A. P. Johnson Co. v. Circle Auto Parks, Inc.

SHINN, P. J. Two actions, one brought by Circle Auto Parks, Incorporated, against A. P. Johnson Company, for declaratory relief, and the other by A. P. Johnson Company against Circle Auto Parts, Incorporated, in unlawful detainer, were consolidated and tried together, judgment being rendered in favor of Johnson Company for restitution of the premises, rent and damages. Circle Auto Parks, Incorporated, appeals.

The premises in question are located in the 600 block on South Olive Street in Los Angeles, and consist of two city [433]lots having a large vacant area. The property, excepting the improved portions, was leased to Circle January 1, 1945, for a four-year term, as an auto park, the lease reserving to the lessor, Johnson Company, the privilege of terminating the tenancy of Circle at the option of the lessor and upon 60 days’ written notice. It contained this provision: “It is covenanted and agreed that the termination of the lease term, as in this paragraph provided, may be made by lessor only in case of the sale or a lease of fifteen (15) years or more of the demised property, or in the event lessor shall determine to erect a new building thereon covering at least the major portion of the ground hereunder leased.” There was the usual provision that at the expiration of the term, or any sooner termination of the lease, the lessee would quit and deliver up possession of the premises. The stipulated rental was $1,500 per month, but by contemporaneous agreement it was reduced to $1,100 per month for the first eight months, and $1,250 per month for the last four months of 1945, the reduction not to extend more than 60 days after the signing of an armistice or termination of the war with either Germany or Japan.

On August 23, 1946, Johnson Company entered into a lease of the premises, including the improved portions, with System Auto Parks and Garages, Incorporated, for a term of 15 years commencing on the first day of November, 1946, and ending on the 31st day of October, 1961, for a rental of $4,500 per month minimum, and in addition a certain percentage of gross income derived by the lessee from the demised premises in excess of $90,000 in each of the years from 1947 to 1961, inclusive. The lessor reserved the right to terminate the lease by giving 60 days’ notice of termination upon the happening of any of the following events: (a) The execution of a bona fide lease for 15 years or longer for use up to October 31, 1961, other than as an auto park; (b) the execution of a bona fide lease providing that the lessee construct a new building covering 75 per cent or more of the demised premises; (c) the bona fide determination by lessor to construct a new building covering 75 per cent of the demised premises; (d) a bona fide sale of all of the demised premises. Upon the execution of the lease to System, Johnson Company gave notice to Circle Auto Parks that its lease was terminated as of October 31, 1946. Circle denied that its lease was subject to cancellation because of the lease that had been made to System, retained possession of the premises, and the two actions were instituted. No question is raised on the appeal as to the amount of the award for