Williams v. Puccinelli

• Decision Date: 16 August 1965
• Citation: 46 Cal.Rptr. 285,236 Cal.App.2d 512
• Court: California Court of Appeals Court of Appeals
• Parties: Alice WILLIAMS, Plaintiff, Cross-Defendant and Respondent, v. Cecilia PUCCINELLI, Defendant, Cross-Complainant and Appellant. Civ. 22121.

Page 285

46 Cal.Rptr. 285

236 Cal.App.2d 512

Alice WILLIAMS, Plaintiff, Cross-Defendant and Respondent, v. Cecilia PUCCINELLI, Defendant, Cross-Complainant and Appellant.

Civ. 22121.

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

Aug. 16, 1965.

Rehearing Denied Sept. 16, 1965.

Severson, Zang, Werson, Berke & Larson, Edmund T. King, II, San Francisco, for appellant.

Shapro, Anixter & Aronson, Burlingame, for respondent.

AGEE, Justice.

Defendant-owner appeals from ajudgment rescinding the lease to plaintiff of a portion of a two-story building located on the northeast corner of Montgomery Street and Pacific Avenue, San Francisco. The term of the lease was for ten years, commencing December 1, 1960.

The leased portion of the building included the entire second floor and two spaces on the first floor. The remaining three first floor spaces were occupied by the Barbary Restaurant and two other businesses.

The parties mutually contemplated that respondent would install and operate a restaurant and bar on the second floor and the lease expressly provided for such purpose. The second floor had not been occupied for 14 years and was last used as a rooming house.

Unknown to both parties, substantial alterations in the building, including portions not leased by respondent, were required by law in order to allow the second floor to be used for a restaurant and bar. The principal defect was that the second floor would not support the weight or 'live load' ¹ requirements of the Building Code of the City and County of San Francisco as to restaurants. The law also required that a fire resistant material or partition be installed on the ceiling of the first floor, except that portion occupied by the Barbary Restaurant, where such work had already been done.

The structural weaknesses in the building itself, that is, in the exterior walls, roof and in the columns and beams supporting the second floor, were not discovered by respondent until after the lease had been signed and plans and specifications were being prepared for the construction and installation of the restaurant and bar.

When advised on January 27, 1961 of the work necessary to be done in order to comply with the law, respondent immediately notified appellant and requested that the necessary steps be taken to put the premises in such condition. Appellant refused to do anything, taking the position that the responsibility for any alterations or improvements was solely that of the respondent.

On February 10, 1961 respondent sent to appellant a further request that the necessary structural corrections be made to the building 'outside of the space' leased to respondent.

This request reads as follows: 'My plans and specifications are nearly complete for commencing work in the space leased in your building at the northeast corner of Montgomery Street and Pacific Avenue.

'Before I can start, however, the building structure must be repaired to conform to the San Francisco Building Code and fire and safety regulations.

'According to our lease it is your responsibility as lessor to make repairs to the outside building walls and roof, as well as to correct structural defects outside of the space leased by me. These defects were partially outlined in the report submitted to you on January 27, 1961.

'Please advise me by mail, at your earliest convenience, as to whether or not you intend to comply with all of the City and State Codes and Ordinances to make the structure surrounding the space leased to me suitable for my occupancy.' (Emphasis added.)

Again, appellant refused to do anything. On March 7, 1961 respondent's attorneys gave appellant written notice of rescission and demanded that appellant return the money which respondent had paid under the laese.

On March 20, 1961 appellant's attorneys replied that 'the rescission set forth in your letter of March 7, 1961 is rejected. Your attention is invited to Paragraph 22nd of the lease under which the lessee leased the premises 'as is.' It is the position of the lessor that she is under no duty, liability or obligation to perform any work which may be required to fit the demised premises for use as a restaurant * * *.' Appellant also relies upon paragraph Sixth of the lease. The pertinent parts of these two paragraphs follow.

'SIXTH: That the lessee will, at his sole cost and expense, comply with all of the requirements of all Municipal, State and Federal authorities now in force, or which may hereafter be in force, pertaining to the said premises, occasioned by or affecting the use to which said premises have been, are being, or are to be put by the lessee, and will faithfully observe in the use of the premises all Municipal ordinances and State and Federal statutes now in force or which may hereafter be in force.' (Emphasis ours.)

'TWENTY-SECOND: The parties agree that the lessee leases the premises in an 'as is' condition and the lessee may at its own expense, make exterior and interior alterations, repairs and improvements to the demised premises, including windows and doors and including but not limited to the installation of trade fixtures, ceilings, lighting fixtures, removable partitions and interior decorations.' (Emphasis ours.)

It is clear that both paragraphs apply only to the demised premises, which are described in the lease as follows: 'All of the space on the entire second floor, known and designated as 910 Montgomery Street; all of the space in the corner store, known and designated as 498 Pacific Avenue; and all of the space in the store next to the corner, known and designated as 496 Pacific Avenue; same being part of that certain two story brick building situate on the northeast corner of Pacific Avenue and Montgomery Street.' (Emphasis ours.)

It is equally clear that the essence of the trial court's holding herein is that, unknown to the parties at the time of entering into the lease, a restaurant and bar could not be lawfully constructed and installed upon the demised premises without substantial structural improvements and repairs to that part of the premises not demised and which was not within the control of respondent under the lease.

The trial court expressly found that 'there was a material, mutual mistake of fact in that the parties to said lease believed said demised premises, on the second floor of said building, could be used as a restaurant and bar without any structural changes in the brick building; and that it was not within the contemplation of the parties at the time the lease was executed, [that] the very costly structure changes to the building itself would have to be made before said second floor could be used lawfully as a restaurant.' (Italics ours.)

The foregoing finding is based upon substantial evidence and supports the trial court's conclusion that there was a mutual mistake as to a basic fact which induced respondent to enter into the lease. (Civ.Code § 1577; Rest., Contracts § 502; 1 Witkin, Summary of California Law, p. 135, § 127, 'Mutual Mistake as to Basic Fact.') As stated by Witkin, supra, at page 135: 'If there is mutual assent as to the subject matter and parties to the agreement, a contract results; but it may be voidable and subject to rescission where there is a harmful mistake as to some basic or material fact which induced the plaintiff to enter into it. [Citations.] * * * It must affect in some material way one of the essential elements of the contract, * * * so that it clearly appears that the complaining party would not have entered into it except for his mistaken belief.'

The testimony is without conflict that both parties entered into the lease under the assumption that respondent could lawfully install and operate a restaurant and bar on the second floor without the necessity of any substantial structural alterations or repairs to the building itself, and that both parties were ignorant of the structural weaknesses of the building which would prevent such use unless such work was done.

Appellant makes no contention that the trial court did not make complete findings of fact or that such findings are not supported by substantial evidence. Appellant's contention is that, as a matter of law, there was no 'mutual mistake' under the facts as found which would support a rescission of the lease.

The basis of the trial court's holding is clearly stated in its written opinion and decision, which is a part of the record before us and which may be considered as an aid in interpreting the findings. (Trans-Oceanic Oil Corp. v. Santa Barbara, 85 Cal.App.2d 776, 790, 194 P.2d 148; 3 Witkin, Calif. Procedure, Appeal § 77, pp. 2236-2237.) It is clear that when the trial court refers to the substantial structural changes which had to be made in the building it is not referring to the space therein leased to respondent. Excerpts from said opinion and decision follow.

'The evidence in this case discloses that plaintiff leased from defendant, for a period of ten years, the second floor of an old brick building at Montgomery Street and Pacific Avenue, along with certain spaces in the building fronting on Pacific Avenue; that the said second floor, which was formerly used as a rooming house, was to be used by plaintiff, according to the lease, as a restaurant and bar; that there were other tenants in the building who occupied space on the Pacific Avenue frontage under the second floor; that the premises (second floor) were leased in an 'as is' condition; that before the demised premises (second floor) could be lawfully changed over from a rooming...