Property Keyed to Saxer
Service Oil Co. v. White
Service Oil Company, Inc. (Plaintiff) is in the business of leasing service stations and then subleasing them to service station operators. Plaintiff began negotiating a lease with Howard I. White, Jr. (Defendant), who built and owned a vacant service station. Plaintiff visited the station for inspection and noted that the total distance between the rear of the station and the property line was 100 feet. It also found that the station pumps were located fifteen feet from the property line. Plaintiff agreed to lease the property and an agreement was drawn up. The lease described the premises, including the 100-foot distance noted by Plaintiff, and restricted Plaintiff’s use of the property to its use and occupation as a gas station. Defendant had his attorney look over the provisions before approving it. The parties signed the lease on March 21, 1973, and Plaintiff found an operator to sublease the station beginning June 1. In preparation for its opening, Plaintiff hired a contractor to install a canopy on the premises. The city, however, refused to issue a permit for a canopy. Upon investigation, Plaintiff learned that Defendant had previously conveyed the front ten feet of the leased property to the city. It also learned that, due to the conveyance, the pumps were only five feet away from the property line. At the time, city ordinances required the pumps to be at least ten feet away. Plaintiff expended $3,335.73 to move the pumps in compliance with the city ordinances. Plaintiff made a demand on Defendant for reimbursement. When Defendant refused, Plaintiffsued. After trial, the court found that the provision of the lease restricting the station’s use as a gas station constituted an implied guarantee that the premises was suited for use as a gas station. It also found that Defendant knew or should have known that Plaintiff could not operate the station legally without the front ten feet of the station, and that Defendant’s reckless misrepresentations were actionable for damages. The court then held in favor of Plaintiff and granted a $3,957.35 judgment for actual damages and $1,500.00 judgment for punitive damages.
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