Schmidt v. Hershey

Bond, C. J., delivered the opinion of the Court. These are cross appeals in a suit by a lessee of space in a hotel to enjoin the landlord and a lessee of other space from selling articles which the complainant claimed he had, by the terms of his prior lease, an exclusive right to sell. The court granted the injunction in respect to some articles but refused it in respect to others. Harry F. Schmidt, as assignee of his father Frank K. Schmidt, held a sublease from John S. Hershey, lessee and proprietor of the Francis Scott Key Hotel in Frederick, of a cigar and news stand in the hotel.

According to its express terms the lease of the stand was “for the purpose of vending-cigars, cigarettes, tobaccos, newspapers, periodicals, candy, chewing gum, souvenir post cards, and such other articles proper to he sold at such stands in a first class hotel.” And another clause provided that “the said party of the first part will not rent or sublet any other storeroom or any other space in said Francis Scott Key Hotel for the purpose of conducting a cigar or nows stand business.” The original sublease was executed in December, 1922, and was extended by agreement beyond ibe present time. Scbmidt also became in 1923 lessee of one of several storerooms in or under the hotel building opening on the outside street; the original lease for this was made in 1923, and the property was leased for a cigar and news stand. This second lease had no ³⁰⁴ eovenant giving Schmidt exclusive rights. On July 1st, 1926, another storeroom opening on the outside street was sublet to Luther E. Derr, for a “goodey shop,” or as it was expressed in the lease, “a merchandise business in bakery products and confectionery, ice cream and soda water,” entitling the lessee, Derr, “to serve hot and cold drinks, his own small baking products, ice cream, light sandwiches, etc., either in a wholesale or retail way, or in the form of light lunches, serving to his guests at such times as he may see fit,” which business, conducted within the lines and intent above described, was not to be construed as interfering with the business of the party of the first part.

And Alice R. Dean is an assignee of this latter lease. James H. Dean conducts the business for her. It appears from evidence táken in the case that, even before the Derr lease, candy, chewing gum, and other small articles sold in a candy shop, and ice cream, had been sold in that store as well as at the cigar and news stand inside the hotel, and they continued to be sold up to the time of suit, all without any objection from the Schmidts, father or son. .When Dean took over the sublease from Derr, Derr told him that cigarettes could not be sold in that store because of an exclusive right given to Schmidt, but there is no evidence of notice to Dean, or to Derr, of an exclusive right or claim to such a right in Schmidt to sell candy and chewing gum, or anything other than cigarettes; on the contrary it seems clear that there was no notice of such a claim. ■ Shortly before the institution of the suit, Dean, assuming that Schmidt had the exclusive right to- sell cigarettes -about the hotel property, asked -Schmidt to supply him with cigarettes to be sold in the Dean store at Schmidt’s retail price, for the convenience of Dean’s customers, but Schmidt refused, apparently fearing that he might prejudice in some way his rights under his lease. He showed Dean his lease, and then, according to Dean’s testimony, he, Dean, concluded that Schmidt -did not have the exclusive right he claimed.

Dean then proceeded to sell the cigarettes in his store. Schmidt protested to Mr. Hershey and his manager, but was ³⁰⁵ merely referred by them to his lawyer and to the court. Schmidt then brought his .suit to enjoin sale by Dean of cigarettes, candy, chewing gum, and other articles, enumerated in the Schmidt lease as those which might he sold at his stand. The trial court concluded that he had an exclusive right to the sale of cigarettes about the hotel property, hut not to the sale of candy and chewing gum, and issued an injunction only to restrain Hershey and Dean from having cigarettes sold in the Dean shop.

The parties on each side appeal from this decree. The question mainly argued is that of the extent of the exclusive right given in the Schmidt lease for the stand in the lobby. Does it extend beyond that part of the building used by the hotel, or is it confined to that part ? The words to be construed are that no other storeroom or any other