Adams v. Willis

• Decision Date: 28 July 1954
• Docket Number: No. 16897,16897
• Citation: 83 S.E.2d 171,225 S.C. 518
• Parties: ADAMS v. WILLIS.
• Court: South Carolina Supreme Court

Page 171

83 S.E.2d 171

225 S.C. 518

ADAMS v.WILLIS.

No. 16897.

Supreme Court of South Carolina.

July 28, 1954.

Julien D. Wyatt, Felix L. Finley, Jr., Pickens, Leatherwood, Walker, Todd & Mann, Greenville, for appellant.

Edward H. Ninestein, Walhalla, Mann, Arnold & Mann, Greenville, for respondent.

HENDERSON, Acting Associate Justice.

Several years ago Whit Holleman was the owner of a lot and filling station in the town of Clemson.On March 24, 1937, he leased the premises to Sinclair Refining Company for a term of ten years, to commence on a date as thereinafter provided, with the privilege of an extension for five additional years, and gave the lessee an option to purchase the property for $7,000 at any time during the term of the lease or of any renewal of it, upon giving thirty days notice.

On August 3, 1943, Mr. Holleman sold the lot to Dr. P. S. McCollum.On May 10, 1945, Dr. McCollum sold a half interest in it to the appellant, Dr. H. H. Willis, and on August 2, 1948, sold him the other half interest.

Sinclair Refining Company assigned the lease and option to the respondent, Roy D. Adams, on May 14, 1952, for a consideration of $1.00 and the further consideration that the assignee would exercise the option by paying the $7,000 to Dr. Willis, and then lease the premises to the Sinclair company for a term of five years, at a specified rental.On May 22, 1952, Adams notified the appellant that he exercised the option to purchase, and thereafter tendered him the $7,000, which was refused.Upon the failure of Dr. Willis to convey the lot Adams brought this action for specific performance.The special referee held that he was not entitled to such relief.This holding was reversed by the circuit judge, Honorable J. B. Pruitt, and the appellant was ordered to convey the premises.

We must first decide when the ten year term began, so that we may know when the lease and the renewal ended, and thus see if Adams exercised the option in time.On March 24, 1937, the date of the contract, certain repairs to the filling station were necessary, and it was provided that the term should begin upon the completion of the improvements, at which time the parties were to sign a written memorandum fixing such date as the time for the commencement.Thereafter Holleman signed a statement that the building was ready for occupancy and that he agreed that July 1, 1937, should be considered the date upon which the term should commence and from which rentals should begin.The Sinclair company did not sign the statement, and it was never recorded.

The evidence is clear that actually the repairs were completed, the rent started, and the term began on July 1, 1937.Holleman so stated, and Sinclair Refining Company, the other party to the contract, recognized that to be the commencement date, as shown in its renewal notice, to be discussed later, and in the assignment of the lease to Adams.However, the appellant Willis says that as to him the lease and option should be regarded as having begun not later than June 1, 1937, since he had no notice of the memorandum signed by Holleman, and since the parties had first supposed that the improvements would be completed by that time.

The lease itself was duly recorded in April, 1937, and so Willis had constructive notice of it when he bought.Indeed, the presence on the lot of a Sinclair station was sufficient to put him on inquiry.Barksdale v. Hinson, 212 S.C. 1, 46 S.E.2d 170.We think that he had actual notice also.He testified that he knew of the lease when he bought in 1948, and in fact the lease is referred to in his deed.And we believe that the evidence shows that he knew of it when he bought in 1945, since his deed of 1948 recites that a half interest in the lease had been assigned to him by Dr. McCollum on May 10, 1945, which was the precise day on which he had bought the first half interest in the lot.

Having both actual and constructive notice of the lease, he had the duty to make reasonable inquiry and investigation as to its commencement date.National Bank of Newberry v. Livingston, 155 S.C. 264, 152 S.E. 410;Moyle v. Campbell, 126 S.C. 180, 119 S.E. 186.We think that by due diligence, by asking either Holleman or the Sinclair company, the fact would have been disclosed that the effective date was July 1, 1937, and appellant is chargeable with notice of such fact since inquiry, properly conducted, would certainly have revealed it.

The lease, if duly renewed, would run for fifteen years from July 1, 1937, or until June 30, 1952.It was on May 22, 1952, that respondent gave notice that he would exercise the option.The thirty days of the notice would expire on June 21, 1952, so Adams was on time, although with little to spare.

The appellant contends, however, that the evidence does not show that the lease was renewed in 1947.The notice of the Sinclair company to Dr. McCollum, dated March 14, 1947, stating that it exercised its privilege of renewing the lease for an additional five years, was contained in a deposition, and the appellant objected to the opening of the envelope.The special referee held that the deposition should be excluded.The circuit judge was of opinion that the referee was in error, and held that the envelope was properly opened and that the deposition should be admitted.

On the face of the envelope, in the upper left corner, appear the name and address of the sender, 'Mr. Robert E. Schuster, 600 Fifth Avenue, New York, 20, New York'.It is addressed to Honorable E. Inman, Special Referee, Greenville County Court House, Greenville, S. C.On the front of the envelope, in the lower left corner, is written 'Roy D. Adams, Plaintiff, vs. H. H. Willis, Defendant'.On the reverse side written across the flap after the envelope had been sealed, appears the signature 'Robert E. Schuster'.

The appellant says that nowhere upon the envelope does it appear that Robert E. Schuster is a notary public, or that the envelope contains a deposition.However valid these objections might be in the ordinary case, in this action a stipulation had been entered into by the parties.Notice of the taking of the deposition had been given by the respondent, setting forth the time and place, and that it would be before Robert E. Schuster, a notary public for New York.Attorneys for the appellant consented to the time and place of taking the deposition, and further stipulated that 'same shall be mailed by the above named notary public to E. Inman, Special Referee, Greenville County Court House, Greenville, S. C.'

There was no contention that the deposition had been tampered with.It was opened by the special referee in the presence of the parties.Ordinarily a deposition is sent to the clerk of court, but here it was mailed to the special referee by agreement.In view of the stipulation we think that the trial judge correctly held that there was a substantial compliance with the statutory requirements, and that the deposition was admissible.

The appellant also says that it does not appear that the notice was actually received by Dr. McCollum, since the registered mail return card is signed 'Dr. P. S. McCollum, by Albert Meiburg'.The evidence shows that Meiburg was an employee of Dr. McCollum in his store, but apart from the deposition the fact is established that Dr. McCollum did receive the notice.On August 2, 1948, he assigned the lease to the appellant, and in his deed of that date he said that the property was subject to the lease.

At the time the Sinclair company gave the notice of renewal to Dr. McCollum, Willis owned a half interest in the property, but the lease provided that if there should be more than one lessor 'notice to any one of them shall constitute notice to all.'Besides, we think that the evidence shows that Dr. Willis himself, after 1947, recognized that the lease had been...