Pomona Valley Center, Inc. v. Nash's of Pomona

BISHOP, J. pro tem.* The plaintiff had prayed for a declaratory judgment, but not the one that was entered, and so it has appealed. We have concluded that the trial court was warranted in decreeing, as it did, that the activities of the Sperry and Hutchinson Company, which is occupying 6,000 square feet of the premises leased by the plaintiff to the defendant Nash’s of Pomona, are not to be taken into consideration in figuring the 3 per cent of the monthly gross sales that the defendant (Nash’s of Pomona) agreed to pay as rental, and so we are affirming the judgment.

The plaintiff leased to the defendant (by which term we refer to the defendant Nash’s of Pomona and not to its co-defendant, F. C. Nash & Co.), a building in its shopping center for a period of close to 20 years. The rental for the first two years was to be 3 per cent of a basic figure provided for in section 9 of the lease, and thereafter a minimum of $3,500 per month, together with any amount over that, that the 3 per cent might amount to. The vital question on this appeal is, as already suggested, this: In determining the 3 per cent that was the rental to be paid during the first two [539]years, and that may have to be taken into account during the balance of the term, is the business done by Sperry and Hutchinson Company a factor?

The answer to this question depends, first of all, upon the provisions in section 9 of the lease. The section begins simply enough: “During the first two (2) lease years Tenant agrees to pay to Landlord monthly as rental for the demised premises an amount equal to three percent (3%) of the monthly gross sales of Tenant, as hereinafter defined. . . .” Then follow provisions that make use of the same 3 per cent to determine whether, throughout the remaining life of the lease, the rental shall be more than $3,500 any month.

The second paragraph of section 9 gets down to the business in hand: “The term ‘gross sales’ or ‘gross receipts’ as used in this lease shall include all sales made and all cash and credit revenue of Tenant and any persons, firms or corporations claiming through or under Tenant as subtenant, concessionaire, licensee or otherwise, at, in, upon or from the demised premises, and the store in business conducted therein by Tenant, its subtenants, concessionaires and licensees and all other things of value received or receivable by Tenant, its subtenants, concessionaires and licensees arising from any transaction whatsoever, including orders for sales received in the demised premises and delivered from any other store or place and those involving sales, exchanges of goods, wares and merchandise or other property, whether sold for cash or on a charge basis, collected or uncollected, and including the gross compensation or consideration received or receivable for services rendered to customers in the conduct of business upon the demised premises less the following: ’ ’ Then follow some five deductible items and then 10% legal-size pages of provisions, none of which throws any light on our problem.