Schuldes v. Wubbolding

• Decision Date: 27 October 1971
• Docket Number: CA-CIV,No. 1,1
• Citation: 15 Ariz.App. 527,489 P.2d 1229
• Parties: Jack R. SCHULDES et al., Appellants and Cross-Appellees, v. Paul WUBBOLDING, Executor of the Estate of Horace E. Comer, Deceased, et al., Appellees and Cross-Appellants. 1307.
• Court: Arizona Court of Appeals

Page 1229

489 P.2d 1229

15 Ariz.App. 527

Jack R. SCHULDES et al., Appellants and Cross-Appellees, v. Paul WUBBOLDING, Executor of the Estate of Horace E. Comer, Deceased, et al., Appellees and Cross-Appellants.

No. 1 CA-CIV 1307.

Court of Appeals of Arizona, Division 1, Department B.

Oct. 27, 1971.Rehearing Denied Dec. 1, 1971.

Rawlins, Ellis, Burrus & Kiewit, by Chester J. Peterson, Phoenix, for appellants and cross-appellees

Jennings, Strouss & Salmon, by Jon L. Kyl, Phoenix, for appellee and cross-appellant Paul Wubbolding, Executor of the Estate of Horace E. Comer, Deceased.

Thomas W. Murphy, Phoenix, for appellees and cross-appellants Martori and Talamini, a co-partnership doing business as The Steak House.

EUBANK, Judge.

This appeal primarily involves the construction of the provisions of a written lease and the duties and obligations of the parties arising therefrom. A question is also raised concerning this Court's jurisdiction to consider the lessors' cross-appeal.

On December 14, 1967, the plaintiffs in the trial court being appellees, cross-appellants here and referred to as the 'lessors', filed their complaint against the defendants and appellants, cross-appellees here, referred to as the 'lessees', alleging that they had entered into a written lease agreement on May 22, 1967, that the lessees had breached the lease by their failure to pay $3,560 in rent; $1,253.13 in taxes and a paving assessment in the sum of $59.69 and that they had remanded possession but the lessees had failed to deliver possession to them. They prayed for 'restitution of possession of the premises,' together with damages, costs and attorneys' fees. Concurrently with the filing of the complaint, lessors applied for and received a writ of attachment requiring the sheriff to attach property owned by the lessees equal to the sum of $3,560. The return filed on December 21, 1967 reports that the sheriff attached a sizeable quantity of liquor and $291.21 in cash on December 15, 1967.

The lessees filed their answer and counterclaim on June 12, 1968. The answer admitted that the lessees were indebted to the lessors in the sum of $400 for rent, and admitted that they had not paid the taxes and assessments required under the lease. They also admitted that the lessors had demanded possession and affirmatively alleged that lessors had wrongfully and actually taken possession from the lessees and refused to return it to them. Their prayer was that lessors be awarded only the sum that lessees had admitted in the answer ($400) and nothing else. The counterclaim consists of a claim against the lessors for breaching the lease by wrongfully taking possession of the leased premises, and lessees prayed for $100,000 in damages, together with attorneys' fees and costs. The lessors' reply denied this breach of the lease agreement.

The matter was tried to the court sitting without a jury in May of 1969. Neither side requested findings of fact or conclusions of law and none were made. On August 8, 1969, judgment was filed in favor of the lessees on all issues presented by the lessors' complaint and in favor of the lessors on all issues presented by the lessees' counterclaim.

On September 11, 1969, the trial court modified the judgment by ordering that the $291.21 cash and the inventory of liquor held by the court under the writ of attachment be returned to the lessees. All parties appealed from this judgment.

The effect of the judgment is adverse to all of the legal theories advocated by all of the parties. Its pertinent parts are as follows:

'IT IS NOW ORDERED that judgment be and the same is hereby entered in favor of the defendants (lessees) on all issues presented by plaintiffs' (lessors) complaint, and

'IT IS FURTHER ORDERED that judgment be entered in favor of the counter-defendants' (lessors) upon the counter-claimants' (lessees) claim, and

'IT IS FURTHER ORDERED that each party shall bear their respective costs.'

The lessees interpret the provisions of the judgment as inconsistent and in conflict, entitling them to judgment on appeal. Their specific contention on appeal is that since the trial court denied lessors the relief prayed for in their complaint it must, of necessity, have found that lessees were entitled to possession of the leased premises on the date the lessors reentered the leased premises and therefore the trial court wrongfully denied the relief requested in the counterclaim.

In support of this contention lessees cite Chadwick v. Winn, 101 Ariz. 533, 421 P.2d 890 (1966). They further argue they should be entitled to damages arising from the lessors' breach of the lease by their wrongfully taking possession from the lessees. We agree with Chadwick but its rule is not applicable where the construction of a contract or lease agreement, such as that present in this case, is involved. Under such circumstances the construction of a written agreement involves questions of law, or mixed questions of fact

and law, neither of which are binding on this court on review. T. D. Dennis Builder, Inc. v. Goff, 101 Ariz. 211, 418 P.2d 367 (1966); Park Central Development Co. v. Roberts Dry Goods, Inc., 11 Ariz.App. 58, 461 P.2d 702 (1969). However, where the trial court also denied relief on the counterclaim, we must construe all inferences in support of the entire judgment, and in order to do so must review the lease to see if its provisions support the judgment. It should be noted at this point that lessors contend that their right to judgment is based upon the express provisions of the written lease and the admissions of the lessees contained in the answer and pretrial stipulation.

THE LEASE

On May 22, 1967, the lessors and lessees executed a lease agreement wherein the lessees received possession of a restaurant and bar known as The Steak House, located in the city of Phoenix, for a term beginning June 1, 1967 through April 30, 1969, at a rental for the term of the lease of $41,400, payable $3,600 upon execution of the agreement (representing the first and last month's rent--June 1967 and April 1969 respectively) and $1800 on the first day of July, 1967, and the first day of each month thereafter. Additional rent was required if the enterprise was successful, which it was not, consequently, those provisions are inapplicable to this appeal.

Prior to the trial, the parties entered into a pretrial stipulation of fact admitting the lease agreement and admitting the payment dates and payments made by lessees to lessors as follows:

                May 27, 1967        $3,600.00 (representing
                                    the first and last
                                    months' rent under
                                    the terms of the
                                    Lease)
                July 5, 1967        $1,800.00
                August 9, 1967      $1,800.00
                September 13, 1967  $  500.00
                October 18, 1967    $1,800.00
                November 18, 1967   $1,340.00
                

The stipulation of facts further admits that the lessees were in possession of the leased premises until December 15, 1967, and that the lessees had made no payments for taxes or paving assessments while in possession. It also admitted that 'Written notices were sent * * * (to the lessees) dated October 11, 1967, November 3, 1967, December 8, 1967, and December 14, 1967,' hereafter discussed in detail. Finally, it was admitted that the lessors, after they took possession, received $601.13 which resulted from lessees' business and that lessors had deposited this amount in a trust account pending determination of the action.

The lease is clear that all rent payments beginning with the July 1, 1967, payment were to be paid by lessees, 'on the first day of each and every month.' The stipulation of facts shows that this covenant was breached by lessees every month that they were in possession of The Steak House. The record also shows that no payment of rent was made for the month of December, 1967. The stipulation shows that $500 was paid by lessees on September 13, 1967, for the September 1 rent payment. Lessees' explanation for this is that because of adverse business conditions lessors permitted them to apply $1300 of the April, 1969, advance payment to the September payment on condition that they repay it later. The record reveals that this sum has not been repaid to lessors.

The 'notices' of October 11, 1967, and November 3, 1967, referred to in the stipulation of facts sent by the lessors and received by the lessees are identical and read as follows:

'You are hereby notified as Lessee and Guarantors that the Lease Agreement entered into May 22, 1967, concerning the Steak House located at 4041 North Central Avenue, Phoenix, Arizona, is in default due to the non-payment of rent.

'This letter constitutes the notice provided for in Paragraph 6, page 9 of the said Lease Agreement. Ten days hereafter Paragraph 6, page 9 of the Lease Agreement reads:

action will be taken to enforce the rights of the Lessor.'

'6. That, upon the nonpayment of the whole or any portion of the rents hereby reserved or any other sum or sums of money due to Lessor under the provisions hereof or upon the nonperformance by Lessee of any other covenant or condition herein contained on the part of said Lessee to be kept and performed, within ten (10) days after notice in writing from Lessor of such default, then and in any of such events, said Lessor may, at its election, either distrain for said rent or other sums due or to become due hereunder or declare this lease at an end and recover possession of the demised premises as if the same were held by forcible detainer or pursue any other remedy available to it in law or in equity.'

The October 1 rent payment was made within the limits of the 10-day notice on October 18.

This brings us to the crux of the case, the November 1 payment. The 'notice' of November 3, for the November 1 rent payment, was not paid until November 18, or five days late and $460 short, or by check in the sum of $1340. The check in evidence shows that lessees deducted...