Masonic Temple Ass'n v. Stockholders Auxiliary Corp.

THOMPSON, J.

Judgment was rendered in favor of the plaintiff for costs incurred in restoring to its original condition demised premises after the termination of a lease. The interior of the building which is situated on the leased premises was altered by the lessee pursuant to an agreement to restore the property to its original condition at the expiration of the lease. The appellant claims that the obligation to restore the premises is conditioned upon its exercise of an option to renew the lease for an additional five-year term. The option was not exercised. The appellant refused to restore the building. This suit depends upon the construction of the agreement under which the building was remodeled.

The plaintiff, a corporation, owns lot 5 and the east twenty feet of lot 6, in a block bounded by I and J and Eleventh and Twelfth Streets in Sacramento. September 11, 1923, the plaintiff executed a five-year lease of a portion of this lot, together with the building which is situated thereon, to the Bancitaly Corporation, for $150 rental per month, to be used for the purpose of conducting a banking business. This lease was immediately assigned to the defendant corporation. By written consent of the plaintiff, the interior of the building was radically altered by the appellant, at its expense, and occupied as a banking business during the entire term of the lease. The remodeling of the building included the installing of a concrete vault, toilets, sinks and radiators; the removal of partitions and a stairway; the laying of marble floors and the closing of two entrances into the building. The lease contains the usual provisions that all alterations of the building are to be made at the expense of the lessee and only with the written consent of the owner,

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and. that at the termination of the lease the premises shall be surrendered in as good condition as reasonable use thereof will permit. December 17, 1924, pursuant to the requirement of the original lease, the appellant secured a written authorization from the plaintiff to make certain alterations in the building. This instrument was termed an “option”. In addition to authorizing the remodeling of the building, it granted the appellant the privilege of renewing its lease at the termination thereof for another five-year term upon conditions therein expressed. The chief purpose of the written document was apparently to secure a permit to remodel the interior of the building to adapt it to use as a banking business. Regarding the obligation for the cost of the alterations and the restoration of the building to its original.condition at the termination of the lease this instrument provides that: