Springs v. Atlantic Refining Co.

• Decision Date: 22 November 1933
• Docket Number: 414.
• Parties: 205 N.C. 444, 110 A.L.R. 474 v. ATLANTIC REFINING CO. SPRINGS et al.
• Court: North Carolina Supreme Court

171 S.E. 635

205 N.C. 444, 110 A.L.R. 474

SPRINGS et al. v. ATLANTIC REFINING CO.

No. 414.

Supreme Court of North Carolina

November 22, 1933

Appeal from Superior Court, Mecklenburg County; Harding, Judge.

Action by J. C. Springs and others against the Atlantic Refining Company. From an order making permanent a temporary restraining order theretofore granted, defendant appeals.

Error and cause remanded.

Where lessee parted with entire interest in premises to third party, transaction was "assignment" or sale of lease, not "sublease."-- Civil action to restrain the defendant from removing "any buildings, structures, equipment and appliances placed or installed upon the premises of the plaintiffs at the northeast corner of West Trade and Pine Streets in the City of Charlotte prior to the first day of July, 1932."

The facts alleged are these:

(1) On June 17, 1929, the plaintiffs leased the premises in question to John F. Boyd and C. E. B. Mendenhall as a filling station site for a period of three years beginning July 1, 1929, and ending June 30, 1932. Said lease, which is in writing and duly registered, contains the following stipulation: "Lessors hereby agree that the lessees may erect on said property such buildings, structures, or equipment as they may desire for carrying on their business and the lessees shall have the right to remove said buildings from said property at the termination of this lease."

(2) On July 27, 1929, Boyd and Mendenhall assigned their lease to the Red "C" Oil Company, a wholly owned subsidiary of the Atlantic Refining Company. These two companies were later merged, and were in continuous possession of said premises up to June 30, 1933. At the time of the merger the lease was again assigned to the present defendant.

(3) On August 21, 1929, Boyd and Mendenhall, by "Bill of Sale," sold and delivered to the Red "C" Oil Company, its successors and assigns, for a consideration of $4,500, "the building, cement driveway and cement wash-pit," which they had erected on plaintiffs' premises in accordance with the terms of the original lease, with the same right of removal as assignors had etc.

(4) On June 22, 1932, the plaintiffs leased to the defendant Atlantic Refining Company, already in possession under the prior assigned lease, the premises in question for a period of one year, beginning July 1, 1932, and ending June 30 1933. Said lease, which is in writing and duly registered, also contains a stipulation with respect to removing buildings, structures, equipment, and appliances placed thereon by the lessee for filling station purposes, "at the termination of this lease, and for a period of ten days thereafter."

(5) It is alleged by the defendant that the assignment of the Boyd and Mendenhall lease to the Red "C" Oil Company "was made with the knowledge and express consent of the plaintiffs," and that the said buildings and other improvements placed thereon by Boyd and Mendenhall are now "the sole and exclusive property of the defendant and it has the right to remove the same from said premises."

(6) It is further alleged by plaintiffs that the defendant is attempting to remove the buildings and improvements erected on said premises by Boyd and Mendenhall.

Wherefore plaintiffs pray that defendant be permanently enjoined from removing said buildings and improvements. The temporary restraining order was made permanent on the return hearing, and from the order thus entered the defendant appeals, assigning errors.

Edgar W. Pharr, of Charlotte, for appellant.

J. C. Newell and H. L. Taylor, both of Charlotte, for appellees.

STACY Chief Justice.

It is alleged in the complaint that Boyd and Mendenhall sublet the premises in question to the Red "C" Oil Company, but, as they parted with their entire interest in the demised premises, what really took place was an assignment or sale of the lease. Cornell Millinery Co. v. Little-Long Co., 197 N.C. 168, 148 S.E. 26. And, as this was done with the knowledge and express consent of the plaintiffs, it would seem that the assignees were in under the original lease with the same rights which their assignors had with respect to removing buildings and improvements placed thereon by Boyd and Mendenhall. Causey v. Orton, 171 N.C. 375, 88 S.E. 513.

It is further alleged in the answer that the buildings and other improvements erected or placed upon the demised premises by Boyd and Mendenhall are now "the sole and exclusive property of the defendant and it has the right to remove the same from said premises." Under this allegation, it would seem the defendant is entitled to show, if it can, its right to remove the said buildings and improvements. Belvin v. Paper Co., 123 N.C. 138, 31 S.E. 655; Western N.C. R. Co. v. Deal, 90 N.C. 110.

The injunction was made permanent--not simply continued to the hearing--upon the theory that the defendant, being a tenant in possession, is estopped to deny the plaintiffs' title to the buildings and improvements placed thereon prior to the beginning of defendant's present lease, July 1, 1932.

It is undoubtedly a well-settled principle of law that, where the conventional relation of landlord and tenant exists, and the latter takes possession of the demised premises under a lease from the former, the tenant will not be permitted to dispute the title of the landlord, either by setting up an adverse claim to the property or by undertaking to show that it rightfully belongs to a third person, during the continuance of such tenancy. Hobby v. Freeman, 183 N.C. 240, 111 S.E. 1; Clapp v. Coble, 21 N.C. 177. But this wholesome and salutary principle, supported both by authorities and considerations of public policy, we apprehend is not necessarily controlling in a case like the present, where the removal of buildings and improvements placed upon the premises by the tenant is expressly provided for in the agreement between the parties. Causey v. Orton, supra; Freeman v. Leonard, 99 N.C. 274, 6 S.E. 259; Feimster v. Johnson, 64 N.C. 259.

Speaking to the subject in Prudential Insurance Co. v. Totten, 203 N.C. 431, 166 S.E. 316, 317, it was said: "That a tenant who takes possession of demised premises under a lease from the landlord, or, being in possession, unconditionally agrees to hold as such (Riley v. Jordan , supra), will not be permitted to dispute the landlord's title, during the continuance of the tenancy, is established by all the authorities on the subject. Hobby v. Freeman, 183 N.C. 240, 111 S.E. 1; Clapp v. Coble, 21 N.C. 177. But this principle, founded upon reasons of public policy, applies only in cases where the simple relation of landlord and tenant exists ( Abbott v. Cromartie [72 N.C. 292, 21 Am. Rep. 457], supra), and does not extend to instances where title to the property is brought in question or equities are to be adjusted between the parties (Hughes v. Mason , supra; Hauser v. Morrison [146 N.C. 248, 59 S.E. 693], supra; Turner v. Lowe, 66 N.C. 413)."

The doctrine of fixtures has been the subject of much consideration by the courts. A number of interesting cases appear in our our Reports, and they abound with many niceties and distinctions.

For example, in Smithwick v. Ellison, 24 N.C. 326, 38 Am. Dec. 697, speaking of the right of a tenant to remove manure made on a farm during the tenancy, it was said: "Whatever things the tenant has a right to remove ought to be removed within the term; for, if the tenant leave the premises without removing them, they then become the property of the reversioner. But where the tenant holds over, even so as to become a trespasser, he will not be considered as having abandoned the things he had a right to remove." Compare 11 R. C. L. 1080.

Likewise in Feimster v. Johnson, 64 N.C. 259, it was held that a still set up and incased in masonry in the usual way did not become a part of the realty contrary to the intention of the parties, the court taking occasion to say: "As a general rule, whatever is attached to land is understood to be a part of the realty; but as this depends, to some extent, upon circumstances, the rights involved must always be subject to explanation by evidence. Whether a thing attached to land be a fixture or chattel personal, depends upon the agreement of the parties, express or implied. Naylor v. Collins, 1 Taunt. 19; Pervy v. Brown, 2 Stark. 403; Wood v. Hewitt, 55 E. C. L. 913. A building, or other fixture which is ordinarily a part of the realty, is held to be personal property when placed on the land of another by contract or consent of the owner."

Again, in Sanders v. Ellington, 77 N.C. 255, holding that a crop cultivated by a tenant and left standing in the field after the expiration of his term becomes the property of the landlord, the court observed: "A tenant for years may remove fixtures and anything put there by himself, provided he does so before his term expires; but after that, all of such things belong to the owner of the land, and the quondam tenant has no right to put his foot upon the land, except by the license of the owner. All of the cases agree that such is the law." See, also, Chauncy v. Atlantic Coast Line R. Co., 195 N.C. 415, 142 S.E. 327.

But coming nearer to the subject in hand, it was said in Horne v. Smith, 105 N.C. 322, 11 S.E. 373, 18 Am. St. Rep. 903, that, as between landlord and tenant, the intent with which fixtures are attached to the freehold becomes material, and, if it appear that they were for the better...