Schurman v. American Stores Co.

145 F.2d 721, 157 A.L.R. 617, 1944 U.S. App. LEXIS 2633
CourtCourt of Appeals for the Fourth Circuit
DecidedNovember 13, 1944
DocketNo. 5291
StatusPublished
Cited by2 cases

This text of 145 F.2d 721 (Schurman v. American Stores Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schurman v. American Stores Co., 145 F.2d 721, 157 A.L.R. 617, 1944 U.S. App. LEXIS 2633 (4th Cir. 1944).

Opinion

SOPER, Circuit Judge.

This suit was brought by American Stores Company of Delaware, lessee of a store property in Alexandria, Virginia, against the lessor, to recover the amount of a judgment in the sum of $10,000 obtained by a person injured by the defective condition of the premises against Acme Markets, Inc., of Delaware, a wholly owned subsidiary of the plaintiff. In the pending case the American Stores Company sued for itself and for its subsidiary. The case was tried before the court without a jury and resulted in a judgment for the plaintiff.

The leased property consists of a lot 100 by 170 feet, on which a store 50 feet by 100 feet is situated. The remainder of the lot is available to patrons of the store for parking purposes and is paved with concrete or some similar surface.

The lease is on a printed form furnished by the lessee. In the printed portion of the lease the following agreements, amongst others, occur:

“During the said term lessee will keep said premises in good condition, order and repair, * * * 'and at the termination of said term will deliver up the said premises in good condition, order and repair, reasonable wear and tear, and damage by accidental fire excepted.
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“Lessor further agrees to * * * keep roofs in repair, and agrees that if any of lessee’s merchandise or equipment is destroyed or damaged by reason of water from the roof, * * * the lessee may deduct from the rent, a sum sufficient to reimburse lessee for said damage.”
“Lessor agrees to keep pavement in repair and agrees to indemnify lessee for any loss incurred by it as a result of failure of lessor to so repair and maintain, and lessor further agrees that if said repairs are not made by lessor within ten days, lessee will have the privilege of making repairs at expense of lessor and deduct costs of repairs from said rental.”

Immediately following these provisions is a blank space in the form in which the following agreement is typewritten: “Les[722]*722sor agrees to make all necessary repairs to store, putting same in first class condition, and agrees to repair surface of parking lot, putting same in first class condition and install a flood light on parking lot to be located to meet lessee’s requirements. It is understood and agreed should the lessor be unable to complete repairs on or -before January first, 1941, the rental for the month of January will be pro rated from the time the Lessee takes possession.”

A previous tenant bad erected on the parking lot a sign supported by two large posts. When this tenant moved out and the plaintiff’s tenancy began, the posts were sawed off several inches above the ground, leaving projections above the surface of the parking lot. An accident occurred a few weeks later when a customer of the store tripped over one of the projections at night and received serious and permanent injuries. He sued Acme Markets, Inc., as the operator of the store and secured a judgment for $10,000 which was affirmed on appeal. See Acme Markets, Inc. v. Remschel, 181 Va. 171, 24 S.E.2d 430. The judgment was paid by the insurer of Acme Markets, Inc.

When American Stores Company took over the property it placed a sign on the store building stating that it was an Acme Market and a sign in the window which contained the words, “Owned and Operated by American Stores Company”. The complaint in the pending case alleged that on January 1, 1941, American Stores Company, through its wholly owned subsidiary, took possession of the demised premises, and in the suit in which the judgment for $10,000 was recovered it was assumed that the business was being operated by Acme Markets, Inc. The testimony in the pending case, however, indicated and the District Judge found that, from the inception of the occupancy the store was operated by the American Stores Company.

Upon these undisputed facts the District Judge held that the lessor had broken its agreement to keep the' premises in repair and to indemnify the ■ lessee for any loss it might suffer from breach of this agree-; ment; and that American Stores Company, as lessee,- had the right to sue in its own name in this action on account of the loss sustained for the benefit of itself and of its wholly owned subsidiary.

On the part of the lessor it is contended in the first place 'that American Stores Company has no right to recover in this suit since it is not the real party in interest, as defined by Rule 17(a) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c. It is said that American Stores Company cannot sue on its own account since the loss was not suffered by or paid by it but by Acme Markets, Inc.; and that it cannot sue for the benefit of the latter corporation on the ground that the lease was made for the latter’s benefit because there is nothing in the lease to indicate that the agreement of the lessor to indemnify was made for the benefit of any one but American Stores Company, the named lessee. It is argued that the ownership by American Stores Company of all the stock of Acme Markets, Inc., does not destroy the corporate identity of the latter or justify the court in ignoring its existence as an independent legal entity in this case.

We pass by these contentions because under our construction of the lease, the lessor is not bound to indemnify either corporation for the amount of the judgment. Ordinarily a lessor is not required either to put the leased premises in good condition at the beginning of the lease or to keep the premises in repair unless he specifically agrees to do so. See Adams Grain & Provision Co. v. C. & O. Ry. Co., 118 Va. 500, 502, 88 S.E. 171. The rule is generally recognized as well appears from an examination of the authorities cited in 32 Am.Jur., Landlord and Tenant, §§ 657 and 705; and in § 786 of Shear-man and Redfield on Negligence, Revised Edition, 1942, an authority which is cited with approval by the Virginia courts. See Smith v. Wolfsiefer, 119 Va. 247, 89 S.E. 115. In the pending case the lessee itself agreed generally to keep the premises in repair and the lessor assumed an obligation to repair only in certain named particulars, to'wit: (1)' to put the store in first class condition at the beginning of the term; (2) to put the surface of the parking lot in like condition; (3) to keep the roofs in repair; and (4) to keep the pavement in repair.

As to the last two items, it is especially noteworthy that the lessor agrees to indemnify the lessee for any loss resulting from a breach' of the Contract, while the agreements of the lessor to put the store and the parking space in good condition contains no indemnity in case of breach. We. do not think that this distinction can be overlooked. The first two items relate to the condition of the premises at the be[723]*723ginning of the lease and provide for the postponement of the rental until they have been accomplished, while the last two items relate to maintenance in good repair during the term of the lease. The new tenant was not obliged to enter until the store and parking space had been put in good condition but when these portions of the premises had been attended to, it became the duty of the lessee to maintain them in repair. Thereafter the lessor’s duty of repair was limited to the pavement and the roofs.

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Cite This Page — Counsel Stack

Bluebook (online)
145 F.2d 721, 157 A.L.R. 617, 1944 U.S. App. LEXIS 2633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schurman-v-american-stores-co-ca4-1944.