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Petroleum Collections, Inc. v. Swords

California Court of Appeals
48 Cal. App. 3d 841 (1975)


Texaco leased a gas station to Swords (defendant) under a 10-year lease. The gas station included a large neon sign that was visible from a nearby highway as the main way that customers would be attracted to the business. One month into the lease, the local building inspector found a dangerous flaw in the sign, and as a result Texaco had the sign removed. After taking down the sign, Texaco installed an old billboard advertising the services of the gas station, but it could not be seen from the highway. Swords insisted that Texaco replace the sign with one similar to the sign that had existed when he leased the property. When Texaco failed to do so, Swords refused to pay the rent. Eleven months after the lease began, Texaco and Swords mutually cancelled the lease. Either Swords or the sublessee he had rented the land to two months prior to the cancellation had remained in possession of the premises for the entire 11-months duration of the lease. Texaco hired Petroleum Collections, Inc. (plaintiff), to recover back rent from Swords, and Petroleum Collections sued Swords. The lower court found in favor of Swords, and Petroleum Collections appealed.

Rule of Law


Holding and Reasoning (Gargano, J.)

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