Estate of James G. Frazier - Page 6




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          (1947).  Neither party disputes that FNF's holdover created a                
          tenancy at will.                                                             
               Under section 1019 of the California Civil Code, a tenant               
          may remove his trade fixtures only "during the continuance of his            
          term".  We endeavor to interpret this phrase as a California                 
          court would.  See Commissioner v. Estate of Bosch, 387 U.S. 456,             
          465 (1967).  We must determine whether "the continuance of his               
          term" refers only to the original 10-year term or whether it also            
          includes FNF's holdover period.                                              
               In Merritt & Bourne v. Judd & Byrne, 14 Cal. 59 (1859), a               
          case decided prior to the enactment of section 1019 of the                   
          California Civil Code, the California Supreme Court held that a              
          tenant's renewal of his lease constituted a new tenancy, and the             
          tenant's right to remove trade fixtures was lost upon his                    
          renewal.  The court reasoned that upon the commencement of the               
          new lease, the tenant was "in the same situation as if the                   
          landlord, being seized of the land, had leased both land and                 
          fixtures to him."  Id. at 71.  In Wadman v. Burke, 147 Cal. 351,             
          353-354 (1905), a case decided after the enactment of section                
          1019 of the California Civil Code, the California Supreme Court              
          held:                                                                        
               Unless there is some understanding, * * * between the                   
               lessor and the lessee in the second lease, at the time                  
               it was executed, as to the fixtures, the rule of law is                 
               * * * that the tenant entitled to remove trade                          
               fixtures, must avail himself of that right before the                   





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