Kelley v. R. F. Jones Co.

Judgment was entered in favor of plaintiff, as successor to the original lessor, and against defendant for $10,000 (unpaid rental for the last four months under a five-year lease terminating on April 30, 1966) ; a reasonable attorney’s fee, pursuant to the provisions of the lease, was also awarded. In rendering judgment for plaintiff, the trial court found against the affirmative defense that the lease was modified by an executed oral agreement between the parties where-under defendant was authorized to, and did, vacate the premises on November 1, 1965, thus releasing it from the liability eventually sued upon.

Early in 1965 steps were taken by plaintiff (lessor) to secure a possible extension of the lease. Jack C. Henderson, a real estate broker who had originally negotiated the lease for plaintiff, proposed certain renewal terms to defendant’s general manager; offers and counter-offers were made over a period of two to three months, but nothing came of them. Meanwhile, Henderson secured an exclusive listing for the entire property, part of which was occupied by defendant. On August 7, 1965, he notified plaintiff by letter that a Pontiac automobile dealership was interested; a few days later plain

A letter was secured from defendant along the lines requested, hereinafter quoted in full, under the following circumstances: During his negotiations with Poliak, the latter indicated to Henderson that he wanted possession of the property by December 1, 1965. According to Henderson, he discussed this with plaintiff, telling him that he would contact the Jones people who, he thought, would agree “in time to save my deal.” Henderson was then told by plaintiff “[t]o go ahead and proceed with it because he couldn’t make a sale without it.” Thereafter he discussed the matter with Mr. Klein, defendant’s general manager, and Mr. Jones, defendant’s president: “Well, I told them that I had a live prospect to buy the property and inasmuch as they were not going to renew they would have been—they were paying $2,500 a month rent, and Mr. Kelley authorized me to inform them that the new rent would be, say $3,250 . . . something like $3,200. They had decided that they were not going to exercise that option, so as long as they were going to eventually get out of the building at the expiration of the lease, they could— as an accommodation, they could vacate; we were willing to agree they could vacate.” Klein corroborated the fact of a meeting with Henderson in July or August at which the latter told him that ‘ ‘ General Motors was interested in the building

The letter required for deposit in escrow was then obtained. Drafted by Henderson, it read as follows:

“September 20, 1965

“Jack C. Henderson Co.

816 West Pico Blvd.

Los Angeles, California ‘1 Dear Mr. Henderson:

You have informed us that you have a sale deal pending for the Kelley property on Figueroa and Pico Blvd. We have a lease at 1269 South Figueroa Street, Los Angeles, a portion of this property that expires on April 30, 1966. We understand that you expect to get this sale in escrow within a few days and that the new buyers have agreed verbally to cancel this lease as of December 1, 1965, if and when the sale is consummated and our lease is assigned to them. We agree to vacate the premises as of December 1, 1965, if you will secure the signature of the new buyer, when the sale is put in escrow, and give us one copy of this letter, in accordance with this understanding.

“Very truly yours,

E. F. Jones Company Charles E. Klein, General Manager

“CEKrblw

“Approved:"

The above letter was turned over to the broker representing the Pontiac dealer, but the signature of the buyer (as therein requested) was never obtained. Eventually the escrow was cancelled, and a new escrow for the sale of. the property for $960,000 was entered into on January 28, 1966, between plaintiff and one Kay; the latter transaction, with California Bank

Summing up, prior to orally finding in plaintiff’s favor, the trial court observed that “the key to this law suit really, I think, is this letter of plaintiff’s 3” (the letter dated September 20, 1965). Accordingly, Finding of Fact No. IX provides: “That it is true that the defendant B. F. Jones Co. in connection with a proposed sale of the property indicated a willingness to vacate the premises as of December 1, 1965 provided the sale was consummated, provided further that their Lease was assigned to the new buyers, and provided still further that the broker would secure the signature of the new buyer on a copy of a letter submitted by defendant agreeing to the terms thereof; that it is true that said sale was never consummated, that said Lease was never assigned to the buyer, and that the letter was never signed by the buyer nor the terms thereof agreed to by him.” The above finding is made the basis of plaintiff’s principal argument in defense of the judgment, specifically, that a right which is subject to conditions precedent does not become enforceable until those conditions are satisfied, citing section 1436, Civil Code, which provides that “A condition precedent is one which is to be performed before some right dependent thereon accrues, or some act dependent thereon is performed.” In the present case, plaintiff points out, such conditions precedent were the sale to Poliak and the assignment of the lease to the new buyer; from this it assertedly follows that since the subject conditions were never satisfied, neither plaintiff nor anyone else had the right to require defendant to vacate the premises, and hence defendant’s act in abandoning the premises prior to the termination date of the lease made it subject to the claims here adjudicated. With respect to the affirmative defense herein asserted, it is additionally argued by plaintiff that the oral agreement could not have become fully executed on November §0 (when defendant vacated) since plaintiff’s request (or offer) to vacate by December 1 in return for a waiver of any further rentals due was an unconditional one which defendant, by its letter of September 20, conditionally

Although defendant requested a special finding as to Henderson ’s agency, the trial court found that he possessed neither actual nor ostensible authority on and after September 20 to modify the lease between the parties at bar; there was no finding as to such authority prior to the above date. An agency is “actual” when the agent is really employed by the principal (Civ. Code, §2299); it is “ostensible” when the principal intentionally or by want of ordinary care causes a third person to believe another to be his agent who is not really employed by him. (Civ. Code, § 2300.) “To establish actual or ostensible authority the principal’s consent need not be express. ‘ Agency may be implied from the facts of a particular ease, and if a principal by his acts has led others to believe that he has conferred authority upon an agent, he cannot be heard to assert, as against third parties who have relied thereon in good faith, that he did not intend to confer such power .... An agent’s authority may be proved by circumstantial evidence. . . ” (Tomerlin v. Canadian Indemnity Co., 61 Cal.2d 638 , 644 [ 39 Cal.Rptr. 731 , 394 P.2d 571 ].) Plaintiff did not testify at the trial of the present cause. There was evidence that Henderson had acted as plaintiff’s agent in negotiating the original lease with defendant; all during the tenancy defendant contacted Henderson whenever there were complaints, and the latter had acted as plaintiff’s agent in negotiations for an extension of the leasehold. Too, Mr. Jones testified that he had never seen plaintiff and never had any dealings with him. In Lee v. Helmco, Inc., 199 Cal.App.2d 820 , 833 [ 19 Cal.Rptr. 413 ], this court declared that the testimony of an agent at the trial is admissible to prove either the fact of agency or the extent of the authority. In light of that principle it bears emphasis that Henderson himself testified (as noted earlier) that plaintiff had told him to “go ahead” because “he couldn’t make a sale without it.” There are these additional principles controlling here: Liability of the

Finally, it is statutory law that an agency may be created and an authority conferred by a precedent authorization or a subsequent ratification. (Civ. Code, § 2397.) In this regard, the second escrow makes reference to four leases on the property to be assigned to buyer at the close thereof: however, instructions for the same escrow originally mentioned five leases, but the word “five” is deleted and “four” substituted in place thereof alongside the initials of both plaintiff and buyer. Since there is no dispute that there were four other leases in addition to the one between the parties in suit, the conclusion seems inescapable that long after the critical events heretofore related, Kelley by the above actions acknowledged that the lease with defendant had already terminated. Also, the same actions are a complete answer to the claim asserted in plaintiff’s brief that “we find no action on the part of respondent indicating compliance with or acceptance of the terms of the counter-proposal. ...”

It is true, of course, that whether a written contract has been modified by an executed oral agreement is a question of fact (MacIsaac & Menke Co. v. Cardox Corp., 193 Cal.App. 2d 661 , 670 [ 14 Cal.Rptr. 523 ]); but the evidence here pointed out is uneontradieted. Hence, for the reasons heretofore given, the judgment may not stand.

The judgment is reversed.

Wood, P. J., and Fourt, J., concurred.