an option to purchase the real estate. Subsequent to the alleged oral agreement, the parties entered into a written lease with a five year term which contained no reference to an option to purchase.

Foster filed a motion to dismiss the complaint on the grounds that Cook County Superior Court has no jurisdiction over him and that the claim of Grist is barred by the statute of frauds. After hearing evidence, the trial court found there was no jurisdiction and further ruled in Foster's favor on the issue of statute of frauds. It is this order of court which Grist appeals, but the issues on appeal are narrowed to the question of statute of frauds since Foster no longer disputes the jurisdiction of the Superior Court of Cook County.

Equity will not generally decree specific performance of an oral contract as to real estate, but Grist contends that his claim comes within the exception to the statute of frauds set forth in Code Ann. § 37-802, "The specific performance of a parol contract as to land shall be decreed, if the defendant admits the contract, or if it be so far executed by the party seeking relief, and at the instance or by the inducements of the other party, that if the contract shall be abandoned he cannot be restored to his former position. Full payment alone accepted by the vendor, or partial payment accompanied with possession, or possession alone with valuable improvements, it [sic] clearly proved in each case to be done with reference to the parol contract, shall be sufficient part performance to justify a decree."

Foster specifically denies the oral contract and Grist makes no contention that there has been a full payment. Construing the evidence in Grist's favor, his claim is that he is entitled to relief because of his possession of the land and his having made valuable improvements to the land in reliance on his option to purchase. There is no evidence that Grist has made any payment to Foster other than that which is provided for by the written lease which is still in effect.

When a party seeking specific performance of an oral contract to sell realty relies on the principle of possession with improvements, it must be shown that the possession and improvement arose "by virture of and in the faith of the oral contract or promise, so as to take the case out of the statute of frauds and constitute the equivalent of a writing by showing acts unequivocally referring to the alleged contract or promise." Taylor v. Cureton, 196 Ga. 28, 30 ( 25 S.E.2d 815) (1943). Where a party takes possession under an oral contract to rent, and also alleged an oral option to purchase, the possession is under the tenancy and cannot also be shown to be in reliance on the option. Hennon v. Gresham, 196 Ga. 197 ( 26 S.E.2d 252) (1943).

Grist does not contest the existence of the lease nor the fact that he is in possession under the terms of the lease. In order to prevail under § 37-802, he must show that his possession is in reliance on the oral option to purchase. In the early case of Brown v. Hayes, 33 Ga. Sup. 136, it was held that where a tenant takes possession under a contract for rent, he may not assert that possession was taken in reliance on seller's promise to convey the property. Here, Grist's possession for five years is controlled by the written lease agreement, and he is asserting additional rights as a result of certain previous oral promises. Since he is admittedly in possession under the lease, he cannot now claim that this possession takes on additional legal significance adverse to the interest of his lessor because of an alleged oral promise. His possession does not meet the requirements of § 37-802. See Neely v. Sheppard, 185 Ga. 771 ( 196 S.E. 452) (1938). The trial court was correct in finding Grist's claim did not meet the equitable exception to the statute of frauds. Judgment affirmed. All the Justices concur.

ARGUED SEPTEMBER 8, 1980 — DECIDED OCTOBER 22, 1980.