Scott v. Mullins

• Decision Date: 18 December 1962
• Citation: 27 Cal.Rptr. 269,211 Cal.App.2d 51
• Court: California Court of Appeals Court of Appeals
• Parties: Ivan SCOTT and Louis Freeland, Plaintiffs and Respondents, v. Clarence R. MULLINS, Defendant and Appellant. Civ. 26434.

Page 269

27 Cal.Rptr. 269

211 Cal.App.2d 51

Ivan SCOTT and Louis Freeland, Plaintiffs and Respondents, v. Clarence R. MULLINS, Defendant and Appellant.

Civ. 26434.

District Court of Appeal, Second District, Division 4, California.

Dec. 18, 1962.

James A. Miller, Los Angeles, for defendant and appellant.

No appearance for plaintiff and respondents.

BURKE, Presiding Justice.

This is an action for declaratory relief. Plaintiffs, assignees of a subleesee, seek to establish their right to recover prepaid rent against the sublessor and the sublessor's assignee. The matter was tried by the judge alone upon a stipulation of facts and documentary exhibits. Judgment was in favor of plaintiff against defendant sublessor but in favor of the sublessor's assignees.

The court found the facts to be substantially as follows: In June 1951 defendant Mullins, as lessee of certain real property, executed a sublease thereon to Phillip Kay and Robert Mason. Kay and Mason built a restaurant on the property. In December 1953 Mullins conveyed the master lease and assigned his interest in the sublease to defendants David and Peal Rosen. The Rosens and the owner thereafter mutually rescinded the original master lease and entered into a new master lease covering more property and extending the original term. The new lease was executed in September 1956, but the original sublease remained in force. (Bailey v. Richardson, 66 Cal. 416, 421-422, 5 P. 910 [Lessee may not, by surrendering his estate to the landlord, destroy the rights of a sublessee under a sublease].)

Kay and Mason continued in possession of the property held under the sublease until April 12, 1957, at which time plaintiffs entered and took possession pursuant to a contract with Kay and Mason for sale of the restaurant and assignment of the sublease. Part of the consideration paid by plaintiffs for assignment of the sublease was $2,200 which represented advance rental paid under the original sublease by Mason and Kay to Mullins. The advance rental was for the period between August 1, 1960, and June 30, 1961. The agreement of sale from Mason and Kay to plaintiffs was dated April 26, 1957. It expressly preserved the advance rental payment and related covenants in favor of plaintiffs as assignees.

The court further found that on or about April 22, 1957, the owners of the property served a three-day notice to pay rent or quit on the Rosens as lessees under the master lease. Thereafter, an unlawful detainer action was brought against the Rosens and a keeper was placed on the property. The Rosens vacated the premises and plaintiffs were advised by mail to pay rent directly to the owner.

On or about May 17, 1957, the owner entered into a new master lease, covering the property embraced in the Rosen master lease, with Charles J. and Julie T. Kalish. The Kalishes notified plaintiffs of the new master lease and demanded execution of a new sublease. Plaintiffs, in December 1957 entered into a new sublease with the Kalishes which called for a higher rental. The Kalishes refused to give credit for the $2,200 rent prepaid by Mason and Kay to Mullins under the original sublease which expressly accrued to plaintiffs under their assignment from Mason and Kay.

Shortly after execution of the new sublease with the Kalishes plaintiffs brought this action asking the court to declare their rights under the original sublease as respects the $2,200 advance rental. The original sublease provided: 'If this lease be terminated prior to the expiration of the full term thereof as herein specified without fault on the part of lessee, and if lessee be not then in default hereunder, then, upon surrender by lessee of the demised premises lessor will pay to lessee, in case of such termination and surrender prior to July 1, 1960, the sum of Twenty-Two-Hundred Dollars ($2,200.00), or, in case of such termination and surrender on or subsequent to July 1, 1960, an amount equivalent to the rental hereunder for the unexpired portion of the term hereof at the date of such termination and surrender, calculated at a daily rate based on the regular monthly rate.'

The trial court found that the several transactions concerning the master leases set out above did not work a forfeiture or termination of the sublease and that plaintiffs voluntarily elected to terminate said sublease and enter into a new sublease with the Kalishes. However, the court further found that under the above-quoted provision of the first sublease plaintiffs were entitled to recover the advance rental payment from defendant Mullins, the original sublessor, but not against the Rosens as assignees of the sublessor's interest. The court's distinction between Mullins and the Rosens was based on evidence indicating that the prepaid rental was not transferred to the Rosens at the time the original master lease and sublease were assigned to them by Mullins.

On this appeal only Mullins has filed a brief. He asserts several bases upon which the judgment against him should be reversed or, in the alternative, should be reversed as to the Rosens. After reviewing the stipulated facts and documentary evidence, we have concluded that the judgment must be sustained.

Where rent is paid in advance a lawful surrender or termination of the leasehold estate does not entitle the lessee to a rebate. But this well-settled rule is qualified to permit recovery of advance rental where such recovery is expressly provided for in the lease. (Friedman v. Isenbruck, 111 Cal.App.2d 326, 335, 244 P.2d 718; Hindin v. Caine, 104 Cal.App.2d 238, 231 P.2d 83.) Therefore, under the provision of the original sublease in issue here, which is set out above, if the termination is without fault of the sublessee he is entitled to recover prepaid rent 'upon surrender * * * of the demised premises.'

The trial court's conclusion that forfeiture of the Rosens' head lease for failure to pay rent did not work a termination of the sublease is contrary to the rule established in this state. The general rule is stated in 32 Am.Jur. 344, quoted in Herman v. Campbell, 86 Cal.App.2d 762, 765-766, 195 P.2d 801, 803, as follows: "The right of the sublessee to the possession of the premises as against the original lessor terminates with the lease or term of the original lessee, and since a subtenant holds the premises subject to the performance of the terms and conditions impressed upon the estate by the provisions of the original lease, his rights are generally held to be terminated when the original lessor declares a forfeiture of the original lessee's term based upon the latter's nonperformance of obligations...