Kent v. Humphries

• Decision Date: 17 February 1981
• Docket Number: No. 801SC476,801SC476
• Court: North Carolina Court of Appeals
• Parties: Melody KENT v. Fletcher HUMPHRIES and H & W Plastics, Inc.

Page 176

275 S.E.2d 176

50 N.C.App. 580

Melody KENT v. Fletcher HUMPHRIES and H & W Plastics, Inc.

No. 801SC476.

Court of Appeals of North Carolina.

Feb. 17, 1981.

Discretionary Review Allowed by

Supreme Court April 7, 1981.

Sanford, Adams, McCullough & Beard by J. Allen Adams and Catharine B. Arrowood, Raleigh, for plaintiff-appellant.

White, Hall, Mullen, Brumsey & Small by Gerald F. White and William Brumsey, III, Elizabeth City, for defendants-appellees.

CLARK, Judge.

Plaintiff first argues that the amendment of defendants' answer to plead the statute of frauds was irrelevant to her claims of fraud, unfair trade practices, and nuisance. We agree. The statute of frauds, G.S. 22-2, is an affirmative defense to recovery on an oral contract of lease for a period in excess of three years. The statute of frauds, then, even if properly pleaded and proven, could do no more than bar plaintiff's recovery on her contractual claim. Her claims of fraud, unfair trade practices, and nuisance, not sounding in contract, were thus not precluded by G.S. 22-2. Whether there were other grounds for summary judgment as to these three claims will be discussed after an examination of the propriety of the granting of summary judgment as to plaintiff's contract claim.

We are presented with two versions of the agreement of lease: the written lease, signed by Humphries, and the earlier oral lease. We believe plaintiff is precluded from relying on the written lease because her own deposition testimony reveals that the written lease was no more than a proposal by defendant, that plaintiff found the proposal unacceptable because it varied from the parties' earlier oral agreement, that because it varied from the oral agreement she refused to sign it, and that she considered the earlier oral lease in effect. For plaintiff to succeed on her contract claim then, she would have to rely on the oral lease.

Plaintiff may not rely on the oral lease, however, because it is barred by the statute of frauds, G.S. 22-2, which provides that, "all ... leases and contracts for leasing land exceeding in duration three years ... shall be void unless said contract, or some memorandum or note thereof, be put in writing and signed by the party to be charged ...." Plaintiff suggests that the written lease, which she refused to sign, should be admitted as a partial memorandum of the oral lease, to be aided by parol evidence. We disagree. Were the memorandum plaintiff offered merely sketchy, we believe that details not included in the writing could properly be supplemented by parol testimony, see, e. g., McGee v. Craven, 106 N.C. 351, 11 S.E. 375 (1890); but to qualify as a memorandum to take an oral lease out of the statute, the writing must, at the very least, show all of the essential elements of the agreement, see Hall v. Misenheimer, 137 N.C. 183, 49 S.E. 104 (1904), and those elements set out in the writing must not contradict the terms of the oral lease sought to be proved, see Keith v. Bailey, 185 N.C. 262, 116 S.E. 729 (1923). Plaintiff, in her own deposition, establishes the inconsistencies between the oral lease she seeks to recover under, and the written lease she offers as a memorandum thereof. As noted by our Supreme Court in a somewhat similar case:

"The plaintiff cannot recover on the memorandum or receipt (even if it be otherwise sufficient), because it does not embody the entire contract, nor on the agreement to which he testified at the trial, whether considered independently of or in connection with the receipt, because in either event is there no written note or memorandum signed by the party to be charged and embracing all the essential terms of the contract which the evidence tends to establish."

Id. at 264, 116 S.E. at 730.

We note further that even if the writing were allowed to take the oral lease out of the statute of frauds, the writing does not contain the alleged covenant not to operate a plastics plant in the shopping center. "Covenants limiting the use of real property are within the scope of the statute of frauds," Herring v. Merchandise, Inc., 249 N.C. 221, 226, 106 S.E.2d 197, 201, 78 A.L.R.2d 927, 932 (1958), and such a covenant not included in a written lease cannot be proved by parol testimony, Sakellaris v. Wyche, 205 N.C. 173, 170 S.E. 638 (1933). Plaintiff therefore could not recover for breach of defendant Humphries' alleged covenant even if the lease were proved.

Since the writing is not allowed, and the lease is void, plaintiff has no underlying contract upon which to base an implied covenant of quiet enjoyment. Although "(e)very demise implies a warranty for quiet enjoyment, unless the contrary be expressed ...," McKesson v. Mendenhall, 64 N.C. 502, 505 (1870), plaintiff is precluded in this action from proving the demise, and thus from implying the covenant. See 49 Am.Jur.2d Landlord and Tenant § 330 (1970).

We hold that summary judgment on plaintiff's contract claim was properly entered because the five-year lease upon which plaintiff's contract claim necessarily relied was void as a matter of law under the statute of frauds, G.S. 22-2. We agree with plaintiff, however, that the statute of frauds is a good defense only to the claims based in contract, and must now examine plaintiff's other claims to determine whether summary judgment was properly entered in each case.

For plaintiff to recover in nuisance, she must show an unreasonable interference with the use and enjoyment of her property. Barrier v. Troutman, 231 N.C. 47, 55 S.E.2d 923 (1949). In deciding appeal of a summary judgment, we must consider all pleadings, affidavits, and depositions in the light most favorable to plaintiff. Brice v. Moore, 30 N.C.App. 365, 226 S.E.2d 882 (1976). Taken in the light most favorable to her, plaintiff's deposition clearly establishes an interference with her use and enjoyment of the beauty shop. Reasonableness of the defendants' interference is a factual question that must go to the jury if plaintiff held a sufficient property right in the rented space to otherwise support a nuisance action. Defendants point out that plaintiff was no more than a tenant at will by virtue of her entry under a void lease and argue that since Humphries had the right to terminate the tenancy instanter, his constructive eviction of her by the maintenance of the plastics plant and the emission of noxious vapors was not inconsistent with the very limited property rights she held as a tenant at will.

We first note, with regret, that defendants are correct in characterizing plaintiff's tenancy as one at will. We believe the better reasoned and more modern view would be that plaintiff's tenancy at will was converted into a tenancy from month-to-month when she began paying a monthly rental. We believe such a view would more fairly distribute the rights and liabilities of landlord and tenant when a tenant enters premises under a lease unaware that it is void under the statute of frauds and begins paying rent in accord with the void lease. As a tenant from month-to-month, plaintiff would have been entitled to seven days' notice, under G.S. 42-14, before the tenancy could be terminated, and would clearly have a sufficient property right to support an action in nuisance where, as here, her use of the property was disturbed during a period and without the required notice. Most modern authorities suggest that entry under a lease void under the statute of frauds creates a periodic tenancy, usually based on the rental period. See Restatement (Second) of Property, Landlord and Tenant § 2.3 (1977); 1 American Law of Property § 3.27 (A.J. Casner ed. 1952); 49 Am.Jur.2d Landlord and Tenant §§ 48-50 (1970). The majority of jurisdictions follow the rule that payment of rent under the void lease converts the tenancy at will to a periodic tenancy. Annot., Character and Duration of Tenancy Created by Entry Under Invalid or Unenforceable Lease, 6 A.L.R.2d 685 (1949).

Dicta in two North Carolina cases have suggested that our Supreme Court would follow the majority rule. See Ingram v. Corbit, 177 N.C. 318, 319, 99 S.E. 18 (1919) (Clark, C. J.); Barbee v. Lamb, 225 N.C. 211, 34 S.E.2d 65 (1945). At least one authority appears to have been misled by these dicta. See J. Webster, Real Estate Law in North Carolina § 80 (1971) ("if the lessee goes into possession under such unenforceable lease and pays the rent pursuant to the agreement, a tenancy from period to period is created." Citing Ingram, supra.) These dicta and Professor Webster's statement, however, are contradicted by square holdings in two other cases to the effect that, regardless of the landlord's acceptance of rental payments, the tenancy is never converted into one from period-to-period, but remains a tenancy at will. Mauney v. Norvell, 179 N.C. 628, 103 S.E. 372 (1920) (Clark, C. J.); Davis v. Lovick, 226 N.C. 252, 37 S.E.2d 680 (1946). This Court has followed these precedents once before, Stout v. Crutchfield, 21 N.C.App. 387, 204 S.E.2d 541, cert. denied, 285 N.C. 595, 205 S.E.2d 726 (1974), and although we now question whether this rule adequately recognizes the interest and expectations of tenant as well as landlord, we are constrained to continue to follow the rule until our Supreme Court is faced with an appropriate set of facts to allow it to reconsider and, in its wisdom, change the rule.

As a tenant at will, the plaintiff's interest in the property could be terminated instanter by defendant. Barbee v. Lamb, supra; Davis v. Lovick, supra. See Webster, supra, § 96; Strong's N.C.Index 3d, Landlord and Tenant § 15 (1977). Thus the defendant suggests that the constructive eviction of plaintiff was within defendant's rights under the tenancy at will and could come at any time. We cannot go so far.

We believe that even under a tenancy at will the method of paying the rent is significant. The significance of the method of payment is not that the defendant should be finally estopped...