Durfy was the owner of a water system, known as the Sherman Water Works, and was supplying water for domestic purposes to inhabitants of the town of Sherman and vicinity. He also owned about 190 acres of land, in Sherman and in Franklin Canyon, some of which was used for furnishing water to the water system. In March, 1913, Durfy entered into a contract with Hanlon for the sale by the former to the latter of the said water system and land. The contract was made before the public utilities act took effect, but it was evidently entered into in contemplation of that act, since it provides for a transfer of possession upon compliance wih certain conditions, including "permission for transfer from railroad commission". Thereafter the city of Los Angeles sought to acquire a part of Durfy's lands for a reservoir site and right of way to be used in connection with the city's aqueduct project, then in course of construction. In October, 1913, Hanlon filed with the commission a petition, setting forth his contract with Durfy, and praying for an order authorizing the sale of the water system by Durfy and its purchase by him. This proceeding was designated on the files of the commission as number 951. Before it had been disposed of, Durfy filed a petition, the proceeding upon which became number 942. Durfy's petition also set forth the contract with Hanlon. It then alleged that the city of Los Angeles desired to acquire Durfy's lands to complete its water works; that the Hanlon contract was contrary to the public interest; that it would be for the public interest if a sale to the city was authorized; and that the applicant would sell to Hanlon pursuant to his contract, if the commission should determine that course to be for the best public interest. The prayer of the petition was for such order "as shall be deemed by this commission for the best public interest in the premises".

Both proceedings were heard together. Before a decision had been reached, Durfy filed another petition in No. 942, alleg. ing that he had executed a deed conveying to the city of Los Angeles a portion of his lands necessary for the location of reservoirs and conduits for the Los Angeles aqueduct, and praying for an order approving said conveyance. The commission dismissed the Hanlon application (No. 941) and, in the other proceeding (No. 942), authorized Durfy to sell to the city of Los Angeles the property described in his deed to the city.

The present proceeding seeks to compel the commission to pass upon the application for authority to consummate the sale from Durfy to Hanlon pursuant to the contract between them.

[1] The theory upon which the commission declined to act in proceeding No. 941, by either granting or refusing permission to carry out the Hanlon contract, was that the action of the commission, under section 51a, is merely permissive, and that "the application should be made by the owner of the public utility property, because the authority must run to such owner". This view, we think, is the correct one. [2] The commission's power is to be exercised for the protection of the rights of the public interested in the service, and to that end alone. The sales,

leases or incumbrances affected by section 51a are dispositions of property of a public utility "necessary or useful in the performance of its duties to the public". The owner may not transfer such properties unless authorized by the commission. All that the commission is concerned with, therefore, is whether a proposed transfer will be injurious to the rights of the public. If not, the owner may be authorized to make the transfer. With the rights of an intending purchaser the commission has nothing to do. Nor has it power to determine whether a valid contract of sale exists, or whether either party has a legal claim against the other under such contract. These are questions for the courts, and not for the railroad commission, which is merely authorized to prevent an owner of a public utility from disposing of it where such disposition would not safeguard the interests of the public. If the owner does not desire to sell, the commission cannot compel him to do so. If, having contracted to sell, he refuses to comply with his contract, the commission is not empowered to determine that he should carry out his bargain. The provision that an owner may not sell without the consent of the commission implies that there must be an owner ready to sell and seeking authority so to do before the commission is called upon to act. [3] We conclude, therefore, that the commission acted properly in determining the application of Hanlon (No. 941).

It is urged, however, that in No. 942 Durfy, the owner, presented a petition which alleged the making of the contract with Hanlon, and asserted Durfy's willingness to carry out that contract, if the commission should give its approval. Here, it is claimed, was a submission of the question by the owner, and since by such submission, the commission obtained jurisdiction to decide whether the sale should be authorized, any person interested has a right to insist that the jurisdiction be exercised. We do not find it necessary to pass upon the merit of this position. While the matter was still before the commission, Durfy filed a second petition, in which he asked authority to sell a part of the property to the city of Los Angeles. There is some difference between the parties over the question whether this second petition was filed "in substitution" of the first. Be that as it may, the second petition asked for an order, which, if consummated, would make it impossible to carry out the contract with Hanlon, The entire property could not be conveyed to Hanlon, if a part of it had first been conveyed to the city. The second petition was therefore inconsistent with a continued willingness on Durfy's part to abide by his contract with Hanlon. Furthermore, the record, and particularly the opinion of the commission, show with sufficient clearness that Durfy's final position was that the sale to Hanlon should not be approved. At the conclusion of the proceeding, therefore, the commission had before it an owner who, having made a contract of sale, did not desire authority to consummate it, but urged that such authority ought not, in the public interest, to be granted. The only person having the right to invoke the action of the com

mission declined to invoke it, and the commission was therefore right, in No. 942 as in No. 941, in declining to pass upon the propriety of a sale to Hanlon.

The alternative writ of mandate is discharged and the proceeding dismissed.

We concur:

ANGELLOTTI, C. J.

LORIGAN, J.
MELVIN, J.

SHAW, J.

SLOSS, J.

S. F. No. 6202. In Bank. February 8, 1915.

LOUIS T. SAMUELS, Plaintiff and Appellant, v. ADOLPH OTTINGER and NATE FRANKLIN, Defendants and Respondents. [1] LEASE ASSIGNMENT-CONSENT OF LESSOR-LIABILITY OF LESSEE FOR FUTURE RENTS-RULE.-A lessee who has not agreed to pay rent is, by the transfer to an assignee, with the consent of the landlord, relieved of any further obligation to pay rent, but where the lessee has expressly agreed to pay rent, his liability under his contract remains, notwithstanding an assignment with the consent of the lessor.

[2] ID. CONSTRUCTION OF LEASE-LETTING UPON SPECIFIED RENTAL PAYABLE AT STATED TIMES-CONTRACTUAL OBLIGATION TO PAY RENT— ASSIGNMENT WITH CONSENT OF LESSOR-CONTINUANCE OF LIABILITY FOR RENTS.-A lease executed by the lessees as well as by the lessor which demises the premises to the lessees at a given rental "payable" at stated times, expresses a contractual obligation to pay rent, and the assignment of such lease with the consent of the lessor, and subsequent acceptance of rent from the assignee, does not absolve the lessees from their original liability.

[3] ID.-I. OTHER PROVISIONS REFERRING TO RENTS CONFIRMA-TION OF EXPRESS OBLIGATION TO PAY.-The contractual obligation of the lessees to pay rent under such a lease is further established by the provisions therein that insurance is to be taken out for the purpose of securing the lessor in the "payment of the rents herein stipulated", and that the improvements are to be security for the rent "herein stipulated to be paid", and that a holding over shall be deemed a tenancy from month to month at the same monthly rental as shall have been "payable hereunder by said lessees" prior to such holding over.

[4] ID, ACTION FOR RENT REASONABLE ATTORNEY FEES-RIGHT OF LESSOR.--Where such lease also provides that "in case the lessor prevails in any suit against the lessees for violation of any of the covenants of this lease . the lessees shall be liable to the lessor for a reasonable attorney fee in such suit, not exceeding the sum of seventy-five dollars", the lessor is entitled in an action for rent to have judgment entered for such fees in such sum, where the reasonableness of the same is admitted by the pleadings.

Appeal from the Superior Court of the City and County of San Francisco-George H. Cabaniss, Judge.

For Appellant-Charles W. Slack, H. U. Brandenstein and Grover O'Connor.

For Respondents-Leon Samuels.

The plaintiff appeals from a judgment in favor of the defendant. The judgment disposed of three separate actions, which,

with the consent of the parties, had been consolidated for trial. The appeal is on the judgment roll.

The actions were brought to recover installments of monthly rent accruing under a written lease of real property. The three proceedings differed only in the months for which rental was claimed.

A jury trial having been waived, the court made findings as follows: On December 20, 1906, D. Samuels Realty Company, a corporation, as lessor, leased to the defendants, as lessees, a certain lot in the city of San Francisco. A copy of the lease is set out in the answers and referred to by the findings. The term of the lease was ten years, commencing on the 20th day of December, 1906. The rent of the premises was $150.00 per month, payable in advance, for the first five years of the term, and $175.00 per month, payable in advance, for the next five years. Other provisions of the lease will be mentioned in the course of the discussion to follow.

The defendants went into possession of the premises under the lease, and paid the monthly installments of rent to and including the 19th day of May, 1908. On that day they sold and assigned the lease to one Altschular. The lessor was, at the same time, notified of the assignment. Altschular paid the rent for the month commencing May 20, 1908, and said payment was received and accepted by the lessor. The monthly installments of rent payable on the 20th days of the successive months from June, 1908, to March, 1910, have not been paid. D. Samuels Realty Company, the original lessor, has conveyed the premises, and assigned its claim against the defendants, to the plaintiff.

The single question presented for decision is whether the defendants, the original lessees, are absolved from liability to pay rent by their assignment to Altschular, and the payment by Altschular to the lessor of one month's rent. The general rule of law governing the controversy is settled beyond the possibility of dispute. A lease has a dual character-it presents the aspect of a contract and also that of a conveyance. (Pollock on Contracts, 3rd am. ed., p. 531.) "Consequently the lease has two sets of rights and obligations-one comprising those growing out of the relation of landlord and tenant, and said to be based on the 'privity of estate', and the other comprising those growing out of the express stipulations of the lease, and so said to be based on 'privity of contract'." (Tiffany on Real Property, sec. 46.) An obligation to pay rent, without an express agree ment to that end, arises from the mere occupancy, as tenant, of the premises. [1] A lessee who has not agreed to pay rent is, by his transfer to an assignee, with the consent of the landlord, relieved of any further obligation to pay rent. Such obligation is thereafter upon the assignee who has come into "privity of estate" with the landlord. But where the lessee has expressly agreed to pay rent, his liability under his contract remains, notwithstanding an assignment with the consent of the lessor. "The lessee cannot by assigning his lease rid himself of liability under the covenants." (Brosnan v. Kramer, 135 Cal. 36, 39.) "The effect of the

assignment is to make the lessee a surety to the lessor for the assignee, who, as between himself and the lessor, is the principal bound, whilst he is assignee, to pay the rent and perform the covenants." (Id.; Wood on Landl, & Ten., 2nd ed., sec. 347; Bonnetti v. Treat, 91 Cal. 223; Sutliff v. Atwood, 15 Oh. St. 186; Sexton v. Chic. Storage Co., 129 Ill. 318.)

The test of the assigning lessee's liability is, then, whether he has, in the lease, agreed to pay rent during the term. The rule of law is sometimes phrased thus: The obligation to pay rent remains on the lessee, after his assignment, when the obligation was created by his express agreement. It does not survive an assignment with the lessor's consent when the obligation is implied. By "express agreement", in this connection, is meant, not merely a promise, in exact words, to pay a given sum as rental. Any language necessarily importing an undertaking on the part of the lessee to pay the rent will satisfy the requirement of the rule. For the distinction to which we have referred rests on the nature of the lessee's obligation. If that obligation arises solely from the fact that he occupies the premises as tenant, if, in other words, it is based on the "privity of estate" alone, the assignee who succeeds to that privity becomes the party to whom the landlord must look. But if the obligation be one arising from the tenant's contract to pay rent, it is not ended by the assignment. Whether there be a contract to pay rent must depend on whether such contract is to be found in the words of the lease, giving such words a fair and reasonable interpretation. (Tiffany, Land. & Ten., sec. 50.)

[2] The lease in question was executed by the lessees, as well as by the lessor. It begins by stating that the lessor leases the premises to the lessees, for the term of ten years, at the monthly rental above stated, "payable in advance on the twentieth day of each and every month". By subsequent clauses the lessees agree to pay all bills for water, gas and electricity furnished to the premises, and all taxes on improvements to be erected by said lessees. The privilege of subleasing is expressly given, as is permission to erect buildings, which, if they comply with certain conditions, are to be purchased by the lessor at the expiration of the term. The lessees agree to insure the improvements, "and said insurance shall be made payable to the lessor and the lessees jointly, for the purpose of securing the said lessor in the payment of the rents herein stipulated By another clause it is agreed that the improvements to be erected "shall be security for the rent herein stipulated to be paid ." Finally, it is agreed that if the lessees hold over beyond the term provided in the lease, such holding over shall be deemed merely a tenancy from month to month, "and at the same monthly rental that shall have been payable hereunder by said lessees immediately prior to such holding over".

"

If it is possible to express a contractual obligation to pay rent by any form of words other than a direct promise, in exact terms, to pay such rent, the language we have quoted from the lease before us, imposes that obligation on the lessees. The