STOCKBURGER v. DOLAN

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

STOCKBURGER v. DOLAN et al.*

DOLAN et al. v. STOCKBURGER et al.

Civ. 12061, 12060

Decided: February 17, 1939

Edward C. Purpus, of Los Angeles, for appellants. A.L. Abrahams, of Los Angeles, for respondent.

After trial before the court without a jury in two actions, consolidated for trial by stipulation, judgments were entered in favor of respondent.

The essential facts are:

June 1, 1936, an oil and gas lease was entered into between appellants and respondent by the terms of which appellants leased certain property to respondent for the sole purpose of using the same to drill for, produce, extract, take and remove oil, gas, asphalt, and other hydrocarbonates, and to erect and maintain tanks, machinery, buildings and other structures upon the demised property for the lessee's use in carrying on the business of drilling for oil, etc. The leased land, situated in the city of Los Angeles, was located in an area which under ordinance No. 77,000 of that city could be used for no other purpose than single family dwellings. The lease contained, among others, these provisions:

“5. Commencing with the fourth month of the term hereof, if the Lessee has not theretofore commenced drilling operations on said land or terminated this lease as herein provided, the Lessee shall pay or tender to the Lessor monthly in advance, as rental, the sum of One Thousand Dollars until drilling operations are commenced or this lease terminated as herein provided.”

“13. The obligations of the Lessee hereunder shall be suspended while the Lessee is prevented from complying therewith, in whole or in part, by strikes, lockouts, action of the elements, accidents, rules and regulations of any Federal, State, Municipal or other governmental agency, or other matters or conditions beyond the control of the Lessee, whether similar to the matters or conditions herein specifically enumerated or not.”

At the time the lease was executed and as consideration therefor respondent paid to appellants the sum of $5,000. Subsequently respondent sought to obtain a permit from the city planning commission for permission to drill an oil well on the leased property. This permission was denied, and on September 3, 1936, respondent wrote appellant Francis H. Dolan a letter reading as follows:

“Dear Mr. Dolan:

“On July 24, 1936, I made application to the City Planning Commission for a permit to drill an oil well on the property I leased from you in Tract 6735. Enclosed is a copy of their letter to me dated August 21st, in which they disapproved my request. You are, of course, at liberty to check the proceedings with the Planning Commission.

“Since I am prevented from going ahead with the drilling of a well by the City, which is a matter beyond my control, there is no rental due under my lease during the continuance of such prevention by the City. This condition is covered in paragraph 13 of our lease.”

July 16, 1937, respondent served a purported notice of rescission of the lease upon appellants.

September 8, 1937, appellants filed an action (superior court No. 419,992) against respondent seeking to recover a sum alleged to be due as rent pursuant to the terms of the lease above mentioned.

September 28, 1937, respondent filed an action (superior court No. 420,633) against appellants in the form of a common count for money had and received for the recovery of the sum of $5,000.

These are the sole questions necessary for us to determine:

First: May an appellant for the first time on appeal raise the objection that a cause of action which has been set forth in a complaint is barred for the reason that the plaintiff in such suit is defendant in another suit between the same parties, and that the cause of action in the second suit could have been pleaded as a counterclaim to the prior suit?

Second: Did the trial court commit prejudicial error in sustaining an objection to appellants' offer to prove a conversation between appellant Francis H. Dolan and respondent relative to clause 13 of the lease as set forth above, which conversation took place prior to the time the lease was signed by the parties?

Third: Does a lease of real property for purposes which are forbidden by a valid municipal ordinance create any legal obligation?

Fourth: Did respondent by his conduct ratify the lease?

Fifth: Was respondent by his conduct estopped from asserting the invalidity of the lease?

The first question must be answered in the negative. Pleadings are merely the machinery by which an issue or issues are brought to the attention of the trial court, and it is the established rule in this state that an objection thereto (except an objection that a complaint fails to state a cause of action or that the trial court is without jurisdiction) must be raised at the earliest opportunity and in the trial court if possible. It is likewise settled that a failure to comply with this rule constitutes a waiver of the objection, and this court will not entertain the same for the first time on appeal. In the present case appellants failed to call to the trial court's attention the fact that the subject-matter of the second suit might have been pleaded as a counterclaim to the action previously filed.

Therefore, applying the rules of law above stated we will not consider appellants' contention that respondent's cause of action as set forth in the suit (No. 420,633) filed by him was barred under the provisions of section 439 of the Code of Civil Procedure by respondent's failure to plead it as a counterclaim to the prior action (No. 419,992) filed against him by appellants.

The second question must also be answered in the negative. The law is established that parol evidence is inadmissible to alter or contradict the terms of a contract which has been reduced to writing, in the absence, as in the instant case, of (1) a mistake or imperfection in the writing put in issue by the pleadings, or (2) a showing that the validity of the agreement itself is the fact in dispute. Sec. 1856, Code Civ.Proc.; sec. 1625, Civ.Code; Blackledge v. McIntosh, 85 Cal.App. 475, 483, 259 P. 770; First Federal Trust Co. v. Stockfleth, 98 Cal.App. 21, 24, 276 P. 371.

The third question likewise must be answered in the negative. It is essential to the creation of any legal obligation by contract that the following elements exist: (1) Parties capable of contracting; (2) their consent; (3) a lawful object; and, (4) sufficient consideration. Sec. 1550, Civ.Code; Industrial D. & L. Co. v. Goldschmidt, 56 Cal.App. 507, 509, 206 P. 134.

It is also established that where a contract has for its purpose a single object, which object is unlawful, the entire contract is void. Sec. 1598, Civ.Code; 6 R.C.L. (1929) 694, sec. 100, 699, sec. 105. In California it is the law that if a lease is void the lessee is entitled to a return of the consideration which he has paid therefor. Texas Co. v. Bank of America, etc., Ass'n, 5 Cal.2d 35, 39, 53 P.2d 127.

Applying the foregoing rules to the facts of the instant case, it is conceded that at the time the lease was executed it was illegal to drill for oil upon the property which was the subject of the lease. Therefore, the third essential of a valid contract as set forth supra was absent, to-wit, a lawful object. Hence, no obligation upon the part of respondent, the lessee, to pay rent was created by the lease, and judgment was properly entered in favor of respondent upon the cause of action alleged in the first suit filed, No. 419,992.

Likewise, since the lease was void, respondent, the lessee, was entitled to a return of the consideration paid for its execution, and judgment was properly rendered in his favor in the suit which he filed, No. 420,633.

The fourth and fifth questions must be answered in the negative. The law is established in California that a contract, void, because it stipulates for doing what the law prohibits, is incapable of either (a) being ratified, or (b) creating the basis for an estoppel. Wood v. Imperial Irrigation District, 216 Cal. 748, 759, 17 P.2d 128; Silverthorne v. Percey, 120 Cal.App. 83, 87, 7 P.2d 746; Butterfield Construction Co. v. Federal L.V. Ins. Co., 5 Cal.App.2d 16, 20, 41 P.2d 958; 10 Cal.Jur. (1923) 623, sec. 11; 5 Cal.Jur.Ten Yr.Supp. (1936) 537, sec. 11. In the present case the alleged contract was void from its inception. Therefore, applying the rules just stated no act or failure to act upon the part of respondent could give it validity. It could not be ratified nor could respondent be estopped by his conduct from asserting its invalidity.

For the foregoing reasons the judgments are and each is affirmed.

McCOMB, Justice.

We concur: CRAIL, P.J.; WOOD, J.