Exchange Securities Co. v. Rossini

186 P. 828 | Cal. Ct. App. | 1919

The material facts upon which the trial court rendered judgment for defendants, and from which plaintiff appeals, asserting that it is entitled to judgment upon the findings, are as follows: On the ninth day of May, 1913, Rosie J. Poggi made a written lease of certain real estate to defendants John Rossini and Henry Monighetti. The term of the lease was for a period of five years and the rental reserved therein was twelve thousand five hundred dollars, payable in equal semi-annual installments in advance. The lessees at the time caused a bond, for the faithful performance of their covenants contained in the lease, to be executed to the lessor by Joe Guidotti and Pietro Guidotti, who are joined with them as defendants herein. Among other covenants contained in the lease was one whereby the lessor agreed that if, during the term of the lease, she should receive a bona fide offer for the purchase of the property and desire to accept such offer and sell the property, such facts should be communicated to the lessees, who were, for a period of ten days from the service of such notice, given an option to purchase the leased property at the price and upon the terms contained in the offer so received by the lessor, which option to purchase by defendants, unless exercised within the time so specified, should terminate. The lease also contained provisions under which the purchaser, if other than the lessees, might terminate the lease upon notice as therein provided. On March 20, 1915, the lessor, without any notice to the lessees of her intention so to do and in violation of the covenant to give the lessees an opportunity to exercise their option to purchase the property, sold and conveyed the same to the Diamante Gardini Company, to which she assigned and transferred the lease, together with the bond given her for the faithful performance of the terms thereof; and on October 29, 1915, the Diamante Gardini Company conveyed the property to plaintiff herein, to which it likewise assigned the lease and bond aforesaid. On November 8, 1915, the lessees having paid all rent due to said date, abandoned the leased premises without plaintiff's consent, and thereafter refused to pay any rent for the balance of the term, which expired on May 8, 1918. Thereafter, plaintiff notified the lessees to resume possession of said premises and that, in case of their failure so to do within ten days, plaintiff would rent the property to other tenants upon the best terms obtainable for and on account of said lessees and look to them for the payment of the difference between the amount called for by the lease and that which they might be able to obtain from the new tenant, to which the lessees, through their attorney, answered, saying that their abandonment of the leased property was due to the violation of the lessor's covenant contained in the lease by failing to give them an opportunity to exercise the option for the purchase of the property, and that plaintiff was at liberty to take such steps in the premises with reference to letting the property to another tenant as it might be advised. Thereupon, on December 1, 1915, plaintiff leased the property for the balance of the term, at one thousand dollars per year, which, though less than that reserved in the lease, was at the time a fair and full rental for the property.

Upon these facts being made to appear, in an action to recover the amount called for by the lease, with interest on the installments of rent as they became due, less the sum of one thousand dollars per year, for which the premises were re-rented, the court, as a conclusion of law, found that plaintiff was entitled to take nothing and that defendants were entitled to their costs.

Whether or not the covenant in question so made by the lessor warranted the lessees in terminating the lease and refusing to pay the rent is the sole point in controversy between the parties. [1] As to the landlord, the general rule is that, in the absence of statutory provision, the breach of an independent covenant made by the tenant will not justify the eviction of the latter unless the lease contains a stipulation to that effect. "The mere breach of a covenant by the tenant can give the landlord no right of re-entry unless there be a stipulation in the lease that such breach of covenant shall work a forfeiture or determination of the tenant's interest. No ejectment can be maintained by the landlord for mere breach of covenant not coupled with a proviso that the term shall end. His only remedy would be an action for breach of covenant." (Jones on Landlord and Tenant, sec. 487.) In support of this proposition, the author cites a number of cases. [2] And where there is no statutory regulation of the subject, it is equally true, upon like principle, that in the absence of stipulation to such effect, the breach of a like covenant on the part of the landlord will not warrant the tenant in terminating the lease and refusing to pay the rent called for thereby. Thus it has been held that, in the absence of such stipulation giving the tenant the right to terminate the lease, the failure of the landlord to comply with his covenant to make improvements upon the demised premises will not justify the tenant in abandoning the premises and refusing to pay the rent. (Partridge v.Dykins, 28 Okl. 54, [34 L. R. A. (N. S.) 984, 113 P. 928];Huber v. Ryan, 26 Misc. Rep. 428, [56 N.Y. Supp. 135]; 18 Am. Eng. Ency. of Law, p. 230.) In the absence of a stipulation therefor, which must be construed strictly against the party for whose benefit it is created (Civ. Code, sec. 1442; Randol v. Scott, 110 Cal. 590, [42 P. 976]), neither party can claim forfeiture. As to the landlord, the covenant must be coupled with a proviso that the breach thereof shall entitle him to a re-entry of the premises, and shall, as to the tenant, to entitle him at his option to terminate the lease, be coupled with a like proviso. Otherwise, and in the absence of such stipulation, the remedy in either case is an action for breach of the covenant. Conditions arising upon a breach of covenant are the subject of contract and, if desired, the party interested should insist upon their insertion in the lease. In the instant case, the lease expressly provides that upon breach of any of the covenants therein contained on the part of the lessees, the lessor shall, at his option, re-enter upon the demised premises and terminate the lease. No such provision, however, is contained in the lease giving the tenants a like right. Hence, in the absence thereof, the lessees' remedy for breach of the covenant in question is an action thereon.

[3] Our conclusion is that the covenant in question on the part of the lessor was in its nature independent and not a condition precedent to the payment of the rent by the lessees; and since the lease contains no stipulation that upon a breach thereof the tenants may at their option abandon the premises and terminate the lease, they are not absolved from the obligation to pay the rent reserved therein.

The judgment is reversed and the lower court instructed to render judgment on the findings for plaintiff for the rent reserved in and payable under the terms of the lease, together with interest upon each installment thereof from the time when it became due and payable, less the amount of one thousand dollars per year and interest thereon from the time when under the terms of the contract of re-rental the same became due and payable. Such judgment, however, as to defendants Joe Guidotti and Pietro Guidotti to be limited to the penal sum specified in their bond for the faithful performance by the lessees of the covenants contained in the lease.

Conrey, P. J., and James, J., concurred.