Morris v. Austraw , 269 N.C. 218 ( 1967 )

152 S.E.2d 155 (1967) 269 N.C. 218

Ralph R. MORRIS and wife, Annie Jo Morris
v.
Richard F. AUSTRAW and wife Jean A. Austraw.

No. 120.

Supreme Court of North Carolina.

January 20, 1967.

Uzzell & DuMont, by William E. Greene and Robert E. Harrell, Asheville, for defendant appellants.

Williams, Williams & Morris, by William C. Morris, Jr., Asheville, for plaintiff appellees.

PARKER, Chief Justice.

Defendants assign as errors each of Judge Martin's two conclusions of law, each of the three matters adjudged and decreed in the judgment, and the entry of the judgment.

The written lease between the parties referred to in the first paragraph of the stipulated and agreed facts is set forth in fourteen pages in the record. The basis and scope of summary ejectment in actions between the landlord and tenant are established by G.S. § 42-26. Defendants' brief states that the first question involved is: "Did Richard F. Austraw's violation of 21 USC 331 and 333 constitute a forfeiture of all appellant tenants' rights under the terms and conditions of their lease with appellee landlords?" Plaintiffs' brief states likewise. It seems clear from the stipulated and agreed facts and the first identical question stated in the briefs of the parties that the only section of G.S. § 42-26 which could possibly fit the facts stipulated and agreed to is subsection (2), which provides: "When the tenant * * * has done or omitted any act by which, according to the stipulations of the lease, his estate has ceased."

Paragraph 1(a) of the lease between the plaintiffs as landlord and the defendants as tenants provides, inter alia: "Tenant shall not use or permit the use of any portion of said premises for any unlawful purpose or purposes." The lease or contract of rental disclosed in the record before us contains no provision automatically terminating the estate for breach of provisions of the lease that "tenant shall not use or permit the use of any portion of said premises for any unlawful purpose or purposes," nor does such contract or lease reserve the right of re-entry for breach of the quoted provisions of the lease. Appellees in their brief contend:

"Section 16(b) of the lease clearly contemplates in unmistakable language that suit might be brought by the Landlord for possession of the premises in the event of the breach of any covenant that may be set forth in the lease. The language of the lease is as follows: ``In case Landlord should bring suit for the possession of the premises, for the recovery of any sum due hereunder, or because of the breach of any covenant herein.' This clearly indicates that it was the intention of the parties that the landlord might bring suit for possession of the premises if any covenant or promise in the contract was broken."

Paragraph 16(b) of the lease reads as follows:

"In case Landlord should bring suit for the possession of the premises, for the recovery of any sum due hereunder, or because of the breach of any covenant herein, or for any other relief against Tenant, declaratory or otherwise, or should Tenant bring any action for any relief against Landlord, declaratory or otherwise, arising out of this lease, and Landlord should prevail in any such suit, Tenant shall pay Landlord a reasonable attorney's fee which shall be deemed to have accrued on the commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment."

Except in cases where G.S. § 42-3 writes into a contract of a lease of lands, when the lease is silent thereon, a forfeiture of the terms of the lease upon failure of the lessee to pay the rent within ten days after a demand is made by the lessor or his agent for all past due rent, with right of the lessor to enter and dispossess the lessee, Ryan v. Reynolds, 190 N.C. 563, 130 S.E. 156, a breach of the conditions of a lease between a landlord and tenant cannot be made the basis of summary ejectment unless the lease itself provides for termination of such breach or reserves the right of re-entry for such breach. Dees v. Apple, 207 N.C. 763, 178 S.E. 557; 2 Strong's N.C. Index, Ejectment, § 3.

This is said in 32 Am.Jur., Landlord and Tenant, § 848:

"Generally, unless there is an express stipulation for a forfeiture, the breach of a covenant in a lease does not work a forfeiture of the term. Moreover, the settled principle of both law and equity that contractual provisions for forfeitures are looked upon with disfavor applies with full force to stipulations for forfeitures found in leases; such stipulations are not looked upon with favor by the court, but on the contrary are strictly construed against the party seeking to invoke them. As has been said, the right to declare a forfeiture of a lease must be distinctly reserved; the proof of the happening of the event on which the right is to be exercised must be clear; the party entitled to do so must exercise his right promptly; and the result of enforcing the forfeiture must not be unconscionable."

We do not agree with appellees' contention that the provisions of paragraph 16(b) of the lease automatically terminate the tenants' estate for breach of the provisions of the lease that "tenant shall not use or permit the use of any portion of said premises for any unlawful purpose or purposes," and that such provisions of paragraph 16(b) of the lease reserve the right of re-entry to plaintiffs. Appellants' assignments of error to Judge Martin's two conclusions of law are good and are sustained.

The second and last question presented in the brief of each party is: "Are appellee landlords entitled, under the terms and conditions of the lease in question, to the present possession of the premises described in such lease?" Considering the stipulated and agreed facts and what has been said above, the answer to the question is, No.

The remedy by summary proceedings in ejectment is restricted to those cases expressly provided by G.S. § 42-26. The proceeding should be dismissed as in case of nonsuit. Howell v. Branson, 226 N.C. 264, 37 S.E.2d 687.

The judgment below is

Reversed.