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BEWICK v. MECHAM.*
This is an action for specific performance. In 1929, J. J. Lopez leased certain real property in Bakersfield to one S. S. Lombard for a period of ten years, expiring on July 1, 1939. In September, 1930, with the written consent of the lessor all of the interest of Lombard was assigned to this plaintiff, who assumed and agreed to perform the terms of the lease. The plaintiff and his predecessor built a market and service station on the property which cost $13,500 and which the court found to be of the present value of $8,000. The plaintiff paid all rental and kept all covenants of the lease for the ten–year period.
The lease provided that within thirty days after its expiration the lessee might remove the improvements erected by him. The lease also contained a provision granting the lessee an option to purchase the property at the expiration of the ten–year term at a price and on terms then to be agreed on or, if not agreed on, to be fixed by arbitration, each party to select one arbitrator, these two to select a third, and the three arbitrators to fix the purchase price and the terms of sale, with the provision that at least one–half of the purchase price should be payable in cash and the balance secured by a trust deed, at not less than the legal rate of interest. It was further provided that the lessee must give written notice to the lessor of his desire to exercise this option not later than thirty days before the expiration of the term of the lease, and accompany such notice with a deposit of not less than $1,000 to be applied on the purchase price.
On May 12, 1939, the plaintiff attempted to exercise the option to purchase the property by sending Lopez a check for $1,000 with a letter informing him of his desire to purchase the property and asking him to meet with the plaintiff for the purpose of determining the purchase price, or that the same might be fixed by arbitration, as provided in the lease, if it could not be agreed upon. Lopez refused to sell the property and attempted to return the $1,000 to this plaintiff. When the plaintiff refused to accept the return of the money Lopez deposited it to the plaintiff's account in a bank. The plaintiff then deposited the money in Lopez' account in a bank, where it has since remained.
A purported arbitration proceeding was then gone through which resulted in a purported award fixing the price of the property at $7,800, one–half to be paid in cash and the balance in three years in certain installments with interest at 7%, the deferred payments to be secured by a deed of trust. This plaintiff filed in the superior court a petition for an order confirming this award. J. J. Lopez had died in the meantime and his executrix filed an answer and objections to the confirmation of the award and moved to vacate the same. After a hearing, the trial judge granted the motion and entered a judgment vacating and setting aside the award and denying the petition to confirm it. That judgment was affirmed on appeal by this court on the ground that the evidence sufficiently supported the court's implied finding that J. J. Lopez in his lifetime had not appointed one of the purported arbitrators. In re Bewick, 49 Cal.App.2d 287, 121 P.2d 815. In the decision in that case it was suggested that the affirmance of the judgment on the ground that there had been no arbitration might not preclude this plaintiff from finding a remedy under the provisions of section 1280 et seq. of the Code of Civil Procedure.
After the going down of the remittitur on that appeal and on May 18, 1942, this plaintiff served a notice upon this defendant informing her that he had appointed a certain person to act as arbitrator in this matter, demanding that she appoint an arbitrator, and further notifying her that unless she appointed such an arbitrator within ten days he would take such action as he might be advised to enforce the terms of the lease and the option to purchase. No arbitrator was appointed by the defendant during that time, or at all.
For reasons that do not appear the plaintiff took no further steps to secure an arbitration but filed this action seeking a specific performance of the option to purchase the property. The complaint alleged, in substance, the facts above set forth and further alleged that the plaintiff was ready, willing and able to purchase the property for such amount as the court might determine to be a reasonable purchase price therefor, and to pay the same upon such terms as the court might fix, that if he were denied the right to purchase the property at a price and on terms to be determined by the court he would suffer the loss of all monies invested in the improvements, and that he has no plain, speedy or adequate remedy at law. The prayer was that the court fix and determine the purchase price of the property, that if the defendant desired the payment of the purchase price to be deferred that the court fix and determine the terms of payment, and that upon payment of the purchase price as fixed by the court the defendant be required to execute and deliver a deed to the property, and for other and further equitable relief. At the trial, over the defendant's objections that the complaint did not state a cause of action and that the court did not have jurisdiction to give the relief asked for, evidence was received, among other things, as to the value of the property in question and as to the present value of the improvements placed thereon by the plaintiff. The court found in favor of the plaintiff finding, among other things, that the defendant had refused to appoint an arbitrator to fix the purchase price of the property or the terms of payment therefor; that the plaintiff was and had been since May 12, 1939, ready, able and willing to pay the purchase price as it might be fixed by arbitrators appointed pursuant to the agreement, on the terms fixed by them; that he was now ready, willing and able to pay the purchase price and on the terms as fixed by the court; that the plaintiff has no plain, speedy or adequate remedy at law; that the reasonable value of the property in question is $9,000; and that the defendant has in her possession $1,000 which had been tendered to J. J. Lopez. A judgment was entered ordering specific performance of the option agreement in the lease and ordering the defendant to execute and deliver a grant deed conveying the property to the plaintiff on the payment of $8,000. From this judgment the defendant has appealed.
It is first contended that the court was without jurisdiction to proceed in this equitable action because the matter was exclusively within the jurisdiction of the probate court by reason of the provisions of sections 850 to 853 of the Probate Code. Section 850, by its terms, is made applicable where a person who is bound by contract to convey property dies before making the conveyance and where he might, if living, have been compelled to make the transfer. This seems to imply a definite contract which is in a position to be specifically performed and where nothing remains to be done to make the conveyance enforceable. It hardly seems appropriate where under the contract in question the price has not been determined and something remains to be done before the conditions of the transfer can be fixed. In Estate of Garnier, 147 Cal. 457, 82 P. 68, 69, the court referred to this statutory provision as a wise one “where the right of petitioner in the premises is free from doubt.” If we assume that the remedy thus provided by the Probate Code was available under the circumstances here existing that remedy is not made exclusive by these statutes and it cannot be here held to be exclusive since another remedy is so clearly and definitely provided by the statutes for the regulation and enforcement of arbitration proceedings. Sec. 1280 et seq. of the Code of Civ.Proc.
A number of points are next presented, all going to the general proposition that the court exceeded its jurisdiction in fixing the price and terms for the sale of this real property and that the equitable remedy of specific performance was not available to the respondent under these circumstances, and particularly since he had not exhausted his legal remedy under the arbitration statutes. Sec. 1280 et seq., Code of Civ.Proc.
These statutes, since the extensive amendments and additions thereto in 1927, furnish a full and complete remedy for the enforcement of an agreement to arbitrate and for the refusal of one of the parties to appoint an arbitrator. They were in force some two years before the agreement here in question was executed and it must be considered that the parties entered into their contract with these statutes in mind and that they constitute a part of the agreement. Frey & Horgan Corp. v. Superior Court, 5 Cal.2d 401, 55 P.2d 203. Where parties agree that the value of property shall be fixed in a certain manner they are entitled to have it fixed in that manner. Rives–Strong Bldg. v. Bank of America, 50 Cal.App.2d 810, 123 P.2d 942. This should be true where, as here, a full and complete remedy is provided by statute for carrying out and enforcing that agreement.
In section 3390 of the Civil Code it is provided that an agreement to submit a controversy to an arbitration cannot be specifically enforced. In section 1282 of the Code of Civil Procedure, it is provided that in one stage of the procedure for enforcing an agreement to arbitrate either party has the right to demand a jury trial. In section 1284 of that Code it is provided that in any suit brought upon any issue arising out of an agreement providing for arbitration the court in which the suit is pending, upon being satisfied that the issue involved is referable to arbitration, shall stay the action until an arbitration has been had according to the terms of the agreement. Not only do these matters indicate a statutory intent that specific performance should not be resorted to in such a case as this but, under general principles, an equitable remedy is not available where there is a legal remedy, where the plaintiff has a plain, speedy and adequate remedy at law, and equity will not make a new or different contract where the parties have definitely agreed upon certain things. Moreover, in order to have specific performance there must be a definite contract and the only definite part of the contract here in question is the provision for arbitration which, in itself, cannot be enforced in an action for specific performance but for which a statutory remedy is directly provided.
The respondent relies on certain cases from other jurisdictions as supporting his contention that this equitable remedy was available to him. Without analyzing all of these cases it is sufficient to state that even those cases are based upon the general ground that no other remedy was available and that equitable cognizance was necessary in order to secure justice. For instance, in Gunton v. Carroll, 101 U.S. 426, 25 L.Ed. 985, it was pointed out that a contract might be specifically enforced where the price was to be fixed by arbitration, where the owner had died before appointing arbitrators, and where the valuation could not be made in the manner agreed upon. The respondent here has not brought himself within the principle of that case since under our statutes the valuation can be fixed in the manner agreed upon even though one of the parties died before arbitrators were appointed.
The respondent particularly relies on two decisions in this state. In Streicher v. Heimburge, 205 Cal. 675, 272 P. 290, which was an action in unlawful detainer, the court held that a tenant, having given timely notice of a desire to extend the period of a lease, was entitled to retain possession even though the lease provided that in such case the future rental was to be fixed by arbitration. Under such circumstances and for the purposes of that action it was held that the essence of the contract was the renewal of the lease and that the fixing of the future rental was merely incidental thereto. Not only was that not a case of specific performance but the court determined the right of possession only, and specifically did not pass upon the question as to whether a court of equity might fix the future rental. Not only is that case not applicable here, where we are concerned with specific performance, and where the right to purchase the property is so closely connected with the fixing of the purchase price, which has never been done, but that case was decided upon facts which arose before our arbitration statutes were amended in 1927 and at a time when no complete remedy for the refusal to arbitrate was provided. The inferences which respondent would draw from that case are not applicable here. Similar considerations obtain with respect to the other case in this state relied upon by the respondent. Glenn v. Bacon, 86 Cal.App. 58, 260 P. 559. That also was a case in unlawful detainer and while it was held that under the agreement there in question there was a right to extend the term of a lease the court made no attempt to fix the amount of the rental for the extended time.
The respondent further argues that the appellant waived any right to arbitration by not asking the court to stay this action as provided for in section 1284, Code of Civil Procedure. It may first be observed that the appellant was hardly in a position to ask for such a stay since that section provides that it is not to be granted to an applicant therefor who is in default in proceeding with the arbitration. The appellant was not waiving arbitration of the price and terms but, as it appears from the record, was denying the respondent's right to purchase the property at all on the ground that the option provisions of the lease were separable from the lease itself, and that the option to purchase had never been assigned to the respondent with the consent of the lessor. In any event, the burden of proof was upon the respondent to establish his case and it was incumbent upon him to show that he was entitled to specific performance.
The only other point which need be considered is appellant's contention that the respondent has no right to maintain this or any other action because the option to purchase the property had never been assigned to him with the written consent of the lessor. This contention is without merit as we, at least impliedly, held in our former decision where the same point was presented. In re Bewick, 49 Cal.App.2d 287, 121 P.2d 815. The lease provided that the lessee could not assign the lease or any interest therein except on the written consent of the lessor and that the lessee could not assign any option to purchase contained in the lease, or any interest in such option, without the written consent of the lessor. The assignment of this lease to the respondent, dated September 12, 1930, makes particular reference to this lease and assigns to the respondent all of the lessee's right, title and interest in and to that instrument. The lessor signed a written consent to that assignment, describing it as transferring to the respondent all of Lombard's “right, title and interest in and to that certain lease herein mentioned,” and particularly describing that lease. On October 1, 1934, an agreement was entered into between the respondent and the lessor in which it was agreed that the rental should be reduced for a certain time and in which it was provided that “it is mutually agreed––that Richard H. Bewick is the owner of said lease and entitled to all of the rights and privileges thereunder.” The option to purchase the property was by the lease given to the lessee, the respondent became that lessee by the written consent of the lessor, and it must be held that the assignment of the lease, and the consent thereto, included the assignment of the option to purchase the property.
It appears that the respondent has mistaken his remedy and that he cannot maintain this action in specific performance under the circumstances here appearing.
For the reasons given, the judgment is reversed.
BARNARD, Presiding Justice.
MARKS and GRIFFIN, JJ., concur.
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Docket No: Civ. No. 3120.
Decided: April 14, 1944
Court: District Court of Appeal, Fourth District, California.
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