Burns v. Sousa

SHINN, Acting P. J. On March 24, 1945, Marguerite Burns, Fritzi Ann Lalis and Olive V. Dunn, owned certain real property in the town of Atascadero, San Luis Obispo County, subject to a life estate in their father, John E. Doran. On that day they leased the premises for five years to John P. Sousa, to be used and occupied in carrying on a cafe, on-sale and off-sale liquor business which had theretofore been conducted by the owners of the property. Sousa evidently acquired the stock-in-trade of the agreed value of $10,218.91. As rental he was to pay John E. Doran $150 per month, and also to the three daughters, at the end of each month, 50 per cent of the profits of the said business and any other business conducted on the premises. The profits were to be computed by deducting from the money actually received during the month the monthly rental paid to Doran, the cost of keeping up the stock-in-trade, and the usual and ordinary expense of the business, the cost of liquor licenses, taxes and insurance, and the cost of repairs. The lease provided that the lessee would keep “perfect, just, and true books of account when each of the items of expenditure incurred in the operation of said businesses shall be set down as well as each and every item of income shall be set down, which said books shall be used in common between the parties to this lease so that either of them may have access thereto without any interruption or [512]hindrance of the other.” There were stipulations that John E. Doran should make certain exterior repairs and that the daughters would maintain the carpets and other interior fixtures, and that on the expiration of the term, or sooner termination of the lease, stock-in-trade to the value of $10,218.91 should belong to the lessee' and that any excess should be divided one-half to Sousa and the remainder to the three women. There was a provision for termination of the lease in the event of violation of its terms by the lessee. There was attached to the agreement a duly executed certificate of limited partnership between Sousa and the three women under which defendant was general partner and the others limited partners in ownership of the liquor licenses. On the termination of the partnership the latter were to own all liquor licenses. The life estate of John E. Doran was terminated by his death in 1945. On December 9, 1946, Mrs. Burns, Mrs. Lalis, and Mrs. Dunn served on Sousa a written notice of termination of the lease, and demand for possession upon the ground that by the lease “lessee promised to keep at all times just and true books of account when each of the items of expenditure incurred in the operation of said business shall be set down as well as each and every item of income; and whereas said lessee has failed to perform said covenant and others as set forth in said written contracts and has defaulted in the performance of lessee’s promises therein contained,” and stating, “now therefore, lessors hereby elect to terminate said lease,” etc. Sousa refused to agree to the termination of the lease or to surrender possession, and the present action in unlawful detainer was brought by Marguerite Burns and Fritzi Ann Lalis. Olive V. Dunn gave notice that she rescinded and cancelled the notice of termination of lease, so far as she was concerned, she declined to join as a plaintiff, and was named as a defendant. Her interests are identical with those of her two sisters and for convenience we will refer to all three of them as plaintiffs. The complaint alleges that Sousa has not kept books of account as he agreed to do, but that the books he has kept or made accessible to the lessors are imperfect, unjust, incomplete and untrue; that the lessors have been unable to determine therefrom what their share of the profits have been, and they are “informed and believe that defendant Sousa has paid said lessors less than 50% of the net profits of said businesses.” Defendant answered and a trial was had before the court. The court found the allegations of the complaint with reference to