Union Oil Co. v. Chandler

• Decision Date: 24 February 1970
• Citation: 4 Cal.App.3d 716,84 Cal.Rptr. 756
• Court: California Court of Appeals Court of Appeals
• Parties: , 1970 Trade Cases P 73,098 UNION OIL COMPANY of California, Plaintiff and Respondent, v. Joseph CHANDLER, Defendant and Appellant. Civ. 26025.

Page 756

84 Cal.Rptr. 756

4 Cal.App.3d 716, 1970 Trade Cases P 73,098

UNION OIL COMPANY of California, Plaintiff and Respondent, v. Joseph CHANDLER, Defendant and Appellant.

Civ. 26025.

Court of Appeal, First District, Division 1, California.

Feb. 24, 1970.

Rehearing Denied March 17, 1970.

Hearing Denied April 22, 1970.

Maxwell Keith, San Francisco, for defendant and appellant.

Brobeck, Phleger & Harrison, San Francisco, for plaintiff and respondent.

MOLINARI, Presiding Justice.

Defendant Joseph Chandler appeals from a judgment in an unlawful detainer action restoring plaintiff Union Oil Company of California (hereinafter referred to as 'Union') to possession of certain property and awarding damages in favor of Union against Chandler. We find each of the several assignments of error made by Chandler to be without merit. Accordingly, we affirm the judgment.

Factual and Procedural Background

On November 18, 1966, Union leased a service station in Fremont, California, to Chandler pursuant to a written lease for a period of three years commencing on November 18, 1966 and ending on the 17th day of November, 1969. This lease contained three clauses which are pertinent to this appeal. Clause 2 provided that the term of the lease was three years 'subject, however, (a) to sooner termination by Lessee at any time on not less than ninety (90) days' written notice to Union and (b) to sooner termination in accordance with any other provision of this Lease relating to or providing for sooner termination.' Clause 9 permitted Union to terminate the lease at any time upon certain specified defaults on the part of Chandler. Clause 10 provided that Union could terminate the lease at any time during the first 12-month period by giving Chandler 30 days' prior written notice of such termination.

On September 18, 1967, Union gave Chandler notice that it was terminating the lease pursuant to clause 10. Chandler did not vacate and the instant unlawful detainer action was commenced. Chandler's answer consisted of a general denial and the assertion of three separate affirmative defenses. The first affirmative defense alleged that no good cause existed for the termination of the lease, that Union acted in bad faith, and that Union had unclean hands. The second affirmative defense alleged that Union was in violation of federal antitrust laws. The third affirmative defense alleged that Union's action was violative of the California antitrust laws.

The pretrial conference order designates the instant action as one for unlawful detainer and delineates the issues as follows: (1) Whether or not the plaintiff had the right to terminate the lease as of October 17, 1967; (2) the amount of damages, if any, for withholding possession; and (3) the amount of attorneys' fees due plaintiff, if any.

At the trial the court rejected offers of proof on the part of Chandler with respect to the second and third affirmative defenses. The trial court also ruled that the provisions of clause 10 were not ambiguous, but permitted extrinsic evidence on whether or not coercion or unfair dealing was indulged in by Union in the actual execution of the lease. The cause proceeded to trial before a jury, but it was stipulated that the issue of equitable estoppel was an equity question which was to be submitted to the court for its determination. The trial judge announced that he determined the issues of equitable estoppel in favor of Union. The court also announced that since the provisions of clause 10 were unambiguous the interpretation of that provision was a matter for the court. The trial court thereupon announced that under clause 10 Union was entitled to terminate the lease without a showing of good cause and that Union was entitled to possession of the premises. Counsel for the parties then stipulated as to the amount of the damages which had accrued, and Chandler stipulated that he would surrender possession of the premises on March 8, 1968, the following Friday. Pursuant to the stipulation the trial court made its order that Chandler vacate the premises on March 8, 1968. Counsel for Union was thereupon directed to prepare findings of fact and conclusions of law, and the form of judgment.

Other pertinent facts will be set out hereafter where germane to the discussion.

Contentions

Chandler makes five assertions of error. He asserts that the trial court erred (1) in determining that clause 10 of the lease required no showing of cause by Union prior to termination; (2) in excluding Chandler's offer of proof that Union's termination of the lease was in bad faith; (3) in refusing to entertain the issue of promissory fraud; (4) in refusing to submit the issue that the termination of the lease was in furtherance of a plan in violation of the antitrust laws of the United States and the State of California; and (5) in making certain findings of fact beyond the scope of the issues litigated.

Union makes the contention that since Chandler agreed to vacate the station voluntarily on March 8, 1968, a voluntary surrender was effected, thus making the issue of possession moot. We dispose of this contention here. The record discloses that, although formal judgment had not been entered, the trial court had announced that Union was entitled to a judgment for possession, and that the stipulation agreeing to surrender possession two days later was made in order to minimize damages. The record is clear that the stipulation was entered into under the compulsion of the trial court's announced decision which merely required the formalization incident to the preparation of findings of fact and conclusions of law, and the judgment. The record discloses, moreover, that the trial court granted a stay of execution pursuant to stipulation until March 8, 1968. We observe, moreover, that the judgment subsequently entered provides that Union was restored to possession and that Chandler was ordered to vacate no later than March 8, 1968. Under the circumstances, it is clear that Chandler was deprived of possession by the judgment of the court. Accordingly, Chandler did not waive his right to appeal on the issue of possession. (See Schubert v. Bates, 30 Cal.2d 785, 791--792, 185 P.2d 793.)

Nature of Unlawful Detainer Proceeding

Before entering upon a discussion of Chandler's contentions, it is appropriate to observe that an unlawful detainer action is a summary proceeding, the primary purpose of which is to obtain the possession of real property in the cases specified by statute. (Fontana Industries v. Western Grain Co., 167 Cal.App.2d 408, 411, 334 P.2d 611; Markham v. Fralick, 2 Cal.2d 221, 227, 39 P.2d 804; Arnold v. Krigbaum, 169 Cal. 143, 146, 146 P. 423; see Code Civ.Proc. § 1161.) Accordingly, a general rule has emerged that, since the sold issue before the court is the right to possession, neither a counterclaim nor a cross-complaint, nor affirmative defenses, are admissible in an action in unlawful detainer, even though the alleged cause contained therein grows out of the subject matter involved in the original suit. (Smith v. Whyers, 64 Cal.App. 193, 194, 221 P. 387; Arnold v. Krigbaum, supra, 169 Cal. at p. 145, 146 P. 423; Lakeside Park Assn. of Kelseyville v. Keithly, 43 Cal.App.2d 418, 422, 110 P.2d 1055; Knowles v. Robinson, 60 Cal.2d 620, 625, 36 Cal.Rptr. 33, 387 P.2d 833; Cheney v. Trauzettel, 9 Cal.2d 158, 159, 69 P.2d 832). The purpose of this rule is to prevent tenants who have violated the covenants of their leases from frustrating the ordinary and summary remedy provided by statute for the restitution of the premises. (Abstract Investment Co. v. Hutchinson, 204 Cal.App.2d 242, 248, 22 Cal.Rptr. 309; Lakeside Park Assn. v. Keithly, supra; Knowles v. Robinson, supra.) As observed in Lakeside Park, supra, and reiterated in Knowles, supra, 'The reason for this rule is that * * * the injecting of other issues extrinsic to the right of possession may defeat the very purpose of the statute.' (43 Cal.App.2d p. 422, 110 P.2d at p. 1058.) Accordingly, under this general rule a tenant is not permitted to interpose a defense usual or permissible in ordinary actions at law. (Arnold v. Krigbaum, supra, 169 Cal. at p. 146, 146 P. 423.)

The general rule, however, has two recognized exceptions. The first exception is where the tenant has voluntarily surrendered possession before the issues of fact are finally joined. (Servais v. Klein, 112 Cal.App. 26, 36, 296 P. 123; Heller v. Melliday, 60 Cal.App.2d 689, 697, 141 P.2d 447.) The basis for this exception is that since the right to possession is no longer in issue, the rationale underlying the general rule evaporates and the action thus becomes an ordinary one for damages. The second exception is that which permits the court to inquire into equitable considerations in an unlawful detainer suit. (See Schubert v. Lowe, 193 Cal. 291, 295--296, 223 P. 550; Johnson v. Chely, 43 Cal. 299, 305; Manning v. Franklin, 81 Cal. 205, 207--208, 22 P. 550; Pico v. Cuyas, 48 Cal. 639, 642; Gray v. Maier & Zobelein Brewery, 2 Cal.App. 653, 658, 84 P. 280; Knight v. Black, 19 Cal.App. 518, 525--527, 126 P. 512; Rishwain v. Smith, 77 Cal.App.2d 524, 531, 175 P.2d 555; Strom v. Union Oil Co., 88 Cal.App.2d 78, 83, 198 P.2d 347; Abstract Investment Co. v. Hutchinson, supra, 204 Cal.App.2d 242, 247--248, 22 Cal.Rptr. 309.) In Abstract Investment, supra, it was observed that 'An equitable defense is '(a) defense to an action on grounds which, prior to the passing of the Common Law Procedure Act (17 and 18 Vict. c. 125) would have been cognizable only in a court of equity.' (Citation.)' and that 'It has also been construed to mean a defense which a court of equity would recognize or one founded upon some distinct ground of equitable jurisdiction. (Citation.)' (P. 248, 22 Cal.Rptr. at 313.) In Schubert, supra, the Supreme Court cited, with approval, language in Gray, supra, that in an unlawful detainer action the equitable powers of the...