Gourmet Lane, Inc. v. Keller

PIERCE, P. J.

Plaintiff, after a court trial, recovered a money judgment in an action based upon a contractual obligation by defendant to pay his agreed share of certain expenses in a joint food purveying operation.

Defendant’s appeal is on the ground that neither of the two theories of plaintiff’s complaint was established. These theories were: (1) a direct agreement between plaintiff, an incorporated association, and defendant, one of its members, whereby the latter agreed to pay at the rate charged by plaintiff’s board of directors for services admittedly received ; and (2) defendant’s obligation under a third party beneficiary contract to pay at such rate. The findings and holding of the trial court are in favor of plaintiff on both counts. We agree.

Plaintiff has seven shareholder-members, all of whom are directors. The seven are operators of food-dispensing concessions under separate leases with Kassis Building Corporation in the concourse of a large Sacramento market owned by the lessor. This concourse is known as Gourmet Lane.

The lessor furnished a dining area, kitchen, dishwashing and garbage disposal facilities used in common by these seven tenants.

Each lease contains the following provisions: “Lessee promises and agrees, together with such other tenants as there may be of the other concourse shops, to maintain and operate in a sanitary businesslike manner the said dining

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area at no cost or expense of any nature to lessor. Lessee shall enter into an association and cooperate with such other tenants in the operation of said dining area. This obligation is to be joint and several among all of said tenants.

A decision of the majority of said tenants with regard to the details of the operation and maintenance of said area and allocating the costs thereof shall he binding upon lessee and all of the other

tenants(Italics supplied.)

The tenants first operated as a voluntary unincorporated association, but soon decided to incorporate and plaintiff corporation was organized. The bylaws, approved by defendant, provide that a majority of directors shall constitute a quorum. They also provide: ‘ ‘ Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors,...”