Wright & Hunt, Inc. v. Wright, 5753

• Decision Date: 11 September 1964
• Docket Number: No. 5753,5753
• Court: Virginia Supreme Court
• Parties: WRIGHT AND HUNT, INC. v. LLOYD E. WRIGHT, ET AL. Record

Page 902

137 S.E.2d 902

205 Va. 454

WRIGHT AND HUNT, INC. v. LLOYD E. WRIGHT, ET AL.

Record No. 5753.

Supreme Court of Appeals of Virginia

September 11, 1964.

Rothwell J. Lillard (Randolph W. Church, Jr.; McCandlish, Lillard & Marsh, on brief), for the appellant.

Lois H. Miller, for the appellees.

JUDGE: SNEAD

SNEAD, J., delivered the opinion of the court.

Wright and Hunt, Inc., herein called complainant, filed a bill in chancery against Lloyd E. Wright and his wife, E. Louisa Wright, herein referred to as defendants. The bill alleged that defendants had breached certain covenants of a lease agreement under which the complainant, as assignee of the lessee, William H. Hunt, occupied premises owned and leased by defendants.

The bill prayed (1) that defendants be required to remove an enclosure erected by them around the interior stairway, or, in the alternative, the lease agreement be reformed reducing the rent payable thereunder by $3,500 per annum, or, in the alternative, judgment for $10,000 be awarded complainant to cover the costs for removal of the enclosure and to restore the premises in its original condition; (2) that complainant be awarded a judgment for $50,000 for damages suffered because of the breach of covenants in the lease; (3) that the complainant be awarded $100,000 punitive damages, and (4) that general relief be granted. The chancellor heard the evidence ore tenus and viewed the premises during the course of trial. We granted complainant an appeal from the decree which denied all relief sought.

By a lease dated June 9, 1956, Lloyd E. Wright and E. Louisa Wright leased to William H. Hunt the basement and first floor of a store building located at Maple avenue and Mill street in the Town of Vienna. The lease provided that Hunt could assign the lease to complainant, Wright and Hunt, Inc., and this was done immediately after the lease was executed. For about 10 years prior to the execution of this lease the Wrights and Hunt had conducted a retail mercantile business under the partnership name of Wright and Hunt on the demised premises. The Wrights sold their interests in the partnership to Hunt who formed the complainant corporation, Wright and Hunt, Inc., and Hunt was its manager. The defendants owned the leased premises but had no financial interest in this corporation.

At the time the lease was assigned to Wright and Hunt, Inc., it was the only department store in the town. According to Hunt, since that time 'There has been new competition opening in the town in various fields.'

The demised premises were composed of an old section which was known as the variety store, and a later addition called the department store. While the partnership was conducting the business the entire first floor of the new section and the first floor and basement of the old section of the building were used for the purposes of display and sales. The basement of the new section was utilized for storage. The complainant used the same areas for sales and display as did the partnership until September, 1959, when it, with defendants' consent, partitioned the first floor of the variety store into two sections, each about 20 feet wide, and sub-leased the section farthest from the department store to Vienna Speedwash, a laundromat. The remaining section of the variety store was referred to as the home goods store and this area had the only stairway in the building connecting the sales areas of the basement and the first floor.

In the spring of 1961 the Wrights were approached by a representative of complainant for permission to sub-lease 'the basement, the downstairs store, to Twin Auto Parts', but for reasons not disclosed in the record this transaction was not consummated.

Hunt's lease was for a term of 10 years and provided for an annual rental of $10,500, and in addition thereto 3 per cent of gross sales between $300,000 and $450,000. It specified that the tenant was to 'use and occupy said premises for the sale, storage or display of goods, wares and merchandise or service or any other legitimate business and not to use the said premises for an illegal enterprise.' The lessors covenanted that the tenant 'shall peaceably and quietly have, hold and enjoy the demised premises' during the term of the lease; that as of the first day of the term the tenant would be placed in actual possession of the premises, 'all in conformity with law and in a safe, dry, clean and tenantable condition and in good order and repair', and that they would at their expense 'maintain and make all necessary repairs to the demised premises * * * and keep the same in good and tenantable condition and repair.'

When the lease was executed in 1956 and the complainant commenced its operations, the premises did not conform to the requirements of the Virginia Fire Safety Regulations. Hunt testified that both he and Wright knew this at the time, but Wright denied having such information.

In 1958, the premises were inspected by a representative of the State Fire Marshal and as a consequence a report, dated August 1, 1958, was mailed to Wright and a copy of it was also mailed to Hunt. The report set forth certain violations of the Virginia Fire Hazards Laws or Virginia Fire Safety Regulations and directed that steps be taken to conform. Among the requirements listed therein was the following:

'2. The basement of this building shall be provided with two approved exitways one of which discharges directly to the outside. This may be accomplished by fully enclosing the existing interior stairway from the basement to the first floor and by providing an approved exit which is remotely located from the existing interior stairway from the first floor to the basement to the outside. * * *.'

The report also contained this recommendation:

'Because of the height, construction and occupancy of this building, it is strongly recommended that it be equipped with an approved automatic sprinkler system in order that a reasonable degree of safety to life in case of fire may be assured.'

According to James C. Shipley, District Engineer for the State Fire Marshal and the person who signed the report, if a sprinkler system had been installed in the basement and if an approved exit was provided in the basement there would have been no requirement to enclose the interior stairway. He was asked:

'Q. Now, was it your testimony that, even with a sprinkler system, that the interior stairway would have to be enclosed?

'A. I think with a sprinkler system in the basement and another approved exit in lieu of that one, then that stairway would not have to be enclosed.'

The complainant took the position that enclosing the interior stairway would render the basement area 'useless for retail purposes' and it advised defendants that it would not agree to the enclosure by any method.

Wright testified that he made inquiry and secured several bids for the installation of a sprinkler system in the basement; that he later learned that the town's water main which came to a 'dead end' behind the store was only four inches in diameter and would not furnish a sufficient volume of water for the sprinkler system.

In response to questions propounded to him, Shipley testified:

'A. Mr. Wright did make an effort to put in a sprinkler system and when he investigated into the situation, he discovered that the water system or water supply, I think the nearest available main to him in the town of Vienna was substandard for sprinklery work and he would have to lay a water main which would run into thousands of dollars. I think that put the stop on it right then. He was very concerned about it. He called the man and I think he acted in good faith, but I think this water main stopped it right then as far as he was concerned.

'Q. But he did know the available main was substandard?

'A. I believe he would have sprinklered the building, but the water main was such an expense that it would have prohibited it for him.

'Q. The cost of the sprinkler system and the cost of the water main was prohibitive?

'A. That, all added in together, I think was prohibitive.'

The evidence shows that the installation of necessary water mains in the town's street and the automatic sprinkler system would have entailed an expenditure of approximately $10,000. Defendants expended $3,047.25 to enclose the stairway.

The defendants invited representatives of complainant to meet with them,...