48 N.C. App. 108 | N.C. Ct. App. | 1980
The order dated 2 April 1979, which was, in effect, a final judgment terminating the defendants’ interest in the leasehold estate, contained a recital “the nature of the action was for summary ejectment.” Summary ejectment is governed by Art. 3 of Chapter 42 of the General Statutes. It is allowed on five days’ notice in certain cases and claims for summary ejectment are first heard before magistrates. The summons in the case sub judice were not returnable before a magistrate, and they required the defendants to answer within 30 days. We hold that the case sub judice is not an action in which summary ejection may be had before the defendants had filed answers and before the time for filing answers had expired. With this in mind, we examine the order of 23 January 1979 upon which the order of 2 April 1979 was in part based. The order of 23 January 1979 purported to appoint a “permanent” receiver pursuant to Chapter 1, Art. 38 of the North Carolina General Statutes. G.S. 1-502 provides in part:
A receiver may be appointed —
(1) Before judgment, on the application of either party, when he establishes an apparent right to property which is the subj ect of the action and in the possession of an adverse party, and the property or its rents and profits are in danger of being lost, or materially injured or impaired; except in cases where judgment upon failure to answer may be had on application to the court.
*112 (2) After judgment, to carry the judgment into effect.
(3) After judgment, to dispose of the property according to the judgment, or to preserve it during the pendency of an appeal, or when an execution has been returned unsatisfied, and the judgment debtor refuses to apply his property in satisfaction of the judgment.
(4) In cases provided in G.S. 1-507.1 and in like cases, of the property within this State of foreign corporations.
(5) In cases wherein restitution is sought for violations of G.S. 76-1.1.
The only subsection of G.S. 1-502 under which a receiver could have been appointed was subsection (1). No judgment had been entered which would bring subsections (2) or (3) into effect; subsection (4) deals with the appointment of receivers for corporations (the receiver in the case sub judice was appointed to hold real property); and subsection (5) deals with unfair methods of competition which is not in issue in this case. Although the court characterized it as the appointment of a “permanent” receiver, the most the court could do under subsection (1) was to appoint a receiver pending the outcome of the litigation. The court’s findings of fact in the 23 January order, which pertained to the matters at issue, were not binding so far as the final determination of the case was concerned but could only have been used to support the order appointing the receiver. We hold that on 23 January 1979, after the order had been signed, the action was pending as to all issues, and a receiver had only been appointed to hold the property pending the outcome of the litigation.
The next question we face is the motion of the defendants to dismiss on the ground they had tendered the rent and costs to the plaintiffs. G.S. 42-33 provides in part:
If, in any action brought to recover the possession of demised premises upon a forfeiture for the nonpayment of rent, the tenant, before a judgment given in such action, pays or tenders the rent due and the costs of the action, all further proceedings in such action shall cease.
“[T]he court finds and interprets the entire contract between the parties to provide for the termination of the lease agreement in the event that the Lessee does not make the payments of monies which includes rental, taxes and assessments, insurance premiums and mortgage payments and that the original parties to the lease agreement intended for the lease to so provide.”
We hold the superior court committed error in this finding. Unless we infer from the two lease provisions cited above that the lessors have the right to terminate in the event of a failure to pay rent or for some other breach, we can find nothing in the lease which gives the lessors this right. We do not believe we can make this inference. Unless there is an express provision for a forfeiture in a lease, a breach of a covenant does not work a forfeiture. See Morris v. Austraw, 269 N.C. 218, 152 S.E. 2d 155 (1967).
The plaintiffs contend that G.S. 42-33 has no application because (1) the tender was not made prior to 23 January 1979 at which time a final judgment had been entered, (2) the defend
The plaintiffs contend that in any event the lease was terminated by the appointment of a receiver for the property. The lease provides in part as follows:
“In the event that LESSEE ... shall ... consent to or acquiesce in the appointment of any .. . receiver ... of all or any substantial part ... of the Demised Premises ... or if within ninety (90) days after the appointment without the consent or acquiescense [sic] of LESSEE of any ... receiver ... of all or any substantial part ... of the Demised Premises, such appointment shall not have been vacated or stayed on appeal, or otherwise ... then and in any such event, LESSOR ... may give written notice to LESSEE ... stating that this Lease and the term hereby demised shall expire and terminate on the date specified in such notice ... and ... this Lease and the term hereby demised and all rights of LESSEE under this Lease shall expire and terminate ... .”
In interpreting this provision of the lease, we note first that the receiver was appointed at the instance of the plaintiffs. The plaintiffs then contended they had the right to have the lease nullified because a receiver had been appointed. The law does not look with favor on forfeitures of leases. See 49 Am. Jur. 2d Landlord and Tenant § 1021 (1970). We do not believe the defendants acquiesced in the appointment of the receiver because they did not appear at the hearing of 22 January 1979. They
For the reasons stated in this opinion, we reverse the judgment of the superior court and remand for a determination as to whether the defendants tendered the proper amount of rent, including interest, and the costs. If they did so, the claim for possession of the premises, based on the failure to pay rent, should be dismissed and the receivership should be dissolved. The plaintiffs have also sued for waste and money damages based on expenditures they have made as a result of the defendants’ violation of the lease agreement. These claims are left for trial.
Reversed and remanded.