Harron, Rickard & McCone v. Cutting

KERRIGAN, J.

This is an appeal from a judgment against the defendant and from an order denying his motion for a new trial.

The action was brought to recover the accrued monthly rentals due upon a lease contract of personal property.

On February 21, 1908, plaintiff and defendant entered into a lease, by the terms of which the plaintiff leased to the defendant for the period of seven months a set of bending rolls, at a total rental of $710.85, payable in seven equal monthly installments of $101.55, commencing with the first day of April, 1908. The instrument among other things provided “that upon the failure of the lessee strictly to keep and perform any of the covenants or promises by him agreed to be performed, then and thereupon, without any notice, this instrument shall be deemed to be canceled and of no further effect as against the lessor, and all rights and interests of the lessee shall cease, and all rent by the lessee theretofore paid shall belong to the lessor as full payment for the prior use of said property; and the lessor shall be entitled to take into his possession all said property. ’ ’ The document further provided that “said lessor further agrees that upon strict performance by the lessee of the foregoing covenants and promises by him to be kept and performed, he shall then . . . have the right to purchase said property by the prompt payment to the lessor of the sum of two (2) dollars.”

Defendant made the first payment, and the plaintiff, having waited until the time for the other payments had elapsed, and none of them having been made, although often demanded, commenced this action for the balance claimed to be due.

Defendant asserts that the instrument which is the basis of this action is not a lease, but a contract of sale; and that as no bill of sale of the property was ever tendered, the action cannot be maintained; and that moreover, whether the instrument be construed as a lease or a contract of sale, the defendant is not liable, because of the provision therein that .upon

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the failure of the defendant to make any monthly payment the contract became terminated.

The instrument in question is a lease. It was so held in an action brought by the same plaintiff against Wilson, Lyon & Co., reported in 4 Cal. App. 488, [88 Pac. 512], where this court passed upon an instrument identical in form with the one here. There the court, in the course of its opinion, said that the defendant took and retained possession of the property, and no question of the title or possession of the property was involved; that the court was merely called upon to construe an instrument and determine the rights of the parties arising thereunder. The instrument was designated a lease, and that as its terms were peculiarly appropriate to instruments of hiring and lease, and as it conferred upon the defendant no right in the property except to use it, and expressly imposed upon it an obligation to pay the plaintiff for such use, it must be construed as a lease. The court, continuing, said that the other terms of the instrument restrictive of the manner in which the defendant might use the property were inconsistent with its ownership by the defendant; and the provision giving the defendant the right to purchase the property for a small sum of money furnished additional grounds for holding the instrument to be a lease.