Walker v. Phillips

• Decision Date: 25 June 1962
• Docket Number: B-Q
• Citation: 205 Cal.App.2d 26,22 Cal.Rptr. 727
• Court: California Court of Appeals Court of Appeals
• Parties: Lee WALKER, an Individual doing business as Walker's Music Co., Plaintiff and Appellant, v. Melvin W. PHILLIPS, Elizabeth Phillips, Clyde A. Phillips, Carmella Phillips, Phil's Tap Room, Bar-ue Cafe, Defendants and Respondents. Civ. 25559.

Page 727

22 Cal.Rptr. 727

205 Cal.App.2d 26

Lee WALKER, an Individual doing business as Walker's Music Co., Plaintiff and Appellant, v. Melvin W. PHILLIPS, Elizabeth Phillips, Clyde A. Phillips, Carmella Phillips, Phil's Tap Room, Bar-B-Que Cafe, Defendants and Respondents.

Civ. 25559.

District Court of Appeal, Second District, Division 2, California.

June 25, 1962.

Gordon & Weinberg, Los Angeles, George P. Coulter, Pasadena, for appellant,

Paris & Paris, Bette S. Paris, Beverly Hills, for respondents.

HERNDON, Justice.

Plaintiff appeals from an order entered on March 2, 1961, granting defendants' motion to dissolve a writ of attachment.

Plaintiff was engaged in the business of leasing coin-operated music, amusement and cigarette machines to the owners and operators of restaurants and taverns upon a percentage and commission basis. Plaintiff alleges that defendants Melvin W. Phillips, Elizabeth Phillips, Clyde A. Phillips and Carmella Phillips were 'the agents and associates of one another, and they in concert maintained and operated a business under the fictitious name and style of Phil's Tap Room, sometimes also known as Bar-B-Que Cafe, at 4950 Main Street, Baldwin Park, California.'

On July 17, 1958, plaintiff, as lessor, and defendants Melvin and Elizabeth Phillips, as lessees, entered into a lease by the terms of which lessor loaned to lessees the sum of $700.00 and leased to lessees certain described property to be installed in lessees' described premises. The lease begins with a recital that in consideration of said loan 'and in consideration of the rental of the equipment hereinafter referred to, the parties agree as follows: * * *' (Emphasis added.) The term of the lease is four years, ending on July 17, 1962.

Paragraph eleven of the lease provides that 'the rental' shall be computed on 'the gross income of the equipment', to be divided in the following manner: (1) the gross income from the amusement machines is to be divided equally between the parties; (2) as to the cigarette machines, lessees shall retain out of the gross receipts a commission of 2cents per package sold, the remainder of the gross income to go to lessor as rental; and (3) as to the gross receipts from the phonograph equipment, a minimum weekly rental of $15 per week shall be paid to lessor, the second $15 to lessees, and any excess over $30 per week to be divided equally between the parties.

Other provisions include the following: '6. In the event that the business operated at the above address is sold, transferred, assigned or discontinued for any reason, Lessee agrees at once to reimburse Lessor in the full amount of the then balance of the above loan. Lessor's right to reimbursement is in addition to its right to fulfillment of this agreement as otherwise stated. 9. This agreement shall be binding upon and transferable to the parties' respective heirs, successors and assigns. 10. In the event legal action shall be instituted by the Lessor to enforce the terms and conditions contained herein, then and in that event Lessee or his successors in interest agree to pay reasonable attorney's fees.'

A true copy of the lease is annexed as an exhibit to plaintiff's amended complaint and by reference is incorporated therein. Said complaint alleges, in substance, that under the terms of the lease 'the said agreement would be binding upon the parties' respective heirs, successors, and assigns, and that the lessor's right to fulfillment of the agreement would not be terminated by sale, transfer, assignment or discontinuance of the aforesaid business' and that said defendants 'did further promise and agree that in the event of sale or transfer of the said business, the said defendants would secure the acceptance of the terms and conditions of the said agreement by their assignees or successors in interest.'

It is further alleged: (1) that at all times mentioned in the complaint the named defendants 'each had full power and authority to act on behalf of, and bind by his actions, each other said defendant, and the business, as to all acts mentioned in this pleading * * *'; (2) that 'on or about the 1st day of November, 1960, the said defendants entered into an agreement to transfer and convey the said business to the defendants, Clyde A. Phillips, and Carmella Phillips * * *'; (3) that 'at the time of said agreement of sale, the said Clyde A. Phillips and Carmella Phillips * * * were advised of the terms and conditions of the aforesaid agreement (Exhibit 'A') with plaintiff, and that the said agreement was assigned to them'; (4) that 'plaintiff expended the approximate sum of $2,100.00 for coin equipment and licenses and taxes for said equipment, in preparing to render performance under said agreement, and the salvage value of said equipment is approximately $1000.00.'

Plaintiff alleges that on January 1, 1961, defendants breached and repudiated the lease and demanded the removal of plaintiff's coin-operated equipment from defendants' premises. Prior to January 1, 1961, plaintiff had been realizing profits under the lease in the approximate amount of $182.50 per month. On the date when the agreement was repudiated, the lease still had approximately eighteen and one-half months remaining to be performed. Plaintiff alleges that by reason of the aforesaid breach of the contract, he has been damaged in the amount of $3500.00, which sum represents the reasonable expectation of the profits which plaintiff would have realized under the lease during the remainder of its term.

In moving that the attachment be dissolved, defendants contended that the action was not brought upon a contract for the direct payment of money as required by Code of Civil Procedure, section 537, and that the damages were unliquidated and too uncertain, unclear and difficult of computation to justify an attachment. Defendants' motion was granted and this appeal followed.

Respondents' brief submits, as the basic and decisive issue in this case, the question whether or not the contract herein sued upon is a contract for the direct payment of money as required by section 537 of the Code of Civil Procedure. We agree that this is the decisive issue, but we have concluded that appellant is correct in contending that said question must be answered in the affirmative, and that the court below erred in dissolving the attachment.

Bringas v. Sullivan, 126 Cal.App.2d 693, 273 P.2d 336, is a case involving a factual situation strikingly similar to that presented in the case at bar. In the cited case, the defendant was the owner and operator of a cafe. Plaintiffs were the owners of a coin-operated automatic phonograph machine. The parties entered into a written contract by the terms of which plaintiffs agreed to install and maintain the phonograph in defendant's cafe for a period of eight years, and defendant agreed to pay plaintiffs 50% of all monies deposited in the machine.

After five months of operation, defendant breached the contract, disconnected plaintiffs' machine and moved it to a place on the premises where the patrons would no longer use it. Plaintiffs filed an action for damages alleging in substance: that from the time of the execution of the contract to the date of its breach, plaintiffs' share of the earnings of the phonograph machine averaged approximately $14.90 per week; that the machine would, during the period of the term of the contract, earn as plaintiffs' share approximately $14.90 per week; that the contract at the date of its breach had 393 weeks to run, and that the breach caused plaintiffs to be damaged in the sum of $5855.70. A copy of the contract was attached to the complaint and incorporated therein by reference.

Plaintiffs filed an affidavit in the usual form for the issuance of a writ of attachment. After the writ had been issued, defendant moved that it be discharged, contending that the damages were too uncertain, unclear and difficult of...