Mott v. Cline

This action was brought by the assignee of a lessee who was also the holder of an option against the owner and lessor of the let premises to compel specific performance of the option provision contained in the lease providing for the purchase by said lessee of the demised premises at any time during the term of the lease. Said assignee, who relies solely upon the assignment of the option to purchase, made a tender between rent days of the purchase price as agreed upon by the owner and lessee and demanded the execution and delivery to him of a deed of the demised lands. The owner and lessor refused to comply with the demand to convey. The answer raised the question of the sufficiency of the tender. Judgment went for the plaintiff (assignee), hence this appeal.

The lands in suit are agricultural lands and are situate in the county of Madera, this state. On January 13, 1913, appellant, owner and lessor of said lands, entered into a written contract of lease with Ah Chue, a person of Mongolian blood and a subject of the Empire of China, and alleged to be within the inhibitory provisions of Statutes 1913, page 206, and other subsequent Alien Land Acts, all of which were adopted subsequent to the execution of the lease contract containing the option to purchase, the assignability of which is challenged.

The term of said lease was for a period of ten years, commencing February 1, 1914, almost one year after its execution, at an annual rental of $200 for the first two years and $250 a year for the remainder of the term, payments to be made on the twentieth day of December of each year, commencing with December 20, 1914. By the provisions of said lease all improvements placed on the demised premises by either party were to belong to the lessor,

“And the said party of the first part, his heirs and assigns, does hereby covenant and agree, that the said, party of the second part, or his legal representatives, paying the rental herein provided for, and keeping and performing the several covenants herein provided for, shall at all times during the full term of this lease have, hold and fully enjoy the said premises with its appurtenances without let or hindrance of or by the said party of the first part, his heirs or assigns, or any other person whomsoever. First party agrees to sell said premises at any time during the term hereof to said second party for the sum of $4100.”

The lessee, on February 1, 1914, went into possession and cleared some thirty acres of land during his tenancy and paid all installments of rent except the installment payable on December 20, 1923, which was not due at the time the complaint was filed, to wit, June 18, 1923. On May 26, 1923, said Ah Chue executed the following instrument:

“I, Ah Chue, ... do hereby sell, assign, transfer, set over, grant, bargain, sell, convey and confirm unto R. B. Mott ... all of my right and option to purchase said real property set forth in said lease wherein it is provided that the said J. W. Cline ‘agrees to sell said premises at any time during the term’ of said lease ‘for the sum of $4100.’ It is intended hereby to subrogate the said R. B. Mott to every interest which I have in the said option included in said lease and to grant and assign the said option to the said R. B. Mott.”

No claim is made that the leasehold was assigned, and no attempt was made to put respondent in possession as a subtenant. The lessee, in fact, continued in possession of the premises under the lease. By a separate paper Mott and Ah Chue agreed as follows:

“I will, as soon as delivery of a conveyance thereof is made by the said Cline, endeavor to sell said property at a profit and in the event of a sale will pay over to you

[Ah Chue] one-half of my profit on such sale. It is understood that you are to consent to a cancellation of your lease of such property to any such purchaser, should such purchaser desire such cancellation . . . All expenses to be paid by R. B. Mott.”

On May 28, 1923, Mott served notice upon appellant Cline of the assignment of said option and made a tender to him of the sum of $4,100 and demanded a conveyance of said premises. The grounds of Cline’s refusal, if any were stated, do not appear in the record. The points that the rentals were not fair and reasonable, and that $4,100 was not the fair and reasonable market value of the lands at the time the lease and contract were executed are' not tenable. It was stipulated at the trial that $6,700 was then the fair market value of the premises.

The lease contract was executed before the passage of any of the inhibitory Alien Land "Acts subsequently adopted by this state and before there was any law interdicting the ownership of land or any interest therein by any class of aliens. The alienage of Ah Chue was put in issue by the answer and it is the contention of appellant that the option provision is in violation of the 1913 act, supra, and the initiative Alien Land Act of 1920 (Stats. 1921, p. Ixxxiii) enacted pursuant to the police power of the state and is therefore void. This being so, it is further argued, the option was neither assignable by Ah Chue nor enforceable against him. It is further contended that the lease contract is not severable or divisible on equitable grounds and to so hold would tend to impair the rights of the lessor to the rentals reserved, as the title would be transferred out of the lessor. It is also made grounds of complaint that Ah Chue occupied the premises for a period of about four months immediately prior to the assignment of the option, for which period he paid no rent to the lessor and none has since been paid or tendered for such occupancy by him or anyone in his behalf. His occupancy seems to have continued undisturbed after the execution of the assignment. Aside from the assignability of the option, the sufficiency of the tender and a few questions of pleading, the case is one hinging largely upon the application of the police power of the state and the construction to be given the statutes germane to the subject.

[1] The applicability of the Alien Land Laws to subjects of China is challenged by respondent herein. We have not been cited to nor have we found any state or federal decision construing the Alien Land Laws with respect to the treaty with China. [2] It is contended that while the Alien Land Laws of the state do not violate any treaty agreement between the United States and the Empire of Japan, a different situation exists as to subjects of China by force of the language used in the treaty agreement with that power, it being different in phraseology from the treaty agreement with Japan. It is argued that by the provisions of articles II and III of the existing treaty between the two nations, proclaimed October 5, 1881 (22 U. S. Stats, at Large, p. 826), subjects of China cannot be brought within the inhibitory provisions of the Alien Land Laws of the state without effecting a violation of our treaty agreement. This argument is based mainly upon the clauses of said articles II and III, which accord to Chinese subjects, as therein classified, the rights, privileges, immunities, and exemptions which are accorded to “the citizens and subjects of the most-favored nation.” Said articles in their order read:

“Article II.

“Chinese subjects, whether proceeding to the United States as teachers, students, merchants or from curiosity . . . , and Chinese laborers who are notv in the United States shall be allowed to go and come of their own free will and accord, and shall be accorded all the rights, privi

leges, immunities and exemptions which are accorded to citizens and subjects of the most favored nation. (Italics supplied.)

“Article III.

“If Chinese laborers, or Chinese of any other class, now either permcmently or temporarily residing in the territory of the United States, meet with ill treatment at the hands of any other persons, the Government of the United States will exert all its power to devise measures for their protection and to secure to them the same rights, privileges, immunities and exemptions as may be enjoyed by the citizens or subjects of the most favored nation, and to which they are entitled hy treaty.” (Italics supplied.)

A supplemental treaty concerning commercial intercourse and judicial procedure was ratified July 19, 1881 (22 U. S. Stats, at Large, 828), by the two nations, but it guarantees no rights to the subjects of China to own or occupy real property. The riotous conditions that existed in some of the states of the Pacific slope as a protest against Chinese immigration, which was pouring into this state and other coast states in menacing numbers, are matters of state history, and were considerations inseparably connected with our treaty agreements with China and were the motive of much subsequent legislation. Tears prior to the ratification of said treaty the people of the state of California adopted a new constitution (1879), in which it was provided that no native of China could ever thereafter become an elector of this state. The adoption of statutes withholding from the Chinese rights and privileges granted to the subjects of other nations followed. Conflicts involving violence to the person were not infrequent. As residents of this state they were in disfavor. Their testimony in the earlier years of our statehood was not receivable in courts of justice in certain trials and proceedings. It was claimed by their government that they were denied the equal protection of the laws guaranteed by the federal and state constitutions. At the time the treaty of 1881 was adopted they were not generally engaged in agricultural pursuits and were not landholders, but - mainly contract laborers who had been brought into this country originally by the builders of the great transcontinental railroads to be used as laborers in the construction of said railroads. They settled in districts which

[5] The Alien Land Acts are not repugnant to any article of the federal or state constitutions and do not impinge upon the treaty agreements existing between this nation and China.

We have set forth at some length the history of our treaty agreements and our commercial, industrial, and political relations with China and her subjects, together with the constitutional and statutory regulations bearing upon those subjects, to show that there is no substantial ground upon which a claim may be based that it was the intention of either the state or federal governments to grant to native-born subjects of China the right of acquiring the title to agricultural lands. The spirit and scheme of our state and federal regulations are repugnant to such a claim.

[6] We now come to a consideration of the question whether or not the Alien Land Acts are retroactive so far as the option is concerned. This question depends largely upon the legislative intent and upon whether or not the objects sought to be attained are within the police power of the state. There is no direct language upon this point, but there is general language which necessarily implies an intention to prevent an executory contract from ripening into a fee simple. Section 2 of the act of 1920 provides: “All aliens other than those mentioned in section one of this act may acquire, possess, enjoy and transfer real property, or any interest therein, in this state, in the manner and to the extent and for the purpose prescribed by any treaty now existing between the government of the United States and the nation or country of which such alien is a citizen or subject, and not otherwise.” Section 7 provides: “Any real property hereafter acquired in fee in violation of the provisions of this act by any alien mentioned in section two of this act, . . . shall escheat to, and become and remain the property of the State of California . . . ”

[7] “The police power being in its nature a continuous one, must ever be reposed somewhere, and cannot be barred or suspended by contract or irrepealable law. It cannot be bartered away even by express contract.” (5 Cal. Jur. 689; Laurel Hill Cemetery v. San Francisco, 152 Cal. 464 [14 Ann. Gas. 1080, 27 L. R. A. (N. S.) 260 , 93 Pac. 70 ].) It is to be presumed that parties contract in contemplation of the inherent right of the state to exercise unhampered the police power that the sovereign always reserves to itself for the protection of peace, safety, health and morals. Its effect cannot be nullified in advance by making contracts inconsistent with its enforcement. (Freund on Police Power, see. 556; 5 Cal. Jur. 778; Louisville & N. R. R. v. Mottley, 219 U. S. 467 [ 34 L. R. A. (N. S.) 671 , 55 L. Ed. 297 , 31 Sup. Ct. Rep. 265 , see, also, Rose’s U S. Notes]; Philadelphia, B. & W. Ry. Co. v. Schubert, 224 U. S. 603 [ 56 L. Ed. 911 , 32 Sup. Ct. Rep. 589 ] ; Manigault v. Springs, 199 U. S. 473 [ 50 L. Ed. 274 , 26 Sup. Ct. Rep. 127 ]; Pinney & Boyle Co. v. Los Angeles Gas & Electric Co., 168 Cal. 12 [Ann. Cas. 1915D, 471, L. R. A. 1915C, 282, 141 Pac. 620 ]; Kentucky Traction & Terminal Co. v. Murray, 176 Ky. 593 [ 195 S. W. 1119 ]; Raymond Lumber Co. v. Raymond L. & W. Co., 92 Wash. 330 [L, R. A. 1917C, 574, 159 Pac. 133 ] : Massillon Sav. & Loan Co. v. Imperial Finance Co., 114 Ohio St. 523 [ 151 N. E. 645 ] ;

[8] It has been firmly settled by the decisions of both federal and state courts (Webb v. O’Brien, supra; Terrace v. Thompson, supra; Porterfield v. Webb, supra, and many others to the same effect) that the adoption of the Alien Land Acts was a lawful exercise of the police power. In fact, it is the exercise of that power in its highest and truest sense. The ownership of the soil by persons morally bound by obligations of citizenship is vital to the political existence of a state. It directly affects its welfare and safety. In Terrace v. Thompson, supra, the following observation is quoted approvingly: “It is obvious that one who is not a citizen and cannot become one lacks an interest in, and the power to effectually work for the welfare of the state, and, so lacking, the state may rightfully deny him the right to own and lease real estate within its boundaries. If one incapable of citizenship may lease or own real estate, it is within the realm of possibility that every foot of land within the state might pass to the ownership or possession of non-citizens.” (Terrace v. Thompson, 274 Fed. 841 , 849.) It is further declared by the high authority last cited that “the allegiance of the farmers to the state directly affects its strength.”

“At - common law, aliens, though not permitted to take land by operation of law, may take by the act of the parties; but they have no capacity to hold against the state, and the land so taken may be escheated to the state.” (Webb v. O’Brien, supra; Doe v. Robertson, 11 Wheat. (U. S.) 332 [ 6 L. Ed. 488 , see, also, Rose’s U. S. Notes]; Suwa v. Johnson, 54 Cal. App. 119 [ 203 Pac. 414 ].)

[9] It is appellant’s view that the option provision has been rendered void by section 10 of the act of 1920, which makes it a crime punishable as a misdemeanor or felony to conspire to effect a transfer of real property or an inter

The acts are designed to keep agricultural lands in the control of citizens or such persons as are eligible to citizenship under the state and federal laws. The option agreement was entered into at a time when there was, and for a number of years prior thereto had been, a very general public demand for the adoption of laws rendering persons ineligible to citizenship incapable of owning, leasing, or occupying agricultural lands within this state. The act of 1913 was introduced in the legislature as a proposed law about the same day the lease containing the option was signed. It became a law within a few months thereafter, and before the ten-year term, as stipulated in the lease, commenced. Ah Chue occupied the lands nine years and four months before making an assignment of the option. Within this period the initiative act of 1920 was adopted. Had the assignment of the option been made to an ineligible person we would hold that the assignment violated the act of 1920 and consequently a court of equity would not compel specific performance of an act forbidden by law. Likewise we are of the opinion that the ineligible alien could not have compelled a conveyance to himself. (Ales v. Epstein, 283 Mo. 434 [ 222 S. W. 1012 ] ; Case v. Kelly, 133 U. S. 21 [ 33 L. Ed. 513 , 10 Sup. Ct. Rep. 216 , see, also, Rose’s U. S. Notes]; Suwa v. Johnson, supra.) The policy of the state forbade it. But here we have quite a different question presented. The ineligible person is not attempting to transfer any right or interest whatsoever to another who is likewise ineligible. The diverted stream is turned back into its legitimate channel. Respondent Mott, who is Ah Chue’s assignee, is a person eligible to exercise all the

It was held in Suwa v. Johnson, supra, supported by a citation of authority from almost every jurisdiction of the nation, that under statutes forbidding ownership of land by aliens an alien grantee takes a defeasible estate free from attack by anyone except the government in escheat proceedings. (See, also, Estate of Yano, 188 Cal. 645 , 650 [ 206 Pac. 995 ]; In re Akado, 188 Cal. 739 , 742 [ 207 Pac. 245 ]; Fairfax v. Hunter, 7 Cranch (U. S.), 602 [ 3 L. Ed. 453 ],- Phillips v. Moore, 100 U. S. 208 [ 25 L. Ed. 603 ].) It is a governmental affair, a transfer made in violation of the act being defeasible as to the state only. It is quite well settled that in case title to real property is defeasible by reason of the alienage of the owner and said owner before the power of the state is invoked in an escheat proceeding conveys the property to a person eligible to hold it, as Mott unquestionably is, the infirmity of title is removed. (Manuel v. Wulff, 152 U. S. 505 [ 38 L. Ed. 532 , 14 Sup. Ct. Rep. 651 ]; State ex rel. Atkinson v. World Real Estate Commercial Co., 46 Wash. 104 [ 89 Pac. 471 ] ; Oregon Mtg. Co., Ltd., v. Carstens, 16 Wash. 165 [ 35 L. R. A. 841 , 47 Pac. 421 ]; 2 Cor. Jur. 1053.)

A case quite in point is State ex rel. Atkinson v. World Real Estate Commercial Co. et al., supra. There an ineligible alien conveyed real property to the World Real Estate Commercial Company in violation of the provisions of the constitution of the state of Washington. The court, in passing upon an objection similar to the one made here, held that an alien holding lands in that state by purchase under a defeasible title, subject to attack on the part of the state, might by deed transfer a good title to a third person entitled to receive and hold it, provided no pro

[11] It is next contended that the option was nonassignable. Inasmuch as the contract contains no features of personal trust or confidence reposed in any of the parties and requires nothing more than a mere routine of paying money, it is assignable. (25 Cal. Jur. 509; 5 Cor. Jur. 852; Prichard v. Kimball, 190 Cal. 757 [ 214 Pac. 863 .].) The option provision is clearly severable from all other provisions of the lease and no injury could possibly come to the owner and lessor by receiving the cash purchase price, to wit, $4,100, from the optionee’s assignee, rather than from the optionee. No features of trust or confidence, as pointed out in Prichard v. Kimball, supra, exist in the instant ease. Under the laws of this state “property of any kind may be transferred, except as otherwise provided by this article [Article 2 of Div. 2, Pt. 4, Tit. 4, Ch. 1, Civil Code].” (Civ. Code, sec. 1044.) The assignability of an option in the exercise of a general property right is not made an exception to the general rule by any code provision.

[12] But we are of the opinion that respondent cannot prevail because of his failure to make a proper and seasonable tender. It is admitted that the only tender made by respondent was the amount stated in the option, to wit, $4,100. In other words, no proportionate amount of rent was tendered by either the lessee or his assignee for the use of the premises for a period of about four months, or one-third of the year 1923. “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, sec. 1935.) That the section of the code above cited has direct application to the instant case, there can be no doubt. (Diepenbrock v. Luiz, 159 Cal. 716 [Ann. Cas. 1912C, 1084, L. R. A. 1915C, 234, 115 Pac. 743 ].) Resolving all other controverted questions of law in favor of respondent, the failure to tender a proportionate amount of rent for the use made of the premises by the lessee for a period of about four months prior to the offer to purchase furnishes a complete bar and answer to his demand for specific per

[13] Respondent further contends that appellant, Cline, by a failure to object to the insufficient amount of the tender must be deemed to have waived any objection he might have made on that ground. (Sec. 2076, Code Civ. Proc.; sec. 1501, Civ. Code.) An examination of the record, however, does not show that respondent sought to introduce any evidence of such waiver. The record is silent as to what actually took place when the insufficient tender was made. The burden is on the party asserting a waiver to introduce evidence of the facts constituting it (25 Cal. Jur. 932; 40 Cyc. 269), and respondent did not meet this burden. If Cline, in fact, waived the insufficiency of the tender, respondent had the right to seek from a court of equity a decree of specific performance directing a conveyance to him upon payment of the stipulated purchase price and the proportionate amount of rent due. (Bradford v. Fidelity Sav. & Loan Society, 177 Cal. 247 [ 170 Cal. 404 ] ; Hixson v. Hovey, 18 Cal. App. 230 [ 122 Pac. 1097 ]; Colton v. Oakland Bank of Savings, 137 Cal. 376 [ 70 Pac. 225 ]; Shermaster v. California Bldg. etc. Co., 40 Cal. App. 661 [ 181 Pac. 409 ].) If Cline did not waive the insufficiency of the tender, respondent lost all rights under the option, and cannot be given the relief sought by a modification of the judgment of the trial court or in any other manner. The offer by its very terms was to continue only during the life of the lease, and since the insufficient tender of $4,100, in the absence of circumstances establishing a waiver, did not constitute an acceptance, the effect of holding that respondent now has the right to compel specific performance would be to extend the option beyond the time when it was to terminate by the express agreement of the parties.

Questions going to the sufficiency of the evidence and the findings and questions of pleading, more or less of a techni

The judgment is reversed.

Richards, J., Shenk, J., Waste, C. J., Curtis, J., Preston, J., and Langdon, J., concurred.

Rehearing denied.