Oliver v. Schene

These are appeals upon the judgment roll alone from parts of a judgment in an action for declaratory relief, and from an order made after judgment.

The respondents have moved for a dismissal on the ground that appellants have accepted the benefits of the judgment and thus waived their right to complain.

The plaintiffs, as lessors, and the defendants, as lessees, entered into a lease evidenced by two instruments dated

On September 19, 1958, the plaintiffs brought this action for declaratory relief. In due course the court made a pretrial order outlining the issues for determination among which were the following:

1. Whether the action should be stayed to permit arbitration;

2. Whether the lease was invalid because it was in violation of the rule against perpetuities, i.e., section 715.2 of the Civil Code;

3. Whether the lease had been terminated;

4. If terminated, how much compensation for occupancy should be paid to plaintiffs and, if not terminated, how much rent was due them; and

5. Several other subsidiary matters.

Subsequently a trial was had, and thereafter judgment was entered adjudging that the “Lease and Addendum in said action was and is valid and enforceable”; that the plaintiffs should recover from defendants “the sum of $29,214.18 rent accrued as of July 1, 1959, together with interest ... in the sum of $658.70 . . .”; that “defendants are entitled to a credit of $627.00 against said sum” and that “plaintiffs are not entitled to attorneys’ fees.” At this juncture it should be noted that the lease contained a provision with respect to attorneys’ fees, but no specific allegations concerning this subject were contained in the pleadings.

The judgment was dated July 14, 1959. Plaintiffs served notice of entry of judgment on that date. On the same day the defendants obtained a stay of execution for 30 days after notice of entry of judgment. However, the judgment was not filed and entered until July 17, 1959. On August 18, 1959, plaintiffs obtained a writ of execution under which a levy was made, but which was recalled and quashed upon motion of the defendants. This motion was made on the ground that the 30-day stay should have been measured from the time when a valid notice of entry was given defendants; that the notice of entry served was premature and, therefore, not valid; and that the writ was issued in violation of the order granting a stay. In the meantime the plaintiffs had obtained an ex parte order amending the order staying execution so as to limit the stay to 30 days after entry of judgment as distinguished from notice of entry of judgment.

On September 14, 1959, the plaintiffs appealed from the order recalling and quashing the first writ of execution, contending that the writ was properly issued as the court had no power to order a stay for a period longer than 30 days after entry of judgment.

On October 30, 1959, the defendants paid the plaintiffs $541.95 as the balance owing on the judgment and received a receipt marked, “Balance on Judgment.”

The defendants have moved this court to dismiss the appeal on the ground that the plaintiffs have accepted the benefits of the judgment and cannot now seek its reversal. In support of this motion defendants filed an affidavit which, among other things, states that defendants “have in fact satisfied the said judgment in full.” This statement is not denied. The plaintiffs contend that the motion to dismiss should be denied because they did not appeal from that part of the judgment decreeing recovery of the $29,214.18 rent accrued and interest; that their appeal is from those parts of the judgment declaring the lease to be valid, denying them attorneys' fees, and allowing the defendants an offset; and that these provisions of the judgment are severable from the provisions respecting recovery of the accrued rental. The plaintiffs further note that they also are appealing from an order after judgment.

“It is the general rule that the voluntary acceptance of the benefit of a judgment or order is a bar to the prosecution of an appeal, since the right to accept the fruits of the judgment and the right to appeal therefrom are wholly inconsistent, and an election to take one is a renunciation of the other.” (Mathys v. Turner, 46 Cal.2d 364 , 365 [ 294 P.2d 947 ] ; Schubert v. Reich, 36 Cal.2d 298 , 299 [ 223 P.2d 242 ].)

The application of this general rule is limited where the judgment under consideration consists of severable parts. In such a case “a party by voluntarily accepting the fruits of one portion thereof does not necessarily estop himself to attack other and severable portions thereof upon appeal.” (Preluzsky v. Pacific Co-operative C. Co., 195 Cal. 290 , 293 [ 232 P. 970 ] ; Gudelj v. Gudelj, 41 Cal.2d 202 , 214 [ 259 P.2d 656 ].) The plaintiffs claim they come within the aforesaid limitation.

On appeal plaintiffs contend that the lease is void, or if not void, has been terminated, and that the trial court’s decision to the contrary is in error. If either of their contentions is correct, they would not be entitled to the rent provided for under the terms of the lease. When the defendants went into possession of the leased premises the building they were to occupy had not been completed and, as determined by the trial court, the lease provided that they should pay a rental equal to 6 per cent of the gross income from the business conducted thereon until the building was completed, whereupon the rental would continue to be payable in accord with the same percentage formula but a minimum fixed pursuant to another formula would be imposed. The plaintiffs contended that the building was completed on February 1, 1958, and demanded the minimum payment, which was in excess of the amount being paid under the percentage provisions. The defendants contended that the building had not been completed. The addendum provided for arbitration of any dispute respecting “the time when the Lessors obligations to complete the building have been substantially complied with’’ and the “date on which the payment of minimum rental shall commence. ’ ’ Attempts by the parties to arbitrate were futile and the complaint herein was filed without arbitration. At the trial both parties waived arbitration,- admitted that attempts to arbitrate had failed; and stipulated that the court should act as arbitrator and, as such, determine the matters referable to arbitration under the agreement.

Not having received the minimum rental demanded by them, the plaintiffs, on September 17, 1958, served defendants with a notice declaring plaintiffs’ election to terminate the lease on account of defendants’ refusal to pay the minimum rental and to comply with other specified covenants contained therein. The lease provided that, at the option of lessors, the term thereof would terminate should lessees refuse or neglect to pay any rental due thereunder or to perform any covenant thereof. Two days later plaintiffs commenced this action. The triable issues were set forth in a pretrial order, as hereto

It is obvious that the amount of any recovery by the plaintiffs was based on the minimum rental requirement in the lease which, in turn, was based on its present valid existence.

Also, it is undisputed that since entry of judgment the defendants have paid to and the plaintiffs have received the minimum monthly rental prescribed by the lease.

In addition, by accepting from defendants the sum of $541.95 as the balance owing on the judgment, the plaintiffs credited the defendants with the sum of $627 which the court awarded them as an offset.

If the lease is void or has been terminated, as plaintiffs contend, they are not entitled to the rental therein prescribed. They argue, however, that under such circumstances, even though they may not recover the agreed minimum rental, they are entitled to the reasonable value of the use of their property during the time of defendants’ occupancy; that this amount equals the amount awarded them by the court and the amount they are now receiving; and, consequently, they should not be estopped to proceed with their appeal. Granted the correctness of their factual premise and its judicial determination, the law might sustain their conclusion. (Mathys v. Turner, 46 Cal.2d 364 , 365 [ 294 P.2d 947 ].) However, the court made no finding respecting this matter and did not award plaintiffs the reasonable value of the use of their property. The value of that use conceivably could be smaller than the minimum rental prescribed by the lease. It follows, therefore, that the plaintiffs have taken advantage of that puirt of

The plaintiffs contend, however, that they cannot be estopped to assert the illegal nature of a transaction, citing Fewel & Dawes, Inc. v. Pratt, 17 Cal.2d 85 , 91 [ 109 P.2d 650 ], and Reno v. American Ice Mach. Co., 72 Cal.App. 409 [ 237 P. 784 ]; that an agreement which violates the law against perpetuities, being against public policy, is illegal, citing In re Walkerly, 108 Cal. 627 , 659 [ 41 P. 772 , 49 Am. St. Rep. 97 ] and Burns v. Grable, 138 Cal.App.2d 280 , 288 [ 291 P.2d 969 ] ; that their appeal is an objection to the illegality of such an agreement which is sustained by the judgment; and therefore, they cannot be estopped to prosecute such appeal.

The trial court has determined that the lease in question does not violate the rule against perpetuities. What the plaintiffs have done by accepting a part of the judgment based on the findings is to waive their right to have the determination of the trial court reviewed on appeal and not their right to raise, in a proper proceeding, an objection to the lease on the ground that it violates such rule.

Moreover, in considering the foregoing contentions we have reviewed the record; have determined that plaintiffs’ basic premise of claimed illegality is false; and conclude that the argument in support of their claim that they are not estopped to proceed with this appeal is without merit.

The trial court found that the instruments entitled lease and addendum constituted one contract. (Mayers v. Loew’s, Inc., 35 Cal.2d 822 , 827 [ 221 P.2d 26 ] ; People v. Ganahl Lumber Co., 10 Cal.2d 501 , 507 [ 75 P.2d 1067 ] ; Civ. Code, § 1642.) As such, obvious ambiguities and uncertainties appear. The instrument entitled “Lease” provides for a 10-year term commencing on completion of construction of the improvements therein contemplated, and further provides that

Under any circumstances, the uncertainties and ambiguities thus presented authorized the admission of parol evidence to interpret the contract. The court found that the “Lease” and “Addendum” should be construed as providing that the term thereof commenced as of the date of execution, i.e., September 23,1957, and, as this is an appeal on the judgment roll alone, it must be assumed that the evidence supports this conclusion.

The plaintiffs contend that such a conclusion is contrary to an allegation in their complaint, which was not denied by the defendants’ answer, that the Addendum provided that lessees would use and occupy the premises in question on a month to month basis; and that upon completion of the building the leasehold term would commence. The complaint also incorporates by reference the provision of the “Lease” and “Addendum,” copies of which were attached as exhibits. Waving aside defendants’ contention that the allegations referred to were conclusions of law and not of ultimate fact, the net result of this pleading is a presentation of uncertain

We conclude, therefore, that the trial court’s determination that the leasehold commenced on the date the “Lease” and “Addendum” were signed is sustained by the record on appeal and its conclusion that the resulting agreement was not in violation of the rule against perpetuities necessarily follows.

As heretofore noted, the plaintiffs, by accepting the fruits of the judgment, are barred from prosecuting their appeal from that part thereof declaring the lease valid and existing as well as from that part awarding plaintiffs an offset. For this reason the other contentions urged by plaintiffs with respect to these appeals will not be considered.

However, their appeals from a third part of the judgment and from the order after judgment remain for consideration.

The court adjudged that “plaintiffs are not entitled to attorneys ’ fees. ’ ’ This determination was based on findings that the actual fault for causing the controversy presented to the court “lies equally with each party”; that “the Addendum to the Lease contained an Agreement to arbitrate controversies respecting completion of the building and commencement of minimum rental . . . and that both plaintiffs and defendants failed and neglected to arbitrate, the fault for such failure and neglect resting equally with both parties”; “that the action to enforce the obligations of the lease was premature in that these matters should have been settled by arbitration”; and “that the obligation to pay attorney fees should not apply.”

The lease provides that the lessees shall pay all attorneys’ fees incurred in enforcing any of the obligations of the lease or in any litigation in which the lessors, “without their fault,” become involved on account of the lease.

The trial court concluded that the action in question was not brought to enforce any of the obligations of the lease. It was an action in declaratory relief which was brought to effect a judicial determination that the lease either was void or had been terminated. Any attorneys’ fees incurred for this purpose were not incurred to enforce the obligations of the lease. Having determined the controversies presented by the complaint adversely to the plaintiffs, the court proceeded to conclude all of the issues before it and awarded a judgment for rent in their favor. Nevertheless, the fact remains that any attorneys’ fees incurred in prosecuting this action were not

Moreover, there is no pleading that plaintiffs incurred any attorneys’ fees with respect to the matters covered by the lease, or at all. Their agreement with the attorney representing them in this action has not been disclosed and whether they have incurred any attorneys’ fees as a result thereof does not appear. The attorneys’ fees in question are recoverable as damages under the lease and not as costs. (Genis v. Krasne, 47 Cal.2d 241 , 246 [ 302 P.2d 289 ] ; Stubblefield v. Fickle, 123 Cal.App.2d 325 , 326 [ 266 P.2d 808 ].) Pees on account of services rendered in connection with an action arising out of a contract providing for the payment thereof may be recovered as special damages, but the “rules of pleading require such damages to be specially averred.” (Prescott v. Grady, 91 Cal. 518 , 522 [ 27 P. 755 ]; Cirimele v. Shinazy, 124 Cal.App.2d 46 , 52 [ 268 P.2d 210 ].) Attorneys’ fees recoverable as damages may not be allowed without pleading and proof that there is a contract provision for them (Genis v. Krasne, 47 Cal.2d 241 , 246 [ 302 P.2d 289 ]), and that the facts authorize recovery under such provision. The extent of the lessor’s right and the lessee’s duty with respect to such fees “is measured by the terms of their agreement.” (Genis v. Krasne, 47 Cal.2d 241 , 248 [ 302 P.2d 289 ].)

The record presented on this appeal does not establish any error in the judgment decreeing that the plaintiffs are not entitled to attorneys’ fees herein.

The appeal from the order quashing the writ of execution issued on August 15, 1958, was taken, so plaintiffs contend, in order that they may recover sheriff’s costs in the sum of $126.50 which were incurred in making a levy under that writ. The plaintiffs claim that the writ was properly issued because the trial court was not authorized to grant a stay of execution for a period longer than 30 days after entry of judgment; that the order granting the stay Eor a period of