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Middleton Restaurant Enterprises v. Tovrea Land & Cattle Co.

Supreme Court of Arizona

May 17, 1961

MIDDLETON RESTAURANT ENTERPRISES, a corporation, Appellant,
v.
TOVREA LAND AND CATTLE COMPANY, a corporation, et al., Appellees.

Page 931

[89 Ariz. 317] Otto H. Linsenmeyer, and Marshall W. Haislip, Phoenix, and Max L. Bernbaum, Beverly Hills, Cal., for appellant.

Fennemore, Craig, Allen & McClennen, and Evans, Kitchel & Jenckes, Phoenix, for appellees.

BERNSTEIN, Vice Chief Justice.

This is an action seeking a declaratory judgment to have certain rights of the parties under a lease declared and established by the court pursuant to A.R.S. § 12-1831 et seq.

[89 Ariz. 318] Tovrea Land and Cattle Company was the owner of real estate and improvements consisting of approximately seventy-six acres including the Stockyards Administration Building and Restaurant and Bar at 5001 East Washington Street, Phoenix, Arizona. On August 26, 1958, Tovrea Land and Cattle Company entered into a lease with Middleton Restaurant Enterprises covering the portion of the Stockyards Administration Building occupied by the Stockyards Restaurant and Bar, for a period of five years commencing October 1, 1958.

On December 1, 1958, Tovrea Land and Cattle Company sold certain real and personal property to P E. Tovrea and Helen Green Tovrea, stockholders in the Tovrea Land and Cattle Company, which sale included the said administration building. Thereafter, P. E. Tovrea and Helen Green Tovrea sold the property to F. A. Sitton and others as evidenced by the Outline of Escrow Instructions and Escrow Instructions entered into by the parties on February 2 and 9, 1959, respectively, and the recording of the deed by F. A. Sitton on March 5, 1959. On February 23, 1959, P. E. Tovrea and Helen Green Tovrea executed and signed the deed before a notary public and delivered it into escrow and sent the following notice to Middleton Restaurant Enterprises, which notice was duly served on the same day:

'Notice of Cancellation

'To: Middleton Restaurant Enterprises

5001 East Washington Boulevard

Phoenix, Arizona

'You are hereby notified, under the provisions of paragraphs 15 and 17 thereof, that the undersigned hereby cancels the Lease dated August 26, 1958, by and between Tovrea Land and Cattle Company, the Lessor therein, and Middleton Restaurant Enterprises, the Lessee therein, such cancellation to be effective March 1, 1960.

'The Administration Building, of which the leased premises are a part, together with the furniture, fixtures, and equipment owned by the Lessor

Page 932

and used by you in connection with the bar and restaurant operated by you, was sold on December 1, 1958, to P. E. Tovrea and Helen Green Tovrea, and now is being sold by P. E. Tovrea and Helen Green Tovrea, his wife, to F. A. Sitton and Hazel Sitton, Lela S. Hancock, Virginia L. Hancock, Helen S. Vetter, Donna D. Sutton, and Max L. Sitton.'

Upon receipt of the above notice, Middleton Restaurant Enterprises protested in writing to the lessor and its successors in interest that it objected to the sufficiency of the notice of cancellation and thereafter [89 Ariz. 319] brought this action in the trial court. The trial court entered Summary Judgment in January 11, 1960, adjudging that the notice of cancellation was in compliance with the cancellation provision in the lease and by reason thereof the effective date of cancellation of the lease was March 1, 1960. The trial court also decreed that under the lease Middleton Restaurant Enterprises was responsible to the City of Phoenix for the payment of moneys for liquor tax permit and the liquor tax levied by said city. This appeal followed:

Middleton Restaurant Enterprises contend that the lessor had no right to cancel the lease until it had completely consummated a sale and conveyed the premises. They also contend that the notice of cancellation was defective and void in that it did not indicate an unequivocal acceptance of the option contained in the cancellation clause; and because of a failure to make a tender of money at the time ...


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