Nelson v. Angel

GOODELL, Acting P. J.

This is an appeal from a judgment in defendants’ favor after their demurrer- to the amended complaint had been sustained without leave to amend.

The action was brought by the lessor against his two lessees of premises on Mason street, in San Francisco, to be occupied as a night club. The lease was dated April 30, 1947, to run for a term of 10 years commencing on August 1, 1947.

The lease (which consists of some 33 articles) provides that it may be assigned to a California corporation organized by lessees. -Such corporation, named Hellenic Enterprises, Inc., was so organized, an assignment to it was made on July 1,1947, and the corporation on that day accepted and assumed the lease and agreed to perform and be bound by all its terms and conditions. Hellenic Enterprises, Inc., is not sued.

Attached to the lease is an inventory of the equipment, furniture and other personal property located on the premises and owned by lessees, “subject to certain encumbrances.”

By paragraph four lessees agreed to execute to lessor and record, not later than July 31, 1947, a chattel mortgage which would be a first lien (1) on all the inventoried property, free and clear of all encumbrances, and (2) on all equipment, furniture and personal property thereafter placed in the premises, which would be a first lien thereon subject to any conditional sale contracts covering such new property (with certain limitations respecting the amount or value thereof), to secure the faithful performance of the lease including the rent. Paragraph four provided, further, that whenever any personal property was placed by lessees on the property subject to conditional sales contracts, exact copies of such contracts would be immediately furnished to lessor, who would have the right to pay off such contracts, and to have them assigned to him by the conditional vendors.

Paragraph five contains the provisions mentioned above respecting assignment to a corporation. Those provisions, however, contain the proviso that such assignment may be made only if lessees 11 are not then in default in the performance of any of the terms of this lease . ; and upon the written assumption of this lease by such corporation and the compliance by said Lessees or by said corporation of the terms of

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