Ellis v. BradBury

California Supreme Court Mar 14, 1888 No. No. 9725Published

Before: Temple

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Holding. The court held that while the tax covenant in the lease runs with the land and is divisible, the plaintiff's method of calculating the defendant's proportionate tax liability based on front footage rather than relative value was erroneous.

Issues

Whether a complaint alleging a breach of a tax covenant in a lease is sufficient against a general demurrer when assessment details are pleaded generally.
Whether a tax covenant in a lease is a covenant running with the land and is divisible.
Whether the proportionate tax liability of a sublessee should be determined by front footage or relative property value.

Disposition. Reversed and remanded for a new trial.

Quotations verified verbatim against the opinion

“We think the covenant was one running with the land, and was divisible, but we think the method adopted to ascertain the proportionate tax upon the portion sublet was clearly erroneous.”

“Property is assessed in proportion to its value, and the division should be made on that basis.”

Synopsis

Lease—Covenant to Pat Taxes—Breach oe—Allegation oe Assessment — Pleading. — In an action by a lessor for the breach of a covenant by the lessee to pay taxes, it is not essential to the statement of a cause of action that the complaint should specifically allege all the steps necessary to constitute a valid assessment. A general allegation in the complaint showing that the demised premises were assessed for state and county purposes, and the amount of the taxes due thereon, is sufficient, when tested by a general demurrer.

Id. —Covenant Runs with Land. — A covenant by a lessee to pay taxes on the demised premises runs with the land, and is divisible.

Id. —Liabilitt oe Assignee how Determined. —Where a lease contains a covenant by the lessee to pay taxes, an assignee of a portion of the leased premises, which are assessed as a whole, is liable for the taxes assessed thereon in the proportion that the value of the land assigned to him bears to the whole of the leased premises.

Temple, J. —Plaintiff, by indenture in writing, leased to Samuel Tyler certain lots of land in San Francisco for a term of fifteen years. The lessee covenanted to pay all taxes levied or imposed upon said premises, or any part thereof, or upon the owner on account thereof. The lessee assigned all his right, title, and interest in said indenture as to a portion of one of said lots leased to the defendant, Bradbury. This action is to recover a proportion of the taxes on the whole lot, levied after such assignment, and alleged to have been -paid by plaintiff under authority given in the lease.

In addition to the covenant on the part of the tenant to pay the taxes when they became due, the lease provides that:—

“ If any of said taxes, charges, assessments, or impositions should become due and payable and remain unpaid, [236]and the said demised property should be offered for sale, then the party of the first part may pay the same; or if said premises, or any part thereof, should be sold, then the party of the first part may redeem the property so sold therefrom; and all sums of money by said party of the first part paid as aforesaid ■ shall be repaid by the party of the second part within ten days, with interest at the rate of two per cent per month.”

To this complaint a general demurrer was interposed, and the point is made that the steps necessary to constitute a valid assessment are not specifically set forth. It is alleged in general terms that the whole of the lot in question was assessed for state and county taxes, and that the proportionate amount of taxes due upon the portion sublet to defendant is a certain sum. This suit is upon a covenant in the lease, and the assessment is a collateral matter. Under such circumstances, we think the complaint not obnoxious to a general demurrer.

We think the covenant was one running with the land, and was divisible, but we think the method adopted to ascertain the proportionate tax upon the portion sublet was clearly erroneous. Property is assessed in proportion to its value, and the division should be made on that basis. The court cannot assume that each portion of the lot had the same value per front foot; especially where, as in this case, the portion sublet had less depth than the remaining portion. Upon this question the method followed by the assessor was an entirely immaterial circumstance. That might or might not be &■ correct mode of ascertaining the value of the whole lot; but it would not follow that it would be a proper criterion of the relative value of the portion sublet to defendant. Defendant is not sued upon the covenant for allowing the tax to become delinquent, or a sale of the property to be made. The action is for money laid out and expended for his use, and since it was his duty to pay when it became due and payable, and the lessor had an inter

Ellis v. BradBury

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