Opinion
As Modified on Denial of Rehearing May 3, 1930
Hearing Granted by Supreme Court June 2, 1930
Appeal from Superior Court, Yolo County; J.O. Moncur, Judge.
Action by the Borchers Bros. Company, a corporation, against Antonio Ciaparro and others. Judgment for defendants, and plaintiff appeals.
Reversed.
COUNSEL
Busick & Leeper, of Sacramento, for appellant.
A.G. Bailey, of Woodland, for respondents.
OPINION
JAMISON, Justice pro tem.
By its amended complaint appellant seeks to restrain respondents from injuring or removing certain buildings and property from land owned by it, and theretofore leased to respondents Ciaparro, Fenech, and Borg, and by its supplemental complaint seeks to recover damages from them for tearing down and removing buildings and property belonging to appellant, from said leased premises. Judgment was rendered in favor of respondents, from which appellant has appealed.
It appears from the evidence that on May 2, 1927, the said Ciaparro, Fenech, and Borg leased from appellant the 50 acres of land described in the complaint, for a term of ten years and two months, and thereupon entered into possession of same, and continued in such possession until April 3, 1929. Respondent Grech acquired an interest in said lease some time after its execution. On April 21, 1927, an agreement was entered into between the city of Sacramento and respondents Fenech, Borg, and Ciaparro by which for a period of ten years from the date they were given the exclusive right to collect and carry away all swill and garbage from all hotels, restaurants, hospitals, and clubs situate in said city. The agreement further provided that said respondents should establish a ranch for the purpose of feeding said swill and garbage to hogs. The said lease provided that the leased premises were to be used by the lessees to aid in the performance of the said agreement, and it further provided that if for any reason whatever the said agreement with said city should be or become unenforceable or void, or if the lessees should be prevented from gathering the garbage aforesaid, or if, without the fault of the lessees, they should be prevented by law, or pursuant to law, from using said premises for the purpose of raising hogs thereon, then at the option of the lessees the lease should be deemed canceled and of no further force or effect, and all liability of the lessees thereunder should cease.
Respondents, in their answer, set forth as a defense to said action that on the 12th day of December, 1928, a judgment was given and was entered on December 15, 1928, in the case of I.K. Ohaver v. Phillip Fenech, Sam Borg, Antonio Ciaparro, John Doe Number One, John Doe Number Two, John Doe Number Three, in the superior court of the state of California, in and for the county of Yolo, in an action therein pending, which judgment restrained and enjoined these respondents from shipping to, or receiving at Borchers Bros. ranch, being the property described in the lease, any garbage or other similar materials, and from feeding said garbage, or other similar material, to hogs on said Borchers Bros. Company ranch. That said injunction was granted without any fault of respondents. And further allege in said answer that by the provisions of said lease, if respondents were ever prevented by law or injunction, from using said premises for the purpose of feeding garbage to hogs, or raising hogs thereon, or carrying out the terms of that certain contract between respondents and the city of Sacramento, described in said lease, that thereupon defendants would have the right to cancel same, and that on the _______ day of January, 1929, they gave notice to plaintiff that they canceled and rescinded the lease. That said lease has been canceled by virtue of the terms of said lease, and that appellant has accepted said cancellation when offered by respondents.
The trial court found that on the _______ day of January, 1929, the lease was rescinded, terminated, and extinguished, and of no further force or effect.
Inasmuch as the lease provides that any alteration in, or improvements on the leased premises, made or constructed by the lessees, shall remain on said premises after the expiration of said term or extension, it becomes necessary to determine whether or not there is substantial evidence to support the said finding of the court that the lease was rescinded or canceled.
It is apparent that the judgment in the said case of Ohaver v. Fenech et al. did not render the lease void, nor give respondents the option of so declaring. That portion of the lease bearing upon this question is to the effect that if the said contract with the city of Sacramento became unenforceable or void, or if the lessees be prevented from gathering the garbage mentioned in said contract, or if, without their fault, the lessees be prevented from raising hogs on the leased premises, then at their option they may cancel same. The said judgment in no manner prevented, or affected the enforcement of the said agreement with the city of Sacramento, nor did it prevent the gathering of the garbage named therein, nor restrain or enjoin the said lessees from continuing to use said leased premises for raising hogs thereon.
The said case of Ohaver v. Fenech et al. was before the Supreme Court upon an application for a supersedeas (273 P. 555, 557), and in passing upon the effect of the injunction granted by the trial court, the following language was used: "It is contended by appellants [respondents in the instant case] that these restrictions upon the disposal of said garbage will necessarily require the removal by them of the hogs from the locality in which they are now maintained, and that the effect of said injunction will therefore be to compel them to take affirmative action in removing said hogs. This does not necessarily follow. The appellants may feed their hogs other food and maintain them in such a manner as not to render them a nuisance to their neighbors. So long as they pursue this course, the prohibitive terms of the injunction above set forth will not make it necessary for them to make any change in the locality in which their hogs are kept."
In addition to claiming that the effect of the said judgment gave them the option of declaring the lease void, respondents allege in their answer that on the ______ day of January, they gave appellant notice that they canceled and rescinded the said lease. No proof was offered to support this allegation. They claim, however, that appellant verbally agreed to the cancellation or surrender of the lease, and in support thereof produced the following evidence: Fenech testified that he had three or four talks with George Borcher; that Borcher asked him when he was going to move, and he said, when they picked a place, and that in the presence of Grech, Ciaparro, and witness Borcher, asked when they were going to move, and Fenech said that they would move right away; and in reply to this Borcher said, "Because I want to rent the place." He further testified that Borcher went with him to look at two places, and at one place he said, "This is the best place you fellows can get for hogs." And then he said, "When you move out there, I am going to raise pigs there." Ciaparro testified that he said to Borcher: "What you think if we appeal the case? Are you satisfied with $150 a month?" And Borcher said, "No, I have got a man I can get $500 for the ranch." He told me three or four times, "When are you going to move? When are you going to get out of here?" And I told him, "Just as soon as we can find a place to get out." Grech testified that Borcher asked him when they were going to move, and he said as soon as they were ready at the other place. Grech then said to him, "Why are you in such a hurry?" And he said: "Well, because I have got a fellow here to put a deposit on the place and I am losing $500 a month while you stay here. As soon as you move out of here, I make money. I am losing money right along." And on cross-examination he testified as follows:
"Q. You knew that Mr. Borcher wanted some money to have him release you from the lease, didn’t you? A. I don’t know such a thing like that. What I know, I thought the lease was canceled when it was in court, when we lost the case. I thought we had to move out of there; I thought the lease was canceled. We lost the case and the lease is canceled and Mr. Huston himself tells us that the lease is canceled." (The Mr. Huston referred to was one of respondents’ attorneys in the injunction suit.)
"Q. And that is your only reason for believing that this lease is canceled, is that right? A. Yes, so they never talk to me about money at all.
"Q. You said that your only reason for believing the lease was canceled was the decision of the court? A. Well, what I know, Borcher, the way he was talking to me, looks like the lease was canceled, and when he is going to raise the hogs and sheep and cattle there himself and ask me to move out of there. He says he is going to start business himself."
Fenech testified on cross-examination as follows:
"Q. You recall that the court rendered the decision in the injunction matter? A. Yes.
"Q. Isn’t it a fact that you thought that they canceled the lease? A. That is what I thought, yes.
"Q. And isn’t that the only reason for thinking so, the decision of the court? A. Yes."
On redirect examination this witness further testified:
"Q. Well, now, you say that he told you to get off, didn’t you? A. Yes.
"Q. And you said you would when you got a place? A. Yes.
"Q. And you thought the lease was terminated by that didn’t you? A. Yes, sure."
W.H. Greenlaw, Jr., a witness produced by respondents, testified that Borcher told him that he hoped respondents would get off immediately because he wanted possession of the place himself; that he had a chance for greater money than they were paying him. No date is given as to the time of this conversation. On cross-examination he testified that some month and a half after, "when the thing was over," Borcher told him that the boys had made a mistake in not accepting his proposition, which was an offer of $4,000, and he to keep the improvements and releasing them from the lease. D.G. Nunnelly was also produced as a witness by respondents. He testified that in December or January, Borcher took witness to the leased premises and wanted him to give him figures as to what witness thought the 20 acres across on the west of the road could be sold for. Witness asked him if he could do that under the lease, and he replied, "Well, they are going to get off, and we can do that anyway, as soon as they get off." This witness further testified that nearly every time he met him Borcher talked about their going to get off the ranch, and on one occasion asked witness what he thought the premises could be used for after they got off; that if they moved off, they would have to do something, go in with him; he wanted to go in with them, or something of that kind. The foregoing is practically all of the evidence introduced by respondents that tended in any way to show that appellant consented to or acquiesced in the rescission, cancellation, or termination of said lease.
Robert W. Huston, called by the appellant, testified that he had been attorney for respondents in the injunction suit; that some time in January, 1929, he had a conversation in his office with respondents and Mr. O’Connor, an attorney, who had been associated with witness as attorney for respondents in said injunction suit; that at said meeting O’Connor asked witness if he would talk with Borcher and see if a settlement could be reached. Witness finally consented to do so. All those present then discussed the matter. The result was that witness was to have a talk with Borcher and ascertain what sort of a settlement or understanding they could come to relative to the surrender of the premises. Pursuant to this arrangement he had a talk with Borcher and Borcher offered to let them take certain buildings and improvements off the rented premises and cancel the lease for $6,000. Witness then communicated the proposition to respondents, and they refused to accept it. He then had another talk with Borcher, and leaving out some of the property to be removed, Borcher reduced the offer to $3,000 or $3,500. The conversation of witness with Borcher was about a week before this action was begun, and the last conversation witness had with any of the respondents was with Grech some two or three days before this action was commenced.
Appellant admitted that respondents told him they were going to move off of the leased premises, but denied that he ever at any time agreed to release respondents from the lease, or to rescind or cancel it.
A lease may be brought to an end by the surrender of the leased premises and the acquiescence in such surrender by the landlord. Such acquiescence is perhaps best evidenced by his taking possession of the property and assuming again all the authority over it of an owner in possession. Baker v. Eilers Music Co., 26 Cal.App. 371, 146 P. 1056; Steel v. Thompson, 59 Cal.App. 191, 210 P. 430. This surrender may be evidenced by some act on the part of the party against whom the surrender is claimed. This kind of surrender is termed a surrender by operation of law, and is based upon the doctrine of estoppel, and arises where the owner of the premises is a party to an act in conjunction with some act on the part of the tenant, the validity of which act the owner or landlord is estopped to deny. Underhill on Landlord and Tenant, vol. 2, 1198. Under the statute of frauds a surrender of the term can be done only by express consent of the parties, in writing, or by operation of law, when the parties do something that implies that both have consented. Welcome v. Hess, 90 Cal. 507, 27 P. 369, 25 Am.St.Rep. 145. A mere statement by the lessor to the lessee that he may move out if he desires, does not become of binding effect in terminating the leasehold until a surrender and acceptance have actually been made. 15 Cal.Jur. p. 795; Steel v. Thompson, 59 Cal.App. 191, 210 P. 430; Voss v. Levi, 33 Cal.App. 671, 166 P. 359. Merely attempting to secure a new tenant for premises previously leased, but which have been vacated without taking possession, or in fact reletting, is not an acceptance of the surrender by the former tenant. Melone Co. v. Acquistapace, 73 Cal.App. 199, 238 P. 734, 736. In this last-named case the court said: "A surrender is the yielding up of an estate for life or years to the reversioner or remainderman. Under the statute of frauds it can be done only by express consent of the parties in writing, or by operation of law when the parties do something which implies that both have consented. These acts are such as would estop the parties from disputing the fact of surrender, and which would not be valid unless the term were ended; as, for instance, a new lease accepted by the tenant or the resumption of possession by the landlord if the tenant acquiesces, or the giving of a lease to another. *** The tenant, subject to the covenants *** is the owner for the term. If he leaves the demised premises vacant, and avows his intention not to be bound by his lease, his title still continues, unless the landlord has accepted the offer of surrender. Merely attempting to secure a new tenant, without taking possession or in fact reletting, is not an acceptance of the surrender. *** Chase v. Oehlke, 43 Cal.App. 435, 185 P. 425."
In the case under consideration there is no evidence that there was any written agreement between appellant and respondents rescinding, canceling, or terminating the lease, nor is there any evidence that appellant ever took possession, or assumed possession of the leased premises after respondents removed therefrom. Nor, in the opinion of this court, is there any substantial evidence that appellant ever consented to or accepted a surrender of the lease. Such being the case, it is unnecessary to pass upon the question as to whether or not the improvements placed upon the leased premises are trade fixtures subject to removal by the lessees upon the termination of the lease.
For the reasons aforesaid the judgment must be and is hereby reversed.
We concur: FINCH, P.J.; R.L. THOMPSON, J.