Lawrence G. Beckett, Plaintiff and Appellant v. City of Paris Dry Goods Co. (a Corporation), Defendant and Appellant --- 14 Cal.2d 633, 96 P.2d 122.
Facts: Beckett (plaintiff) and a department store City of Paris Dry Goods Co. (City of Paris) (defendant) agreed that the former would operate an eye-glass shop (“optical department”) within City of Paris. The agreement called for Beckett to pay City of Paris twenty percent of his shop’s monthly sales for a term of three years. It also stated that Beckett “cannot assign this lease” without the landlord’s written consent. Two years into the agreement, City of Paris terminated the contract because of asserted violation of the provision requiring the deposit of receipts with its casher. It demanded surrender of the premises by a set date, after which Beckett’s equipment and merchandise were removed and Beckett was excluded. Beckett sued for unlawful eviction. City of Paris argued that its agreement with Beckett made him a licensee; thus City of Paris was free to revoke Beckett’s license at any time and to exclude Beckett from the premises. The trial court ruled that Beckett was a lessee and that he was wrongfully evicted. City of Paris and Beckett respectively appealed the ruling and the calculation of damages.
Issue:
-whether a contract made by the parties is a lease or only a license to occupy certain property
-whether the plaintiff can recover upon wrongful eviction, and if so, whether the damages are correctly calculated
Rule:
-A lease must show an intention to establish the relationship of landlord and tenant (Baranov v. Scudder).
-A lease must include a definite description of the property leased and an agreement for rental to be paid at particular times during a specified term. (Losson v. Blodgett) Yet, where one goes into possession of premises under a contract containing an ambiguous or uncertain description of property to be occupied and pays the stipulated rent, it will be enforced as a lease if the parties acted upon it as relating to particular premises (Baranov v. Scudder).
-An agreement under which an owner of real property allows another to conduct his own separate business in a stall or section of a store or lot creates the relationship of landlord and tenant rather than licensor and licensee (Herman v. Rohan).
Application:
Provisions that definitely point to an intention that the relationship between them should be that of lessor and lessee
Ex) the agreement provides that "the designated space shall be delivered to second party in good, tenantable condition", and that Dr. Beckett shall have "the sole and exclusive right to conduct the optical department". It also bound Dr. Beckett, in terms common to leases, "to pay as a monthly rental a sum equivalent to twenty per cent (20%) of the total monthly sales of said department".
The provision which forbids assignment without the consent of the department store is not applicable to a license, which is "a personal, revocable and unassignable permission to do one or more acts on the land of another without possessing any interest therein. ... A license, because it is personal, is incapable of being assigned by the licensee".
Rights & language that definitely indicate that a lease was intended
The parties use the term “lease” in their agreement
The phrases "good, tenantable condition", "cannot assign this lease", "space demised", and "monthly rental" are the terminology of a lease.
The retention by the store of a certain amount of control over the management of the optical department and the requirement that Dr. Beckett adhere to the rules and regulations governing its operations do not negate the showing of this intention.
If the agreement is a lease, violations of the requirement for all money received to be turned in at the end of each day are not sufficient to justify a forfeiture of it. Therefore, the plaintiff is entitled to recover upon his cause of action for eviction.
Damage calculation
During the year immediately preceding his eviction, his average monthly earnings were $259.61. As he was evicted three months before the expiration of his lease, he is entitled to the sum of $778.83 for loss of profits instead of $666 allowed as actual damages.
Also, the defendant does not deny that Dr. Beckett expended $35 for the removal of his furniture and equipment. This sum is recoverable by him.
Conclusion: Yes, it constitutes a lease. The appellant is recoverable for damages, and the judgment is modified by adding the sum of $147.83 to the amount of $666 for the damages. As so modified the judgment is affirmed.
Feedback:
Lease vs. license
- License is not considered a real property contract
- License is personal, revocable and unassignable
- Lease is impersonal, irrevocable, and transferable
Distinguish between lease and license to figure out the remedy
- No remedy for Dr. Beckett based on license because he breached the contract by failing to deposit the money with the cashier of the City of Paris
- If the agreement is a lease, violations of the requirement for all money received to be turned in at the end of each day are not sufficient to justify a forfeiture of it. Therefore, the plaintiff is entitled to recover upon his cause of action for eviction.
----- Eviction was conducted by self-help rather than by legal order à illegal è entitled to damages
Eviction
- the process used by landlords to recover possession of leased real property from tenants who do not want to leave
- the dispossession of a tenant of leased property by force or especially by legal process