Plaintiff lessees challenged the judgment of the Superior Court of Los Angeles County (California), which ruled in favor of defendant stockholders in the lessees’ action to recover from the stockholders their proportionate share of an alleged liability of the corporation as lessor to the lessees.

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Overview

The lessees claimed damages against the corporation they sustained reason of an alleged breach of a covenant contained in a lease of certain land for farming purposes delivered the corporation to the lessees. The action against the stockholders was commenced more than three years after the execution and delivery of the lease but within three years after the alleged breach of the covenant of the lease relied on. The trial court found that the action was barred the statute of limitations. The court affirmed the judgment because the action was not brought within three years of the execution of the lease. The lessees’ claim against the corporation was for damages for breach of a covenant contained in their contract of lease. The claims were based on the contract itself and were barred the statute of limitations.

Outcome

The judgment in favor of the stockholders in the lessees’ action seeking damages alleged to have been sustained as a result of the corporation’s breach of contract was affirmed.