Hobson v. Metropolitan Casualty Insurance

CONREY, P. J.

On October 28, 1926, the defendant as surety, and Robert Marsh & Co., Inc., a corporation, as principal, executed to plaintiff a bond in the sum of $15,000 conditioned as follows: that “Whereas the said Robert Marsh

&

Co., Inc., have sold to A. L. Hobson and his associates, certain property with improvements located in the city of Los Angeles (describing said property) and whereas the said Robert Marsh & Co., Inc., have agreed with the said A. L. Hobson and his associates, that the property herein described will not be vacated by October 15, 1927; and should said property herein described be vacated before October 15, 1927, said Robert Marsh

&

Co., Inc., agree to lease from A. L. Hobson and his associates the property herein described from such time as property is vacated to October 15, 1927, at a rental of Two Thousand Five Hundred Dollars ($2,500.00) per month, payable in advance.

[729]

“Now therefore, if the said Robert Marsh & Co., Inc., shall enter into such lease as herein referred to, and shall well and truly pay the monthly rentals herein referred to, as provided for by the terms of a lease agreement, then this obligation to be null and void; otherwise to be and remain in full force and effect.”

The execution of the bond was incidental to a transaction wherein the principal obligor (hereinafter called Marsh

& Co.)

was agreeing to convey the described property to respondent Hobson and certain other persons. The property at the time was occupied by a tenant under a lease which was subject to a right of termination by the tenant. In order to protect Hobson and his associates from such termination by the tenant prior to a fixed date, Marsh & Co. agreed that if the property should be vacated by the tenant before October 15, 1927, Marsh & Co. would lease the property at the stated rate of rental up to and including October 15, 1927. The undertaking sued upon in this action was given to secure the performance of that agreement. The tenant did vacate the property within the period against which provision was made as above stated; the accumulated rents which would have accrued under the lease exceeded the sum of $15,000; Marsh & Co. did not lease the property and did not pay the amount of said agreed rental, but refused to so lease or pay, although the plaintiff and his associates (and assignors) demanded that Marsh & Co. execute a lease of said premises and pay the rentals as specified in said bond. The foregoing facts are included in those alleged in the complaint and found by the court. The defendant appeals from the judgment, as entered against it in the sum of $15,000 with interest allowed from November 30, 1927.