St. Regis Paper Company v. Brown Et Al., 155 Ga. App. 679, 272 S.E.2d 544 (1980)

Georgia Court Of Appeals

Status: ARGUED

Docket Number: 60203

Parts: SHULMAN, Judge.

Linked as:

Summary

Judgment affirmed. Quillian, P. J., and Carley, J., concur.

Summary

Judgment affirmed. Quillian, P. J., and Carley, J., concur.

Text

Albert W. Stubbs, Jesse G. Bowles, III, for appellant.

Plaintiffs brought suit seeking, in addition to other relief, a judgment declaring null and void the purchase options contained in two lease agreements (denominated Leases A and B) entered into with defendant-lessee, St. Regis Paper Company (hereinafter "St. Regis"). This appeal is from an order granting plaintiffs' motion for summary judgment as to the declaratory judgment count of their complaint and denying defendant's motion for summary judgment on the same issues. We affirm.

The timber leases entered into between the parties (or their predecessors in title) were to run for a term of 60 years. Lease A was executed on September 1, 1958; Lease B on April 1, 1959. Both leases contained separate purchase options which were to become exercisable, respectively, in 1970 and 1971. The issue presented on appeal is whether or not the purchase options contained in the lease agreements violate the rule against perpetuities. We agree with the trial court's judgment that they do and that they are, consequently, void.

The pertinent language of the purchase options at issue reads as follows: ". . . Lessor, in consideration of One Dollar ($1.00) and other consideration, the receipt whereof is acknowledged, hereby grants unto St. Regis, the irrevocable right and option at any time after September 1st, 1970 [March 31, 1971, for Lease B] when St. Regis is not in default with respect to any payment required to be made under Section 3A (1) or 3B hereof to purchase the property at and for the purchase price of $65.00 per acre . . ." (Emphasis supplied.)

As stated above, the two timber leases in question were substantially similar, each lease running for a term slightly in excess of 60 years. Under the provisions of these leases, St. Regis had approximately 49 years in which to exercise the option to purchase in Lease A, and approximately 48 years in which to exercise the option in Lease B.

Code Ann. 85-707 (a), the rule against perpetuities, reads in significant part as follows: "Limitations of estates may extend through any number of lives in being at the time when the limitations commence, and 21 years, and the usual period of gestation added thereafter. A limitation beyond that period the law terms a perpetuity and forbids its creation. When an attempt is made to create a perpetuity, the law gives effect to the limitations not too remote, declaring the others void, and thereby vests the fee in the last taker under legal limitations."

Where, as here, ". . . no life in being forms any part of the period of suspension or postponement of the time when the estate or interest is to become vested, the limit of time under the rule against perpetuities is twenty-one years." Murphy v. Johnston, 214 Ga. 289 (104 SE2d 461), is inapposite and does not demand a contrary result. Moreover, the fact that the majority of other jurisdictions may not similarly hold such lease-purchase options to fall under the rule does not preclude its application in the case at bar or dictate a different result. It is the law of Georgia that must be determined and applied to such options. Although we recognize and appreciate appellant's comments concerning the continued efficacy of and value in the application of the rule to long term lease-purchase options, we are nevertheless without authority to overrule Supreme Court decisions, which, as we have stated above, apply the rule to lease-purchase options. If the law is to be changed in Georgia, it is not the prerogative of this court to do so. We therefore hold, in accordance with Turner and Brown, that the lease-purchase options in question are within the rule. This being so, their duration, being in excess of the time for vesting under the rule, renders such options void.

McKown states definitively that "[i]n the absence of a specified date for exercising the right of purchase, the option will be construed as operative for the term of the lease or renewal thereof." Id., p. 820. In view of the court's holding in McKown, we cannot impose time limitations upon the exercise of the options in question inconsistent with the stated durational terms of the leases, thus rendering valid what are otherwise void options under the rule.

4. In view of the foregoing, appellant's contentions of error in regard to the trial court's denial of its motion for summary judgment on its demand for specific performance of the lease-purchase options are moot.

5. Nor can we agree with appellant's assertion that a declaratory judgment was an inappropriate vehicle for determination of the validity of the lease-purchase options. An actual controversy concerning conflicting claims to real property existed between the parties, and the trial court had authority under either subsection (a) or (b) of Code Ann. 110-1101 to entertain a declaratory judgment action. See also State Hwy. Dept. v. C. F. Williams Lumber Co., 222 Ga. 23 (1) (148 SE2d 426); Rogers v. Rooth, 237 Ga. 713 (229 SE2d 445), wherein petitioner brought an action for declaratory judgment to have her interest under a will defined, as she contended that the will violated the rule against perpetuities.

The judgment of the trial court is affirmed.

Donald D. Rentz, Robert M. Margeson, III, Edward Wohlwender, Jr., for appellees.

1980