S. L. Nusbaum & Co. v. Atlantic Virginia Realty Corp.

• Decision Date: 17 January 1966
• Citation: 146 S.E.2d 205,206 Va. 673
• Parties: S. L. NUSBAUM AND COMPANY, Incorporated, v. ATLANTIC VIRGINIA REALTY CORPORATION.
• Court: Virginia Supreme Court

Page 205

146 S.E.2d 205

206 Va. 673

S. L. NUSBAUM AND COMPANY, Incorporated, v. ATLANTIC VIRGINIA REALTY CORPORATION.

Supreme Court of Appeals of Virginia.

Jan. 17, 1966.

Robert C. Nusbaum, Alan J. Hofheimer, Norfolk (Hofheimer, Nusbaum & McPhaul, Norfolk, on brief), for plaintiff in error.

Joseph A. Gawrys, Norfolk (Braden Vandeventer, Jr., Vandeventer, Black, Meredith & Martin, Norfolk, on brief), for defendant in error.

Before EGGLESTON, C. J., and SPRATLEY, BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

SPRATLEY, Justice.

On February 1, 1963, S. L. Nusbaum and Company, Incorporated [Nushaum], a real estate broker, filed this motion for judgment against Atlantic Virginia Realty Corporation [Atlantic Realty] and Virginia Dars Stores Corporation [Virginia Dare], seeking the recovery of $28,080.00. Nusbaum alleged that, as agent for Anjo Corporation [Anjo] it had interested Virginia Dare in leasing certain land of Anjo and a building to be erected thereon; that as a result of negotiations between the parties a lease, dated April 27, 1959, was entered into between Anjo and Atlantic Mills Thrift Center of Norfolk, Incorporated [Atlantic Mills], a wholly owned subsidiary of Virginia Dare; that its compensation for procuring the lease and collecting the rent therefrom was fixed at 6% of all rent payable under the lease; that Atlantic Realty subsequently purchased the demised property, expressly subject to the above mentioned lease and the obligation of Anjo to compensate the plaintiff as aforesaid; and that Atlantic Realty and Virginia Dare had refused to pay any commission on rent accruing after August 21, 1962.

Atlantic Realty demurred to the motion on the ground that it did not set forth a cause of action. After considering the pleading and exhibits introduced by the parties, the court sustained the demurrer, with leave to Nusbaum to amend its pleadings. Nusbaum filed an amended motion, in which it alleged that its compensation for procuring the lease was 'orally' fixed by it and Anjo at 6% of all rent payable thereunder, 'as and when the rent was paid;' that the agreement conferred upon it 'a vested interest in 6% of all rents' and 'an equitable assignment' of the rents to secure [to Nusbaum] its said compensation; that Anjo had thus 'divested itself of 6% of future rent payable, and could not convey to any grantee more than 94% of such rent;' that Virginia Dare, the parent corporation, guaranteed the lease; that Anjo, by letter dated May 3, 1960, expressly confirmed its right to collect the rent throughout the term of the lease; that pursuant to said agreement, it was 'paid each month a commission of $260.00 by Anjo, and later by Independence Bus Corporation [I. B. C.], a successor in title to Anjo, for all rents paid under said lease up to and including August 31, 1962;' that in August, 1962, the property demised in the lease was conveyed to Atlantic Realty by I. B. C., expressly subject to the lease, and that although Atlantic Realty knew that the rent payable under the lease was charged with its [Nusbaum's] commission rights, Atlantic Realty had refused to pay and of said commission.

Atlantic Realty demurred to the amended motion and the demurrer was overruled. It thereupon filed an answer specifically denying that it was obligated to Nusbaum in any manner or for any sum whatsoever. On motion of Nusbaum, the court entered a nonsuit as to Virginia Dare.

The case came on to be heard by the court, without a jury, and after considering the pleadings, the evidence, including the exhibits, and the argument of counsel, judgment was entered for Atlantic Realty and the proceeding dismissed with prejudice. This appeal followed.

The record reveals the following chain of events:

Early in 1959, Nusbaum wrote to Virginia Dare, a Delaware corporation, and informed it that there were several suitable locations in the Norfolk area for building a discount store. Representatives from Virginia Dare became interested in the property of Anjo and Nusbaum introduced them to L. T. Zoby, president and sole stockholder of Anjo. On April 27, 1959, Anjo executed a written lease demising its property to Attlantic Mills, subsidiary of Virginia Dare, for a term of twelve years, begining September 1, 1959, at an annual rental of $52,000.00, payable at the rate of $4,333.13 per month. Nothing is said in the lease as to the collection of the rent by Nusbaum, or the payment of any compensation to it for procuring the lessee. The name of Nusbaum appears only twice. In its first paragraph, it is recited that the lease was made and entered into 'by and between ANJO COPR., c/o S. L. Nussbaum & Company, Agents, of Norfolk, virginia (hereinafter called the 'Lessor').' [206 Va. 676] Paragraph 19 provides that: 'Any and all notices required to be given pursuant to this lease should be sent by registered or certified mail to the Lessors act c/o S. L. Nussbaum & Company, Norfolk, Virginia and the Lessee at 111 Eighth Avenue, New York, New York. Either party shall notify the other in writing to specify a new or different address to which notices should be sent.'

Anjo promptly constructed a building on the demised property, and delivered possession to Atlantic Mills on September 1, 1959. Atlantic Mills forwarded its monthly check in payment of the rent to Nusbaum, the agent of Anjo. Nusbaum deducted 6% therefrom for its commission, and remitted the balance to Anjo.

Nusbaum, realizing that there was no written agreement as to its compensation, requested a written commitment from Anjo, setting out certain conditions. In response Anjo, disregarding the requested conditions, sent the following letter to Nusbaum, dated

May 3, 1960:

'Re: Anjo Corporation lease to Atlantic Mills Thrift Center of Norfolk, Incorporated

Date of lease: April 27, 1959

Premises: Sewells Point and E. Little Creek Roads, City of Norfolk, Virginia

'Dear Sirs:

'This letter contains the covenant and agreement of the undersigned to pay you, for services heretofore rendered by you in procuring the above mentioned lease, regular commissions at the minimum (6%) rate prescribed by the Norfolk Real Estate Board, Incorporated, in respect to all rent payable on the said lease and any extensions or renewals thereof.

'It is understood that you will, without additional charge, use your best efforts to collect rent payable under the lease, after deducting your commission, and any other authorized items, remit the balance regularly to the undersigned. Nothing herein obligates you to furnish legal counsel or institute legal proceedings in order to collect rent; however, the collection of rent by you is an express condition of the payment of money set forth herein.

'Signed and sealed this 3rd day of May, 1960.

'ANJO CORPORATION

'By L. T. Zoby

'President.'

Nusbaum received the letter, made no objection, and continued to collect the rent. L. T. Zoby, author and signer of the letter, testified that he had a 'standing deal in town [Norfolk, Virginia] with all the real estate agents' that if they would bring him a tenant that he liked they would be authorized to collect the rent and receive '6% in the deal.'

On September 15, 1959, Anjo conveyed the demised property to trustees to secure the payment of $350,000.00 to the Home Beneficial Life Insurance Company, Incorporated. The deed also granted and transferred as additional security for the loan all the right, title and interest of Anjo in the lease dated April 27, 1959, with the agreement that, in the event of default under the deed of trust, or the payment of the obligation secured thereby, the holder of the obligation should have the right to collect the rents.

It appears that Zoby had pledged his stock in Anjo Corporation to the First National Bank of Boston as security for a loan made by that bank to one of his corporations, the Towers Shopping Center in Roanoke, Virginia. Upon default in payment of that loan, the bank agreed that if Anjo would convey to it the property leased to Atlantic Mills, the bank would release the Anjo stock to Zoby. On February 26, 1962, the property was conveyed with general warranty by Anjo to I. B. C., a corporation wholly owned by the bank and organized to receive the conveyance. No mention of Nusbaum was made in the deed, but the conveyance was made 'expressly subject to the lease of April 27, 1959,' the deed of trust from Anjo securing the Home Beneficial Life Insurance Company, Incorporated, and another deed of trust from Anjo to Frank W. Rogers and John W. Walker, trustees, dated November 21, 1961. No mention was made of Nusbaum in the deed. Subsequent to the conveyance to I. B. C., Nusbaum collected the rents from Atlantic Mills, and made a report to I. B. C. until it sold and conveyed the property.

The First National Bank of Boston acquired the property in the name of I. B. C., with the view to selling it within a short time. On June 21, 1962, I. B. C. entered into a contract to sell the property to 10 Barrow Street Corporation [Barrow]. The contract stated that the sale was to be made subject to the lease held by Atlantic Mills and 'further subject to the management contract of L. S. Nusabum and Co., Inc., as well as the deed of trust securing the Home Beneficial Life Insurance Company, Incorporated.' On July 18, 1962, Barrow assigned the contract to Gibraltar Management Company, Incorporated, and on August 13, 1962, Gibraltar assigned it to Atlantic Realty. No mention is made of Nusbaum in either assignment.

In the meantime, on August 1, 1962, the property leased to Atlantic Mills was conveyed by deed of I. B. C., with general warranty, to Atlantic Realty. The deed contained the recital that the conveyance was made 'expressly subject to a lease from Anjo Corp., c/o S.L. Nusbaum & Company, Inc., Agents' and Atlantic Mills. No other mention was made of Nusbaum.

On August 31, 1962, Atlantic Realty, the owner of the land, and Atlantic Mills, the tenant thereof, entered into an...