[Civ. *No.*3177.

First Appellate District, Division One.

January 28, 1920.]

#### J. L. BRADY et al., Appellants, v. R. A. FOWLER et al., Respondents.

[i] Contracts — Nature of — Ambiguity and Uncertainty — Parol Evidence.—Where written agreements relating to real property are ambiguous and uncertain as to whether they were intended to constitute an option to- purchase the property or a lease thereof with an option to purchase, in order to arrive at a correct interpretation the trial court, in an action based thereon, is justified in resorting to evidence of the circumstances under which they were executed, including the situation of the subject matter thereof and of the parties thereto.

*589
      [2] Id. — Findings — Appeal on Judgment-roll Alone—■ Presumptions.—The trial court, in such action, having admitted evidence upon such points and having determined that the instruments did not constitute a lease, and the appeal from the judgment based on such finding having been taken on the judgment-roll alone, the appellate court must assume that the evidence thus admitted fully supported the findings of the trial court.

[3] Id.—Agreement to Fat Taxes—Termination of Option—Extent of Liability.—Where such agreements provided that the holder of such option should pay all taxes assessed upon the property during the term of the option, he became liable only for the taxes which became due prior to the termination of the option, notwithstanding the owner of the property did not resume control and dominion over the property until a later date.

[4] Id.—Action on Contracts—Ambiguity and Uncertainty—Issues —Parol Evidence—Findings.—The agreements set out in the complaint having been ambiguous and uncertain, and there having been an issue as to the correct interpretation thereof, the trial court having properly admitted evidence of the circumstances under which they were executed, its findings touching those circumstances cannot be said to be outside the issues made by the pleadings.

APPEAL from a judgment of the Superior Court of Los Angeles County. Paul J. McCormick, Judge. Affirmed.

The facts are stated in the opinion of the court.

E. L. Brady and Dewitt J. Brady for Appellants.

Goudge, Robinson & Hughes and J. Wiseman Macdonald for Respondents.

RICHARDS, J.

Appeal by plaintiffs from a judgment in their favor for the sum of $1,306.94. The appeal is taken upon the judgment-roll alone, and from the facts found by the court it appears that the plaintiffs, husband and wife, on October 1, 1912, entered into a written agreement with the defendant R. A. Fowler, by which they granted to Fowler an option to purchase certain real property situate in the city of Los Angeles for the sum of one hundred and ten thousand dollars, the latter agreeing until the exercise by him of said option during the term of the agreement to pay to the plaintiffs on the first day of every month the sum of $550, these payments aggregating annually the sum of six thousand six hundred dollars, and being six per cent *590upon the said purchase price. Said agreement or option also provided that Fowler should pay all taxes assessed upon the property during the term of the option. This writing was variously referred to therein as a “lease and option” and a “lease or option,” and much of its verbiage was evidently taken from the form of a lease pure and simple. In the month of July, 1913, the defendant Goudge, desiring to succeed to the interest of Fowler under said agreement, but not being willing to do so if it should be claimed by the plaintiffs that it created as between the parties to it the relation of lessors and lessee, the plaintiff J. L. Brady and defendant Fowler on July 12, 1913, entered into what is termed in the complaint and findings a “memorandum of auxiliary agreement,” the terms of which, however, are just as, if not more, ambiguous than those of the instrument that it purported to clarify. Said plaintiff received from Fowler the sum of one thousand dollars for entering into this auxiliary agreement, and the court finds that it was entered into for the purpose of satisfying Goudge that the original agreement of October 1, 1912, was an “option to purchase and not a lease,” and that it was mutually understood between plaintiff J. L. Brady and the defendants at the time said auxiliary agreement was executed that the original agreement and the auxiliary agreement together constituted an option to purchase and not a lease, and that the monthly installments of payments "of $550 were intended to be paid as interest on an option purchase price of one hundred and ten thousand dollars while the option was in force. In this connection the court also found that these two writings were ambiguous and uncertain, but that when construed in the light of the circumstances surrounding their making they constitute an option to purchase said real property, and not a lease and option, as contended by the plaintiffs. The court further found that defendant Goudge never personally entered into possession of the real property forming the subject of said option, but that at all times mentioned in the amended and supplemental complaints it was occupied by one Jennie Boyd as a tenant from month to month at a rental of less than $80 per month, and that its rental value did not exceed said sum. The court also found as facts that between July 17, 1913, and November 30, 1914, the defendant Goudge paid to the plaintiff J. L. Brady the *591monthly sum of $550 as interest on said option purchase price; that no payments were made by either of said defendants after November 30, 1914; that between October 1, 1912, and July 17, 1913, defendant Fowler received the benefit of the rentals collected from the occupant of said real property, and that between said last-mentioned date and September 1, 1915, the defendant Goudge received such benefit, and that said option terminated on November 30, 1914. The court concluded as matter of law that each of said defendants was liable to the plaintiffs for. unpaid taxes up to the time of the termination of said option, the amount of which it found to be the sum of $1,306.94, and for which the plaintiffs recovered .judgment.

The appellants’ first contention in support of their appeal is that the court erred in finding that the written agreements above referred to constitute an option to purchase said real property and not a lease thereof with option to purchase, and they refer to certain provisions of the instruments as bearing out this contention. [1] It is very plain, however, that, in view of the ambiguity appearing upon the face of the agreement of October 1, 1912, which was in nowise removed by that of July 12, 1913, ostensibly prepared and executed for that purpose, the trial court was justified in resorting to evidence of the circumstances under which these instruments were made, “including the situation of the subject of the instruments and of the parties to it” (Code Giv. Proe., see. 1860). [2] Having admitted evidence upon these points, it has found upon such evidence that the instruments do not constitute a lease. As we have said, appeal is here upon the judgment-roll alone. This appellate court, therefore, must assume that the evidence thus admitted fully supports the findings of the court *(Horton*v. *Dominguez,*68 Cal. 642, [10 Pac. 186]; *Peck*v. *Noee,*154 Cal. 351, [97 Pac. 865]), so that the appellants are in no position here to argue that the writings in question bear the dual character of lease and option.

[3] It is next urged by the appellants that the court erred in restricting plaintiffs’ recovery of unpaid taxes to those due up to December 1, 1914, contending that all taxes payable to the 15th of April, 1916, ought to have been allowed, the latter being the date when, according to the court’s finding, the plaintiffs resumed control and dominion *592over the real property. .But the trial court having, upon consideration of the evidence received, construed the written agreements which created the rights and obligations of the parties hereto to be an' option merely concluded— and we think correctly—that- only those taxes whicV became due during the life of the option were payable by defendants. They having had the full benefit of said option up to the first day of December, 1914, they could not avoid payment of such taxes as were then due; their interest in the option then "terminating, there was no further obligation resting upon them to discharge taxes thereafter accruing against the property. *(Jordan*v. *Swan,*43 Cal. 564; *Smith*v. *Bangham,*156 Cal. 359, [104 Pac. 689].) •

[4] It is finally contended by the appellants that there were no issues in the case' supporting certain of the findings of the court: The findings thus attacked are those, which the court made as to the circumstances surrounding the transaction. But since there was - an issue as to the correct interpretation to be given to • the writings set out in the complaint, and upon which the plaintiffs based their alleged right of recovery, and the court properly admitted evidence of facts relevant to this issue, its findings touching those circumstances cannot be said to be outside of the issues made by the pleadings.

For the reasons given, the judgment is affirmed.

[Waste, P. J., and Knight, J., *pro tern.,*concurred.