Nybor Corp. v. Ray's Restaurants, Inc.

225 S.E.2d 609 (1976)

29 N.C. App. 642

NYBOR CORPORATION v. RAY'S RESTAURANTS, INCORPORATED, et al. v. GEM OIL COMPANY.

No. 7521SC806.

Court of Appeals of North Carolina.

June 16, 1976.

*611 Blackwell, Blackwell, Canady, Eller & Jones by Jack F. Canady and Hudson, Petree, Stockton, Stockton & Robinson by J. Robert Elster and C. P. Craver, Jr., Winston-Salem, for plaintiff-appellee.

Womble, Carlyle, Sandridge & Rice by W. P. Sandridge, Jr., Winston-Salem, for defendants-appellants.

Grubb & Penry by Robert L. Grubb, Lexington, for third-party defendant-appellant.

PARKER, Judge.

Appellants first assign as error that the court overruled their objections to the testimony of James C. Bethune, Jr., an officer of plaintiff Nybor Corporation, to the effect that Nybor, in buying the property and accepting the deed from Grubb, did not agree to assume the sublease. Appellants contend admission of this evidence violated the parole evidence rule. This case was heard by the court without a jury. The trial court made no finding of fact based upon the challenged evidence, but based its adjudication of the rights of the parties entirely upon its judicial interpretation of the legal effect of the written instruments here involved and not on any testimony outside of those instruments as to what any of the parties may have intended. Thus, the error complained of in appellants' first assignment of error did not affect the judgment appealed from, and if error occurred, appellants suffered no harm.

Appellants' second assignment of error challenges the court's conclusion of law and its adjudication that plaintiff, Nybor, is not bound to honor any rights purportedly granted to the sublessees in the 7 July 1965 sublease from Gem to Ray's which were in excess of the rights held by Gem under the 15 May 1961 lease from Grubb to Gem. Appellants contend that the language in the 29 October 1971 deed by which Nybor acquired title, which made that conveyance "subject to" the specified leases of record, so qualified the fee granted as to make it subordinate to all rights purportedly granted by Gem to its sublessees, including the rights to occupy an area greater and option rights for a term longer than Gem, as lessee, had under its lease from Grubb. We do not agree.

*612 Looking at the language of the deed and finding it to be clear and unambiguous, we hold the trial court was correct in its determination that plaintiff, Nybor, was not obligated to defendant Ray's under those provisions of defendants' sublease from Gem which purported to convey an estate of greater size and duration than Gem possessed under its primary lease from Grubb. Ray's gained no additional rights under the invalid portions of its sublease. "In general, the rights of the subtenant are measured by those of his sublessor. A sublessee can in no event have any greater rights against the lessor than were given by the original lease to the lessee." 51C C.J.S. Landlord & Tenant § 48(1), p. 140. The words "subject to leases of record", as found in the deed accepted by Nybor, cannot be construed to give validity to rights purportedly granted to defendants which their sublessor, Gem, had no power to convey. "[T]he rights of an earlier grantee to which a later grant is expressed to be subject to are neither abridged nor enlarged by the later grant." 23 Am.Jur.2d, Deeds, § 217, p. 262. The words "subject to" imposed upon Nybor the burden of recognizing only those rights under the lease and sublease which were already valid and enforceable and did not by implication or otherwise grant to the sublessees rights which they did not then hold.

In addition, the third-party defendant, Gem, contends the judgment of the trial court was in error in its holding that Gem was liable to the original defendants for breach of its contract and obligation both as to tenure of the sublease and as to the area conveyed. We find no error in the court's adjudication in this regard. The following language appears in the sublease from Gem to Ray's:

"16A. The LANDLORD warrants that it has a right to lease the premises described herein in accordance with the terms and options set forth herein."

This contract language is, in and of itself, sufficient to support the judgment in favor of the original defendants as against the third-party defendant.

The judgment appealed from is

Affirmed.

BROCK, C.J., and ARNOLD, J., concur.