M. Friedman & Co. v. Sterling Furniture Co.

STURTEVANT, J. In an action brought to recover moneys alleged to be due under the terms of a written instrument, the trial court made findings in favor of the plaintiff and from the judgment entered thereon the defendant has appealed.

The defendant makes several points, the substance of each one being that under the facts it is not liable in any sum whatever. That claim is based on the following story: For many years M. Friedman & Co. conducted a retail furniture business at 259-273 Post Street in San Francisco. The building was leased from Hobart Estate Company. The lease was dated April 10, 1921, and provided a term of twelve years expiring April 9, 1933. It contained no limitation as to the business to be conducted by the lessee. It contained a provision limiting the right to assign without the lessor’s consent, but it did not contain a provision against subletting. In the early part of 1929 M. Friedman & Co. decided to retire. After some negotiations, on April 3, 1929, it entered into a contract with the Sterling Furniture Company under the terms of which M. Friedman & Co., as the seller, agreed to sell its merchandise then on hand, and the Sterling Furniture Company agreed to buy the same, under the terms provided in a written contract executed by the parties on that date. The buyer did not buy the lease. At the time the contract of purchase was-entered into the lease had four years to run and the rental reserved for those years was specified at $2,721.59 per month. Among other provisions contained in the contract between the seller and the buyer was the following:

“Refund of Rental. In the event that the Seller shall not succeed in re-letting or re-leasing the Post street premises, nor in securing the consent of the owner thereof to a cancellation and surrender of its existing lease on said premises, prior to September 1st, 1929, the Buyer further agrees to refund to the Seller one-half of the net rental paid by the [687]Seller for said premises each month for the period commencing September 1st, 1929, and ending January 1st, 1930, not exceeding in all, however, the sum of Six Thousand ($6,000) Dollars. ”

Without consulting the defendant, and without first obtaining any authority from it so to do, on the eleventh day of July, 1929, M. Friedman & Co. entered into a written contract with the Hobart Estate Company under the terms of which M. Friedman & Co. surrendered to the owner the premises and every part thereof, and the owner undertook to entirely reconstruct the interior of the building for the use of “Ransohoffs” and at the same time the owner entered into a lease with “Ransohoffs” under the terms of which the new lessee would take possession January 1, 1930, and would commence paying rent on February 15, 1930. In said agreement a provision was inserted that the lease dated April 10, 1921, should terminate February 15, 1930, and that the sums accruing under the lease dated April 10, 1921, should be paid as stated in said lease down to February 15, 1930.