Dominguez Estate Co. v. Los Angeles Turf Club

• Decision Date: 05 August 1953
• Citation: 119 Cal.App.2d 530,259 P.2d 962
• Court: California Court of Appeals Court of Appeals
• Parties: DOMINGUEZ ESTATE CO. v. LOS ANGELES TURF CLUB, Inc. Civ. 19495.

Page 962

259 P.2d 962

119 Cal.App.2d 530

DOMINGUEZ ESTATE CO. v. LOS ANGELES TURF CLUB, Inc.

Civ. 19495.

District Court of Appeal, Second District, Division 3, California.

Aug. 5, 1953.

Hearing Denied Oct. 1, 1953.

Victor Ford Collins and Arnold M. Cannan, Los Angeles, for appellant.

Frank P. Doherty and James L. Patten, Los Angeles, for respondent.

PARKER WOOD, Justice.

Action to recover $5,000 allegedly agreed to be paid to plaintiff in compromise of a claim made by plaintiff that defendant unlawfully induced a lessee of plaintiff to breach a lease. Defendant appeals from judgment in favor of plaintiff.

Plaintiff is the owner of 236 acres of land located at 190th Street and Western Avenue in Los Angeles County. On January 3, 1950, the plaintiff and one Curry, a promoter of industrial fairs, entered into a written lease which provided as follows: Curry leased said land for one year, commencing October 1, 1950 and ending September 30, 1951, for the purpose of conducting thereon a 'World Transportation Fair.' He agreed to pay a minimum cash rental of $25,000, payable in certain installments, including a payment of $2,000 when the lease was made and $5,000 on or before October 1, 1950. He also agreed to pay as additional rental five cents for each adult and two and one-half cents for each juvenile entering the fair as a spectator. Possession of the land should be delivered to Curry on October 1, 1950, provided he had paid the $5,000 installment due on that date. Curry agreed that he would commence to construct said fair promptly after October 1, 1950, and he would operate the fair from June 3, 1951 to September 30, 1951.

At the time the lease was made Curry paid the first installment of $2,000, and he represented to plaintiff that the total rental payable would exceed $50,000.

Defendant is the owner of 400 acres of land at Santa Anita Park in Arcadia, California, which is used principally for horse races. About March 31, 1950 (approximately three months after plaintiff and Curry made said lease), the defendant and Curry entered into a written lease which provided as follows: Curry leased approximately 200 acres of said land for the purpose of conducting thereon a World Transportation Fair. He agreed that he would commence to construct said fair promptly after the close of defendant's racing season in March, 1951, and he would operate the fair from May 30, 1951 to September 9, 1951. He agreed to pay a minimum cash rental of $35,000.

Curry did not commence the construction of the fair on plaintiff's land, did not operate the fair thereon, and did not pay any money to plaintiff except the first rental installment of $2,000.

Mr. Crawford, the general manager of plaintiff, testified that about April 3, 1950, he read in a newspaper of that date an article indicating that Curry had decided not to go ahead with the fair on plaintiff's land. That article, which was received in evidence, stated in substance that Santa Anita Park would be the site of the World Transportation Fair from May 30 to September 9, 1951, following the leasing of that property, during the off-racing season, to said Curry; after he had read that article, he received a letter from Curry, dated March 31, 1950, addressed to him as manager of plaintiff, which letter stated, in part:

'This is to let you know, in advance of newspaper release, that I have today completed an agreement with the Los Angeles Turf Club, Inc. under terms of which they are extending to me use of the fifteen million Santa Anita Park as the new site of the World Transportation Fair.

'While it is a matter of personal regret to me that the Torrance site [plaintiff's land] will, therefore, not be utilized as previously planned, the existing facilities at Santa Anita will reduce the cost of staging the fair by at least $509,000. I therefore, had no alternative but to accept the offer.'

Mr. Crawford testified further that on April 4, 1950, the day after he received said letter, he called Curry by telephone (at Dallas) and told him that the letter had been received and he had read the newspaper article; he asked Curry what the reason was--he was under contract with plaintiff to produce the fair on plaintiff's property; Curry replied that he had been approached by representatives of defendant with an offer to conduct the fair on its grounds, which were already prepared, and the fair there would save him a great amount of money; about May 15, 1950, a real estate agent who negotiated the lease with plaintiff on behalf of Curry, told the witness that representatives of defendant had gone to Dallas to offer Curry the facilities of defendant for a fair similar to the one Curry agreed to conduct on plaintiff's property; at a meeting in June, 1950, when the real estate agent, his associate, Curry and the witness were present, Curry said that Jaynes and O'Dorisseo, representatives of defendant, had gone to Dallas and discussed the matter with Curry, and that a principal reason Curry had made the lease with defendant was that defendant had offered its facilities and offered to produce more publicity than he could hope to obtain by having the fair on plaintiff's property; Curry also said at that meeting that in any event defendant was going to conduct a fair of that character and it was offering Curry the first refusal; on June 23, 1950, he (witness) as manager of plaintiff, sent a letter to Curry, the Turf Club, and Jaynes, who was the manager of leasing operations of the Turf Club. That letter was to the effect that plaintiff and Curry had entered into the lease herein described, and that plaintiff would seek such redress as may be available against all persons who are parties to any unlawful arrangement which contributes to any breach of Curry's obligations to plaintiff under said lease. Mr. Crawford testified further that about July 1st, after that letter was sent, Mr. Collins (general counsel and assistant secretary of defendant) called the witness by telephone and asked on what theory plaintiff could show any liability of defendant; he (witness) replied that plaintiff had information that defendant's representatives had approached Curry, and that plaintiff's representatives had an idea that the breach of plaintiff's lease had been encouraged or was the result of an offer of defendant; about June 30, 1950, he (witness) received a letter from Mr. Collins. That letter was to the effect that when the defendant made the lease with Curry it had no information that plaintiff had a lease with Curry, that the lease between defendant and Curry was entered into in good faith, and defendant was proceeding in good faith in connection with the lease. Mr. Crawford testified further that Curry said he would not conduct the fair on plaintiff's property; that when he (witness) wrote the letter of June 23d, and at all times since then, he believed in good faith that plaintiff had a bona fide claim against defendant for damages by reason of its activities in connection with the lease transaction between plaintiff and Curry; plaintiff never consented to release Curry from his obligation under the lease; in the latter part of 1950 or early part of 1951, after plaintiff had been told by Mr. Doherty, one of the attorneys for plaintiff, that a compromise had been made with defendant, the plaintiff leased its said land to a farmer who has been in possession of it since that time.

On July 7, 1950, Mr. Doherty sent a letter to Mr. Collins wherein he stated the substance of plaintiff's lease, and that his understanding of the conditions under which the arrangement between defendant and Curry was made was at variance with the situation outlined in Mr. Collins' letter of June 30th, and that the theory as to liability on the part of defendant is the principle of unlawful interference with business relations.

After said letter of July 7th had been sent, Mr. Doherty and Mr. Patten, the other attorney for plaintiff, had a conversation with Mr. Collins in Mr. Collins' office.

Mr. Doherty (who did not participate in the trial) testified that said conversation was, in substance, as follows: He told Mr. Collins that after plaintiff had entered into a lease with Curry and that fact was made public by a notice in the press, two representatives of defendant went to Dallas to interview Curry; that plaintiff had information that Curry told the Turf Club of the existence of plaintiff's lease, and the Turb Club knew the lease was in existence and it offered a deal to Curry and induced him to breach the lease with plaintiff, and, on that, plaintiff had a claim against defendant. Mr. Collins said that defendant had no information that there was a lease between plaintiff and Curry, that defendant dealt with Curry at arm's length and without knowledge of plaintiff's lease, that defendant entered into the lease in good faith, and he was not the attorney for Curry. Mr. Doherty said that if Curry proceeded with the fair at the Turf Club, the plaintiff would file suit against Curry and would attach the gate receipts until plaintiff had been paid what was due it under the lease. Mr. Collins said that defendant was not liable, he would take the matter up with his people and see what could be done. He asked what plaintiff would expect in the way of a settlement. Mr. Doherty replied $25,000. Mr. Collins said they would not pay any such sum.

On October 10, 1950, Mr. Doherty sent a letter to Mr. Collins wherein he stated that the time has come when plaintiff must file a suit unless some satisfactory adjustment is made, and he asked that they (the attorneys) try to meet the following Monday. It appears that thereafter, for two or three weeks, the attorneys had telephone conversations regarding the matter.

Mr. Doherty testified that on November 9, 1950, Mr. Collins called him by telephone and said that the best offer we can make is $2,500 now and $2,500 in 30 days; the Turf Club to be responsible for the payments; he...