Cohen v. L. & G. Inv. Co., 26087.

• Decision Date: 19 May 1936
• Docket Number: 26087.
• Citation: 186 Wash. 308,57 P.2d 1042
• Court: Washington Supreme Court
• Parties: COHEN v. L. & G. INV. CO.

57 P.2d 1042

186 Wash. 308

COHEN v. L. & G. INV. CO.

No. 26087.

Supreme Court of Washington

May 19, 1936

Department 2.

Appeal from Superior Court, King County; Robert M. Jones, Judge.

Action by Sara Cohen, as executrix of the estate of Samuel Cohen deceased, against the L. & G. Investment Company. From a judgment of dismissal, plaintiff appeals.

Affirmed.

J Kalina and T. M. Royce, both of Seattle, for appellant.

Eggerman & Rosling and Ray L. Johnson, all of Seattle, for respondent.

BLAKE Justice.

The plaintiff and her deceased husband were the sole stockholders of the City of Paris, a corporation. October 6, 1924, the corporation, as lessee, entered into a lease with defendant the L. & G. Investment Company, a corporation as lessor. The term of the lease was for ten years, with a monthly rent reserved of $1,100. At the time the lease was executed, the lessee deposited $11,000 with the lessor, to guarantee the faithful performance of its covenants. It was expressly stipulated that $1,100 of such amount be applied on the rent due for the month of October of each year of the term. The lease also contained the following stipulation: 'In the event said lessees fail to carry out all the covenants and agreements herein contained and it shall be necessary for said lessors to cancel this lease by legal proceedings or otherwise, then said sum shall be forfeited to the lessors; and it is a further stipulation of this lease that in the event of such cancellation that the lessors in no way jeopardize the lessors' right to recover the full amount still due under the lease.'

April 10, 1925, the City of Paris filed in the superior court of King county its petition for dissolution. Upon due notice an order of dissolution was entered June 30, 1925.

Plaintiff and her husband, however, continued the same business, under the corporate name, in the demised premises until the latter's death in July, 1927. Thereafter plaintiff continued to occupy the premises under the lease, and conducted the business under the same name.

In December, 1931, the lessor commenced an action in the superior court of King county against 'the City of Paris, a corporation,' for past-due rent. Appearance was made in that action on behalf of 'the above named defendant corporation.' Thereafter negotiations were had between Mrs. Cohen and the lessor looking to a reduction in the rent. The result of these negotiations was a modification of the lease executed by the defendant, on the one hand, the 'The City of Paris, by Sara Cohen,' on the other. The modification agreement was 'by and between L. & G. Investment Co., a corporation, * * * and Sara Cohen doing business under the firm and style name of City of Paris. * * *' By this agreement it was stipulated that all but $3,300 of the deposit of $11,000 had been applied 'upon rental according to the terms of the lease.' It was agreed that the rental from March 4, 1932, should be $500 per month. The lessor waived past-due rent, and the lessee waived all claim to the balance of $3,300 held by the lessor as security for the performance by the lessee of the covenants of the lease. Thereafter Sara Cohen, as executrix of the estate of Samuel Cohen, brought this action to recover a portion of the deposit of $11,000 which she conceived to belong to the estate. Upon issue joined, a trial was had. At the close of plaintiff's case, defendant interposed a challenge to the sufficiency of the evidence, which the court sustained. Judgment of dismissal was entered, from which plaintiff appeals.

Appellant's theory is that, upon dissolution of the corporation, the City of Paris, the balance of the $11,000 deposit in the hands of respondent became the...