DE HART v. ALLEN (1944)

In an action for damages for an alleged breach of a lease of real estate the plaintiffs had judgment and the defendant has appealed.

This is the second appeal taken in the above entitled action. On the first appeal (De Hart v. Allen, 49 Cal.App.2d 639, 122 P.2d 273), the facts are fully stated and each issue presented was fully considered and decided. After the remittitur went down the plaintiffs did not amend their complaint but the defendant amended his answer setting up the statute of limitations and tendering some other issues. Except as hereinafter noted, neither party introduced any new evidence. The record consists of a transcript of the evidence taken at the first trial and a transcript of the proceedings had on the second trial. On an examination of the transcript last mentioned it appears that the transcript first mentioned was introduced in evidence and that certain witnesses were called and examined. The plaintiffs produced a copy of a written notice attached to a purported affidavit purportedly signed by Edward O'Gara and which in terms purported to state that on the 18th day of July, 1934, he served the said notice on the defendant Joseph Allen. The purported affidavit did not show that O'Gara ever swore to the same. There was proof that the signature was in the handwriting of Edward O'Gara. There was no other evidence supporting the document as an affidavit. At the time of the trial O'Gara was dead, but plaintiffs offered said documents in evidence as O'Gara's ‘report.’ At all times the defendant objected to the document but the trial court overruled his objections and admitted it in evidence.

On the 17th day of May, 1943, the trial court signed findings of fact and conclusions of law. One of the recitals in the findings is ‘now admits in evidence the written report of Edward O'Gara to the effect that on July 18, 1943 he served upon defendant the notice dated July 16, 1934 referred to in paragraph V of plaintiffs' complaint, that plaintiffs would relet the premises at 6th and Mission Streets, San Francisco, California, for the account and benefit of defendant, and also admits in evidence the copy of said notice dated July 18, 1934 attached to said report. * * *’

The defendant contends that the trial court committed prejudicial error in allowing the plaintiffs to introduce said report in evidence. In view of the conclusions which we have reached on the principal claim of the plaintiff we need not pause to discuss the point. We may assume, without deciding, that the ruling of the trial court was correct.

The defendant Allen was sued for an alleged obligation arising on the lease made to him July 3, 1931. The plaintiff's case rests on the assumption that said lease was still extant and binding. For that assumption we think there was no basis whatever. The record shows no question of pleading was presented except as noted in De Hart v. Allen, 49 Cal.App.2d 639, 122 P.2d 273. However, the parties presented evidence showing without contradiction that July 3, 1931, the owner leased said property to this defendant for five years. About December 1, 1933, the defendant commenced to make different arrangements. He entered into an agreement with the lessors to assign his lease to Gammons. Allen brought forward Gammons as a proposed assignee and asked the lessors to consent to an assignment by Allen to Gammons. The lessors consented in writing. At the same time they executed a satisfaction of a chattel mortgage which Allen had executed as security for the payment of rent by him. That satisfaction contained a recital as follows: ‘The mortgage dated the 3rd day of July, 1931, made and executed by Joe Allen * * * to Mary Tracy * * * together with the debt thereby secured is fully paid, satisfied and discharged. * * *’ That mortgage was on the furniture contained in the leased building. Allen then sold his lease and the furniture to Gammons. The latter executed a chattel mortgage on the furniture to the lessors as security. He also put up a cash deposit of $100 additional security. Gammons was doubtful about his being able to carry the lease. After a talk with the lessors they agreed that as to him the rent should be reduced from $250 per month to $175 per month ‘until business picked up.’ To secure the payment of the reduced rental the lessors took from Gammons $100 in cash as a deposit to secure future payments. Later they collected from Gammons all rentals until he vacated the premises. After the lease was sold to Gammons and after Allen sold his furniture to Gammons, the latter executed a mortgage on the furniture to the lessors. At the time the lessors were accepting Gammons as a tenant and making a lease to him, they did not serve any notice on this defendant that they were so acting to protect him and would hold him for any losses of rentals. No such notice was served on this defendant until May 18, 1934, as shown in O'Gara's report hereinabove noted. At no time whatever did they serve such notice on Gammons. All of these proceedings took place in the office of Madison & Burke, realtors acting as agents of the lessors. The defendant stood by. When directly asked to guarantee the payment of rent by Gammons he refused and stated that he wanted the contract so drawn that he would be wholly relieved from any responsibility. The record presents no conflict in the evidence on any of the foregoing statements of fact. However, the trial court made findings against the defendant.

In De Hart v. Allen, 49 Cal.App.2d 639, 122 P.2d 273, this court cited and quoted from Welcome v. Hess, 90 Cal. 507, 27 P. 369, 25 Am.St.Rep. 145, and Rehkopf v. Wirz, 31 Cal.App. 695, 161 P. 285. In the case last mentioned, commencing on page 696 of 31 Cal.App., on page 286 of 161 P., the court said:

‘Where a tenant abandons the leased property and repudiates the lease, and landlord may accept possession of the property for the benefit of the tenant and relet the same, and thereupon may maintain an action for damages for the difference between what he was able in good faith to let the property for and the amount provided to be paid under the lease agreement. Bradbury v. Higginson, 162 Cal. 602, 123 P. 797. But a lessor who chooses to follow that course must in some manner give the lessee information that he is accepting such possession for the benefit of the tenant and not in his own right and for his own benefit. If the lessor takes possession of property delivered to him by his tenant and does so unqualifiedly, he thereby releases the tenant. Baker v. Eilers Music Co., 26 Cal.App. 371, 146 P. 1056; Welcome v. Hess, 90 Cal. 507, 27 P. 369, 25 Am.St.Rep. 145. An unqualified taking of possession by the lessor and reletting of the premises by him as owner to new tenants is inconsistent with the continuing force of the original lease. If done without the consent of the tenant to such interference, it is an eviction, and the tenant will be released. If done pursuant to the tenant's attempted abandonment, it is an acceptance of the surrender and likewise releases the tenant.

‘In this case the plaintiff's testimony presents the facts clearly and without conflict. The defendants informed the plaintiff that they were going to leave the ranch. They did leave, and omitted payment of the installment of rent which, according to the terms of the lease, fell due April 1, 1914. Without making any further demand upon the defendants or in any manner informing them as to the course which he would pursue, the plaintiff took possession and made a new lease of the land as above stated. Upon these facts the plaintiff failed to establish any right of action for the damages claimed by him.’ (Italics ours.)

So in the instant case. When on December 1, 1933, the defendant Allen was discussing with the lessors a change in tenants, the lessors said nothing whatever regarding their intention to relet for the purpose of protecting Allen and that they would hold him responsible for the rentals accruing under the lease. No such expression was made until the notice dated July 16, 1934. That notice was too late. The surrender was completed December 1, 1933, and could not be changed by a notice given seven months thereafter.

Moreover the facts hereinabove stated show that the parties did, on December 1, 1933, make a tripartite agreement by the terms of which Allen surrendered and the plaintiffs accepted his lease. They then made modifications thereof and accepted Gammons as a tenant thereunder.

The judgment appealed from is reversed and the trial court is ordered to remake its findings in accord with what we have said and to enter judgment in favor of this defendant.

STURTEVANT, Justice.

NOURSE, P. J., and SPENCE, J., concur. Hearing granted; SPENCE, J., not participating.