Lewis v. McWhirter Petroleum Co.

SHINN, P. J.

McWhirter Petroleum Company and Van McWhirter, hereinafter referred to as defendant, appeal from a judgment declaring null and void a lease upon a parcel of land improved and operated as a gasoline service station. Prior to July, 1945, the property was owned by Kimball and wife, and was subject to a lease to defendant which expired September 1, 1945. Defendant, who was a distributor of gasoline and oil products of Petrol Corporation, had a man named Lahy operating the station. Plaintiffs purchased the property in July, 1945, and they entered into a written lease with defendant as lessee, for the term September 1, 1945 to September 1, 1950. The only provision for rent was “one cent a gallon on all leaded gas” payable on or before the 10th day of each month. At the time the lease was executed it was orally agreed between plaintiffs and defendant that the former might enter into possession of the premises and operate the station, receiving certain discounts for products purchased from defendant, and that they would not be evicted by defendant during the term of their lease to him. Defendant subleased the property to Petrol and took back from Petrol a sublease and contract providing for exclusive handling of Petrol products on the property. At the time plaintiffs purchased the property George Lewis could not operate the station for the reason that he was “frozen” in his job at Lockheed, but in August he was released from that employment. At plaintiffs’ request defendant discharged Lahy, placed plaintiffs in possession of the service station, and they operated it to their own satisfaction and to that of defendant, using Petrol products, and in compliance with the terms of the oral agreement, until June 7,1946, when they gave defendant notice that they terminated the lease upon the grounds of want of consideration and alleged fraud and misrepresentation of defendant in procuring the lease. Thereafter, they filed this action seeking to have the lease annulled.

Plaintiffs contend, and the trial court found, that a total failure of consideration resulted 'from the fact that the lessee was under no obligation to sell any gas on the premises and therefore could occupy the premises rent free, and that defendant promised to give plaintiffs a letter assuring them of their right to remain in possession and operate the station

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for the duration of the lease, but that he never gave them such a letter.