Bishins v. St. Barnabas Corp.

Brune, C. J., delivered the opinion of the Court. This is a suit by a tenant to enforce a covenant in his lease of a store in a shopping center in order to prevent the leasing of another store in the same center to a competitor. At the conclusion of the plaintiff’s case the defendant landlord moved to dismiss the bill and the motion was granted. The plaintiff appeals.

Bishins, the appellant, leased a store in a new shopping center known as Marlow Heights from the appellee, St. Barnabas Corporation (sometimes referred to below as “Barnabas”). The lease was for a ten-year term beginning October 1, 1957, with two five-year options to renew. The ⁴⁶¹ store was “to be used solely for women’s dress shop, merchandising women’s dresses, women’s coats and accessories (including costume jewelry and cosmetics)”. The terms of the lease excluded a number of articles from those which might be sold on the premises.

Its concluding clause which is here in controversy reads as follows: “The landlord shall not place in the Center any other store of this general type excepting department stores, Adeline and/or Darling types of operation.” The lease, as originally drafted by the landlord, added, at the end of the sentence just quoted, what appear to have been these words: “and/or other women’s shops merchandising apparel at lower or higher prices.” As a result of objections by Bishins these words were stricken out. (They are almost illegible in the copy of the lease filed as an exhibit.) The terms of the lease with regard to the uses of the property, the renewal option and the exclusion of competitors were typed into a lengthy standard form of lease used for the Mar-low I-Ieights Shopping Center, which covers about thirty pages. There were some other departures from or additions to the standard form of lease made by typewriter or by pen, and it seems clear that the final terms of the lease were the result of negotiations. For example, one added clause (No. 33) restricted Bishins’ ownership of or interest in dress shops within a certain radius of the Marlow Heights Shopping Center.

The reason for this doubtless was that the rent under the lease here involved was based in part upon a percentage of sales by the tenant. At the time when the Bishins lease was executed there was a lease of another store in the shopping center to an Adeline store, which has apparently continued in force. About a year and a half after the effective date of the Bishins lease, the landlord asked Bishins to assent to a lease of a store in the center to a women’s apparel shop known as an “Armond” shop. Bishins refused to assent and the proposed lease was not made.

Shortly afterwards a lease was made of the same store to a corporation which operates women’s wear stores known as “Terry” shops. This suit was brought to prevent that lease from being carried into effect. ⁴⁶² It appears that the Terry shop lease was made by Keith Corporation, an affiliate of Barnabas, which is authorized by the owner of the shopping center, also an affiliated (or perhaps a parent) corporation, to lease stores in a different part of the center from that in which Barnabas makes such leases. Keith Corporation is not a party to this suit, nor is the owner of the shopping center, nor is the lessee corporation, Rony Realty Company, Inc., which operates the Terry shop. In the view which we take of this case, no defect as to parties, which there may be, would affect the result.

Also, for the purposes of this case, we shall assume (without deciding) that the covenant against competition is as effective with regard to those stores in the shopping center which are leased by an affiliate as with regard to those stores which are leased by Barnabas as landlord. Testimony was admitted at the trial as to the interpretation placed on the clause at issue by the respective parties and as to negotiations leading up to the execution of the