Young Inv. Co. v. Reno Club, Inc.

• Decision Date: 27 June 1949
• Docket Number: 3543.
• Citation: 208 P.2d 297,66 Nev. 216
• Parties: YOUNG INV. CO. v. RENO CLUB, Inc.
• Court: Nevada Supreme Court

208 P.2d 297

66 Nev. 216

YOUNG INV. CO. v. RENO CLUB, Inc.

No. 3543.

Supreme Court of Nevada

June 27, 1949

Rehearing Denied July 18, 1949.

Appeal from District Court, Washoe County, Second Judicial District Frank McNamee, Judge.

Action by the Reno Club, Incorporated against the Young Investment Company to obtain specific performance of an option to execute a lease and possession of the premises involved wherein the defendant filed a cross-complaint and William Harrah was brought in as a party defendant. Judgment for the plaintiff and defendant Harrah appeals.

Judgment affirmed.

Harlan L. Heward, of Reno, for appellant, William Harrah.

Sidney W. Robinson and M. A. Diskin, both of Reno, for respondent.

EATHER Justice.

This action as originally filed in the lower court was one in which respondent, Reno Club, a corporation, was plaintiff and Young Investment Company, a corporation, was defendant. Plaintiff sought judgment requiring specific performance by defendant of an option to execute a lease and possession of the premises. One phase of this controversy was decided by this court in case of Reno Club, a corporation, v. Young Investment Company, 64 Nev. 312, 182 P.2d 1011, 173 A.L.R. 1145.

We held there that the amended complaint stated a cause of action, reversed the lower court in sustaining a demurrer to the amended complaint and directed the judgment of dismissal be set aside and defendant be given time to answer.

The record now before us shows that defendant Young Investment Company filed an answer in which it was admitted that the option agreement as alleged in amended complaint was executed. The answer further pleaded affirmative matters that will hereafter be discussed, including a cross complaint for reformation of the option agreement.

Following filing of the answer, respondent, based upon allegations therein contained, moved the lower court for an order bringing in William Harrah as party defendant. After argument the court, pursuant to sec. 8565, N.C.L.1929, ordered that William Harrah be brought in, and that a copy of the summons in the action be served upon him. Responsive to such order William Harrah filed a demurrer to amended complaint, which was overruled by the court, and thereafter filed an answer.

Upon trial of the issues the lower court entered judgment directing Young Investment Company to execute and deliver to respondent the lease agreement attached to respondent's amended complaint, for a term period from February 15, 1948 to October 26, 1948.

The court by its judgment and decree directed William Harrah to forthwith surrender possession of the premises to respondent and that Harrah's possession thereof was unlawful.

A motion for a new trial made by Harrah was denied.

This appeal presents for review the lower court's action in entering judgment against, and denial of Harrah's motion for a new trial. While the caption of the cause describes Young Investment Company as appellant, this is an error, as the only appellant is William Harrah.

During the oral argument before this court, it was suggested that the questions involved in this appeal have become moot.

Such conclusion is based upon the fact that Harrah surrendered possession of the litigated premises on October 26, 1948, and prior to that date Young Investment Company executed and delivered to respondent a lease covering the premises.

The judgment in this proceeding determined that Harrah was unlawfully in possession of the premises. Harrah contends that under the proof submitted, his possession was legal. If his possession were legal, his liability would be based on rental value; if unlawful his liability in addition to rental value would include such damages as could be shown to have accrued. New Mexico Motor Corp. v. Bliss, 27 N.M. 304, 201 P. 105.

The rule is well established that while a judgment if affirmed may not be enforced by reason of change of circumstances pending appeal, yet, the subject matter is not moot if the judgment, if left unreversed precludes the party against whom it stands as to a fact vital to his rights.

We conclude that the legal status of Harrah's possession remains a question for determination under the judgment.

In reviewing the judgment of the lower court in connection with Harrah's appeal, it must be kept in mind, that defendant Young Investment Company, has not appealed and apparently has complied with the judgment and executed a lease to respondent. We concern ourselves only with the several contentions presented by Harrah's appeal and so much of the record applicable thereto.

Appellant's assignment of error is directed to the action of the lower court and the order made September 24, 1947, by which Harrah was brought into the proceeding under section 8565, N.C.L. Supporting this assignment it is urged that the presence of William Harrah as a party was not necessary to the complete determination of the controversy between respondent and defendant Young Investment Company. This order of the lower court recites in part, viz.: 'It appearing to my satisfaction from the verified answer and cross complaint (Young Investment Company) on file herein, that a complete determination of this controversy cannot be had without the presence of William Harrah. It is therefore ordered that William Harrah be brought in as a defendant to this action.'

Did the allegations of this answer authorize the court under section 8565, N.C.L. to bring appellant into the proceeding? The answer of defendant Young Investment Company alleged that on May 11, 1942 respondent and defendant reached an agreement under the terms of which respondent surrendered its lease and defendant, with consent of respondent, leased the premises to William Harrah for at least one year, or until the peace treaties with Japan were executed, at a rental of $650 per month, $300 of which was payable to respondent and $350 payable to defendant. That respondent could resume possession after peace treaties were concluded but not before. That in the early part of May 1943, the Harrah lease, with consent of respondent, was extended to May 15, 1945, or until peace treaties were concluded. That Harrah on the date said answer was filed was in possession of the premises under terms of said lease and had complied with all the provisions thereof. That because of these facts defendant should not be compelled to specifically perform the option agreement, or to let respondent into possession of the premises. That when the lease of May, 1942, was executed, respondent represented to Harrah, that he, Harrah could have possession until peace treaties were concluded. That in reliance upon said representation Harrah made valuable improvements upon said premises, had acquired a large amount of goodwill, is now in possession and engaged in a profitable business therein. It was further alleged that the peace treaties had not been signed and Harrah had the continuing right to remain in possession.

The amended complaint not only requested specific performance of the option to lease, but also demanded possession of the premises. Defendant's answer not only alleged facts existing in favor of Harrah upon which it was urged that to grant specific performance would be inequitable but also showed possession in Harrah of the premises involved. These issues could not be completely determined in the absence of William Harrah.

Section 8565, N.C.L. reads as follows: 'The court may determine any controversy between parties before it, when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties, the court must then order them to be brought in, and thereupon the party directed by the court shall serve a copy of the summons in the action, and the order aforesaid in like manner of service of the original summons, upon each of the parties ordered to be brought in, who shall have ten days, or such time as the court may order, after service, in which to appear and plead; and in case such party fail to appear and plead within the time aforesaid, the court may cause his default to be entered, and proceed as in other cases of default, or may make such other order as the condition of the action and justice shall require. And when, in an action for the recovery of real or personal property, a person, not a party to the action, but having an interest in the subject thereof, makes application to the court to be made a party, it may order him to be brought in, by the proper amendment.'

In the case of Bliss v. Grayson, 24 Nev. 422, 451, 56 P 231, 239, the court states 'all persons materially interested,...