Enos v. Foster
| Decision Date | 12 November 1957 |
| Docket Number | No. 17414,17414 |
| Citation | 155 Cal.App.2d 152,317 P.2d 670 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Joseph B. ENOS, Jr., Plaintiff and Respondent, v. C. Louis FOSTER, Executor of the Estate of Louise S. Pheby, Defendant and Appellant. |
Donahue, Richards, Rowell & Gallagher, Oakland, for appellant.
Kessler & Kessler, Oakland, for respondent.
Plaintiff's motions to strike defendant's answer, for summary judgment and judgment on the pleadings, were granted. Defendant appeals from the judgment entered thereon.
Questions Presented.
Was Plaintiff lessee entitled to apportionment of damages as provided in the lease or merely to the amount awarded him by the condemning power? The solution of this question depends upon whether or not paragraphs 17 and 26 of the lease are interdependent.
Record.
February 2, 1947, Louise S. Pheby, defendant's testate, leased to plaintiff certain real property in Berkeley for a period beyond the date of the events causing this action. February 21, 1955, Mrs. Pheby, to avoid an action in eminent domain and for the sum of $52,500, transferred to the city of Berkeley all her right, title and interest in this property. Later, the city filed an action to condemn plaintiff's leasehold interest therein, as a result of which plaintiff received $12,200. Thus the total received by both parties was $64,700. Plaintiff then brought this suit claiming that by reason of paragraph 17 of his lease (hereafter set forth) he was entitled to 15/40ths of the $64,700, or $24,262.50, upon which sum he credited the $12,200 received from the city of Berkeley, leaving a balance due of $12,062.50.
Defendant's amended answer denied that plaintiff was entitled to 15/40ths of the entire recovery and as a separate defense set up a failure of plaintiff to comply with paragraph 26 of the lease, requiring the construction of a certain building. Plaintiff then filed motions to strike out defendant's answer, for summary judgment and/or judgment on the pleadings on the ground that no defense was stated or could be stated. 1
Paragraph 17 reads: * * *'
Defendant concedes that this paragraph would apply to the circumstances of this case, were it not that defendant claims that plaintiff was in default under paragraph 26, and that compliance with paragraph 26 was a condition precedent to plaintiff's right to apportionment under paragraph 17.
Paragraph 26 provides: 'Tenant covenants and agrees that he will erect on the property herein demised a building having not less than 1768 sq. ft. of floor space, which said building is to be built in accordance with all building requirements, laws, ordinances and regulations. * * *' It further provides that the tenant will commence construction when materials, labor and plans are available and that upon the termination of the lease the building will become the property of the lessor.
In June, 1947, plaintiff was granted an extension of time to June 1, 1948, in which to commence construction. The extension stated: 'All other terms and conditions contained in said lease are to remain in full force and effect, and granting of this concession is not to be construed to, nor does it alter or change any of the other terms or conditions contained in said lease.'
February 24, 1948, a further modification of the lease was made providing that the building might contain only 600 square feet of floor space with the right of the tenant to enlarge the building at a future date. The clause continuing in effect all other terms and conditions of the lease was identical with the one above quoted. Plaintiff has never commenced construction of the building.
Are Paragraphs 17 and 26 interdependent?
There is no expression in the lease making them so. Because of historical development, covenants in leases are held to be mutually independent unless the lease expressly or impliedly makes them conditional. 3 Williston on Contracts, p. 2520; Restatement, Contracts, § 290; Kulawitz v. Pacific Woodenware Paper Co., 1944, 25 Cal.2d 664, 669, 155 P.2d 24; Arnold v. Krigbaum, 1915, 169 Cal. 143, 145, 146 P. 423; Exchange Securities Co. v. Rossini, 1919, 44 Cal.App. 583, 585, 186 P. 828. However, in Medico-Dental Bldg. Co. of Los Angeles v. Horton & Converse, 1942, 21 Cal.2d 411, 132 P.2d 457, it is stated that a lease has a duel character with two sets of rights and obligations. One set grows out of the relation of landlord and tenant and the other out of the "* * * express stipulations of the lease * * *" 21 Cal.2d at page 418, 132 P.2d at page 462. The contractual features are to be interpreted according to contract law and the basic principle that the intention of the parties should be given effect as far as possible, so that covenants in a lease are to be construed as independent or dependent according to the intention of the parties and the good sense of the case. The Medico-Dental case distinguishes factually both the Arnold and Exchange Securities cases, supra, but goes on to say that those cases are compatible with a conclusion that covenants in a lease may be dependent. In the Medico-Dental case, the question was whether a covenant against leasing to a competitor was a condition precedent to the obligation to pay rent or for renovating after vacating the premises. As in the later Kulawitz case, supra, the decision in the Medico-Dental case was based upon the fact that the breach of a covenant against leasing to the tenant's competitor went to the whole of the consideration for the lease and hence was necessarily a condition to the lessee's obligation to pay rent. Thus, the covenants were impliedly made interdependent in the lease. In our case it cannot be said that the obligation to build the building went to the whole of the consideration for the lease. That the covenants were not interdependent is shown by: (1) The failure to expressly make them so. (2) No connection in time between the performance of either covenant. (3) The subsequent modification of the size of the building without a corresponding change in the apportionment ratio. Under this, the building was to be only one-third of...
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