Southern California Aircraft Corp. v. City of Ontario

GRIFFIN, P. J. Plaintiff and appellant Southern California Aircraft Corporation, an aircraft manufacturer, brought this action against defendant and respondent City of Ontario for declaratory relief. It involved a provision of a lease of certain land and improvements at the Ontario International Airport owned by and located in the city of Ontario, whereby defendant leased these premises to plaintiff under a lease dated October 31, 1950, for a term of five years, with option of renewal. The particular paragraph of the lease here under question is paragraph 6. It provides:

“Taxes and Assessments.

“The City shall pay all assessments, taxes and similar charges levied upon the Leased Property. Southern California shall pay all such charges upon Southern California’s property and all utility charges incurred by it at the Leased Property during the term of this lease.”

The “Leased Property” described in the lease was certain described real property and certain hangars erected thereon, together with certain described personal property and office buildings. Additional real property was leased under one of the options.

In 1956, for the first time, the assessor of San Bernardino County assessed the possessory interest of plaintiff in the leased premises and levied a tax thereon in the sum of $3,036.90. The county demanded payment by the lessee and the lessee informed lessor of said demand. The lessee then demanded that lessor pay said tax. Upon refusal of payment by lessor, lessee paid it and duly presented a verified claim to lessor city for reimbursement of said sum, which claim was rejected on July 12,1957. Plaintiff brought this action. It was submitted to the trial court for decision on the pleadings as framed. The city contended that no tax was levied upon the “Leased Property” set forth in the lease; that the possessory right of plaintiff under the lease was personal property of lessee and completely separate and distinct from the “Leased Property” itself, as appeared upon the rolls of the county assessor; and that under the second sentence of paragraph 6 of the lease “Southern California shall pay all such charges upon Southern California’s property . . .”; that plaintiff became liable for such taxes; that if the parties had agreed and intended that the city should pay the possessory interest tax, it would have been a simple matter to insert such a provision in the lease; and that in a contract between a public body and a private party it is presumed all uncertainty was [592]