Lindenberg v. MacDonald

Decision Date03 February 1950
Citation214 P.2d 5,34 Cal.2d 678
CourtCalifornia Supreme Court
Parties, 14 A.L.R.2d 1436 LINDENBERG v. MacDONALD et al. S. F. 17809.

Millard Smith, Vallejo, George Olshausen and Philander Brooks Beadle, San Francisco, for appellant.

Hoge, Pelton & Gunther and Leo V. Killion, San Francisco, for respondents.

SCHAUER, Justice.

Plaintiff appeals from an adverse judgment entered upon a directed verdict in his action for damages (presumably for claimed constructive eviction) allegedly caused by defendants' attempt, asserted by plaintiff to have been made in bad faith and unlawfully, to terminate a sublease (sometimes referred to as a lease) of real property. We have concluded that the trial court correctly determined that there was no evidence legally sufficient to show bad faith, constructive eviction, or any unlawful act by defendants, and that the judgment must be affirmed.

Defendants are husband and wife and are sued individually and as partners doing business under the name of MacDonald Products Co. In 1942 they subleased to plaintiff for a three-year term ending December 31, 1945, certain store space 'having a frontage of approximately 17 feet by a depth of approximately 29 feet' in a building located in Vallejo. Plaintiff opened a retail flower shop and 'novelty jewelry' store in the leased premises. The sublease contained the following provision: 'Lessor may terminate this lease in the event that the existing improvements are to be torn down to make way for the erection of a new building on sixty (60) days written notice addressed to the lessee * * * It is understood that this is a sublease and subject to all of the terms and conditions in that certain * * * lease made the 26th day of September, 1941 by and between George Edward McGill and Mabel McGill, as lessors and Graeme MacDonald, as leassee, as well as that certain addenda dated the 14th day of October, 1941 * * *'

In October, 1944, defendants, in contemplation of performance by them of an obligation imposed, and under rights conferred, by the McGill lease, negotiated with the J. C. Penney Company for a long term sublease of a new building to be erected by defendants after the building containing the space leased by plaintiff had been torn down, and on November 30, they served upon plaintiff the following notice: 'Arrangements have been made to tear down the building which you now occupy and a new building will be erected thereon as soon as you and the other tenants have moved. All tenants have been notified.

'Therefore, I am now giving notice as required by the lease, for you to vacate the premises at 407 Georgia Street not later than January 31, 1945. I regreat that you have to move at the present time, as I know the difficulties of finding a suitable location under the present conditions, but in order for me to make certain arrangements which I must do in Vallejo, I must erect this new building now.' Other tenants in the same building, all but one of whom also held under subleases, were given the same notice.

Defendant husband knew, at the time the above notice was given, that the new building could not then be constructed without a permit from the War Production Board; he fully intended to build but not without the permit. Although the permit had not yet been issued, the defendants' property manager, Mrs. Apgar, who had been negotiating with the board, 'felt sure' from those negotiations and from previous experience in securing similar permits that it would be issued, as did defendant husband; they knew, however, that the board had made no binding commitment. As previously indicated, defendants did not own the lot on which the store occupied by plaintiff was situated, but in 1941 had leased it from George Edward McGill and Mabel McGill 'over a long period of years' with an agreement to pay a monthly rent to the owners, 'to pay the taxes for a period of 45 years,' and 'tear those shacks down off that lot' and construct a new building which was to serve as security for the long-term lease. The new building had not been erected prior to the fall of 1944 because of priorities difficulties and lack of a definite tenant, and defendants had secured from the McGills two extensions of time to comply with their agreement to build. Plaintiff was aware of the obligation of defendants to demolish the old building and to construct a new one, as it was expressly provided in plaintiff's sublease, as above noted, that 'this is a sublease and subject to all of the terms and conditions in that certain indenture of lease made (in) * * * 1941 by and between (the McGills) * * *, as lessors and (defendant husband) * * *, as lessee.'

Mrs. Apgar and defendant husband testified that within a few days of the giving of the notice to plaintiff (whether before or after is uncertain from the record), defendants employed an architect to prepare plans for the new building, which was to cost approximately $45,000 and was to follow suggestions made to Mrs. Apgar by the War Production Board as to the 'type of plan' and of building materials which should be used, and obligated themselves for the architect's fees of some $2250; the plans were necessary before formal application for the permit could be made. They also ordered an iron truss, to cost $450; incurred on obligation of $500 to a wrecking contractor for services performed and material purchased by him preliminary to actually wrecking the existing building; and 'made arrangement' with a contractor and sub-contractor for construction of the new building. Defendants also procured from Army and Navy officials and the Mayor of Vallejo, and filed with the War Production Board, written statements concerning the necessity for the new building.

During December, 1944, because of serious setbacks to United States and allied forces in the Battle of the Bulge in Europe, governmental building restrictions were made more stringent and defendants were informed by the board that issuance of the permit was uncertain. During the latter part of December, 1944, or the first week in January, 1945, Mrs. Apgar informed plaintiff and other tenants of this situation and offered to allow them to stay on a 'short termination' basis in plaintiff's case, on a basis of one or two weeks' notice at the same rent they had been paying; plaintiff declined, and vacated the premises on January 13, 1945. Mrs. Apgar testified that plaintiff and his wife stated they wished to take a vacation unless they could remain in the store for 'the whole year.' After plaintiff vacated, the space he had occupied was rented to one of his former employes, to whom plaintiff then sold fixtures and a portion of his stock; the new tenant also operated a jewelry store in the space and paid the same rent formerly paid by plaintiff. All except one of the other tenants in the building remained until the building was actually wrecked some seven months later; the tenant (other than plaintiff) who vacated had already acquired another location and defendants turned over to the Red Cross, rent free, the space he had occupied. Thus, the immediate net result of the giving of the termination notices was a loss of rental income to defendants.

Meanwhile, on January 4, 1945, defendants filed with the War Production Board a formal application for the permit to build; it was refused on January 23. Defendants, however, did not abandon their project nor is there any suggestion that they were released by their lessors from the obligation to build. They continued their efforts to complete the project and, after two more permit applications had first been presented and denied, war developments became more favorable and they were able in August of 1945, to complete the razing of the old building and actually commence construction of the new one.

Concerning the reason for giving the termination notice to plaintiff prior to the formal granting of a permit by the board, defendant testified that waiting for issuance of the permit would have meant a two-months' delay in construction of the new building, and that the loss of the difference in rent between that paid by tenants of the old building and that to be paid by the J. C. Penney Company for the new structure was 'a small consideration * * * I wanted to build the building. I had a contract with the owner of the lot to build a building. Everybody wanted me to build the building.' Certainly we should recognize that defendants were under obligations to keep good faith with their lessors as well as with their subtenants. The situation insofar as good faith is concerned would not have been materially different if the War Production Board had previously granted a permit and, upon adverse war developments, had cancelled it.

The trial court was of the view that plaintiff could recover only if he established bad faith by defendants in the giving of the notice, and that no evidence had been produced tending to show such bad faith. verdict was granted (see In re verdict wa granted (see In re Estate of Flood (1933), 217 Cal. 763, 768, 21 P.2d 579; Burgess v. Cahill (1945), 26 Cal.2d 320, 321-322, 158 P.2d 383, 159 A.L.R. 1304) and this appeal followed.

Both parties agree that inasmuch as no evidence was introduced to show the meaning of the termination provisions of the lease, the construction thereof is a question of law for the court and that no issue of fact is presented. Plaintiff contends, however, that because at the time the notice was given defendants admittedly did not have the permit and did not intend to build without it, the notice was premature as a matter of law and, necessarily, that although it would have been wholly ineffective as a basis for an unlawful detainer action and could have been disregarded by plaintiff, it entitled plaintiff to vacate the premises and claim damages. Although no California decision on this precise point has been discovered, plaintiff relies upon Woods v....

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    • United States
    • California Court of Appeals Court of Appeals
    • April 30, 2014
    ...The mere threat to resort to legal process, made in good faith, “cannot amount to a constructive eviction.” ( Lindenberg v. MacDonald (1950) 34 Cal.2d 678, 683–684, 214 P.2d 5.) A “landlord is not liable for a breach of the implied covenant [of quiet enjoyment] or a constructive eviction wh......
  • Guntert v. City of Stockton
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    • California Court of Appeals Court of Appeals
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    ...by a notice of termination or lawsuit is not actionable unless characterized by bad faith or malice. (See, e.g., Lindenberg v. MacDonald, 34 Cal.2d 678, 683, 214 P.2d 5; Black v. Knight, supra, 176 Cal. at p. 726, 169 P. 382; Asell v. Rodriguez, 32 Cal.App.3d 817, 824--825, 108 Cal.Rptr. 56......
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    ...825.) The mere threat to resort to legal process, made in good faith, "cannot amount to a constructive eviction." (Lindenberg v. MacDonald (1950) 34 Cal.2d 678, 683-684.) A "landlord is not liable for a breach of the implied covenant [of quiet enjoyment] or a constructive eviction when he w......
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