Price v. Conley

184 S.E.2d 405 (1971)

12 N.C. App. 636

Charles B. PRICE v. Irvin CONLEY.

No. 7127DC611.

Court of Appeals of North Carolina.

November 17, 1971.

*407 Horn, West & Horn, by C. A. Horn, Shelby, for plaintiff appellee.

Yelton & Lamb, by Robert W. Yelton, Shelby, for defendant appellant.

PARKER, Judge.

In his charge the judge instructed the jury that the plaintiff had alleged that defendant breached the lease contract "by failing to exercise his option to renew the lease." No such allegation appears in the complaint. Further, the recorded lease, copy of which was introduced in evidence, contains no option to renew. On the contrary, by its express terms the lessors "agree to renew" and the lessee "agrees to accept" the additional ten-year term which began on 10 August 1969. This gave no option to either party, but created an agreement binding upon both.

The judge also instructed the jury "that in cases where there is a lease with a renewal clause, nothing more appearing to be done other than to increase the amount of the rent, that if the amount of the rent is not increased at the time called for in the contract, then they have not complied with the terms of the contract." Thereafter, in *408 the mandate portion of the charge, the judge instructed the jury as follows:

"Finally, ladies and gentlemen, the Court instructs you that if the plaintiff has satisfied you from the evidence and by its greater weight that the plaintiff and defendant had a contract, which they agreed they had, and that the defendant has failed to comply with the terms of the contract by increasing the payments on August 10, 1969, it would be your duty to answer this second Issue, `Yes.' Otherwise, if the plaintiff has not so satisfied you, you would answer it `No.'"

Appellant's exceptions and assignments of error to the above-quoted portions of the charge must be sustained. It was misleading to refer to an "option" to renew the lease, when no such option existed and therefore exercise or failure to exercise a renewal option could not have been in any way involved in the litigation. Moreover, considering the charge as a whole, the judge failed properly to "declare and explain the law arising on the evidence given in the case," as he was required to do by G.S. § 1A-1, Rule 51(a). Under the charge as given, the jury could do nothing other than to answer the second issue in the affirmative, since all of the evidence established that defendant had failed to increase the amount of the monthly payment on 10 August 1969. However, there was also uncontradicted evidence from both parties that each month from August 1969, until June 1970, defendant had paid and plaintiff had quietly accepted a check for $35.00. Further, there was evidence, though contradicted, from which the jury could have found that promptly after the lease provision calling for the increase in the monthly rental was brought to defendant's attention, he had tendered to plaintiff his check for the full amount by which he was then in arrears and had thereafter tendered to plaintiff each month a check in the increased amount as called for by the recorded lease. The court's charge to the jury is completely devoid of any explanation of the law arising on this evidence.

A provision in a lease for termination at the option of the lessor upon breach of the lessee's obligation to pay rental is not self-executing. Such a provision may be waived by the landlord, for whose benefit it was inserted, and he may elect to treat the lease as continuing in effect. Moreover, the purpose of such a provision is not to provide a forfeiture with which to surprise an unwary tenant, but to secure the landlord in his right to receive the rental called for in the lease. "Provisions for the forfeiture of a lease for nonpayment of rent, whether contractual or statutory, are considered in equity as securing the rent, and not as providing for the forfeiture of the lease where the tenant acts in good faith and pays promptly on demand." 49 Am.Jur.2d, Landlord and Tenant, § 1034, p. 1002.

In the present case the plaintiff landlord, by quietly accepting monthly payments of rental in the amount of $35.00 for many months after August 1969, recognized the lease as continuing in effect and waived, not his right to collect monthly rental in the increased amount of $40.00 as called for in the lease, but his right to terminate the lease by reason of his lessee's past defaults. This waiver continued until the lessor made demand upon the lessee to pay the amount by which he was in arrears and until the lessee, after being given a reasonable opportunity to do so, should fail to make such payment. The trial court, by failing properly to declare and explain the law arising on the evidence presented in this case, committed prejudicial error entitling defendant to a new trial.

We note that the defendant's trial counsel made no objection to the form of the issues which were submitted to the jury and joined in a stipulation as to the type of judgment which should be entered depending upon the jury's answer to the second issue. Appellant was entitled, nevertheless, to have the issues decided by the *409 jury under a charge from the court which correctly declared and explained the law arising on the evidence. For the errors above noted there must be a new trial, at which the case should be submitted to the jury upon such issues as shall arise upon the evidence then presented.

For errors in the charge, the judgment appealed from is reversed and defendant is entitled to a

New trial.

MORRIS and GRAHAM, JJ., concur.