Owens v. Geary Drive-In Corp.

BRAY, P. J.

Defendants appeal from a judgment granting plaintiffs declaratory relief and a judgment for $2,876.24 plus $350 attorney’s fees.

Questions Presented

1. Is the lease ambiguous as to the payment of “excess” taxes and hence parol evidence should have been admitted? Did the trial court properly interpret the lease?

2. Should this court determine attorney’s fees for this appeal?

Record

On May 21, 1952, plaintiffs and defendant Geary Drive-In Corporation, a corporation,

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entered into a lease of certain premises belonging to plaintiffs. The lease was for a 20-year term commencing March 10, 1953. In 1955, the first year in which there were “excess” taxes, the parties disagreed over the proper interpretation of paragraph 3 of the lease as to the payment of “excess” taxes, each party apparently reserving its rights. In December 1960, plaintiffs again demanded payment of “excess” taxes in accordance with their interpretation of the lease. Defendants denied responsibility therefor. Plaintiffs then commenced this action for said taxes for the years 1958-1959, 1959-1960, and 1960-1961, and for the court’s determination that defendants were obligated under the lease to pay

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‘ excess ’ ’ taxes annually in future years. At the trial, defendants contended that the lease is ambiguous and sought to introduce parol evidence for its interpretation. The court refused to admit the evidence, holding the lease to be unambiguous. It then construed the lease adversely to defendants, gave plaintiffs judgment for the accrued “excess” taxes and for attorney’s fees, and declared that plaintiffs were entitled

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to such taxes as they accrued during the remainder of the term of the lease.

1.

Lease is not ambiguous, and was properly interpreted.

Paragraph 3 of the lease is the one in controversy. It provided for a monthly rental of $850 (later by addendum increased to $975). It further provided that lessee was to pay annually, and in addition to the rent payments, the amount of any taxes levied by the City and County of San Francisco which would be in excess of the taxes levied for the fiscal year in which the real property with completed improvements was first fully assessed. (The lease provided for certain improvements to be constructed by the lessor.) Thus, the lessor was to pay the taxes on the real property and the completed improvements, but only in the amounts that they were at the time of the first fiscal assessment. Any tax in future years in excess of that basic tax was to be paid by lessee. For convenience this additional tax is referred to as “excess.”