Summary
In Loblaw, the dispute was over what was the meaning of the phrase "demised premises"; did it mean the Loblaw store or the entire premises which included 33 acres of land?
Summary of this case from Love v. Beck Energy Corp.Opinion
No. 34160
Decided June 29, 1955.
Contracts — Construction — Typed portion prevails over printed portion — Lease agreement — Provision restricting use of real property — Strictly construed against limitations upon use — Doubts resolved against increase of restriction — Lease of premises in shopping center.
1. The typed portion of a contract prevails over the printed portion thereof, if the two are inconsistent.
2. The general rule, with respect to construing agreements restricting the use of real estate, is that such agreements are strictly construed against limitations upon such use, and that all doubts should be resolved against a possible construction thereof which would increase the restriction upon the use of such real estate.
APPEAL from the Court of Appeals for Mahoning County.
Loblaw, Inc., herein referred to as Loblaw, instituted this action in the Common Pleas Court of Mahoning County against Warren Plaza, Inc., herein referred to as defendant, for the purpose of securing an injunction restraining defendant from placing the A P Company, herein referred to as A P, in possession of a building in a shopping center developed by defendant, which building has been built and rented by defendant to A P.
Loblaw was and is engaged in the business of merchandising food products, operating both single stores and so-called supermarkets in shopping centers.
On June 24, 1952, a written agreement was made "by and between" defendant, therein "called the `lessor,' party of the first part and Loblaw, Inc.," therein "called the `lessee,' party of the second part," which reads in part:
"Whereas the lessor is the owner of the following described parcel of land, to wit:
"* * * [description of an over-33-acre parcel of land].
"Whereas, the lessor desires to construct upon the parcel of land above described, three separate buildings consisting of several stores, having a combined frontage of approximately 950 feet and to improve the remaining portion of said parcel of land northerly of said building and a substantial portion of such land lying southerly of said building for purposes of a parking lot, with approaches thereto from Elm Road, with driveways, service areas, etc., all as more particularly appears from the plot plan attached hereto, marked exhibit `C' * * * and made a part hereof by reference; and
"Whereas, the lessor desires to lease unto the lessee, under the terms and conditions hereinafter set forth, one of the stores in the central of said three buildings, which store shall be 100 feet in width, front and rear, by 150 feet in depth, with basement space 100 feet in width by 22 feet in depth, located under the rear portion thereof (being store designated `Loblaw' on said exhibit `C'), together with the use of the parking lot, service areas, driveways, etc., as the same are to be improved by the lessor, as hereinafter provided, and as shown on said exhibit `C,' all of which meets with the desires of said lessee.
"Now therefore witnesseth
"First — the lessor agrees, as soon as possible after the execution of this agreement to construct upon the parcel hereinbefore described with union labor three separate store buildings consisting of several stores located and having the dimensions as hereinbefore specified, one of which stores (designated as `Loblaw') shall be of the dimensions hereinbefore specified and as shown on exhibit `C,' which said store shall be entirely constructed in accordance with the plans and specifications attached hereto * * * and made part hereof by reference, and to complete the improvement of the land forming the remaining portion of said parcel of land northerly of said building and a substantial portion of such land lying southerly of said building for purposes of a parking lot with approaches, service areas, driveways, loading and unloading areas and other improvements, as shown on exhibit `C,' all in accordance with the provisions of exhibits `A' and `B.'
"The lessor further agrees to construct a suitable sidewalk across the entire front of the building so agreed to be erected and elsewhere as shown on exhibit C.
"It is further understood and agreed that when completed by the lessor, said building and said parking lot shall in all respects be in full compliance with the laws, ordinances and all rules and regulations of the state and local governments and their respective officers, departments or bureaus applicable, and if such building and parking lot do not so comply, the lessor warrants that it will cause the same to comply at its own expense. The lessor further agrees to obtain, at its own expense, all necessary permits for the entire construction and improvement herein provided for. Lessee's acceptance of possession of the demised premises shall not constitute a waiver of the provisions of this subparagraph.
"It is further understood and agreed that the construction of the building and the improvement of the portion of the premises to be used for purposes of a parking lot shall be commenced as soon as possible and shall be entirely completed and possession thereof shall be given to the lessee on or before January 1, 1953. In the event, however, that the lessor, by reason of strikes or circumstances beyond its control, is prevented from completing such building and said parking lot and of delivering possession thereof on or before January 1, 1953, the time within which such building and parking lot may be completed and such possession delivered to the lessee shall thereupon automatically be extended by the lessee up to but not exceeding April 1, 1953. In the event that possession of the demised premises cannot be given by the lessor to the lessee on or before April 1, 1953, for any reason whatsoever, this lease agreement at the sole option of the lessee shall be null and void and of no effect otherwise to be and remain in full force and effect. Such option shall be exercised by written notice to the lessor, given as hereinafter provided.
"Second — The lessor has agreed to let and hereby does let and the lessee has agreed to take and hereby does take those certain premises hereinbefore described, including the store designated `Loblaw' in the building agreed to be constructed by the lessor, as aforesaid, to be located on the northerly side of Elm Road in the township of Howland, county of Trumbull and state of Ohio and known as _____ in said city, the dimensions of said building and of said building to be as aforesaid, together with the remainder of the parcel of land to be owned by the lessor, as the same shall be improved by the lessor, as hereinbefore described, for a term of ten (10) years, to commence on January 1, 1953, and to end on January 1, 1963, at 8 o'clock in the forenoon of that day, at a rental of twenty-two thousand two hundred ($22,200) dollars per annum each, payable in advance in monthly installments of eighteen hundred fifty dollars ($1,850) each on the first day of each and every month during said period.
"It is further understood and agreed that possession of the demised premises shall be given to and accepted by the lessee immediately upon completion thereof, as aforesaid. However, the rental as herein reserved shall not commence until two full weeks after possession of the demised premises has been received by the lessee. In the event that the rental as herein reserved, after allowing for such two full weeks occupancy without rental charge, shall commence on other than the first day of any month, the lessee shall, at such time, pay to the lessor the rental for the balance of said month prorated on the basis of eighteen hundred fifty dollars ($1,850) per month. In the event that possession of the demised premises is given and received prior to January 1, 1953, it is understood and agreed that such shall be given and received and said premises occupied subject to all the terms and conditions in this agreement contained; provided, however, that the rental from the date when the same shall commence, as hereinbefore provided, to January 1, 1953, shall be prorated and paid on the basis of $1,850 per month.
"In any event the expiration date of the term herein provided for shall be January 1, 1963.
"It is understood and agreed that the entire project being constructed by the lessor, as shown on exhibit `C,' is to be substantially completed and the parking lot, approaches, driveways, service areas, etc., are to be entirely completed and the entire building and the parking lot, approaches, driveways, service areas, etc., are to be cleared at the time when possession of the demised premises is given to the lessee and the lessee shall not be required to accept delivery of such demised premises until the lessor has complied with such conditions. The lessor further warrants and covenants that the possession of the demised premises shall be delivered to the lessee not later than the date on which possession of the premises which are to be occupied by Kroger (or other supermarket) is delivered to that corporation."
Loblaw bases its request for an injunction on the provisions of paragraph "eleventh" of the foregoing agreement, pursuant to which defendant agreed "not to lease or permit to be used any portion of any store or building now or hereafter owned, acquired or controlled by it for any business or purpose which shall be in direct competition with the business then being conducted in the demised premises, provided any such store or building is located within a radius of 500 feet of the demised premises."
Paragraph "nineteenth" of the foregoing agreement reads:
"The lessor reserves the right to construct an additional building or buildings in the area designated on exhibit `C' as `future building site.'"
The building built for and rented to A P is located in that "area" which is to the south of the buildings which were to be constructed by defendant. However, that A P building is adjacent to land designated on that exhibit C as a parking lot, although it is more than 500 feet from the Loblaw store. Exhibit C also discloses that a Kroger store was to be located about 320 feet from the Loblaw store.
The Common Pleas Court held that Loblaw was entitled to the relief prayed for.
On appeal to the Court of Appeals on questions of law and fact the case was tried de novo and a decree was rendered granting the injunctive relief sought by Loblaw.
The cause is now before this court on appeal from the judgment of the Court of Appeals pursuant to allowance of defendant's motion to certify the record.
Messrs. Manchester, Bennett, Powers Ullman, for appellee.
Messrs. Harrington, Huxley Smith and Mr. T. Lamar Jackson, for appellant.
Both parties recognize that the outcome of this case depends entirely upon the meaning to be given to the words "demised premises" where they appear as the last two words of the first sentence of the paragraph numbered "eleventh" in the agreement of June 24, 1952, between Loblaw and defendant. If those words are construed as referring only to the Loblaw store, then defendant must prevail. On the other hand, if they are construed as referring not only to the Loblaw store but also to the portions of the over-33-acre parcel of land which were to be improved by defendant for use by Loblaw and others as "parking lot, service areas, driveways, etc.," then Loblaw might prevail. No other possible meaning for those words has been suggested.
The foregoing agreement is superimposed upon a printed form of Loblaw and was prepared by Loblaw. Part of the agreement is represented by the printed words of that form and part is represented by additions thereto by typewriter. The paragraph numbered "eleventh" of the agreement reads, typewritten portions being indicated by italics:
"The lessor agrees during the term hereof not to lease or permit to be used any portion of any store or building now or hereafter owned, acquired or controlled by it for any business or purpose which shall be in direct competition with the business then being conducted in the demised premises, provided any such store or building is located within a radius of 500 feet of the demised premises.
"The restrictions contained in this paragraph shall not apply to a competitive business which occupies a store having (a) a frontage of 30 feet or less and (b) a total floor area of 3,000 square feet or less. The lessee hereby specifically consents that the lessor may lease to Kroger or may otherwise lease as a supermarket the store 100 feet in width by 140 feet in depth which is designated on exhibit `C' as `The Kroger Co.'. It is specifically understood and agreed that such store shall not be increased in width or depth at any time unless the lessor shall, upon the request of the lessee, increase the demised premises in like manner, with the rent for such space added to the demised premises to be paid at the same rate per square foot of floor area as that being received by the lessor from Kroger or such other supermarket for the area added to its store."
The words "demised premises" are used twice in the printed and twice in the typewritten portion of that paragraph. The first use in the printed portion is with reference to "business * * * conducted in the demised premises." If something other than the store was being referred to, the word "on" should have been used instead of "in."
The second use in the printed portion is the use where the meaning to be given to the words will determine the outcome of this case.
When the typewritten portions of paragraph "eleventh" of the agreement are considered, it is obvious that the words "demised premises," as used twice therein, necessarily mean only the Loblaw store. Thus, if the Kroger "store shall not be increased in width or depth * * * unless the lessor shall * * * increase the demised premises in like manner," it is obvious that "demised premises" mean only the Loblaw store. The remainder of the sentence makes that obvious conclusion absolutely certain.
We have set forth the "whereas" or preamble clauses and paragraph "second" (the granting clause), as well as paragraph "first" to which paragraph "second" apparently refers, quite fully in the statement of facts because of the principal contentions of Loblaw. These were that "the basic rights and duties of the parties are set forth in the granting clause of the agreement, in the light of their basic intent as indicated in the preamble," and paragraph "eleven, the restrictive clause at issue herein, can only be interpreted with respect to, and in light of, the basic intent and effect of this relationship as set forth in" the granting clause and the preamble.
The first sentence of paragraph "second" (in referring to the lessor letting and the lessee taking "those certain premises hereinbefore described, including the store * * * together with the remainder of the parcel of land to be owned by the lessor, as the same shall be improved by the lessor, as hereinbefore described"), as well as three of the last four sentences of paragraph "first" (indicating that "possession" of "the building and the improvement of the portion of the premises to be used for purposes of a parking lot" was to "be given to the lessee," that "possession" of "such building and parking lot" was to be "delivered to the lessee," and that these things to be given to the lessee were "the demised premises"), contains the only words in paragraph "first" or "second" or in the preamble of the agreement that can conceivably in any way support Loblaw's contentions. All those words are part of the printed form.
The last two sentences of paragraph "second" are typewritten and are the only portions of that paragraph which are not part of the printed form. A reading of those two sentences tends to indicate that the words "demised premises" mean the Loblaw store, not the store plus some other premises. Thus, in the first of those typewritten sentences, "the entire project * * * and the parking lot, approaches, service areas, etc.," as well as "the entire building and the parking lot, approaches, driveways, service areas, etc.," are both used as obviously not the equivalent of "the demised premises." Also, in the second of those typewritten sentences, "demised premises" are quite clearly used as the equivalent of the Loblaw store.
This conclusion is also fortified by the last of the "whereas" clauses (likewise typed) which indicates a desire "to lease * * * one of the stores * * * together with [merely] the use of [not] the parking lot, service areas, driveways, etc."
As stated in paragraph two of the syllabus in O'Neill v. German, 154 Ohio St. 565, 97 N.E.2d 8:
"The typed portion of a * * * contract will prevail over the printed portion thereof, if the two are inconsistent."
A reasonable construction of these provisions relied upon by Loblaw leads at most to the conclusion that the "demised premises" were the store and that the right to use other portions of the defendant's land as a parking lot or for service areas or driveways was merely an appurtenance to those premises, — not a part of those premises. See decisions holding that, within meaning of a constitutional provision exempting from taxation sales of food for consumption "off the premises where sold," the word "premises" means only the portion of an area that is in the actual possession or control of the vendor and not other portions that the vendor is merely permitted to use in making sales. Cleveland Concession Co. v. Peck, Tax Commr., 159 Ohio St. 480, 112 N.E.2d 529; Castleberry v. Evatt, Tax Commr., 147 Ohio St. 30, 67 N.E.2d 861, 167 A.L.R., 198.
There are numerous other portions of the agreement which require the conclusion that the words "demised premises," as used therein, mean only the Loblaw store. For example, in the printed portion of paragraph "third" it is "agreed that the lessee shall use the demised premises, or any part thereof, for the purpose of * * * selling beer, ale and wines and household, food, personal and incidental supplies." Certainly no reasonable persons in the position of Loblaw and defendant would have contemplated such sales outside or at least very far outside the walls of a store. Also, the typewritten portions of paragraph "third" spell out the rights and obligations with respect to the portion of defendant's land not to be occupied by buildings and specifically provide "that the lessee's use of the parking areas, approaches, driveways, service areas, etc., shall be in common with the tenants of the other stores in the shopping plaza." Further, in paragraph "fourth," the lessee agrees "to keep the sidewalks in front of the demised premises reasonably clear of snow, ice and dirt" and "that it will not display merchandise on the sidewalk in front of the demised premises."
We do not believe it would serve any useful purpose to point out the numerous other instances of provisions of the agreement which require the conclusion or at least strongly indicate that the parties thereto meant only the Loblaw store when they used therein the words "demised premises."
The very most that can be said with respect to Loblaw's contentions is that there may be some doubt as to whether the last two words of the first sentence of paragraph "eleventh" should be construed to refer only to the store. If they are not so construed, then the restriction on defendant's free use of his land will be substantially increased.
The general rule, with respect to construing agreements restricting the use of real estate, is that such agreements are strictly construed against limitations upon such use, and that all doubts should be resolved against a possible construction thereof which would increase the restriction upon the use of such real estate. 14 American Jurisprudence, 621, Section 212. Thus, in Frederick v. Hay, 104 Ohio St. 292, 135 N.E. 535, the syllabus reads:
"Where the words of a restriction contained in a deed of conveyance are equally capable of two or more different constructions, that construction will be adopted which least restricts the free use of the land. ( Hunt v. Held, 90 Ohio St. 280, approved and followed.)"
Also in Hunt v. Held, 90 Ohio St. 280, 107 N.E. 765, L.R.A. 1915D, 543, paragraph one of the syllabus reads:
"Where the right to enforce a restriction contained in the conveyance as to the use of the property conveyed is doubtful all doubt should be resolved in favor of the free use thereof for lawful purposes by the owner of the fee."
See Arnoff v. Williams, 94 Ohio St. 145, 113 N.E. 661.
The application of this general rule in the instant case requires the conclusion that the words "demised premises," where they appear as the last two words of the first sentence of the paragraph numbered "eleventh" in the agreement between Loblaw and defendant, mean only the Loblaw store.
It follows that the judgment of the Court of Appeals must be reversed and final judgment rendered for defendant.
Judgment reversed.
MATTHIAS, HART, STEWART and BELL, JJ., concur.
WEYGANDT, C.J., dissents.