SMITHFIELD OIL COMPANY v. Furlonge

126 S.E.2d 167, 257 N.C. 388, 1962 N.C. LEXIS 379

• Court: Supreme Court of North Carolina
• Decided: June 15, 1962
• Docket: 532
• Status: Published

Opinion

Shaep, J.

The defendants list thirteen assignments of error. However, the hub of the appeal is clearly the denial of their motions for nonsuit, and a discussion of the questions raised by these motions will dispose of the other assignments of error.

In support of their motions for nonsuit defendants argue that: (1) the option was personal between the original parties and was not assignable to the plaintiff; (2) plaintiff did not tender the $25,000.00 purchase price; (3) on March 19, 1954, Robert A. Bradley, one of the members of the partnership which was the grantee in the original lease of February 13, 1953, assigned his interest therein to Edwin A. Jackson and thereafter had nothing to assign to plaintiff; and (4) defendants had no knowledge of the assignment of the option on February 15,1960 to the plaintiff. These arguments are without merit.

The rule is that in the absence of a statutory or contractual restriction on the assignment of a lease, such lease, and an option to purchase contained therein, is assignable. Pearson v. Millard, 150 N.C. 303, 63 S.E. 1053; Cadillac-Pontiac Co. v. Norburn, 230 N.C. 23, 51 S.E. 2d 916; 55 Am. Jur., Vendor and Purchaser, Section 42; Anno. 45, A.L.R. 2d 1034, 1036. The right is not dependent on the use of the word “assigns” in the lease but exists absolutely in the absence of contractual or statutory prohibitions. 32 Am. Jur., Landlord and Tenant, Section 319.

There was nothing in the lease agreement, executed February 13, 1953 by and between the defendants and the partnership composed of Bradley and Denning, which precluded a sub-lease or an assignment of either the lease or the option. The lease specifically provides that it is binding on the assigns of all of the parties. The contract involved no personal services or relation of personal confidence, only the payment of a specified rental and the sales price of $25,000.00 in the event the option were exercised. The provision contained in the option clause of the lease that “lessors agreed not to sell the property during the term of this lease to any person other than the lessees,” was merely an affirmation of the option itself and a recognition by the lessors that, having agreed to sell to the lessees at any time during the term of the lease, they could not sell to anyone else.

The defendants’ second contention that they were entitled to a non-suit because the plaintiff did not tender the $25,000.00 purchase price before the institution of the suit is equally untenable. Plaintiff’s evidence tended to show — and the jury so found — that the defendants disavowed the contract before the option expired. Notice from defendants that they would not carry out the terms of the option made unnecessary a tender of payment by the plaintiff. Millikan v. Simmons, 244 N.C. 195, 93 S.E. 2d 59; Penny v. Nowell, 231 N.C. 154, 56 S.E. 2d 428. As the Court said with reference to a similar situation in the latter case, “such a tender would avail nothing according to the testimony of the record. The law does not require the doing of a vain thing. The disavowal was a waiver of the requirement.” The evidence was plenary that the plaintiff was ready, willing, and able to pay the purchase price at the time it requested defendants to comply with the terms of the option and deliver the deed. If defendants’ attorney informed the plaintiff — and the jury so found from the evidence — that defendants did not desire to sell at that time and would not make plaintiff a deed, the futile gesture of a tender was not necessary.

Defendants’ third defense is that Bradley, prior to February 15, 1960 had assigned all his interest in the option to Johnson and therefore the partnership of Bradley and Denning could not assign the option to plaintiff on that day. This argument overlooks the following facts: (1) the contract of November 2, 1953, in which Bradley and Denning gave plaintiff the right to purchase their option, was immediately recorded in the office of the Register of Deeds of Johnston County, and thereafter the rights of the plaintiff could not be defeated by an assignment; (2) the agreement between Bradley and Johnson on March 19, 1954 specifically provided that it was subject to the rights of the plaintiff; (3) the right to exercise the option was an asset of the partnership of Bradley and Denning, doing business as Bob’s Drive-In Grill. Although this partnership had ceased to do business, it was not terminated until the winding up of its affairs had been completed. Denning was not a party to the assignment to Jackson on March 19, 1954 and Bradley had no right to assign the option “except in connection with the assignment of rights of all the partners in the same property.” G.S. 59-55 (2).

Defendants’ fourth argument that they had no notice of the assignment of February 15, 1960 is also untenable. In their pleadings defendants based their defense on a failure of tender and a denial of any contractual obligation to convey to the plaintiff. This is still their position. At the trial defendants stipulated that on February 16, 1960 Bradley and Denning executed the agreement which purported to transfer to the plaintiff their rights under the option contained in the lease of February 13, 1953. Since the letter of October 16, 1957, which each defendant stipulated he received, they had known that plaintiff was the assignee of their lease to Bradley and Denning. They also knew that plaintiff claimed the right to exercise the option the lease contained. It is implicit in the evidence in this case that the defendants desired to defeat the option and to avoid the consequences of the contract they had made. They were counting on plaintiff’s over looking the fact that its sub-lease of February 13, 1953 did not contain an assignment of option but merely gave plaintiff the option to buy the option if the partnership known as Bob’s Drive-In Grill should be dissolved or terminated. By the assignment of February 15, 1960, duly recorded on that date, this potential defense was eliminated. Counsel for defendants testified that prior to that date he had been watching the records to see if such an assignment would be recorded. Dr. Furlonge testified that he had knowledge of the contract and the option.

If there were any defenses available to Bradley and Denning which might have defeated plaintiff’s right to an assignment from them, Bradley and Denning did not interpose them. They complied with their agreement and conveyed to the plaintiff their right to exercise the option. In any event, their unused defenses would not have been available to defendants.

The terms of the written agreements which fixed the rights of the parties to this action were explicit and unambiguous. Therefore, it was the duty of the Court to determine their effect by simply declaring their legal meaning to the jury. Strigas v. Insurance Co., 236 N.C. 734, 73 S.E. 2d 788. This the trial judge did by telling the jury, in effect, that after the assignment of February 15, 1960 the plaintiff had legal right between that time and February 19, 1960, the date the suit was instituted, to have defendants execute and deliver to it a deed for the land described in the complaint upon the payment of the purchase price; that if defendants “refused to execute the deed after February 15, 1960 and before the time this suit was instituted, after demand had been made and the statement had been made that the purchase price was ready and could be paid, ... it would not be necessary then for the plaintiff to tender the sum of $25,000.00 in order to be entitled to exercise the option rights.”

The record discloses that this case was carefully and fairly tried by an able and experienced judge. The issues tendered by the defendants were not material in the ease. Upon appropriate issues the jury found the controverted facts in favor of the plaintiff. The judge correctly entered judgment for the plaintiff on the verdict. Each of defendants’ assignments of error has been considered and is overruled. In the trial below we find

No error.