Mewborn v. Haddock

CAMPBELL, Judge. Plaintiffs assert that the payment and acceptance of a larger sum of money, namely, $3,000 instead of $2,600, 27 days after the specified due date, as provided in the lease agreement, constituted a variance of the contractual agreement sufficient to create a new contract between the parties and was therefore a novation and created a tenancy from year to year terminable upon 30 days’ notice prior to the expiration of the term. For their position the plaintiffs rely upon the logic in Coulter v. Finance Co., 266 N.C. 214, 146 S.E. 2d 97 (1966). Coulter is clearly distinguishable from the instant case. In Coulter the lease was for three years with a monthly payment of $175. The lease provided for an extension of two years with an increase of rent to $225 per month and with a provision that in the event the two-year extension was desired, the tenant would notify the landlord 30 days prior to the termination of the original term. The tenant did not notify the landlord 30 days prior to the termination of the original term but did stay over and paid the increased rental payments of $225 a month. It was held that the 30-day notice was for the benefit of the landlord; and when the tenant held over and continued to pay the increased rental payments, the landlord waived the notice requirement and the lease was extended for an additional two years. In the instant case we are dealing with the original five-year term and with no holding over at all. The only thing that occurred in the instant case was that the tenant paid the an [288] nual rent 27 days late and paid $400 more than the rental agreement called for. The landlord accepted the payment which was made late, and the tenant remained in possession. This did not create any new rental agreement, and the doctrine of novation is not applicable. This case is controlled by what was said in Enterprises, Inc. v. Pappas, 19 N.C. App. 725, 200 S.E. 2d 205 (1973). When the tenant Haddock failed to pay the $2,600 rental payment for the agricultural year commencing December 1, 1972, on or before January 2, 1973, he was in breach of a condition of the lease; and the landlord Mewborn had the right to terminate the lease. The landlord Mewborn did not do so, however, and with full notice or knowledge of the breach for which a forfeiture might have been declared, accepted 27 days late the rental payment which not only amounted to $2,600 but exceeded it and was in the amount of $3,000. This constituted a waiver of the forfeiture and was an affirmation by the landlord that the contract of lease was still in force; and the landlord thereby became estopped from setting up a breach of any of the conditions of the lease prior thereto. Affirmed. Judges Parker and Hedrick concur.