Wilson v. Savon Stations, Inc. ( 1971 )

HOWARD, Judge.

This is an appeal from a summary judgment entered in favor of the defendants in a suit against them to recover the sum of $3,500, damages allegedly sustained by virtue of the termination of a sub-lease of certain real property. Plaintiffs contend that on the state of the record existing at the time the motion for summary judgment was presented, it was error to grant the motion. They also complain of the fact that the hearing on the motion and the ruling thereon occurred on May 20, 1970, whereas the motion for summary judgment had not been mailed to their counsel until May 12, 1970, thus not comporting with the time requirements enunciated in Rule 56(c), A.R.C.P., 16 A.R.S. They argue that the matter “could not have been legally heard until May 25, 1970.” We have held that the ten-day notice provision of this rule is not jurisdictional and, in the absence of a showing of prejudice, such error is harmless. Mozes v. Daru, 4 Ariz.App. 385, 420 P.2d 957 (1967). We find a complete absence of prejudice as the record reflects that the trial court afforded the plaintiffs an opportunity to present, via oral testimony, their opposition to the motion.¹

The record discloses the following undisputed facts. On or about March 1, 1967, the owners of the property located at 721 South 19th Avenue, Phoenix, Arizona, entered into a lease agreement of the property with Savon Stations, Inc. This lease provided for a leasehold of ten years commencing April 1, 1967, and for termination in the event of default as to rental payments and/or failure to comply with other covenants of the lease. It also contained a provision prohibiting assignment of the lease, in whole or in part, but granted the lessee the right to sublease the premises or any part thereof except that the lessee would not be relieved of its obligations thereunder.

On January 22, 1969, a lease of the subject property was executed between Arizona Oil Company, Inc.,² as lessor and the plaintiff-husband as lessee for a period of five years commencing January 22, 1969, at a monthly rental of $200 per month payable in advance on the first day of each month. The printed portion of the lease also provided:

“12. BASE LEASE. Upon expiration or sooner termination of any lease (hereinafter called the ‘base lease’) on which the Lessor’s estate or interest in the service station may be dependent, this Lease shall likewise terminate and such termination shall be without liability on the part of Lessor. Nothing herein contained shall require Lessor to extend the term of said base lease.”

An additional typed-in paragraph provided:

“17. Lessor hereby acknowledges the receipt of $3,500.00 upon the execution of this lease as a consideration for entering into this service station lease with * lessee for a term of 5 (five) years from date at a rental of $200.00 per month as' indicated in paragraph 3-B. ¹

It is mutually understood between the parties hereto that the said $200.00 per month shall constitute the entire rental payment and there shall be no additional gallonage rental.” (Emphasis supplied).’.

Arizona Oil made the rental payments-, required of it under the base lease from January 27, 1969 through April 1, 1969,, after which it ceased making payments.. As a consequence, the owners declared the.base lease terminated which resulted in a¿ termination of the 1969 sub-lease.³

Plaintiffs do not dispute that the forfeiture of the base lease terminated all rights under the sub-lease. See 49 Am.Jur.2d Landlord & Tenant, § 511. Their position, however, both in the trial court and on appeal, was that they were entitled to recover a pro-rata share of the $3,500, i. e. 57/60 thereof. In other words, the $3,500 “deposit” which had been paid to Arizona Oil was advance payment of rent and that when the consideration therefor failed they were entitled to restoration of the advance payments. We do not agree with this position.

Paragraph 17, supra, expressly recites that “entering into” the lease was the consideration for the $3,500. It did not additionally provide that the leasehold would last for the designated five-year period. In fact, paragraph 12 of the lease, as set forth above, specifically recognized that termination might occur prior thereto, i. e. upon termination of the base lease.

The subject lease must be construed as a whole and each part must be read in the light of all other parts. C. & T. Land & Development Co. v. Bushnell, 106 Ariz. 21, 470 P.2d 102 (1970). Ambiguity exists only when a contract, taken as a whole, is reasonably subject to two different interipretations. Mays v. Middle Iowa Realty Corp., 202 Kan. 712, 452 P.2d 279 (1969); Williams v. Insurance Company of North America, 150 Mont. 292, 434 P.2d 395 (1967). Courts should not read an ambiguity into a contract where it can reasonably be avoided by reading the contract as a whole. Grant County Constructors v. E. V. Lane Corp., 77 Wash.2d 110, 459 P.2d 947 (1969). Reading this lease as a whole, as is our duty, we conclude that the parties intended the $3,500' to be consideration to .the lessor for execution of the five-year "lease.

I Money paid to a lessor as consideration to the lessor for execution of a lease belongs to the lessor and title thereto passes when the lease is executed. Grand Central Public Market v. Kojima, 11 Cal.App.2d 712, 54 P.2d 786 (1936); Curtis v. Arnold, 43 Cal.App. 97, 184 P. 510 (1919) ; Ramish v. Workman, 33 Cal.App. 19, 164 P. 26 (1917); L. B. Menefee Lumber Co. v. Abrams, 138 Or. 263, 5 P.2d 709 (1931); J. & J. Food Centers, Inc. v. Selig, 76 Wash.2d 304, 456 P.2d 691 (1969) ; Dutton v. Christie, 63 Wash. 372, 115 P. 856 ‘(1911). A lease is a sufficient consideration for the payment of money. Dutton v. Christie, supra. Since there was no dispute as to whether or not the lease was executed, the plaintiffs having admitted same, their “failure of consideration” theory failed. There being no material issue of fact and defendants being entitled to judgment as a matter of law, the motion for summary judgment was properly granted.

Judgment affirmed.

KRUCKER, C. J., concurs.

NOTE: This cause was decided by the "Judges of Division Two as authorized by A.R.S. § 12-120, subsec. E.

1 . May 20th, the date of the hearing, was ' the date set for trial and therefore the parties to the litigation were present in court.

2 . According to plaintiffs-appellants’ opening brief, the 1967 lease was transferred to Arizona Oil by mesne assignments.

3 . Although not material to the disposition of this case, the record reflects that the plaintiffs’ possession was not terminated and a new lease agreement was entered into between them and the owners for a period of five years beginning on July 1, 1969 at a monthly rental of $200.