#### R. D. CRAVER and the GUARANTY MORTGAGE COMPANY v. W. B. SORRELL and Wife, ELIZABETH SORRELL, and the PIEDMONT THEATRES, Inc. (Now Publix-Saenger Theatres of North Carolina, Incorporated).

(Filed 23 January, 1929.)

Landlord and Tenant — Leases—Rights of Parties Under Conflicting Leases of Same Property.

Where the landlord leases his property to another and thereafter makes a contract with a real estate agency whereby it was authorized to obtain a lessee for the same property, and the real estate agency secures a lessee and makes a lease contract with him according to its authority, and both the real estate agency and the subsequent lessee, the plaintiffs, had knowledge of the prior lease, but were of the opinion it was void, and the prior lease was registered and is valid, and there is no evidence of a conspiracy to deprive the plaintiffs of their rights under the contracts: Held, the second lease was made subject to the first, and there was no breach of the contract with the real estate agency or its contract with the subsequent lessee, and neither of them is entitled to damages or to specific performance.

Appeal by plaintiffs from Small, J., at May Term, 1928, of OraNge.

Affirmed.

Action for specific performance of contract, in writing, for lease of a moving picture theatre, or for damages for breach of said contract, and for other relief.

From judgment dismissing the action, as upon nonsuit, upon motion of defendants, at the close of the evidence for plaintiffs, plaintiffs appealed to the Supreme Court.

Gattis & Gattis for plaintiffs.

J. A. Giles and McLendon & Hedrick for defendants, Sorrell and wife.

Alfred S. Wylie for defendant, Theatres, Inc.

CoNNOR, J.

Defendants, W. B. Sorrell and wife, on 16 March, 1927, executed a paper-writing by which they authorized and empowered the plaintiff, the Guaranty Mortgage Company, as their representative, to procure for them a lessee of a moving picture theatre, which they proposed to erect on a lot of land, situate in Chapel Hill, N. C., and owned by the said "W". B. Sorrell. The said paper-writing was duly recorded' on 16 March, 1927. The Guaranty Mortgage Company had notice, at the date of the execution of said paper-writing, that said Sorrell and wife had prior thereto executed a lease of said theatre to the defendant, the Piedmont Theatres, Inc. The said lease was dated 15 September, 1926, and was duly recorded on 8 April, 1927. Thereafter, on 13 April, 1927, within the time stipulated, the said Guaranty Mortgage Company, *562as representative of Sorrell and wife, made a contract with plaintiff, E. D. Graver, by which the said Graver agreed to lease the said theatre, in accordance with the terms upon which the Guaranty Mortgage Company was authorized and empowered to procure a lessee of said theatre. At the date of said contract E. D. Graver had notice of the prior lease made by Sorrell and wife to the Piedmont Theatres, Inc.

Both the plaintiffs were of the opinion that the prior lease to the Piedmont Theatres, Inc., was void.

The said lease, however, is valid and the Piedmont Theatres, Inc., now the Publix-Saenger Theatres of North Carolina, Inc., has entered into possession of the theatre, which has been erected on the lot owned by ~W. B. Sorrell, and holds the same under the said lease. There was no evidence tending to show that defendants had entered into a conspiracy to deprive the plaintiffs of their rights under the contracts upon which this action is founded, as alleged in the complaint. All the evidence is to the effect that the Publix-Saenger Theatres of North Carolina, Inc., entered into possession of said threatre as successor of the Piedmont Theatres, Inc., under the lease dated 15 September, 1926, and recorded 8 April, 1927, and holds the same by virtue of said lease.

There was no error in the judgment dismissing the action, at the close of plaintiff’s evidence. Both plaintiffs entered into the contracts upon which this action is founded with full notice of the prior rights of defendant, the Piedmont Theatres, Inc. They are, therefore, not entitled to a decree of specific performance of said contracts; nor are they or either of them entitled to damages for breach of said contracts. Their rights were acquired subject to the lease executed by W. B. Sorrell and wife to the Piedmont Theatres, Inc. There has been no breach of the contract made by the said Sorrell and wife, with plaintiff, the Guaranty Mortgage Company, or of the contract made by said Mortgage Company, as their representative, with plaintiff, E. D. Craver. Both contracts were made subject to the prior lease, and with full knowledge of its existence. The judgment is

Affirmed.