Courtright v. Dimmick

CRAIL, P. J.

This is an appeal from a judgment in favor of the plaintiffs. It is interesting to note that the action was started in the Superior Court of Los Angeles County February 8th of the current year. The decision on appeal is filed July 19th.

The Bank of America, as trustee under a bond issue amounting to $730,000, had taken possession of the Beverly Hills Hotel upon default in a payment on the bonds. A bondholders’ committee, the plaintiffs herein, was organized to protect such of the bondholders as cared to join it. The defendant obtained possession of the premises under a lease from the bank as trustee which, when boiled down for brevity and clarity, contained the following provisions as to its termination:

“The term of this lease is to commence as of the 15th of December, 1933, and to continue until the termination of the right of possession of the trustee and/or lessee [defendant] through foreclosure sale under the terms of said trust indenture. Provided however that under no circumstances shall the term continue beyond the 14th of December, 1938.”

The committee was in control of $327,000 of the bonds at the date of the lease. At the date of the foreclosure sale, after more than three years’ time, it had gathered together a total of $660,000 in bonds. The committee purchased the property at the sale, using its bonds in payment as far as they would go and paying the balance in cash, and thereafter notified the defendant to surrender possession. The defendant refused to surrender, claiming that his lease had not been terminated by the foreclosure sale. Thereupon this action was instituted and judgment of restitution entered.

The primary contention of defendant upon appeal is that the language of the lease above quoted is ambiguous in that it is susceptible of either of two interpretations; one, that any foreclosure under the trust deed terminates it, and another,

“that only such foreclosure as deprives the plaintiffs of control of the property terminates it”,

and there

[70]

fore the court erred in refusing to admit oral evidence to explain its meaning.