Bomberger v. McKelvey

• Decision Date: 31 July 1950
• Citation: 35 Cal.2d 607,220 P.2d 729
• Court: California Supreme Court
• Parties: BOMBERGER et ux. v. McKELVEY. McKELVEY et al. v. BOMBERGER et al. Sac. 5947.

Page 729

220 P.2d 729

35 Cal.2d 607

BOMBERGER et ux. v. McKELVEY.

McKELVEY et al. v. BOMBERGER et al.

Sac. 5947.

Supreme Court of California, in Bank.

July 31, 1950.

Rehearing Denied Aug. 24 1950.

Taylor & Taylor, Edward T. Taylor and Edward T. Taylor, Jr., all of Modesto, for appellants.

Vernon F. Gant, Modesto, for respondents.

GIBSON, Chief Justice.

Plaintiffs brought this action against D. P. McKelvey to recover a sum of money promised for the demolition and removal of a building which stood on real property purchased by McKelvey from plaintiffs. Further, plaintiffs, as assigness of Mr. and Mrs. Fred L. Hill, sought to recover a sum of money which McKelvey promised to pay to the Hills in return for the latter's surrender of a lease of the premises. A counterclaim and cross-complaint was filed against plaintiffs and the Hills seeking damages for trespass and waste. R. G. McKelvey, who had become a co-owner of the property, joined in this pleading, and as a result thereof the trial court ordered that he be made a party defendant with D. P. McKelvey and that the Hills be made parties cross-defendant. Defendants have appealed from a judgment granting the relief requested in the complaint.

Early in 1946 defendants purchased twelve lots in the City of Modesto for the purpose of constructing a building and adjoining parking facilities for rental to a chain grocery store. Four of these lots, including lots 15 and 16, were acquired from plaintiffs for $60,000. At this time lots 15 and 16 were improved by a business structure occupied by the Hills under a lease, which plaintiffs assigned to defendants on March 16, 1946.

During negotiations for the sale of the lots the Hills agreed to surrender their lease upon payment of $4,000 by defendants, less $300 per month rent after March 1, 1946, and to vacate the premises 'immediately upon the completion' of a new building to be built for the Hills by plaintiffs elsewhere in Modesto. A written agreement or 'Deposit Receipt' entered into by plaintiffs and defendants on February 28, 1946, provided that the sale of the real property to defendants should be subject to the temporary occupancy of the old building on lots 15 and 16 by the Hills at a rental of $300 per month and that 'The seller warrants such occupancy shall terminate and the improvements shall be removed not later than twenty days prior to the completion' of the contemplated chain store building. The instrument provided for payment of $70 for each day the old building remained standing after the agreed date unless the delay was caused by certain specified events, such as strikes, which prevented completion of the new building for the Hills. The deposit received also provided that plaintiffs 'retained' certain dwellings on the remainder of the property and agreed to remove them within sixty days, but no such reservation of title was made with respect to the building on lots 15 and 16.

It was orally agreed that defendants would pay plaintiffs $3500 upon the demolition and removal of the old building on lots 15 and 16. During the various conversations relating to the transaction defendants stated that they did not want the old building or any part of it, and it appears that lots 15 and 16 were to be used as a parking lot by the chain store. Plaintiffs informed defendants that they intended to use whatever material they could from the old building in constructing the new one for the Hills.

The oral agreement was confirmed by a letter from defendants to plaintiffs on March 11, 1946, wherein defendants recited that plaintiffs were to 'remove the existing improvements therefrom' and that in consideration for this defendants would pay them $3500. The letter further stated that if plaintiffs were prevented by strikes, government regulations, or the like, from completing the new building, the Hills could continue to occupy the old building and the time for its 'removal' should be 'extended to coincide with the completion of said new building.' In reliance upon this letter and the agreement to tear down the old building, plaintiffs changed the plans for the new building 'to fit the possible use of salvage' from the old building, namely, plate glass and skylights, and for this reason did not order those items, which were then scarce and could be obtained only after a delay of at least 90 to 120 days. In addition sheet metal for skylights was under priority by reason of governmental restrictions. There is testimony that the new building could not be completed without the glass and skylights from the old one.

Plaintiffs commenced construction of the new store for occupancy by the Hills, but due to governmental restrictions defendants were unable to get materials for the contemplated chain store and parking lot. Because of this delay defendants on August 2, 1946, notified plaintiffs that construction of the chain store building was not contemplated in the immediate future, that until further written notice plaintiffs were not to proceed with the demolition, and that notice would be given in ample time for plaintiffs to have the improvements 'dismantled and removed.' Plaintiffs answered by letter that they intended to proceed since the plate glass and skylights in the old building were needed for use in the construction of the new store. On September 10 defendants wrote to plaintiffs that they were not to dismantle the improvements on lots 15 and 16 nor to enter the premises except as customers of the Hills until such time as written permission was given by defendants, and that 'for any known violations of these instructions redress at law will be had.'

On September 27 defendants instituted a proceeding in which they sought a declaration of their rights to the building as owners of the premises and further requested that a preliminary injunction issue to restrain plaintiffs from dismantling the old building on lots 15 and 16. At the hearing on the application for the injunction it appeared that the new building for the Hills had then been completed except for the glass and the skylights. On October 18 the trial court denied the preliminary injunction and a few days later sustained a demurrer to the complaint with leave to amend.

Toward the end of October plaintiffs removed the plate glass and skylights from the old building and completed the new building for the Hills. About October 30 the Hills abandoned the old building, and plaintiffs thereupon entered defendants' premises and demolished and removed the building. On November 1 the Hills moved to the new store constructed for them by plaintiffs. In December the court sustained, with leave to amend, a demurrer to an amended complaint for declaratory relief, and no further action was taken in that proceeding.

Defendants refused to pay either the agreed price of $3500 due upon demolition of the old building or the unpaid balance of $2500 due to the Hills for surrender of the lease. The Hills assigned their claim to plaintiffs, who brought the present action to recover both amounts.

The trial court found and concluded that defendants had agreed to pay $3500 upon removal of the building and the salvage, that the agreement had not been renounced by defendants, that they were estopped from changing their position or maintaining an action against the cross-defendants or repudiating the contract, that plaintiffs had the legal right to demolish the building and to take the salvage, and that they had fully performed the agreement on their part. The court also concluded that the sum promised by defendants to the Hills became due and payable when the Hills moved into the new building constructed for them by plaintiffs. Judgment was entered for plaintiffs in the sum of $6000, which was the total amount sought in the complaint.

It should be stated at the outset that the order denying the preliminary injunction in connection with the proceeding for declaratory relief is not res judicata as to the issues herein presented. There is no inflexible rule as to the effect of the granting or denial of a preliminary injunction on subsequent litigation, but unless it appears that the court intended a final adjudication of the issue involved, a decision on an application for a preliminary injunction does not amount to a decision on the ultimate rights in controversy. See Miller & Lux v. Madera Canal etc., Co., 155 Cal. 59, 62, 99 P. 502, 22 L.R.A., N.S., 391; 14 Cal.Jur. 184; 28 Am.Jur. 493. Here the court's action in sustaining the demurrer to the complaint with leave to amend indicates that its order denying the preliminary injunction was not intended as a final disposition of the rights of the parties.

The deposit receipt did not fix a definite date for demolition of the old building or specify how the salvaged materials were to be disposed of but provided only that the building was to be 'removed not later than twenty days prior to the completion' of the chain store building, subject to payment of $70 per day in the event of failure to perform on time. It is undisputed, however, that the building was to be left standing for occupancy by the Hills until a new building was constructed elsewhere for them. Further, there is testimony that defendants stated during the negotiations that they did not want any part of the old building and that plaintiffs were to get it off just as soon as possible, and plaintiffs told defendants that they were going to use whatever material they could from the old building in constructing the new one for the Hills. From this evidence the trial court could reasonably infer that the parties had agreed that plaintiffs were to wreck the old building as soon as practicable after construction of the new store for the Hills and that plaintiffs should be entitled to the salvaged material after it had been removed.

Under the contract as thus construed, there was an implied covenant that plaintiffs would be given possession of the premises for the agreed...