Warfield v. Richey

Decision Date12 January 1959
Citation334 P.2d 101,167 Cal.App.2d 93
PartiesPhillip R. WARFIELD et al., Plaintiffs and Respondents, v. Jack C. RICHEY et al., Defendants and Appellants. Jack C. RICHEY, Plaintiff and Appellant, v. Phillip R. WARFIELD et al., Defendants and Respondents. Civ. 5790.
CourtCalifornia Court of Appeals Court of Appeals

Walley & Davis, Los Angeles, for appellant.

Taylor F. Peterson, San Bernardino, for respondents.

SHEPARD, Justice.

On November 21, 1955, plaintiffs Phillip R. Warfield and his wife Nancy Jeanette Warfield (hereinafter called plaintiffs) and Jack C. Richey (hereinafter called defendant) entered into a lease agreement whereby defendant leased to plaintiffs a hotel and motel at Needles, California, for a term of five years from December 1, 1955, at a rental of 25% of the gross income. The lease contained a deposit requirement of $5,000 as lease security and $3,000 in escrow to be spent in improvements (in the case of neither deposit does the lease say where the deposit shall be made nor does it prescribe conditions of control). Lessor agrees to give lessees access to lessor's books for the preceding year to verify income and operating expenses. Lessor further agrees to make repairs to the marquee and outside of the building, to keep the roof and other parts of the building in good repair, and to cause inspection and put into good operating condition the air conditioning and heating units.

On July 5, 1956, plaintiffs brought an action (85923) alleging violation by defendant of the agreement and on information and belief that the alleged statement by defendant that there had been $25,000 gross income during the year preceding date of lease was false, and asked for cancellation and damages. After filing an answer and some intermediate proceedings defendant, on September 12, 1956, filed notice of motion for permission to file an amended answer and cross-complaint, and on September 14th plaintiffs filed notice of motion for permission to file an amended complaint. On September 24th, the trial court denied permission to file the amended complaint on the ground that it attempted to state a new cause of action, and granted defendant's motion to file an amended answer and cross-complaint. On the same day, plaintiffs caused said action 85923 to be dismissed, and on October 2, 1958, filed this action (86834) alleging false representations as an inducement to the making of the lease, refusal to permit inspection of books, refusal to make agreed repairs, the expenditure of $1,600 on improvements, notice of rescission, offer by plaintiffs to restore everything of value received, with a prayer for cancellation of the lease, return of $5,000 deposit, return of $1,600 expended on improvements, and $5,000 for services rendered in operating the hotel and motel.

On August 16, 1956, the defendant filed an action (86409) in unlawful detainer against these plaintiffs, alleging breach by nonpayment of rent and asking restoration of premises, etc.

After issue joined in both actions, causes were consolidated for trial, tried, and the court found generally in favor of plaintiffs on the allegations of false representation and of promises made without intent to perform; that defendant failed and refused to give plaintiffs access to defendant's books for verification of income during the year preceding the agreement; that defendant failed to repair the marquee and other damaged portions on the outside of the hotel or its roof, and other parts of the hotel; that defendant failed to keep the property in good repair; that defendant failed to have the air conditioning and heating units put in good operating order; that the deposits of $5,000 and $3,000 required to be made by plaintiffs were made; that $1,600 was expended by plaintiffs on improvements; that notice of rescission was duly given; that the reasonable value of the use and occupation of the premises during the period occupied by plaintiffs under the circumstances of the occupation was $3,884.56; that the equitable time proportionate refund value of the $1,600 expended by plaintiffs for improvements is $1,217.88; that the $5,000 deposit plus the refund of $1,217.88 totals $6,217.88, and decreed this to be owed from defendant to plaintiffs; that the amount owed from plaintiffs to defendant is the reasonable value of the use and occupation of the premises or $3,884.56, making a balance of $2,333.32 adjudged to be paid by defendant to plaintiffs; that the lease be cancelled and rescinded: and that defendant's action in unlawful detainer was unjustified.

This court has reviewed the entire testimony and the exhibits presented in the cause. There is considerable conflict in the testimony, but on appeal this court is required to resolve all such conflicts in favor of the judgment and to view the evidence in the light most favorable thereto. Donato v. Lopopolo, 20 Cal.App.2d 409, 66 P.2d 1256; Jones v. Lewis, 35 Cal.App.2d 398, 95 P.2d 698; Gould v. Escondido Valley Poultry Ass'n, 56 Cal.App.2d 681, 682, 133 P.2d 448.

Viewing the evidence in this light, the record contains testimony of the bad condition of various and sundry parts of the buildings at the time the lease was entered into, which explains the reason for the special provision for repairs to be made by the lessor. There is also evidence of repeated requests from the lessee for performance in this respect for several months after the commencement of the lease down to March, 1956, and perhaps later into the warm months, and also there is evidence of defendant's failure to make such repairs and of his refusal to allow plaintiffs to inspect the books covering the year preceding the commencement of the lease for verification of income and expenses.

The evidence also shows that the $5,000-deposit for lease rental security was made with defendant, and that the $3,000-deposit for use in making improvements was made at a bank in Needles. This 'improvement' deposit was apparently in the name of plaintiffs and segregated from other deposits. A review of the whole record indicates that said $3,000-deposit was used from time to time for the making of improvements; that defendant was consulted each time the improvements were made, was aware of the circumstances of the deposits, and made no objection whatever either to the method of deposit or to the course and manner of expenditure. In view of the fact that the lease makes no provision as to where the deposit shall be made and does not purport to set up any system of controls or manner of expenditure, it is apparent that the deposit and its expenditure was in accordance with defendant's understanding of the meaning of the contract and was in substantial compliance therewith.

The evidence shows further that the plaintiffs faithfully managed and cared for the premises, and faithfully paid the rent until it became evident that defendant was not performing his obligations and that there was a serious question as to...

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14 cases
  • City of Salinas v. Souza & McCue Const. Co.
    • United States
    • California Supreme Court
    • March 21, 1967
    ...to include in the agreement. (See Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal. 474, 482, 19 P.2d 785; Warfield v. Richey (1959) 167 Cal.App.2d 93, 98, 334 P.2d 101.) The modification agreement also provided that 'the contractor expressly agrees that it has now fully, thoroughly, and......
  • Leaf v. Phil Rauch, Inc.
    • United States
    • California Court of Appeals Court of Appeals
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    ...§ 1692; Modoc Mineral & Oil Co. v. Cal-Vada Drilling etc. Co., 236 Cal.App.2d 868, 873, 46 Cal.Rptr. 508 (1965); Warfield v. Richey, 167 Cal.App.2d 93, 100, 334 P.2d 101 (1959).) Since it is the act of rescission which fixes his right to recover consequential damages, interest on such damag......
  • Cornell v. Wunschel, 86-518
    • United States
    • Iowa Supreme Court
    • June 17, 1987
    ...in which the sale was induced by fraud. See Rice v. Hilty, 38 Colo.App. at 340, 559 P.2d at 727; see also Warfield v. Richey, 167 Cal.App.2d 93, 99-100, 334 P.2d 101, 102-03 (1959) (entitled to return of deposit and amount of improvements less value of use and occupancy of premises when fra......
  • Site Mgmt. Servs., Inc. v. Cingular Wireless LLC
    • United States
    • California Court of Appeals Court of Appeals
    • March 13, 2014
    ...would entitle the injured party to rescind. The actual knowledge standard for waiver and ratification is illustrated by Warfield v. Richey (1959) 167 Cal.App.2d 93, in which plaintiffs leased a hotel and motel from defendant, allegedly based on defendant's representation regarding the prior......
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