Opinion
Rehearing Granted Oct. 26, 1927.
Appeal from Superior Court, Tulare County; J. A. Allen, Judge.
Action by A. M. Drew and others against the Lindsay National Bank and others. Judgment for defendants, and plaintiffs appeal. Reversed, with directions.
COUNSEL
Feemster & Cleary, of Visalia, and A. M. Drew, of Fresno, for appellants.
D. E. Perkins, of Visalia, for respondents.
OPINION
FINCH, P. J.
August 1, 1918, the plaintiffs and R. M. Carr entered into a written contract with defendant Mennillo, by the terms of which Mennillo agreed to purchase the olives grown by the other parties to the contract during the succeeding five years at an agreed price per ton therefor. The contract contained the following clause:
"It is understood and agreed that this contract is not to be binding upon the said first parties until it is indorsed by some person, or firm, or corporation as security for the carrying out of the covenants and conditions thereof by the said second party, or that a satisfactory surety bond is furnished that the said second party will carry out all of the covenants and conditions of the said lease and the said contract." In pursuance of the provisions of the clause quoted, and for the purpose of giving effect to the contract, Mennillo caused the following indorsement upon the contract to be executed by the Santa Barbara Olive Company, B. J. Ruddle and C. R. Mennillo:
"The undersigned for and in consideration of the sum of one dollar and other valuable considerations to _____ running does hereby indorse this contract and guarantee the said second party will carry out all the terms, covenants and conditions thereof during the running of the lease and contract."
At the time of the execution of the contract first mentioned, the Lindsay Ripe Olive Company leased its olive packing house and equipment to Mennillo for a term of five years at the semiannual rental of $390, payable in advance on the "first day of August and the first day of February" of each year during the term. The lease contained the following provisions:
"It is understood *** that the said second party will use the said building for the processing of olives purchased from the members and stockholders of the said first party according to the terms and conditions of the agreement of even date herewith and hereto attached and made a part hereof, and that the said olives of the said stockholders of this corporation aforesaid shall have the first right to delivery and acceptance at such packing house according to the aforesaid agreement. It is understood, however, that the said second party shall have the right to purchase other olives from other parties on such terms and conditions as he may make and that the same shall be processed in the said house and that he may also use the said house for the packing of fruit and vegetables when not needed for olive packing."
Neither party was able to produce the lease at the trial, but the court found, from conflicting evidence, "that by the terms of said lease it was agreed that in case said F. A. Mennillo did not pay the annual rental at the time in the lease provided, that the lessors by giving 30 days’ notice in writing of such default, should have the right to re-enter said premises and remove all persons therefrom and repossess and enjoy said property."
September 18, 1918, the Lindsay Ripe Olive Company, as party of the first part, and defendant Mennillo, as party of the second part, executed an instrument, which was attached to the contract of August 1, 1918, between plaintiffs and Mennillo, and which reads as follows:
"This addendum made this 25th day of September, 1918, to that certain contract dated August 1, 1918, made by the Lindsay Ripe Olive Company, first party, with F. A. Mennillo, second party, wherein the said first party agrees to lease a certain olive packing house in the city of Lindsay to the said second party for the term of five years, and whereas the said second party was to give a bond or indorsers to the contract sufficient to satisfy the said first party that the said second party would carry out all the terms in accordance with the conditions of said agreement and of said lease, and whereas the said second party has failed to give such bond. It is now agreed that the said second party will deposit with the Lindsay National Bank in the form of a certificate of deposit, and that the said certificate of deposit shall remain in the possession of the said Lindsay National Bank during the running of this agreement, or to such subsequent time as shall hereafter be agreed upon between the parties hereto, the said sum of twenty-five hundred ($2,500.00) dollars, to be held as security by the said bank for the said first party to said agreement, that the said second party will carry out the covenants and conditions of the lease and the agreement required as aforesaid. *** Should the said second party fail, neglect or refuse to carry out the provisions and conditions of the aforesaid contract the said sum of $2,500.00 shall be delivered to the said first party, or such proportion thereof as may be necessary to meet the liquidated damages incurred by any breach of said contract."
The sum of $2,500 was deposited in compliance with the terms of the agreement. Mennillo went into possession of the packing house and performed the covenants of the lease and of his contract to purchase plaintiffs’ olives until the early part of the year 1920, when he disappeared and apparently abandoned the packing house and his business at Lindsay. It does not appear that he thereafter, at any time, asserted any right to use the premises or made any claim thereto. At the time of his departure he was heavily indebted to the defendant bank. He assigned his stock of processed olives to the bank, and the bank thereafter sold the same and applied the proceeds thereof upon the indebtedness. After such application, however, his remaining indebtedness to the bank was in excess of $2,500. In an action thereafter brought, the bank recovered judgment against Mennillo for the balance of such indebtedness and caused the money deposited as aforesaid to be seized under a writ of execution and applied in partial satisfaction of the judgment.
About September 1, 1920, the Lindsay Ripe Olive Company re-entered into possession of the packing house. During the remainder of the time covered by the lease and the sales contract, the plaintiff and Carr were unable to sell their olives for the prices specified in the contract, and they sold them at lower prices. The court found that on September 1, 1920, Mennillo was in default in the payment of rent in the sum of $390. The uncontradicted evidence shows that he was in default in a larger sum. Drew testified that the sum of $800 was then due as rent. This testimony was doubtless based on his previous testimony that the lease provided for a monthly rental of $100. He later testified that the lease provided for a semiannual rental of $390. A simple computation, based on such testimony, shows that the unpaid rental on September 1, 1920, amounted to $520. The plaintiffs and Carr and the Lindsay Ripe Olive Company made demand on the defendant bank that said sum of $2,500, deposited with the bank, be paid over to them; but the bank refused to pay any part thereof to any of them. After making such demand, Carr and the Lindsay Ripe Olive Company "assigned and transferred unto plaintiffs herein all of their claim to and all of their right, title and interest in the said $2,500." Thereafter this suit was brought to recover the amount of the deposit. Judgment was entered in favor of defendants for costs of suit, and the plaintiffs have appealed.
Appellants contend that the deposit of $2,500 with the defendant bank was made as security for the performance by Mennillo of the terms of the sales contract as well as those of the lease. The addendum contract of September 25, 1918, is so certain and explicit in its terms as to furnish a complete answer to this contention. It is true that the plaintiffs and Carr owned about two-thirds of the capital stock of the Lindsay Ripe Olive Company at the time the lease and other contracts were executed, but it is not perceived that that fact is at all material. Mennillo’s contract with the corporation and that with the plaintiffs and Carr were independent transactions.
During the progress of the trial the plaintiffs asked leave to amend their third amended complaint by alleging "that what was intended by the addendum was to make it a part of the purchase agreement"; that the failure to so provide in the addendum contract was due to the mutual mistake of the parties thereto. In asking leave to so amend, counsel for the plaintiffs stated that the granting of the request "will *** necessitate the continuance of the case, and we are perfectly willing to take care of any expenses that have been incurred up to this time as a condition to the continuance." The court denied the motion. The trial was commenced in March, 1925. The original complaint, filed January 4, 1924, set forth the addendum contract in full. The plaintiffs were permitted to file three amended complaints. Under the circumstances stated, it was not an abuse of discretion to deny leave to file a fourth amended complaint. Further, the plaintiffs were not parties to the addendum contract. "While a court of equity will reform contracts under many varying circumstances, still it has no power to make a new contract. *** A court of equity can neither add additional parties nor substitute other parties for those already appearing upon the face of the writing." Mabb v. Merriam, 129 Cal. 663, 664, 62 P. 212; Wilson v. Shea, 194 Cal. 653, 657, 229 P. 945, 946.
As stated, the court found that on September 1, 1920, Mennillo was "in default in the payment of said rent to the extent of $390," while the uncontradicted evidence shows that he was then in default in the sum of $520. The complaint alleges that the rent was unpaid for the year 1920, and the answer denies that allegation. The burden was on defendants to prove payment of such rental if made. 20 Cal.Jur. 952. It must be taken as established, therefore, that Mennillo paid no rent for the year 1920.
The court found that plaintiffs’ cause of action for such rent was "barred by the provisions of subdivision 1 of section 337 of the Code of Civil Procedure," to the effect that an action upon a contract in writing must be commenced within four years. The transcript on appeal does not show when the action was commenced, but it appears from the original complaint, brought up by direction of this court, that the action was commenced January 4, 1924. Under the terms of the lease, the agreed rent for the six months ending January 31, 1920, was due and payable August 1, 1919, and, if not paid, it was barred at the time the action was commenced. But the rent from February 1 to September 1, 1920, amounting to $455, was not barred, and plaintiffs’ assignor was entitled to payment of that sum out of the $2,500 deposited by Mennillo with the defendant bank.
The court found that the "plaintiffs conspired together for the purpose of ousting said F. A. Mennillo from said packing house, *** and in pursuance of said conspiracy, *** caused said Lindsay Ripe Olive Company to re-enter upon said leased premises and packing house and ousted the said F. A. Mennillo therefrom," without giving him the notice required by the terms of the lease. While these findings appear to be immaterial under the issues raised by the pleadings, the defendants having made no claim for damages on account of such ouster, it is deemed proper to say that no evidence has been discovered which tends to show the existence of such a conspiracy. It may be added that the conduct of Mennillo, as shown by the uncontradicted evidence, points strongly to the conclusion that he had abandoned the premises long prior to the re-entry by the lessor, and, if such was the case, the re-entry without notice did not constitute an ouster.
While any damages suffered by a tenant by reason of a wrongful eviction may be set up as an offset to a claim for rent, the mere wrongful eviction is not a defense to a claim for accrued rent. 16 R. C. L. 952; 15 Cal.Jur. 717. "When the hiring of a thing is terminated before the time originally agreed upon, the hirer must pay the due proportion of the hire for such use as he has actually made of the thing, unless such use is merely nominal, and of no benefit to him." Civ. Code, § 1935.
Respondents contend that the assignment by the Lindsay Ripe Olive Company to the plaintiffs "is insufficient to transfer to plaintiffs any right of action *** that corporation *** may have had to sue for the money." The addendum contract provides for the deposit of the $2,500 "as security" for the performance of "the covenants and conditions of the lease" by Mennillo, and that upon failure of such performance by him "the said sum of $2,500 shall be delivered to the said first party, or such proportion thereof as may be necessary to meet the liquidated damages incurred by any breach of said contract." This contract was filed with the defendant bank at the time the money was deposited, and the bank was bound by its terms. Upon Mennillo’s default in payment of rent and the making of the demand by the Lindsay Ripe Olive Company for payment of such rent out of the money so deposited, it became the duty of the bank to pay the same, and, upon its refusal, an immediate cause of action accrued in favor of that corporation against the bank to compel such payment. No sound reason is advanced, and none appears, why such cause of action was not assignable, and the assignment is certainly sufficient in form to transfer any claim of the corporation against the deposit to the plaintiffs. The fact that the amount due as rent was not established by judgment prior to the commencement of this action did not prejudice the rights of the defendants, because that issue was determined in this action, to which Mennillo and the bank are both parties.
Under the provisions of section 956a of the Code of Civil Procedure, this court has jurisdiction to make findings of fact "contrary to, or in addition to, those made by the trial court." It is not deemed necessary to disturb immaterial findings, but this court hereby makes the following findings of fact, contrary to findings made by the trial court upon the issues to which said facts relate:
That by the terms of said lease of August 1, 1918, said defendant Mennillo agreed to pay to the Lindsay Ripe Olive Company a semiannual rental of $390; that said defendant duly paid said rental up to January 1, 1920, but paid no rental for the year 1920, and that on September 1, 1920, said defendant was indebted to the Lindsay Ripe Olive Company in the sum of $520 as rental for the first eight months of that year; that the plaintiffs’ cause of action for the amount of such unpaid rent is barred to the extent of $65 by the provisions of subdivision 1 of section 337 of the Code of Civil Procedure, but the remaining $455 thereof is not so barred.
As conclusions of law from the foregoing findings of fact and those not in conflict therewith made by the trial court, this court finds that the plaintiffs are entitled to judgment against the defendants in the sum of $455, together with interest at the rate of 7 per cent. per annum on $390 thereof from February 1, 1920, and on $65 thereof from August 1, 1920, and for their costs of suit.
The judgment is reversed, and the trial court is directed to enter judgment in favor of the plaintiffs against the defendants in accordance with the aforesaid findings and conclusions of law, the appellants to recover their costs of appeal.
We concur: BURROUGHS, Justice pro tem.; PLUMMER, J.