Opinion
Hearing Granted by Supreme Court Oct. 24, 1927.
COUNSEL
McWhinney & Clock, of Long Beach, for appellant.
Denio & Hart, of Long Beach, for respondents.
OPINION
HOUSER, J.
The salient facts herein appear to be that for a term of 10 years plaintiff leased and hired from defendant a certain piece of real property at a stated consideration of $25 per month for the first 7 years of the term, and $35 per month for the remaining 3 years thereof; that approximately 2 years and 10 months after the execution of the lease, plaintiff was evicted from the leased premises by one who had established paramount title to the property; and that thereupon, on account of damages ensuing from such eviction, plaintiff commenced an action against defendant which resulted in a judgment for defendant. It is from such judgment that the appeal herein is prosecuted.
On the trial of the action it was shown that defendant’s claim of title to the leased property was by virtue of a tax title only, which fact was known to each of the parties to the lease prior to its execution, and that the defense interposed by defendant to the action in effect was that before the lease was signed by the parties thereto, a contemporaneous oral agreement was entered into between them, in substance, that in consideration of the low rental to be paid for the use of the property as specified in the lease, plaintiff would take the risk of paramount title being established in another person. The introduction of all evidence tending to show such oral negotiations between the parties, not included within the terms of the lease, was received over plaintiff’s objection, and it is upon such claimed error of the court that appellant bases his argument for reversal of the judgment.
As is substantially declared in section 1625 of the Civil Code and section 1856 of the Code of Civil Procedure, the general rule is that where a contract between parties thereto has been reduced to writing, no evidence of terms of the agreement other than as contained within the contract as thus expressed may be received.
The lease in question contained no express warranty of title in the lessor. The law, however, seems to be well established that a lease which is silent as to guaranty of ownership of the leased premises by the lessor nevertheless carries an implied warranty of the title in him, and consequent quiet possession in the lessee during the term specified in the lease. Section 1927, Civ. Code; McDowell v. Hyman, 117 Cal. 67, 70, 71, 48 P. 984; Agoure v. Lewis, 15 Cal.App. 71, 75, 76, 113 P. 882; Tiffany on Landlord and Tenant, vol. 1, pp. 518, 540; 24 Cyc. 1057. Coupled with such principle of law, it is contended by respondent, as set forth in several authorities, that an implied covenant of warranty may be rebutted by parol evidence. See Miller v. Van Tassel, 24 Cal. 459, 465; Johnson v. Powers, 65 Cal. 179, 3 P. 625; 22 Corp. Jur. 1097, 1261. But the weight of authority, especially as bearing upon a matter such as is here presented, is to the effect that an implied stipulation in a contract is of as great force as though it were fully set forth therein, and such implied stipulation may no more be contradicted or varied by parol evidence than may be that which is clearly expressed.
In the case of Standard Box Co. v. Mutual Biscuit Co., 10 Cal.App. 746, 750, 103 P. 938, 939, among other things, the following appears as the language of the court:
"* * * It is a well-settled principle that that which is implied by law becomes as much a part of the contract as that which is therein written, and if the contract is clear and complete when aided by that which is imported into it by legal implication, it cannot be contradicted by parol in respect of that which is implied any more than in respect of that which is written. * * *"
Also, in Peterson v. Chair, 5 Cal.App. 525, 527, 90 P. 948, 954, it is said:
"* * * There is another principle to be observed, namely, that whatever the law implies from a contract in writing is as much a part of the contract as that which is therein expressed; and to the extent that the contract, with that which the law implies, is clear, definite and complete, it cannot be added to, varied or contradicted by extrinsic evidence. * * *"
To the same effect, see California Drilling & Machinery Co. v. Crowder, 58 Cal.App. 529, 531, 533, 209 P. 68.
Supported by a long list of authorities, the rule is stated in 17 Cyc. 570, as follows:
"The legal effect of a written instrument, even though not apparent from the terms of the instrument itself but left to be implied by law, can no more be contradicted, explained, or controlled by parol or extrinsic evidence than if such effect had been expressed. * * *"
We are therefore of the opinion that, so far as the questioned evidence had the effect of varying or contradicting the implied warranty of title of defendant in the leased premises, the contention of appellant should be sustained.
But respondent suggests that the evidence to which appellant objects was admissible for the reason that it involved an element of consideration for the execution of the lease, and as such, came within the general exception to the rule which forbids any evidence which will have the effect of varying the terms of a written contract. Section 1625, Civ. Code; section 1856 and subd. 2 of § 1962, Code Civ. Proc. Subdivision 2 of section 1962 of the Code of Civil Procedure is as follows:
"The following presumptions, and no others, are deemed conclusive: * * *
"2. The truth of the facts recited from the recital in a written instrument between the parties thereto, or their successors in interest by a subsequent title; but this rule does not apply to the recital of a consideration."
The rule which respondent urges as being here applicable is aptly stated in Deaver v. Deaver, 137 N.C. 240, 243, 49 S.E. 113, 114, as follows:
"* * * Where the payment of the consideration is necessary to sustain the validity of the deed or the contract in question, the acknowledgment of payment is contractual in its nature and cannot be contradicted by parol proof, but where it is to be treated merely as a receipt for money it is only prima facie evidence of the payment, and the fact that there was no payment, or that the consideration was other than that expressed in the deed, may be shown by oral evidence. * * *"
The difficulty with the situation, so far as the admissibility of the evidence in question is concerned, is that the consideration expressed in the lease constituted something more than a mere "receipt for money." According to the written stipulation of the parties, the payment of the rent became and was the complete measure of the burden to be assumed by the lessee during the term of the lease, and for which, by the implied covenant of the lessor, the lessee was guaranteed the quiet enjoyment and possession of the leased premises. Anything other than the payment of the rent, to be added to the responsibilities or the duties to be placed upon the shoulders of the lessee, was in effect a modification of the understanding of the parties to the lease as expressed in their written memorandum covering their agreement. The rule for which respondent contends goes to the vitals of the contract. The price to be paid by the lessee for the privilege of using the land of the lessor was of the greatest importance to the lessee. Whether the price (or consideration) was great or small, whether it consisted of the performance by the lessee of some specified labor, or of the assumption by the lessee of some particular duty or burden, was to him a matter of utmost concern. So far as the lessee, at least, was concerned, the specification of the consideration for the lease went to its very essence. If the written stipulation of the parties in that regard could be varied by the effect of their prior oral negotiations, no limit could be placed on the extent or number of changes which might be permitted. The matter of what consideration was to be paid or yielded by the lessee was thus an essential element of the contract itself, and as such was no more subject to modification by reason of precedent oral representations or promises of either party to the contract than was any other equally important stipulation thereof. The rule, as clearly expressed in 17 Cyc. 661, is approved in the case of Harding v. Robinson, 175 Cal. 534, 542, 166 P. 808, 811, where many authorities are cited. It is there said:
"* * * Where the statement in a written instrument as to the consideration is more than a mere statement of fact or acknowledgment of payment of a money consideration, and is of a contractual nature, as where the consideration consists of a specific and direct promise by one of the parties to do certain things, this part of the contract can no more be changed or modified by parol or extrinsic evidence than any other part, for the party has the right to make the consideration of his agreement of the essence of the contract, and when this is done the provision as to the consideration for the contract must stand upon the same plane as the other provisions of the contract with reference to conclusiveness and immunity from attack by parol or extrinsic evidence" (citing many cases).
It follows that on the ground of varying the consideration specified in the lease, the questioned evidence was inadmissible.
But it is urged by respondent that in any event the evidence to which plaintiff objected on the trial of the action was properly admitted on the question of the amount of damages, if any, to which the plaintiff might be entitled.
In the main, it was plaintiff’s contention that the measure of damages was the difference between the rental agreed to be paid and the rental value of the leased premises for the remainder of the term. On the other hand, the defendant contended that the rule which governed the measure of damages was that expressed in sections 3304 and 3306 of the Civil Code as follows:
"The detriment caused by the breach of a covenant of ‘seisin,’ of ‘right to convey,’ of ‘warranty,’ or of ‘quiet enjoyment,’ in a grant of an estate in real property, is deemed to be:
"1. The price paid to the grantor; or, if the breach is partial only, such proportion of the price as the value of the property affected by the breach bore at the time of the grant to the value of the whole property;
"2. Interest thereon for the time during which the grantee derived no benefit from the property, not exceeding five years;
"3. Any expenses properly incurred by the covenantee in defending his possession.
"The detriment caused by the breach of an agreement to convey an estate in real property, is deemed to be the price paid, and the expenses properly incurred in examining the title and preparing the necessary papers, with interest thereon; but adding thereto, in case of bad faith, the difference between the price agreed to be paid and the value of the estate agreed to be conveyed, at the time of the breach, and the expenses properly incurred in preparing to enter upon the land."
The gist of respondent’s contention is that by the provisions of sections 3304 and 3306 of the Civil Code the plaintiff would be entitled to nominal damages only, excepting that if he could show "bad faith" on the part of the lessor, the plaintiff would then become entitled to "the difference between the price agreed to be paid and the value of the estate agreed to be conveyed, at the time of the breach"; which in effect (in case of bad faith) would be practically the same damages which plaintiff claimed in any event.
In the absence of governing statute, each of the respective rules has its judicial adherents, with perhaps the weight of authority favoring that announced in 24 Cyc. 1136, as follows:
"The general rule is that the measure of the tenant’s damages in case of eviction is the difference between the actual rental value of the demised premises, that is, the value of the use of the premises, and the rent reserved, estimated for the term of the lease, together with other damages naturally resulting from the breach."
Such a rule, however, can have no application in the face of a statute expressing a different measure of damages, such as is contained in the two sections to which reference has been had. Sections 3304 and 3306, Civ. Code.
In the case of Kline v. Guaranty Oil Co., 167 Cal. 476, 140 P. 1, it appeared that, without having title to the property, the defendant leased to the plaintiff certain land. In an action for damages arising from the breach of the covenant for quiet possession, it was held that under either the provisions of section 3304 or section 3306 of the Civil Code, because of the "bad faith" of the defendant, the damages recoverable by the plaintiff "would be those which would ordinarily and proximately follow from the breach of such a contract under the peculiar circumstances which were known to both parties."
It is said in McCormick v. Marcy, 165 Cal. 386, 389, 132 P. 449, 451, that:
"The Civil Code provides that the measure of damages for a breach of the covenant of warranty or of quiet enjoyment, in a grant of an estate in real property, is [stating the rule hereinbefore announced in section 3304 of the Civil Code]. This was also the rule of damages in this state before the enactment of the Code. McGary v. Hastings, 39 Cal. 369, 2 Am. Rep. 456."
It may therefore be said that, at most, the rule suggested by appellant to the effect that the measure of damages in an action of the character of that before the court is the difference between the rental agreed to be paid and the rental value of the leased premises for the remainder of the term, is correct only where "bad faith" on the part of the lessor is shown to have existed. The transcript of the record of the lower court discloses the fact that on the part of plaintiff no attempt was made to show "bad faith"; in fact, at the close of the case counsel for plaintiff made the statement that "there is no question about that." Nor did the complaint in the action present such an issue. Such being the situation, so far as plaintiff’s case was concerned, no occasion existed on the part of defendant to rebut anything in the way of evidence to that effect. It results that on the score of "bad faith," the evidence introduced by defendant, and to which exception was taken by plaintiff, was inadmissible. That such evidence was directly responsible for the judgment which was rendered by the trial court is unquestioned.
It follows that the judgment should be reversed. It is so ordered.
I concur: CONREY, P. J.