Petroleum Collections Inc. v. Swords

• Decision Date: 04 June 1975
• Citation: 48 Cal.App.3d 841,122 Cal.Rptr. 114
• Parties: PETROLEUM COLLECTIONS INCORPORATED, Plaintiff and Appellant, v. Edward W. SWORDS, Defendant and Respondent. Civ. 2079.
• Court: California Court of Appeals Court of Appeals

Page 114

122 Cal.Rptr. 114

48 Cal.App.3d 841

PETROLEUM COLLECTIONS INCORPORATED, Plaintiff and Appellant, v. Edward W. SWORDS, Defendant and Respondent.

Civ. 2079.

Court of Appeal, Fifth District, California.

June 4, 1975.

Charles M. Farrington and David P. Connelly, Los Angeles, for plaintiff and appellant

Eugene L. Adams, Fresno, for defendant and respondent.

OPINION

GARGANO, Associate Justice.

Plaintiff is a collection agency, and it brought this action against the defendant in the court below to recover the sum of $6,043.24; the complaint alleged that the money was unpaid back rent due and owing by defendant to plaintiff's assignor, Texaco, Inc., hereinafter referred to as Texaco. Plaintiff appeals from the judgment entered in favor of the defendant.

The pertinent facts are undisputed.

On April 17, 1969, Texaco leased a parcel of land located on the northwest corner of the intersection of Adams Road and Freeway 99 near the City of Fowler to defendant, Edward Swords. The written lease was for a period of ten years, called for a rental of $500 a month and embraced land, a service station and related buildings and facilities. It also embraced a large 'modular' type sign which was located on top of the service station building and which could be seen approximately one-half mile down the freeway; the sign was equpped with individual letters five feet in height, illuminated from within by neon bulbs; the letters spelled out the word 'TEXACO.'

On May 9, 1969, the Fresno County Building Inspector discovered that the modular type sign had been installed without a county building permit; also, he discovered that the sign had been fastened down improperly and constituted a fire hazard because it was too close to the vents to the gasoline storage tanks. The inspector ordered the hazardous condition rectified or the sign removed; the sign was taken down by the original builder at Texaco's request.

After taking down the sign, Texaco furnished defendant with an 'antique,' 30-year-old, dilapidated, enamel billboard which could not be seen from the freeway. Defendant then insisted that Texaco furnish him with a sign similar to the one which was on the service station when he leased the property; when Texaco failed to do so, defendant refused to pay any rent.

On March 13, 1970, Texaco and defendant cancelled the lease and defendant vacated the premises; however, approximately two months prior to cancellation, defendant subleased the premises to a third party; neither defendant nor the third party paid any rent to Texaco for any part of the 11-month period the premises were occupied.

At the conclusion of the court trial, the trial judge found, in essence, that when the leasing agreement in question was executed the parties contemplated that defendant would take advantage of the trade generated by the freeway and that the large sign on top of the service station was an integral part of the leased premises. The judge further found, in essence, that the sign was installed by Texaco, that the installation did not conform with county safety regulations, that the sign was a fire hazard, and that it was removed at Texaco's request even though the hazardous condition could have been rectified, readily, by the addition of elbow joints and extension pipe to the vents. The trial judge concluded that Texaco breached the lease's implied covenant of quiet enjoyment, that this implied covenant and defendant's covenant to pay rent were mutually dependent and that as a consequence defendant was not obligated to pay any rent to Texaco for the 11-month period he and his sublessee occupied the premises.

Preliminarily, we compendiously reject plaintiff's suggestion that the implied covenant of quiet enjoyment was not breached because defendant, not Texaco, was obligated to repair or replace the modular type sign which was on top of the service station when Texaco leased the property to defendant. While the lease required defendant to maintain the premises '. . . in good repair and in a clean, safe and healthful condition (,)' the fact remains that the sign was installed by Texaco without a building permit and did not conform with county safety regulations. A landowner is duty bound to comply with local building regulations, and it is irresponsible to argue that Texaco could avoid this duty by foisting the responsibility of repairing or replacing the unsafe structure it had installed before it leased the premises to an unsuspecting tenant merely because the lease obligated the tenant to keep the premises in good repair during the period of the tenancy. Such a proposition is against public policy and 'flies in the face' of common sense. (See Glenn R. Sewell Sheet Metal, Inc. v. Loverde, 70 Cal.2d 666, 671--675, 75 Cal.Rptr. 889, 451 P.2d 721; 49 Am.Jur.2d, Landlord and Tenant, § 943, pp. 917--918.)

We turn to the nature and scope of the covenant of quiet enjoyment.

It has long been the rule that in the absence of language to the contrary, every lease contains an implied covenant of quiet enjoyment. (McDowell v. Hyman, 117 Cal. 67, 70, 48 P. 984; Pierce v. Nash, 126 Cal.App.2d 606, 612, 272 P.2d 938.) Initially, the covenant related solely to the right of possession and only protected the lessee against any act of molestation committed by the landlord or anyone claiming under him, or by someone with paramount title, which directly affected the tenant's use and possession of the leased premises; the covenant was construed to protect the lessee against physical interference only. (See e.g., 49 Am.Jur.2d, Landlord and Tenant, § 334, p. 349.) In recent years, the covenant of quiet enjoyment has been expanded, and in this state, for example, it insulates the tenant against any act or omission on the part of the landlord, or anyone claiming under him, which interferes with a tenant's right to use and enjoy the premises for the purposes contemplated by the tenancy. (Green v. Superior Court, 10 Cal.3d 616, 625, fn. 10, 111 Cal.Rptr. 704, 517 P.2d 1168; 49 Am.Jur.2d, Landlord and Tenant, § 336, p. 351.) Under this view, the landlord's failure to fulfill an obligation to repair or to replace an essential structure or to provide a necessary service Can result in a breach of the covenant if the failure substantially affects the tenant's beneficial enjoyment of the premises. (Groh v. Kover's Bull Pen, Inc., 221 Cal.App.2d 611, 614, 34 Cal.Rptr. 637; Sierad v. Lilly, 204 Cal.App.2d 770, 773, 22 Cal.Rptr. 580; Pierce v. Nash, Supra, 126 Cal.App.2d 606, 612, 272 P.2d 938.)

We consider next the question as to whether an implied covenant of quiet enjoyment and an express covenant to pay rent are mutually dependent; at common law, it was the traditional concept that covenants in leases were always independent.

The foundation for the tenant's obligation to pay rent is his right to use and possess the leased property for the purposes contemplated by the tenancy; rent is the compensation paid by the tenant in consideration for the use, possession and enjoyment of the premises. Consequently, when a tenant's possession of leased property has been interfered with, physically, by the landlord, or someone claiming under him, or by a person with paramount title, the tenant's covenant to pay rent is no longer supported by valid consideration and he...