Narcisi v. Reed (107 Cal. App. 2d 586, 1951)

GOODELL, J.

This appeal was taken from a judgment awarding respondents $1,684.48 damages, plus a $750 attorney fee, and costs.

On March 1, 1947, a three-year lease was made by respondents as lessors to appellant as lessee, of a meat market stall 8 feet by 48 feet in area, within a market known as the Golden Gate Food Center on San Pablo Avenue in Oakland. The rental was fixed in the lease at $205 for the first month; at $80 a month for the next five months; at $100 for the next six; at $110 for the next 12, and at $125 for the last 12 months.

Appellant paid the rent for the first four months but none thereafter. He also paid his proportion of the utility bills for the whole Food Center—one-third thereof as required by the lease—for March and April, but not thereafter.

The court found that the place was operated as a meat market from March 1 to May 8, but not from May 10 to June 10; that operations were resumed from June 11 to August 17, but that on August 18 appellant “left the demised premises without explanation and never returned to conduct a meat market business thereupon.”

On August 26, 1947, respondents served on appellant the following notice: “Please take notice that you have failed to conduct a meat business in the demised space since on or about August 18, 1947; and that the undersigned lessors elect, after three days after the delivery to you of this notice, to enter the demised premises and to operate a meat business thereupon, holding you for the rental accruing monthly under the terms of the lease and for any deficiency in rental and benefits under the lease.”

About September 1, 1947, respondents repossessed the place and, as indicated in the notice, proceeded “to operate a meat business thereupon.” They continued to operate it, selling meat products and other goods until May 17, 1948, when they leased a part of the place to John C. Lahey for three years commencing on June 1, 1948, at rentals lower than those, reserved in appellant’s lease.

Appellant’s principal contention is that respondents terminated the lease by reoceupying the place, using it for their own purposes, and then leasing a portion of it for a period extending beyond the expiration date of the lease. They rely on. Welcome v. Hess, 90 Cal. 507 [27 P. 369, 25 Am.St.Rep. 145], and similar cases. In Phillips-H oilman, Inc. v. Peerless Stages, Inc., 210 Cal. 253, 259 [291 P. 178], the court said: ‘ ‘ Ordinarily the reletting of the premises amounts to an election to terminate the lease and to hold the tenant for damages, . . . The lease, however, may he so drawn as to contain provisions hy which the application of that rule may he evaded.” (Italics added.) That case discusses the New York decisions which recognize that “. . . a damage clause can be drawn in such a way as to make a tenant responsible for monthly deficits after the re-entry of his landlord . . .” The lease in the Phillips-Hollman case contained such a provision, and the lease in the instant case does likewise. Section 19 thereof reads:

“19. If default shall be made in the payment of the rent above reserved, or any part thereof, for three (3) days, or, if the lessee after three (3) days notice fails or neglects to perform or observe any of the covenants, agreements or conditions herein contained to be kept by the lessee, the lessors may, at any time thereafter, without notice or demand, declare the said lease terminated and ended and may re-enter in and upon said premises or any part thereof, with or without process of law, and expel, remove and put out the lessee or any person or persons occupying the said premises, using such force as may be necessary to again repossess and enjoy said premises without prejudice to any remedies which might otherwise be used for arrear of rent or precedent breach of covenants, and any claim for damages occasioned by such removal is hereby expressly waived by lessee. It is further understood and agreed that anything to the contrary in this lease notwithstanding, the lessors may give the three (3) day notice to quit hereinbefore in this paragraph mentioned, and require the delivery up of the possession of said premises, and enter into possession of said premises without effecting [sic] the liability of the lessee under the terms of this lease; it being understood and agreed that the lessee shall be liable monthly to the lessors for any rent thereafter to become due under the terms of this lease, or for any deficiency arising from the rental of said premises for any part of the remainder of the term of this lease ...”

The recent case of Yates v. Reid, 36 Cal.2d 383 [224 P.2d 8] is directly in point on several grounds. The lease there contained a provision similar in effect to section 19 and, as in this case, the lessor repossessed the premises amd r