Schnitman v. Husted

California Court of Appeal Jun 29, 1929 No. Docket No. 6824.Published

Before: Koford

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Holding. The court held that the lease, when read in its entirety, requires the lessors to continue paying taxes on the land during the renewal term, as the term "net" in the rent provision does not override the specific tax obligations defined in the lease.

Issues

Whether the lease requires the lessors to pay taxes on the land during the renewal term.
Whether the term "net" in the rent provision shifts the tax burden to the lessee.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The interpretation of the language used by the parties is not to be arrived at by considering the questioned clause as if it stood alone but by consideration of the entire instrument”

“In clause 8, above quoted, the parties have defined the sense in which they have used the word “net” and in that paragraph it is plainly apparent that whatever other deductions they contemplated should be made to arrive at the net rent, taxes on the land was not one of them.”

KOFORD, P. J.

Plaintiff and defendants are, respectively, successors in interest of the lessee and lessors under a lease of real property in San Francisco. The lease provided for a renewal term of ten years without definitely fixing the amount of rental for such renewal term. The parties being unable to agree upon the amount and the arbitration provided for in the lease having failed, the plaintiff brought this action in the Superior Court and had the court fix by judgment the amount of rent to be paid under the terms of the lease during the renewal term. The defendants appeal from the judgment claiming that the court erred in its interpretation of the lease because it decided that de

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fendants should continue to pay taxes assessed upon the land notwithstanding the lease contained a clause to the effect that such rent should be calculated at the rate of four and one-half per cent net on the appraisement of the land. The appraised value of the land was determined by the appraisement committee of the San Francisco Real Estate Board pursuant to stipulation, of the parties.

It is only necessary to set out herein two clauses of the lease, but it should he stated that at the time of the original lease the land was vacant and the lessee agreed in the lease to erect a. certain building thereon. These two provisions follow:

“8. The lessor to pay all state, city and county taxes which may be assessed upon the real estate only. The lessee to pay all like taxes that may be assessed on the improvements during the entire term hereby created, and the same shall be paid to the first party at least five days before the same shall become delinquent by law and said second party agrees to pay all assessments that may arise out of the improvements on said property or of the streets or sidewalks surrounding the same,

to the end that the income from the rental above specified may• be net to said first party and not subject to deduction or expense of any hind connected with the ownership or maintenance of said

property.” (Italics ours.)

“16. That the lessee may extend the term of this lease an additional period of ten years

Schnitman v. Husted

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KOFORD, P. J.

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