*1 5'49 Guy Dolphin, A. him Solfanelli, with Gerald G. appellant.
Sidney him Edioard Grdbowshi, Yaioars, Jr., appellees. Opinion Pee June 1954: Ctjeiam, judgment opin- this case is affirmed on the ion of learned court below. Philadelphia
Dickey, Appellant, Minit-Man v. Corporation. *2 April 1954. Before C.
Argued J., Stern, and Ar- Jones, Chidsey, Musmanno Stearne, Bell, JJ. nold, W.
Robert with Morton Within and Beatty, him Greer & Beatty, Johnson, Butler, appellant. D. Robert with him Maurice J. Abrahams, Klein, H. Abrahams & Lowenstein Linden- George Class, . & Glass; appellee. muth Opinion Mr. Chief Justice Horace Stern, June ' 2, 1954: ' presents question impression This case of first Pennsylvania but one that lias been considered, resulting diversity opinion, some several jurisdictions. Dickey, Samuel
Plaintiff, in 1947 leased to defend- Philadelphia Corporation, ant, Minit-Man a vacant piece of County, land in Millbourne, Delaware years option term of ten with an to the lessee of an ten-year additional term. The lease that the occupied by were to be “in automobiles within scope Philadelphia Minit- Corporation, purpose.” Man . . . and for no other As equal rent the lessee was to sum 12%% the amount of the annual sales but a minimum *3 per year; “gross of the term to in- f1,800 sales” was price clude the sales of all merchandise sold and also charges performed by all for in services the lessee the premises. course the business conducted on the The agreed place lessee to and erect on the the buildings equipment carry and needed to on the busi- buildings all ness; fixtures erected property were to become the lessor the as when agreement expire any the lease should reason what- per- If ever. default were made the or observance agreements formance or conditions right lessor towas have the to terminate lease and premises. re-enter the buildings, erected the installed
Defendant the- nec- essary equipment, washed cars cleaned until August, when discontinued that -feature except simonizing polish- to incidental ing, public. notified it so -never Defendant Sep- failed at least the to minimum but rental, in. present plaintiff, eject- filed the tember, 1953, .action in. op recovery seeking ment, of .possession.of.-the.ppqperty discontinu- had defaulted that defendant the ground filed Defendant in the lease. specified a demurrer nature of in the objections preliminary objections court below sustained complaint; appeals. Plaintiff the action. and dismissed im- there was is whether involved question continue of the lessee on the part plied obligation on the premises to conduct the a diminu- to do resulted if its failure so cleaning cars to the lessor. tion rental payable that in a lease a Generally provision speaking, certain prescribed used only are to be of the lessee part no obligation purpose imports that pur- to use or continue to use the premises a noncom- a against such is covenant pose; provision how- to use. Plaintiff urges, covenant plying use, that here involved, that a lease such as ever, les- based upon of rental to be paid the amount on an implied obligation there arises gross sales, see’s on the premises his to continue the business part reasonably possible. Defendant, the fullest extent an obliga- contends such the other where hand, that, it must be inserted intended, expressly tion is of an covenant implied raising obviously necessary justified except never where clearly and so effectuate the intention parties it unnec- they their deemed contemplation within *4 to and that this true essary express especially it, a minimum rental where substantial of which is to the lessor from protect obvious purpose circumstances that might subsequently unfavorablé conduct of the les- by voluntary arise whether caused beyónd his control. see or events & v. E. Sons 191 F. Joseph Seagram Bynum, In held that in a lease of a mill provision 2d it was 5, for a a distilling to rental-based company percentage
553 at produced and heads on the number barrel staves to operate mill did impliedly obligate mill at its reasonable productive capacity thei'ein requiring. absence of so any express provision 213 In .10 Stores, Jenkins v. Rose’s 5, Inc., 25¢ of a N. a lease C. 197 S.E. where there was 606, 174, rental and store a minimum guaranteed with building a sales provision percentage payment a that there certain it held was excess was amount, in the building no a store implied operate covenant a and that of the minimum rental was payment fulfillment of the complete obligation. lessee’s El In Palm v. Investment Co. Paso, Mortgage 2d 869 there a (Texas Appeals) 229 S. W. Civil was a store and re- lease of a retail shoe shoe building with a for a minimum rental but pair shop, provision to take a certain percentage the lessor option held gross of the sales the lessee’s business. was that the lessee could not be held liable for breach of maintain in the any implied covenant that he would leased a the same substantially he had therein size and character as conducted prior years. Inv. v. Hastings Clothing Cousins Co. Co., 2d P. 2d
45 Cal. where lease App. 878, pro- of a payment vided for rental prescribed percentage income the lessee’s business with a cer- tain it held that monthly minimum, was lessee, to another location shortly which moved its business was not liable for prior the expiration rental which the lessor would have re- had if the lessee remained ceived because there no covenant re- implied was premises, do. the lessee so to The court said quiring the covenant the minimum would seem a., inserted in for. .the. lease substitute rental *5 554 opera- the continuous covenant express requiring
tion of the demised premises. 233 2d 376, v. 105 Cal. App. Masciotra Harlow, and con- 2d a lease the equipment P. there was restau- a of a for the purpose operating tents cafe of a certain a rental rant and the lease for mini- a stipulated receipts percentage removal of the business mum. held that of the lease was expiration prior his to so conduct any implied covenant violative profit- it mutually as to make 589) P. p. The court said (p. 380, able to both parties. con- concluded that “only parties that it could be minimum rent to be itself the stipulated sidered fair and additional sum was adequate of a the lessee was willing nature bonus which if his expectations.” his business exceeded
If an
claimed
implied
by plaintiff,
covenant,
be
arise in
would be
should
held to
such cases what
thereby imposed upon
the extent of the restriction
on his
to each and
act
every
lessee? Would it extend
of his busi-
to reduce the extent
serve
part
might
rental based thereon?
thereby
ness and
it forbid
if
retail
example,
operating
Would
him,
number of
from
fewer
keeping
open
store,
Would it forbid him
formerly?
each
than
day
hours
whereby
might
from
salesmen
his business
dismissing
from
Would it forbid him
dis-
be reduced
volume?
of his business
though
even
continuing
department
found,
he
it to be
at
loss?
It would obvi-
operating
undesirable to
ously
wholly
be
unreasonable
quite
an-
be'
imply
obligation
necessarily
would
vague¿
n '
. .
'..
.'
uncertain and generally impracticable;
in',
jurisdictions
some
a'
There are cases
courts; contrary
to.the'. decisions
view'was-taken
cited,
example, Genet'
previously-
in the authorities
*6
v. President
Delaware and
Co.,
Hudson Canal
138
of
Refining
N. Y.
32 N.E.
Sinclair
Co. v.
1078;
593,
Davis,
App.
Refining
47 Ga.
Com
601, 171 S.E.
Sinclair
150;
pany
App.
v.
54 Ga.
Marvin
187
Giddens,
69,
201;
S.E.
Drug
(Texas
Ap
Co. v.
134
2d
S.W.
356
Civil
Couch,
by
peals).
plaintiff
distin
Other cases relied on
are
guishable
ground
on
another.
in
one
or
Thus
Gold
berg
Corporation
Levy,
2d
168-05
v.
N. Y.
304;
9
S.
provided
11
N.
2d
the lease
Y. S.
where
315,
gross
fell dur
the
of the lessee
event that the
sales
year
specified sum he should
the
a
have
below
right
held that he could
to
the
it was
terminate
agreed-upon percentage
escape paying
of rental
not
the
by diverting
gross receipts
another
on
to
his
depressing
gross
purpose
re
the
store for the sole
lay
specified figure
ceipts
to
the basis
so as
below
In
Inc.
Selber Bros.
v.
of the lease.
cancellation
La.
ducted a general department store business mised removed two of its most lucrative premises, demised departments remunerative from the endeavor the second floor of another building to diminish the rental on the sales percentage & for in Suburbs the lease. Garden Golf 2d v. 156 Fla. So. Country Club, Inc., Pruitt, 825, as rent where the lease obligated busi specified gross receipts held ness conducted him on the it was premises, subletting that he could not evade such obligation or concessions portions granting *7 by authorized the lessor thereby depriving of from the realized percentage gross receipts of such sublessees concessionaires.
There are no such factual elements here present as characterized largely those cases formed has basis the decisions there rendered. Defendant location not moved of its to another any part nor of deliberately to decrease sought rent in order to declare payable induce plaintiff a termination of is seek- lease; contrary, to maintain lease. Nor there anything is to indicate that defendant’s action present case of cars discontinuing except as incidental taken simonizing polishing than in faith and in good the exercise legiti- . mate In judgment. our i.t was not opinion forbidden in the lease. by any implied obligation
The decree is affirmed here judgment is en- tered for defendant.
Dissenting Opinion By Mr. Justice Musmanno: Majority Opinion states that this case presents n in' first question impression Pennsylvania. Un- stare decisis, trammeled, therefore, unbounded by precedent, authoritative restrictive unencumbered hoped question it could be that that would decisions, logic light be considered the clear of reason, justice. appear elemental does not me that hope deciding Instead has been realized. case prin- in accordance with venerated and fundamental ciples jurisprudence dealing and fair between busi- Majority ness has enumerated a number of men, presents exactly out-of-State none which cases, facts point Collectively with those case at bar. up foreign archipelago these cases make of deci- jurisprudence in the vast sea of sions but leases, not one of them touches the mainland of the funda- principle only mental that a lease after a con- is, all, accordingly tract to be enforced in accordance provisions wording ascertained from the Corpus (17 of the contract. Juris Secundum, C.J.S. 683) rudimentary we find this most rule of construc- tion of “A contracts: court will not resort to construc- parties expressed tion where the intent in clear unambiguous language, give but or will enforce according contract effect to its in the ab- terms, grounds affecting sence fraud or other enforcement according to its terms.” *8 allegation no
There is of nor fraud this case, any ground is there other which affects enforcement according unambiguous to its terms. the most lan- guage that one could desire, the lease-contract here premises occupied are: that the “to used states be and washing said Lessee the business of and clean- scope automobiles within the of the business of Philadelphia MINIT-MAN the afore- CORPORATION, upon completion subsequent of said, to the build- ing, placing erection and of said suit- buildings necessary equipment able relevant carrying no on the business aforesaid, of for purpose”* explain attempt Majority Opinion makes no
The finality phrase no other of all-exclusive hypothetical purpose. situations. it discusses Instead, says prevail, plaintiff this mean is to does that if the operating “if be forbidden, the defendant would keeping open for a fewer num- from a retail store, formerly? day it for- than Would of each ber hours whereby dismissing his from salesmen busi- him bid might it forbid him in volume? Would be reduced ness department discontinuing his even from operating though he found it to be at loss? nothing a retail in the contract about store; There is agreement empty reference to dis- any subject missing of lease is silent salesmen; referring department to discontinuance of busi- provisions is saturated however, The ness. may effect that the lessee and conditions to the washing purpose except for the use cleaning Majority But the avoids dis- automobiles. cleaning cussing of automobiles. says The lease further covenants gross on the amount over sales above 12y2 °/o per minimum rental of annum. Gross sales $1800 ‘gross in the contract as “The term defined follows: shall include the as herein used be held to sales’ sales every price of all merchandise sort whatsoever sold, including performed charges all all services course aforesaid.” Lessee of course is the aforesaid,” “business washing business. keep separate that:
The Lessee “it covenants will covering accurate records of the sales all *All italics mine. *9 upon, done or or from de- transacted said in, premises.” agrees: build,
mised The Lessee “to erect complete necessary buildings and all de- tlie said carry premises begin mised order to and on the said including necessary all for aforesaid, utilities occupation operation building in of said manner herein.” repeat
I that the “business aforesaid” is the busi- cleaning washing ness automobiles.
Paragraph prohibits 6 of the lease from the lessee going liquor into the business and then declares premises any purpose not for shall be “used specified, any change than as above nor make in the purposes agreed, as now understood and with- out written consent of the Lessor first had and ob- tained.”
Thus, the clearest and most direct phraseology possible, (1) declares that only washing cleaning are to be used for automo- (2) that the lessee is to to the cer- biles; lessor a cleaning tain on the revenue from derived washing (3) to erect a automobiles; necessary equipment suitable and install structure cleaning washing (4) automobiles; lessee any purpose (except cannot use he lessor) from have written consent other than clean- washing automobiles. With this inundation expressed purpose, Majority say can how thing required if there is one the defendant is do, automobiles? Paragraph 11 of the lease-contract declares that the agrees covenants and lessee that: “if default be made punctual payment part of said rent or there- performance or in the observance of, of said agreements, may, conditions or The Lessor no- without *10 560
tice to the and without demand for rent Lessee, due, ” terminate the Lease paragraph says
This further that the lessee shall expenses making all in costs involved collec- “enforcing pro- of the and in tion said rent visions” of the lease. agreement can it
How be said that the to use the premises only washing cleaning automobiles provision not a is of the lease? corporation repudi-
To defendant allow the here to agreement specifically ate the it so and the con- made definitively accepted, ditions so to out of a read clearly give meaning contract what is so in it and to language directly opposite says. to what it mockery agreements, is to make written turn sol- obligations writing emn into and introduce the exercises every agreement they into courts basis may upon reinterpret be called re- revaluate, agreement. write parties
After the had entered into the solemn con- already quoted amply they tract from, executed an they already addendum if as to reconfirm what had original agreement. very para- in said their In the last graph appears supremely sig- of this addendum this “Notwithstanding any pro- nificant statement: contrary, origi- to the therein visions contained said agreement, expressly nal lease it is understood that a Washing Man certain Minit Automatic Oar Machine, premises, intended to be installed the demised shall at the termination of the lease remain the sole and property privi- exclusive who shall be Lessee, leged remove same at such time without in- part terference the Lessor.” anything confirmatory Could be more than this the fact that the of automobiles the business that the lessee intended devote him- self to? court lower made the observation following “We Opinion: are told the lease before us was by plaintiff’s
drawn it would have been attorney; matter him simple inserted in have the lease, he drew a clause use of it, requiring full defendant’s operation and a forfeiture event his failure.”
There is no doubt that if the drawer of the contract *11 could anticipated have that the meaning simple Eng- could lish be in so beclouded might he have reading, added the clause and suggested illustrated perhaps even it I but doubt that even that pictures, could have made clearer that lessee the cove- agreed, promised, and obligated nanted himself to use the demised prem- ises for and cleaning washing automobiles.
The Majority Opinion says that there is “in nothing the to indicate present case that in defendant’s action washing the discontinuing of cars cleaning except as incidental to simonizing and was polishing taken than in faith in good the exercise of legiti- mate The judgment.” record de- is absolutely void of factual foundation upon which to erect of such laudation. superstructure the Furthermore, defendant has no in corporation the right law use which judgment will advantage work the itself at loss the other expense party the agreement. plaintiff also used what he considered “legitimate he judgment” when offered to lease his to the defendant on the property basis that defendant would use the business washing automobiles. cleaning Even name defendant corporation is one identified through- the area with the cleaning washing auto- out mobiles. “cleaning that says phrase
The lower court than rather descriptive, automobiles” is washing in describing the lease The paragraph directive. effec- Is it less descriptive. is certainly rent manner account? The tive mean it can be Does that is descriptive. be paid ignored? on legal case not only principles
I this dissent language. integrity English defense of the but reasoning opinion the tortuous Despite quoted the citations despite court and lower I can con- only of this majority Court, opinion means automobiles washing cleaning clude of automobiles. Appellant, v. Rothrock. Thrasher, *12 Before C. 1954. Argued April 12, J., Stern, and Ar- Musmanno Bell, Stearns, Jones, Chidsey, nold, JJ.