Childs v. Warner Bros. Southern Theatres, Inc., 200 N.C. 333 (1931)

Feb. 18, 1931 · Supreme Court of North Carolina

200 N.C. 333

R. A. CHILDS, L. D. CHILDS, JANIE C. PHIFER and MARGARET CHILDS v. WARNER BROTHERS SOUTHERN THEATRES, Inc.

(Filed 18 February, 1931.)

Landlord and Tenant D b — Lessee assigning lease held liable to lessor for rent under terms of lease contract in this case.

Where a lease of real property expressly provides that the lessee, his heirs and assigns might not transfer the leased premises to another without the consent of the lessor, the restrictions do not solely apply to the original lessee, and where there are several and successive assignments of the lease, the consent of the lessor to one of these does not waive his right to withhold his consent to subsequent assignments, the respective lessees taking with notice of the express terms of the lease, and where after a series of such transfers the lessor notifies a lessee that the latter could not transfer the lease to another but upon condition that he remain liable for the rent according to the terms of the original lease, the condition under which the lessee may lease the premises is enforceable by the lessor.

Civil actioN, before Oglesby, J., at Spring Term, 1930, of Mecic-LENBURG.

Tbe agreed facts are substantially as follows: Prior to 1 February, 1923, tbe Berkley Company, a corporation, owned certain property in tbe city of Columbia, known as No. 1426 Main Street, fronting on said street approximately 26 feet, and having a depth of approximately 125 feet. Tbe property was used for tbe purpose of conducting a moving picture theatre. On 1 February, 1923, the Berkley Company leased said property to B. D. Graver for a period of five years, commencing 1 February, 1923, and ending 31 January, 1928. Thereafter the Berk-ley Company conveyed the property to the plaintiffs in this action. Subsequently, on or about 10 June, 1925, Graver, the lessee, “transferred and assigned said lease to Warner Bros. Southern Theatres, Inc.” The transfer or assignment by Graver purported to convey “all right, title and interest of the undersigned” in and to said lease. The plaintiffs assented to said assignment. Thereafter Warner Bros. Southern Thea-tres, Inc., took charge of the property and occupied it until about 28 January, 1926, when they reassigned said lease to Carolina Theatres, Inc. The Carolina Theatres, Inc., took possession of the property and occupied the same until said corporation was placed in the hands of a receiver. Warner Bros. Southern Theatres, Inc., paid all rent that accrued up to the time they reassigned said lease to Carolina Theatres. When Warner Bros. Southern Theatres, Inc., assigned the lease to Carolina Theatres they notified the plaintiff of such assignment. Whereupon, the plaintiff notified said Warner Bros. Southern Theatres, Inc., as follows: “If it is your desire to have the Carolina Theatres, Inc., remit the rent direct to me, that will be satisfactory, but I shall continue to recognize you as the lessee of the property now occupied by the Broadway Theatres and expect you to see that the payments are made promptly in accordance with the lease.” The amount of rent accrued and unpaid is $450.

The original lease between the Berkley Company and Graver specified: (a) “that said Berkley Company, Inc., has granted and leased, and by these presents does grant and lease unto the said B. D. Graver, lessee, the two-story building situate, lying and being on the eastern side of Main Street,” etc.; (b) “to have and to hold the said premises unto the said B. D. Graver, his executors, administrators and assigns for the full term of five years,” etc.; (c) “said B. D. Graver, his executors, administrators and assigns for and in consideration of the above letten premises hereby covenant and agree to pay to the said Berkley Company, Inc., its successors and assigns the above-stipulated rent in the manner herein required”; (d) “if the said lessee shall at any time fail or neglect to perform any of the covenants hereunto contained and on his part to be performed, or shall be adjudged a bankrupt, or insolvent, then and in that event the lessor shall have the right to reenter into and upon the demised premises,” etc.; (d) “lastly, it is agreed that the said B. D. Graver shall not convey this lease or underlet the premises without the written consent of the lessors,” etc.

Upon the foregoing facts the trial judge was of the opinion that the defendant assignee was liable for the rent and so adjudged, from which judgment the defendant appealed.

J. L. Delaney for plaintiff.

A. B. Justice for defendant.

BeogdeN, J.

If a lessor executes a lease to a given lessee, and tbe lease provides that tbe lessee shall not convey tbe lease nor underlet tbe premises without tbe written consent of tbe lessor, and thereafter tbe lessor consents to an assignment of tbe lease, can such assignee subsequently make a valid reassignment of tbe lease Avitbout tbe consent of tbe lessor?

In 1603 tbe English courts decided Dumpor’s case, which is reported in 4 Coke, 119, Smith Leading Oases (8th ed.), 95. In that case a lease was made to a lessee and the lease provided that tbe lessee or bis assigns should not alienate tbe premises to any one without special license of tbe lessors. Subsequently tbe lessors consented that tbe lessee might assign tbe lease, and in consequence thereof tbe lessee assigned to one Tubbe. It was held that tbe assignee Tubbe bad a right to assign tbe remainder of tbe term to any person whomsoever, irrespective of tbe consent of tbe lessors upon tbe ground that tbe condition in tbe lease prohibiting assignment without tbe consent of tbe lessor was entire, consequently tbe assent to assignment having once been given, tbe whole condition was wiped out, and tbe assignee was at liberty to assign tbe lease to whomsoever be pleased. In other words, if a lessor once gives bis assent to an assignment, such assent is deemed to be a waiver of tbe provision prohibiting assignment and tbe control of tbe lessor over bis property is forever gone. Tbe Dumpor case was followed in England and perhaps crossed tbe Atlantic in tbe Mayflower and took root in America because many of tbe earlier cases in tbe American courts followed tbe reasoning and applied tbe doctrine announced by tbe English courts. However, some of tbe courts, in order to avoid the application of tbe principles in tbe Dumpor case, began to draw a distinction between covenants in a lease which were single and covenants which were multiple. That is to say, if tbe covenant against assignment operated only upon tbe lessee and did not extend to bis heirs and assigns, tbe covenant or condition was said to be single; but if tbe covenant against assignment without tbe written assent of tbe lessor operated not only upon tbe lessee but upon bis heirs and assigns, the covenant is properly deemed to be multiple. Many courts took tbe position that if tbe covenant was single, Dumpor’s ease applied; but if tbe covenant was not single, Dumpor’s case did not apply. Tbe whole question is discussed and tbe authorities assembled in Investors’ Guaranty Corporation v. Thompson, 225 Pac., 590, 32 A. L. R., 1071. See, also, Spitz v. Nunn, 171 N. E., 117; Klein v. Niezer, 169 N. E., 688; Gusman v. Mathews, 163 N. E., 636. See, also, Keith v. McGregor, 259 Southwestern, 725, 36 A. L. R., 311.

In tbe case at bar tbe lease in tbe babendum clause expressly included tbe lessee and bis assigns. Moreover, tbe lessee and bis assigns agreed to pay tbe rent, and upon failure to pay tbe rent, tbe lessor expressly reserved tbe right of reentry upon tbe premises. Without entering into any discussion of tbe distinctions which may exist between single and multiple covenants and tbe great learning with which various views are elaborated, it is deemed sufficient to say that a reasonable construction of tbe lease involved in this case leads to tbe conclusion that tbe restriction against assignment and subletting operated upon tbe heirs and assigns of tbe lessee as well as upon tbe lessee himself. Tbe covenant to pay rent is continuous in its nature, and such covenant is binding by express provision upon tbe assigns of tbe lessee, and all persons occupying tbe premises under tbe assignment from tbe lessee were charged with notice of tbe conditions imposed by tbe writing under which they held title to tbe premises. Therefore, we bold that by consenting to one assignment tbe lessor did not waive the conditions of tbe lease and did not consent that thereafter any subsequent assignee could turn bis property over to tbe use and occupancy of any undesirable or irresponsible person without bis approval. Indeed, when tbe defendant notified tbe plaintiff of its purpose to reassign tbe lease, tbe plaintiff gave express notice that it would still bold tbe defendant liable for tbe rent. Krider v. Ramsay, 79 N. C., 354; Alexander v. Harkins, 120 N. C., 452, 27 S. E., 120; Garbutt & Donovan v. Barksdale-Pruitt Junk Co., 139 S. E., 357; Millinery Co. v. Little-Long Co., 197 N. C., 168, 148 S. E., 26.

Affirmed.