Shropshire v. Prahalis, 1844

• Decision Date: 08 June 1992
• Docket Number: No. 1844,1844
• Citation: 309 S.C. 70,419 S.E.2d 829
• Court: South Carolina Court of Appeals
• Parties: Rick L. SHROPSHIRE, Appellant, v. Stanley P. PRAHALIS and Steve Valipour, Respondents. . Heard

Page 829

419 S.E.2d 829

309 S.C. 70

Rick L. SHROPSHIRE, Appellant, v. Stanley P. PRAHALIS and Steve Valipour, Respondents.

No. 1844.

Court of Appeals of South Carolina.

Heard June 8, 1992.

Decided June 22, 1992.

Gene M. Connell, Jr. of Kelaher, Bass & Connell, Surfside Beach, for appellant.

J. Carlton Bell and James C. Pike, Jr., North Myrtle Beach, and Phillip D. Sasser, Conway, for respondents.

SANDERS, Chief Judge.

This is a declaratory judgment action to determine rights under a lease. Respondent Stanley P. Prahalis leased certain real property to appellant Rick L. Shropshire. According to the terms of the lease, Mr. Shropshire covenanted "that he will not use said premises for any other purpose than that of a Reservation & Information Ctr." He also covenanted "that he will not assign or sublet without the written consent of the Lessor." The lease further provided that Mr. Prahalis may re-enter the premises for "breach of any covenant contained herein." Contrary to the terms of the lease, Mr. Shropshire subleased the property to respondent Steve Valipour, who proceeded to use it as a used car lot. When Mr. Prahalis discovered what had happened, he declared the lease null and void. Thereafter, sublease payments by Mr. Valipour were put in an escrow account, pending resolution by the Circuit Court. The case was referred to a Special Referee, who declared the lease null and void and ordered that the escrowed funds be given to Mr. Prahalis. We affirm.

Mr. Shropshire presents four issues on appeal.

Issue 1

Mr. Shropshire argues that "the Special Referee erred in holding the lease invalid since all the evidence indicated [Mr. Prahalis'] agent had the apparent authority to authorize [Mr.] Shropshire to lease the premises to [Mr. Valipour] for a used car lot."

"[T]he concept of apparent authority depends upon manifestations by the principal to a third party and the reasonable belief by the third party that the agent is authorized to bind the principal." Orphan Aid Soc'y v. Jenkins, 294 S.C. 106, 109-10, 362 S.E.2d 885, 887 (Ct.App.1987). "[A]pparent authority must be established based upon manifestations by the principal, not the agent." Id. at 110, 362 S.E.2d at 887. A purchaser of the Brooklyn Bridge cannot overcome the title of the true owner, no matter how persuasive the salesman may have been. Id.

In the instant case, there is no evidence Mr. Prahalis did anything to make it appear that the agent had the authority to vary the terms of the lease.

Issue 2

Mr. Shropshire argues that "the Court erred in holding the lease void. The reason being the lease contained ambiguous terms as to the penalty for using the premises as a used car lot."

In support of his argument, Mr. Shropshire relies on Chassereau v. Stuckey, 288 S.C. 368, 342 S.E.2d 623 (Ct.App.1986). There, the Court held that, depending on the intent of the parties, language in a lease pertaining to the use to be made of the premises may be restrictive or merely permissive as to what use is allowed. The Court concluded that the language was permissive, not restrictive. Here, unlike there, the lease contains explicit covenants that the premises will not be used for any purpose other than the stated purpose and that the premises will not be sublet without written consent. Moreover, the lease unambiguously provides for forfeiture upon the breach of any covenant.

Mr. Shropshire appears to argue that the lease is...