Fatjo v. O'Connell

NOURSE, P. J. The plaintiffs appeal from a judgment adverse to them in a suit involving rentals under a lease tried before the court without a jury.

The lease in question was executed on June 1, 1936, for a term of five years commencing November 1, 1936, covering approximately 45,000 acres of land used for the pasturing of cattle. It called for a minimum annual rental of $32,000 with a stipulation for additional payment by the lessee in the event that the average sales price for any one year of “good grade grass slaughter steer cattle (900-1100 lbs.) ” exceeded six cents per pound.

The controversy between the parties centers on the average sale price of such cattle in the years 1937 and 1938, the plaintiffs alleging that such price was 9.48 cents per pound for the year 1937 and 8.171 cents per pound for the year 1938. The defendants, on the other hand, contend that the average sales price of such cattle was not in excess of 8.545 cents per pound for the year 1937 and not in excess of 7.03 cents per pound for the year 1938. On the basis of what the defendants then believed these factors to be they paid for the year 1937 in excess of the $32,000 stipulated rent the sum of $4,320, and on the same basis they paid for the year 1938 an additional rental of $1,875. They now claim that they paid too much. The plaintiffs disputed both of these items and upon the basis of their estimate of the average sales price of such cattle claimed the sum of $900 to be due in excess of the additional sum paid by the defendants for the year 1937, and the sum of $1,381.50 in addition to the sum paid by the defendants for the year 1938. Plaintiffs brought the action to recover these two additional sums, and the defendants filed a cross-complaint to recover what they claimed they had over-paid on account of rentals for these two years.

[66]The lease provided that for the purpose of determining the average sales price of such “good grade grass slaughter steer cattle (900-1100 lbs.) for any of said years, the records of the Federal State Market News Service as published in the daily livestock market summary of the United States Department of Agriculture issued at San Francisco shall be used, taking the average daily sales at South San Francisco Market for good grade grass slaughter steer cattle (900-1100 lbs.) for the months of May, June, July, and August of each of such years”. A specimen copy of one of such market summaries was attached to the lease and identified by appropriate markings showing the sales price of such cattle for the particular day for which the summary was issued. The lease then provided: “In the event that the above market service is not available then the parties of the first part shall have the right to use the records taken from the books of the sellers and buyers of slaughter steer cattle sold from said ranch during the months of May, June, July and August of each of such years.”