General Appliance Storage Co. v. Richmond, F. and P. R. Co., 780924

• Decision Date: 06 June 1980
• Docket Number: No. 780924,780924
• Parties: GENERAL APPLIANCE STORAGE CO. v. RICHMOND, FREDERICKSBURG AND POTOMAC RAILROAD CO. Record
• Court: Virginia Supreme Court

Page 161

267 S.E.2d 161

221 Va. 176

GENERAL APPLIANCE STORAGE CO. v. RICHMOND, FREDERICKSBURG AND POTOMAC RAILROAD CO.

Record No. 780924.

Supreme Court of Virginia.

June 6, 1980.

John H. Ariail, Jr., Arlington (Tolbert, Smith, Fitzgerald & Ramsey, Arlington, on brief), for appellant.

Fred C. Alexander, Jr., Fairfax (Boothe, Prichard & Dudley, Fairfax, on brief), for appellee.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, POFF, COMPTON and THOMPSON, JJ.

THOMPSON, Justice.

In this appeal we determine whether the Richmond, Fredericksburg and Potomac Railroad Co. (RF&P) is liable in damages for terminating a lease and sublease involving commercial property in Arlington County.

RF&P leased two warehouses to General Appliance Storage Co. (GASCO). Paragraph 16 of the lease gave RF&P the right to terminate the lease in event of default for thirty days in the payment of any rent therein reserved, provided GASCO failed to cure the default within thirty days after notice.

Later an Indenture of Sublease was executed by RF&P as "Lessor," GASCO as "Lessee," and AFA Importers, Ltd. (AFA), as "Sublessee," subletting one of the warehouses to AFA, a beverage distributor, for the remainder of the lease term. AFA agreed to pay its monthly rental directly to RF&P, but since the amount due by AFA was less than the amount owed by GASCO to RF&P under the original lease, RF&P was required to send a monthly bill to GASCO for the difference, approximately $430.00 per month. Under the sublease, GASCO assumed liability to RF&P for the performance by AFA of all the covenants and agreements in the original lease, including the obligation to pay rent in the event AFA defaulted in the payment thereof.

GASCO continued to pay its monthly rental as billed, but AFA was in default for all rents due after December 1, 1973. GASCO twice inquired of RF&P as to AFA's rental account, but, because of bookkeeping errors at RF&P, GASCO did not learn of the rental delinquency. By letter dated May 31, 1974, RF&P notified GASCO that because of AFA's default in payment of the rent, RF&P was cancelling the lease unless the default was cured within the thirty-day period. ¹ The default was not cured by June 30, 1974, and by letter dated July 8, 1974, received by GASCO on July 10, 1974, additional notice was given to GASCO. ²

The arrearage was never paid, and RF&P took possession of the two buildings and leased them to a third party. On July 21 1977, GASCO filed a motion for judgment against RF&P, alleging that the lease was terminated by RF&P by its letter of July 8, 1974, that the termination and repudiation of the lease was improper, that it was in violation of the lease, and that GASCO had suffered damages as a result of the termination and repudiation of the lease.

In the trial court summary judgment was entered for the defendant. The lower court held that RF&P had properly terminated the lease. ³

GASCO contends on appeal that jury questions were presented as to whether RF&P had waived its right to terminate the lease and whether RF&P was estopped to assert its right of termination, and thus the lower court erred in withholding those issues from jury determination.

I. WAS THE DEFAULT WAIVED?

The contention of GASCO is that it first learned of the delinquent rent from AFA when, on June 7, 1974, it received the letter from RF&P dated May 31, 1974. After posting the letter, RF&P received GASCO's monthly check of approximately $431.00, which was the difference between what AFA owed and the total rent on the properties. This acceptance of rent, GASCO argues, was a waiver by RF&P of its right to terminate the lease.

In this connection it is to be remembered that the letter of May 31 was reiterated and reemphasized by the letter of July 8, 1974, which was received July 10, and thereafter nothing was paid.

We believe that this phase of the case is controlled by our holding in Eagler v. Little, 217 Va. 869, 872, 234 S.E.2d 242, 244 (1977), where this court said: " 'The waiver of one forfeiture is of course not a waiver of a subsequent forfeiture: And if the act of forfeiture be continuing, a waiver of a right of re-entry for one breach will not preclude a re-entry for a new or continuing breach.' " (Emphasis added.)

The breach of the lease was a continuing one, and under these circumstances the right of termination was continued.

II. WAS RF&P ESTOPPED?

GASCO says in its brief that the facts which create an estoppel are essentially those relied upon in the waiver arguments. We conclude that the result is the same as reached on the waiver arguments.

In essence, GASCO is saying that certain telephone...