Mitchell v. Ceazan Tires, Ltd.

TRAYNOR, J.

On March 21, 1940, plaintiffs leased to defendant corporation, a wholesale dealer in automobile tires and tubes, then in possession under an earlier lease since 1937, for a three-year term to begin July 25, 1940, certain premises located at 1147 American Avenue in the city of Long Beach, used by defendant as one of several wholesale outlets for its business. The lease provided among other things that “The Lessee shall have full control and occupancy of the buildings upon said premises and may sublet or sublease. any part or portion thereof to any acceptable and responsible person, but the Lessee is to be liable for the rentals herein reserved and for the performance of all the conditions of this lease imposed upon the Lessee.

“The premises hereby leased are to be used for the conduct of an automobile tire business and other related businesses such as automobile supplies, and in no event for a business that would increase fire hazard or insurance rates.”

On December 11, 1941, the federal government issued an order restricting the sale of automobile tires and tubes to-persons assigned to A-3 or better preferential rating. On December 30, 1941, the Office of Price Administration promulgated a series of Tire Rationing Regulations, which superseded earlier regulations. The regulations were revised on February 11, 1942, to include recapped and retreaded tires. On February 23, 1942, plaintiff received written notice from defendant that it had concluded that the effect of the governmental regulations on the sale of tires excused it from further performance under the lease, and that it would quit the premises on February 25, 1942. Defendant vacated the premises and plaintiffs brought this action on March 3, 1942, seeking a judgment declaring that the lease remained in effect. The trial court found that the total amount of business transacted by defendant in California, Arizona and Nevada in the year 1941, was approximately $2,000,000 without indicating what proportion of the business was transacted at the Long Beach establishment and that the business transacted by defendant from December 11, 1941, to February 25, 1942, totaled $2,500. It concluded that the effect of the government regulations on

[47]

defendant’s business excused it from further performance under the lease. From the judgment declaring the lease terminated plaintiff appeals.