Fairchild Realty Co. v. Spiegel, Inc.

• Decision Date: 28 June 1957
• Docket Number: No. 601,601
• Citation: 98 S.E.2d 871,246 N.C. 458
• Court: North Carolina Supreme Court
• Parties: FAIRCHILD REALTY COMPANY, v. SPIEGEL, Inc., and Morrison-Neese, Inc.

Page 871

98 S.E.2d 871

246 N.C. 458

FAIRCHILD REALTY COMPANY, v. SPIEGEL, Inc., and Morrison-Neese, Inc.

No. 601.

Supreme Court of North Carolina.

June 28, 1957.

Brooks, McLendon, Brim & Holderness, Greensboro, for defendants-appellants, by Hubert Humphrey, Jr., Greensboro.

Jordan & Wright, Greensboro, for plaintiff-appellee.

RODMAN, Justice.

Findings of fact, when supported by any evidence, are conclusive on appeal. Dayton Rubber Co. v. Shaw, 244 N.C. 170, 92 S.E.2d 799; Reid v. Johnston, 241 N.C.201, 85 S.E.2d 114; Queen City Coach Co. v. Carolina Coach Co., 237 N.C. 697, 76 S.E.2d 47. Conclusions of law, even if stated as factual conclusions, are reviewable. Moore v. Deal, 239 N.C. 224, 79 S.E.2d 507; Allman v. Register, 233 N.C. 531, 64 S.E.2d 861; Radio Station WMFR, Inc., v. EitelMcCullough, Inc., 232 N.C. 287, 59 S.E.2d 779.

The parties are not in agreement with respect to what transpired at the July 1955 conference between representatives of plaintiff and representatives of defendants, called for the purpose of discussing a sale of Spiegel's furniture business and an assignment of the lease of plaintiff's building. Defendants assert that plaintiff arbitrarily announced it would not assent to any assignment unless it could get a new lease based on 4 or 4 1/2 of sales, with a guaranteed minimum of $25,000. Plaintiff denies this, and its witnesses testified that there was discussion of a new lease with changes to be made in the building including air conditioning; and only after that idea was abandoned was the question of an assignment of the lease discussed. At that time defendants were notified plaintiff would require complete information with respect to the merchandising ability and financial standing of any proposed assignee before it would give its consent.

There is evidence supporting the court's finding of fact that plaintiff was not furnished information sufficient to require its assent to the assignment and that its consent was not unreasonably withheld. The rights of the parties must be determined in the light of that established fact.

Article 23 of the lease is a restriction on lessee's right of alienation. Rogers v. Hall, 227 N.C. 363, 42 S.E.2d 347. It does not purport to be a covenant on the part of lessee. Whether a violation of that restrictive provision comes within the provision of Article 24 which permits lessor to terminate the lease upon default by lessee of its covenants need not now be determined. Plaintiff so asserted and has acted upon the theory that it did have that right.

Thus we are brought to the crucial question of the case: Has plaintiff, by the acceptance of rents for a period of more than a year and with knowledge that the lease had been assigned, waived any right which it had to declare a forfeiture on account of the assignment, or may it now exercise that right?

The Court, in Danville Lumber & Manufacturing Co. v. Gallivan Building Co., 177 N.C. 103, 97 S.E. 718, 720, said: 'No one can be said to have waived that which he does not know, or where he has acted under a misapprehension of facts. Waiver or acquiescence, like election, presupposes that the person to be bound is fully cognizant of his rights, and, that being so, he neglects to enforce them, or chooses one benefit instead of another, either, but not both, of which he might claim. The knowledge may be actual or constructive; one cannot be willfully ignorant and relieve himself from a waiver, because he did not know. The question of waiver is mainly one of intention, which lies at the foundation of the doctrine. Waiver must be manifested in some unequivocal manner, and to operate as such it must in all cases be designed, or one party must have so acted as to induce the other to believe that he intended to waive, when he will be forbidden to assert the contrary.'

'Election is simply what its name imports; a choice, shown by an overt act, between two inconsistent rights, either of which may be asserted at the will of the chooser alone.' Mr. Justice Holmes in Bierce v. Hutchins, 205 U.S. 340, 27 S.Ct. 524, 525, 51 L.Ed. 828.

Stacy, J. (later C. J.), in applying these principles to the case of a landlord who with knowledge of a breach accepted rents, said: 'It is the generally accepted rule that if the landlord receive rent from his tenant, after full notice or knowledge of a breach of a covenant or condition in his lease, for which a forfeiture might have been declared, such constitutes a waiver of the forfeiture which may not afterwards be asserted for that particular breach, or any other breach which occurred prior to the acceptance of the rent.' Winder v. Martin, 183 N.C. 410, 111 S.E. 708, 709.

The rule as stated has been consistently applied in similar factual situations. Richburg v. Bartley, 44 N.C. 418; Fredeking v. Grimmett, W.Va., 86 S.E.2d 554; Whitehouse Restaurant v. Hoffman, 320 Mass. 183, 68 N.E.2d 686; Hunt v. Shell Oil Co., 10 Cir., 116 F.2d 598.

The case of Woollard v. Schaffer Stores Co., decided by the New York Court of Appeals, reported in 272 N.Y. 304, 5 N. E.2d 829 and 109 A.L.R. 1262, with lengthy annotations, bears close resemblance to the facts of this case. There, as here, a declaratory judgment was sought to determine the rights of the parties. There the lease contained a covenant that lessee would not sublet nor make structural changes in the building. These covenants were violated. Here the lease contains a restriction on the right to assign. This provision has been violated. There the landlord, after learning of the breach of the covenant, accepted rents with this reservation: 'any rentals you may pay hereafter will be received by me only with the understanding that the same are received without prejudice to the action which will follow your failure to comply with my notice of September 19.' The notice referred to was that the lease had terminated by the breach. Here no reservation of rights was attempted by the landlord when it accepted the rent checks from the lessee. There and here rent checks were issued and accepted after suit was begun by the landlord to enforce his asserted rights. The court held that the acceptance of rent, notwithstanding the notification and reservation waived landlord's right to terminate. Here there has been no reservation attempted in accepting the rents. True the landlord refused to accept a check of the assignee, and the payments were made by lessee. That fact makes no difference. See Landlord and Tenant, 32 Am.Jur. sec. 883; 51 C.J.S. Landlord and Tenant § 117(2)(a).

Every fact necessary to establish waiver in accordance with the definition given in Danville Lumber & Manufacturing Co. v. Gallivan Building Co., supra, is present here. Plaintiff, when it wrote its letter of 16 August had knowledge of the assignment if not the details of the assignment. It knew the provisions of the lease and that the assignment did not have lessor's approval. It notified defendant Spiegel: 'We shall terminate the lease, take steps to repossess the premises and preserve for ourselves all other legal rights and remedies provided in the lease.' In several letters written...