Gavin v. Blumenthal

WOOD (Fred B.), J. This is an appeal by the plaintiffs from a judgment for the defendant in an action tried by the court without a jury upon a complaint for $4,000 had and received to and for the use and benefit of the plaintiffs.

Appellants’ theory is that the money was paid under mistake of fact or of law. They make no claim of any error of law occurring at the trial. The only question is whether or not the evidence supports the judgment.

It appears from the evidence that in February, 1948, appellants held an apartment house under lease from respondent at a rental of $700 per month with a term that had three and one-half years yet to run. Desiring to sell, they engaged the services of a real estate broker, a Mr. Taylor, who found purchasers, referred to as the Littles, who agreed to pay $21,000 for the leasehold interest, the furniture and furnishings, and the good will of the business, “subject to a satisfactory lease [720]for purchasers” and hill of sale by sellers. A new lease was negotiated between the Littles and respondent at a rental of $800 a month for a term of five years with an option in their favor for a five-year renewal, coupled with a power in the lessor to cancel the lease upon payment to the Littles of the sum of $21,000, the amount of their investment. Respondent executed and delivered to appellants a release of their obligations under the old lease, and they returned that lease to him with their relinquishment of their rights in and to it endorsed upon it.

For his part in the transaction, respondent demanded and received the sum of $5,000, of which $1,000 was paid by Mr. Taylor or the firm with which he was associated, out of the realtor’s commission, and $4,000 by Mr. Taylor upon the direction of appellants, out of the proceeds of the sale of their interest to the Littles. In respect thereto, respondent executed and delivered two receipts. One, dated February 19, 1948, recited the receipt of $1,000 from Love Investment Company, the firm with which Mr. Taylor was associated, “as consideration for entering into a lease” of the premises with James and Bessie Little. The other, dated February 27, 1948, recited the receipt of $4,000 and that in consideration therefor respondent released appellants from all obligations under their lease with him, and from any and all claims respondent had or might have against them.

Appellants claim that the transaction concerning the new lease with the Littles was consummated February 19, the date which the $1,000 receipt bears; that the old lease was thereupon cancelled by operation of law and all obligations of appellants under it terminated; hence, that when on February 27, they paid the $4,000 and received their release, respondent gave nothing and they received nothing; that on the 27th they were unaware of the new lease, desired respondent’s consent to a transfer of the old lease, did not ask for a release of their obligations under the old lease, and thus paid the money under mistake.