Bewick v. Mecham

In Bewick v. Mecham (1945) 26 Cal.2d 92, a would-be gas station operator undertook to lease some property for use as a gas station, with the lease placing on him the obligation to do the necessary building and other improvements. There was also a provision in the lease allowing him to buy the land at the expiration of the lease based on a price to be either mutually determined or, if the parties couldn't agree, by arbitration, with each side picking one arbitrator and those two arbitrators picking the third. The operator spent considerable money on improvements and, when the lease was up, sought to buy the property. The reason there was a lawsuit is that the lessor refused to sell and--shades of Darrell's refusal to do the paperwork here--refused to appoint his own arbitrator. The operator brought an action for specific performance, asking the court (as distinct from arbitrators) to establish the price. The court did indeed establish a price and ordered the lessor to sell at that price. The lessor then appealed, but the Supreme Court affirmed. (Id. at pp. 94-95.) In Bewick one of the lessor's arguments on appeal was the absence of the condition precedent of an arbitration which, by the contract's literal terms, was necessary before there could be any forced sale. The Bewick court countered by noting the absence of the fulfillment of the condition precedent was the direct result of the lessor's own doing.