Rainwater v. Hobeika

• Decision Date: 29 May 1946
• Docket Number: 15843.
• Citation: 38 S.E.2d 495,208 S.C. 433
• Parties: RAINWATER v. HOBEIKA.
• Court: South Carolina Supreme Court

38 S.E.2d 495

208 S.C. 433

RAINWATER v. HOBEIKA.

No. 15843.

Supreme Court of South Carolina

May 29, 1946

Appeal from Common Pleas Court of Florence County; L. D. Lide, Judge.

Ejectment by I. S Rainwater against N. E. Hobeika. Judgment of a magistrate in favor of plaintiff was reversed by the circuit court, and plaintiff appeals.

Order of Judge Lide follows:

This is an ejectment proceeding under Section 8813, Code 1942 instituted by the plaintiff above named as landlord against the defendant above named as tenant on December 1, 1945, in the court of B. H. Maynard, Esq., one of the magistrates for Florence County. A notice to show cause was duly issued by the magistrate directed to the defendant requiring him to show cause why he should not be ejected from certain premises, stating that his lease therefor had 'expired'; the premises in question being situate on the northeast corner of Dargan and Evans Streets in the City of Florence. The case came on to be tried before the magistrate and a jury upon the return day, to wit, December 5, 1945, and the respective parties were represented by competent counsel.

Counsel for the defendant presented to the court and read at the hearing an elaborate return in his behalf to the rule to show cause, attached to which as a part thereof are the basic documents concerning the relationship between the parties. Thereupon counsel for the plaintiff interposed a demurrer to the return and moved that the same be rejected and held insufficient, and for judgment on the pleadings. After hearing argument of counsel pro and con the magistrate directed a verdict in favor of the plaintiff for the possession of the premises in question. It will be observed that no evidence whatsoever was adduced at the trial and that the judgment of the magistrate was based solely upon the pleadings. From the judgment of the magistrate the defendant duly appealed to this court, and the appeal was heard by me at my chambers at Marion on December 15, 1945. After argument of counsel for the respective parties the matter was taken under advisement.

From the foregoing statement it is clear that we must first review the defendant's return in order to understand the issues before the court for determination. And it appears from the original lease attached to the return and dated October 24 1940, that I. S. Rainwater, the landlord, granted and leased unto N. E. Hobeika, the tenant, the property in question described as 'the ground floor of the building situate on the northeast corner of Dargan and Evans Streets, in the City of Florence, formerly occupied by Stanley Drug Company, fronting on Evans Street 60 feet and on Dargan Street 25 feet.' The term of the lease is stated to be five years from December 1, 1940, up to and including November 30, 1945, and the amount of the rent to be paid is set forth in the lease. The lease is in the usual form and is executed by both of the parties, and is duly probated.

Sometime after the lease was executed, to wit, on November 22, 1940, Mr. Rainwater, the landlord, executed and delivered to Mr. Hobeika, the tenant, an addendum to the lease of which the following is a copy:

'Florence, South Carolina

Nov. 22nd, 1940

It is further understood and agreed that the lessor is to have an option for five additional years at the expiration of the within lease at a price agreed upon at that time.

This is to be attached to the original lease and becomes a part of the lease.

I. S. Rainwater

Witnesses: Mrs. Clif M. Shaw, Nellie Odom.'

(It will be observed from a casual reading of the foregoing addendum to the lease that there is a manifest clerical or typographical error therein, that the word 'lessor' was obviously intended to be 'lessee', and should be so treated. Indeed, counsel for the plaintiff evidently so regarded it, and hence no reference was made to this matter in argument.)

As directed in the addendum the same was attached to the original lease as a part thereof, and the lease including the same was duly recorded in the clerk's office for Florence County, on November 25, 1940, in Deed Book 82, at page 95.

It appears from the return that the option granted to the tenant by the landlord in and by the addendum to the lease as aforesaid was executed because of the circumstances that the lease was procured by the tenant for the prupose of enabling him to operate a cafe or restaurant in the building, and that considerable remodelling thereof was necessary to fit it for this purpose (such remodelling to be done under the agreement at the expense of the tenant), and that it developed as the work progressed that such remodelling was so extensive that the cost would be not less than $3,000 or about twice what had previously been contemplated. And it is further alleged that upon learning of the tenant's plan to make such additional improvements to the property the landlord agreed then and there to give to the tenant the exclusive privilege of extending the lease at the will of the tenant for five additional years; and pursuant thereto executed the option hereinabove quoted. And it is also alleged that the tenant completed the remodelling of the building at his expense in excess of $3,000; and that he also purchased expensive equipment and fixtures at a cost of approximately $12,000; and that these fixtures were especially made for the particular building and that if they were now removed therefrom would have a diminished value not in excess of $1,500. The return further sets forth in substance that the option granted was relied on by the tenant and was essential for his protection by reason of these expenditures.

So far as the record before the court shows the relation between the parties as landlord and tenant appears to have been quite satisfactory until the occurrence of the following rather recent events.

On August 21, 1945, Mr. Rainwater wrote a letter to Mr. Hobeika of which the following is a copy:

'Florence, South Carolina

August 21st, 1945

Mr. N. E. Hobeika,

Florence, S. C.

Dear Sir:

As it is only one hundred days before your lease expires and in as much as you have not intimated that you would like to renew this is to notify you that the place you now have leased as the B & G Cafe stand is leased to another party and they have paid rent for December and I will ask you to please accept this as your official notice to be vacated by the first of December 1945.

Very respt.

I. S. Rainwater.'

The statement made in this letter that the tenant had not intimated that he would like to renew does not seem to be at all pertinent for the reason that there was ample time in which the tenant might exercise his option to extend the original lease at its expiration. But what is even more surprising is that the letter manifestly shows that Mr. Rainwater did not consider himself bound by the instrument he had executed as a part of the original lease granting the option of extension, but on the contrary, had definitely repudiated the same, for he stated that the property 'is leased to another party and they have paid rent for December.'

Subsequent to the receipt of this letter the tenant retained counsel, who duly gave specific notice to the landlord by letter dated October, 12, 1945, that the tenant elected to renew the lease for five additional years in accordance with the option executed to him as aforesaid. The letter further stated that the tenant and his attorney were prepared to go into conference with the landlord at such time as would be mutually convenient with the view of discussing and arriving at a proper monthly rental for the use of the property beginning with the expiration of the 'present lease.' A copy of this letter is attached to the return as a part thereof.

There are two other letters, copies of which are attached to the return, written by the attorney or attorneys for the tenant, and it appears from these letters, and from the allegations of the return relating to the conference which was held as suggested in the first letter above mentioned, that the result was that the parties were unable to reach an agreement as to the amount of the rent to be paid during the period of extension; all of which will fully appear by reference to the return.

It is thus apparent that the fundamental question which was before Magistrate Maynard, and is now by appeal before this court, is: Has the lease expired? Counsel for plaintiff as landlord contend that it has, upon the ground that the renewal provision partakes of the nature of an option, and that there was no consideration for this option, and that even if there were, the same is ineffectual, null and void, for uncertainty and indefiniteness, in that, the renewal rental was to be agreed upon by the parties. Counsel for defendant as tenant, however, contends that there was valuable consideration for the option, and that the same is valid and binding, for by its terms the lease was to be extended for five additional years, necessarily carrying with it the original covenants and stipulations of the lease, save only as to the rental, and that in the absence of an agreement by the parties as to the amount of such rental, the same would be fixed by the court in accordance with what would be reasonable under existing conditions at the time of the renewal.

After mature reflection upon the record before the court and rather intensive study of the available authorities, I am fully persuaded that the lease should not be held to have expired and that the magistrate was in error in so ruling and holding. Certainly if the contention of counsel for the plaintiff should be held to be correct the intention of the parties would be entirely defeated and the grant made by the landlord completely nullified.

With reference to the...