Bolon v. Pennington

• Decision Date: 10 October 1967
• Docket Number: No. 2,CA-CIV,2
• Parties: Park BOLON, Appellant, v. Bob PENNINGTON and Maude Leota Pennington, husband and wife, Appellees. 370.
• Court: Arizona Court of Appeals

Page 274

432 P.2d 274

6 Ariz.App. 308

Park BOLON, Appellant, v. Bob PENNINGTON and Maude Leota Pennington, husband and wife, Appellees.

No. 2 CA-CIV 370.

Court of Appeals of Arizona.

Oct. 10, 1967.

Rehearing Denied Oct. 31, 1967.

Review Denied Nov. 28, 1967.

Brown, Vlassis & Bain, by George E. Hilty, Phoenix, for appellant.

Charles W. Stokes, Casa Grande, for appellees.

MOLLOY, Judge.

This is an appeal from a judgment of the superior court of Pinal county, Cause No. 19693, denying a landlord eviction of tenants of farm property. The action below was a summary proceedings by the appellant-landlord in pursuance of A.R.S. § 33--361, ¹ charging a violation of the lease by the tenants in not paying taxes, in charging personal expenses to the lease operation, and in not farming the land properly.

The written lease agreements under which the tenants occupied the subject farm land provided, among other things:

(1) that the landlord and the tenants should divide between them any profit realized on crops which were grown upon the subject land;

(2) that production costs would be 'charged 50 per cent to the Lessor's share of the crops grown upon the premises, and 50 per cent to the Lessee's share of such crops';

(3) 'that each crop shall stand on its own and that any losses on crops grown upon said premises pursuant to said lease shall be borne and paid by Lessee, and that Lessor shall in no manner be liable for any such losses' (4) that real property taxes accruing against the subject property were to be treated as 'a production cost' and '50 per cent of the taxes shall be paid by Lessor and 50 per cent by the Lessee'; and

(5) that in the event that the tenants should fail to pay rent or 'to comply with any other provisions of the lease,' the landlord, after thirty days written notice and failure to remedy, 'may at that time declare said lease to be at an end and recover possession of said premises without further notice.'

For the purposes of this appeal, it is admitted that there substantial losses sustained in the farming of the subject land for the crop years 1962--63, 1963--64 and 1964--65, and that the realty taxes were not paid when due for calendar years 196o and 1964.

On appeal, the landlord contends, among other things, that the trial court erred in denying him relief due to the tenants' failure to pay the realty taxes. The landlord has taken the position that the tenants had the obligation to pay the entire tax billed for the calendar years 1963 and 1964 because of the substantial net losses during these years. On March 14, 1965, the landlord made a written demand on the tenants to the effect that the tenants should pay these taxes, informing the tenants that the property had been sold for failure to pay 1963 taxes. By May 5, 1965, ² these taxes remained unpaid, and the landlord gave the tenants written notice of cancellation of the lease.

After the commencement of this action, the tenants paid into the clerk of the superior court sufficient money to pay the delinquent realty taxes in full. The 'memorandum' accompanying this payment stated that it was paid '* * * with the understanding that if the Court should rule against (sic) defendants that this cashier's check will be returned to them.' At the commencement of the trial these funds were released, by stipulation of counsel, to the Pinal County Treasurer to satisfy these taxes and the judgment below is defended on the basis of this 'tender.'

It is our opinion that the payment into court of these taxes by the tenants was untimely and of no moment because a payment into court of taxes, under a conditional tender such as this, was not a payment of the taxes, as required by the lease. Cf. Lortz v. Rose, 346 Mo. 1212, 145 S.W.2d 385 (1940); Boyd v. Weeks, 2 Denio 321, 43 Am.Dec. 749 (N.Y.1845); Annot., 100 A.L.R. 264, 293 (1936). Under any construction of the lease agreement, the tenants were obligated to pay at least one half of the tax bill. Under applicable statute, ³ the tenants could have paid, until the tax installment became delinquent, as little as 10 per cent of the tax. The tenants, however, paid nothing. We hold that the nonpayment of these real property taxes was a material breach of the lease. Woodmen of the World Life Insurance Soc. v. Knudsen, 275 F.2d 440 (5th Cir. 1960); cf. National Dollar Stores v. Wagnon, 97 Cal.App.2d 915, 219 P.2d 49 (1950); Hudson v. Price, 273 S.W.2d 518 (Mo.App.1954).

Both under the express verbiage of this lease and under applicable statute (quoted n. 1 supra), Any breach of this lease on the tenants' part gave the landlord the option to terminate. Undoubtedly, there might be trivial breaches which should be ignored by a court, see Keating v. Preston, 42 Cal.App.2d 110, 108 P.2d 479 (1940), but the amount of these taxes is in no sense trivial. ⁴ The delinquency persisted for a substantial period of time and after written notice to correct was admittedly received. Under analogous circumstances, our Supreme Court has held that the trial court has no discretion to refuse to uphold the landlord's plain right of termination. Karam & Sons Mercantile Co. v. Serrano, 51 Ariz. 397, 77 P.2d 447 (1938). See Union Oil Company of California v....