BBC Inv. Co. v. Ginsberg, 3 Div. 198

• Decision Date: 25 August 1966
• Docket Number: 3 Div. 198
• Citation: 280 Ala. 148,190 So.2d 702
• Parties: BBC INVESTMENT COMPANY, Inc. v. Mollie C. GINSBERG et al.
• Court: Alabama Supreme Court

Page 702

190 So.2d 702

280 Ala. 148

BBC INVESTMENT COMPANY, Inc. v. Mollie C. GINSBERG et al.

3 Div. 198.

Supreme Court of Alabama.

Aug. 25, 1966.

Rehearing Granted in Part Oct. 6, 1966.

Evans Hinson, Montgomery, and Peyton D. Bibb, Birmingham, for appellant.

Whitesell & Alton, Montgomery, for appellee Ginsberg.

Robt. B. Stewart, Montgomery, for appellee Kansas City Title Ins. Co.

SIMPSON, Justice.

The appellant owns and operates the Continental Motel in Montgomery. Appellant bought a piece of property adjoining its motel from All States Life Insurance Company. Subsequently it conveyed this property to Frontier, Inc. Frontier, Inc. agreed to construct a building referred to as an 'Addition to Continental Motel, Montgomery, Alabama', and BBC Investment Company, Inc. and Frontier, Inc. entered into a lease whereby the addition to the motel was leased to BBC. The addition to the motel, or annex, is located so as to be accessible only through appellant's motel property.

According to the lease the building was to have been completed by June 15, 1963, but the tenant did not take possession until July 1, 1963. On July 1, 1963, appellant and Frontier, Inc. made up a list of work still to be done on the building. This agreement is referred to as the supplemental agreement of July 1, 1963, and appellant characterizes it as a conditional acceptance of the building.

The annex was mortgaged to City Federal Savings & Loan Association of Birmingham, and the lease was assigned to it by Frontier, Inc. The building was then conveyed to appellee Mollie C. Ginsberg, subject to the mortgage and lease. On the failure of Mrs. Ginsbert to make the mortgage payments, City Federal Savings & Loan Association foreclosed the mortgage and conveyed the property to appellee Kansas City Title Insurance Company, and assigned the lease to it.

Alleging that Frontier, Inc. had not completed the building and that material defects existed in it, appellant sought to rescind the agreement between it and Frontier, Inc., or in the alternative, asked for relief by way of an allowance or set-off against rent in an amount sufficient to compensate it for Frontier's failure to complete the building properly.

After a full hearing of the evidence taken ore tenus, the court made the following findings:

'Upon consideration of the evidence, the Court is of the opinion and finds that the lease between Frontier, Inc., and BBC Investment Company, Inc., dated March 4, 1963, is a valid and binding agreement and that BBC Investment Company, Inc., is not entitled to the cancellation of said lease; however, the Court is of the opinion that, under all of the evidence, BBC Investment Company, Inc., was justified in withholding rental payments and, therefore, that Mollie C. Ginsberg was not entitled to accelerate the rent and is not and was not entitled to any rent accuring after the payment made to and received by her for the month of October, 1963. The Court is further of the opinion and finds that Frontier, Inc., did not fully perform its obligations under the lease and the agreement of July 1, 1963 * * *. That said lease was validly assigned to City Federal Savings and Loan Association of Birmingham, Alabama, on April 27, 1963, as additional security under its mortgage of the same date from Frontier, Inc.; that Mollie C. Ginsberg paid the mortgage payments under said mortgage thereafter; that City Federal Savings and Loan Association of Birmingham foreclosed its mortgage and purchased the mortgaged property at the foreclosure sale; that the said City Federal Savings and Loan Association subsequently sold the property to Kansas City Title Insurance Company and assigned the said lease to Kansas City Title Insurance Company; that prior to the foreclosure of said mortgage by City Federal Savings and Loan Association, Frontier, Inc., transferred title to said property to Mollie C. Ginsberg, subject to the mortgage to City Federal Savings and Loan Association; that Kansas City Title Insurance Company is now the owner of the property and is the assignee of the original lease from Frontier, Inc., to BBC Investment Company, Inc., subject to the right of redemption of Mollie C. Ginsberg; that as the owner of the property and the assignee of said lease Kansas City Title Insurance Company is entitled to all of the rights under said mortgage and under said lease and is obligated to perform certain obligations originally to be performed by Frontier, Inc., but which were either not performed or were performed in such manner as to require correction; that Kansas City Title Insurance Company is entitled to all rents under the lease beginning November 1, 1963, and continuing for the remainder of the lease period.

'The Court is further of the opinion and finds, however, that the following obligations under the lease were not performed by Frontier, Inc., or were improperly performed and must be done or corrected by the present owner, Kansas City Title Insurance Company:

'1. Replacement of roof.

'2. Waterproofing the exterior, concrete block walls, on the rear and on the north end of the building.

'3. Caulking around all heating and cooling units in the rear wall.

'4. Plainting the interior walls of fifteen rental units.

'5. Installing adequate drainage of the parking area and front of the building.

'6. Repairing one bathroom ceiling damaged by plumbing leaks.

'7. Replacing carpet damaged by leaks.

'8. Replacing 27 thresholds at exterior doors.

'The Court has considered extensive evidence as to the cost of all of the repairs and replacements which it feels should be made by Kansas City Title Insurance Company under the terms of the lease and has considered all of the estimates and bids submitted by recognized and reliable business concerns. To complete the foregoing work and requirements of the Court, the following are approved:

'a. Remove present gravel roof from entire building and re-roof with two layers of 15-pound asphalt felt and one layer of 65-pound smooth surface capsheet all mopped on with hot asphalt. Coat over 65-pound capsheet with rubberoid roof coating. Use same metal coping that is on building at present time, solder all seams, install pitch pans around all vent pipes. All to be done by White Roofing Company in accordance with its written proposal dated March 23, 1965, for the sum of $1,585.00.

'b. Waterproofing rear wall and north end of wall for $669.45; caulk around the air conditioning units in the rear wall for $138.00; caulk around the toilet vents exposed on the rear wall for $19.50; install 27 thresholds on exterior doors for $373.95; repair bathroom ceiling in Room 309 for $108.90; paint rear walls of fifteen rooms for $393.75, or a total of $1,703.55. All of said work to be done by Montgomery Tin Shop in accordance with their bid dated March 25, 1965.

'c. Install adequate storm drainage for the parking area according to plans of Montgomery Engineering Company, Inc., dated April 12, 1965. This work is to be done by Hailey and Bumpass in accordance with their written bid dated April 14, 1965, for the sum of $2,434.50.

'The Court is of the opinion that the carpeting originally installed is of an inferior grade and should not be replaced with carpeting of the same quality. It is in the best interest of all parties that the entire carpeting be replaced with a better quality and more serviceable carpet, and under the testimony, the Court finds that an allowance should be made in cash for damaged carpeting and that this allowance be applied toward the purchase of new carpeting. The Court is of the...