R. J. Reynolds Realty Co. v. Logan

• Decision Date: 16 June 1939
• Docket Number: 755.
• Citation: 3 S.E.2d 280,216 N.C. 26
• Parties: R. J. REYNOLDS REALTY CO. v. LOGAN et al.
• Court: North Carolina Supreme Court

3 S.E.2d 280

216 N.C. 26

R. J. REYNOLDS REALTY CO. v. LOGAN et al.

No. 755.

Supreme Court of North Carolina

June 16, 1939

Manly Hendren & Womble and W. P. Sandridge, all of Winston-Salem, for appellant.

Edward J. Hanson, of Charlotte, John J. Ingle, of Winston-Salem, and Frank H. Kennedy, of Charlotte, for appellees.

DEVIN Justice.

The lease executed by plaintiff to defendants' assignor, and under which they occupied the premises, contained this provision: "It is understood, covenanted and agreed that at the expiration of this lease, provided the said premises are owned by the landlord and are for rent for the purpose of a theatre, the tenant, in event it has fully complied with all of the terms, covenants and conditions of this lease shall be given the privilege of renewing the same in preference to a third party at a figure satisfactory to the landlord." By its terms this lease, which had been given for a period of five years, expired December 31, 1938.

Plaintiff offered evidence tending to show that in May, 1938 defendants were advised that plaintiff proposed to consider only competitive proposals for a new lease and defendants were invited to submit a proposal. They were told that the contents of competitive bids would not be disclosed, and that the best proposal would be accepted without reopening the bidding. Pursuant to this understanding defendants, on May 20, 1938, submitted a bid of $650 per month for a period of five years, the offer to expire July 1, 1938. Plaintiff also received proposal from A. F. and J. B. Sams to pay $700 per month for a period of ten years, and to expend $10,000 in improvements. These bids were considered by plaintiff's Board of Directors and the Sams offer accepted June 22nd, and lease executed to Sams July 11, 1938, to begin January 1 1939. After due notice defendants refused to vacate the premises and this proceeding was instituted to eject them.

While there is authority for the position that when the lease contains a covenant for renewal and the tenant exercises his right to demand a renewal of the expiring lease, he is entitled to remain in possession, and this defense may be interposed in a summary ejectment proceeding before a Justice of the Peace. Forsythe v. Bullock, 74 N.C 135; McAdoo v. Callum, 86 N.C. 419; Lutz v. Thompson, 87 N.C. 334; Barbee v. Greenberg, 144 N.C. 430, 57 S.E. 125, 12 Ann. Cas. 967. However, it was said in McAdoo v. Callum, sup...