Medico-Dental Building Company Of Los Angeles v. Horton & Converse

132 P.2d 457 (1942)

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Nature of the Case

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Facts

D entered into a written lease covering the ground floor of P's building for a term of sixteen years and four months, at a minimum monthly rental of $600 for the part of the term concerned herein, and a fixed percentage of the gross sales. D was in possession of the premises, having occupied them since 1925 under a prior lease. P agreed not to lease or sublease any part or portion of the Building to any other person, firm or corporation for the purpose of maintaining a drug store or selling drugs or ampoules, or for the purpose of maintaining a cafe, restaurant or lunch counter therein during the term of this lease. The restrictive covenant and the obligation to pay rent were included in a rider. A breach of the terms of the lease could result in termination. P leased the entire ninth floor of the same building to one Dr. Boonshaft, a physician, for a term of three years. This lease did not allow Boonshaft to run any type of pharmacy out of the space, nor to display any kinds of signs indicating that a pharmacy was there. Boonshaft maintained a drug room wherein drugs were sold and prescriptions filled per the order of the regular staff or the consultant doctors in the treatment of patients of the Boonshaft enterprise. He obtained a pharmacy license on May 10, 1938. Until June 25 of that year, he bought his drugs from D's store in the building. On June 25, 1938, he commenced buying wholesale from D's wholesale department at another location, which source of supply he continued to patronize to the time of trial. D demanded a halt to Boonshaft’s pharmacy. P was unsuccessful. D rescinded the lease. P sued D for rent. The trial court found for D in that the pharmacy clause was a material condition and P had breached it by leasing to Boonshaft and allowing him to operate a pharmacy. P appealed. P claimed (1) Covenants in leases are independent and performance of a covenant by the landlord is not a condition precedent to an action for rent against the tenant; (2) a covenant 'not to lease' for a restricted purpose is breached only by actual leasing for such purpose, or by acquiescence in the conduct of the second lessee which is in violation of the restriction, neither of which appears in this case; (3) even if the covenants are dependent and there was a breach of the covenant involved herein, the breach was not so substantial as to go to the whole of the consideration; and (4) there was a waiver by the D of the alleged violation.