Snavely v. Berman

Urner, J., delivered the opinion of the Court. In a lease from the appellants to the appellees of a storeroom in a building of the lessors at Sparrows Point, in Baltimore County, there were covenants that the room should be used only for fhe purposes of a “ladies and gents furnishing store,” and that the appellants would “not rent any other store in the immediate vicinity for the same line of business” during the term of the appellees’ tenancy. Another room, in the same building was already in the occupancy of a tenant by the name of Julius Taken, whose lease contained a covenant that he would not use the room for '‘purposes other than those of a merchant tailoring, cleaning and repairing establishment.” In his lease there was also a provision that if he should violate any of its covenants, the lessors should “have the right without formal notice to reenter and take possession.” A two-year term, beginning September 1, 1921, was created by the lease to the appellees, with a right of renewal for a further term of three years. Laken’s tenancy was for an original period of two years from January 1st, 1920, and for additional terms of two years each, subject to the right of either the lessor or the lessee, at the end of the second or any succeeding term, to end the tenancy by giving ninety days’ notice in writing of such intention. ⁷⁷ After the appellees had been using their leased room about six months for the purposes mentioned in their lease, the sale of men’s furnishings was started by Laken, in the room rented to him for the different use which his lease designated.

Upon complaint by the appellees of this competition, the appellants arranged a meeting between Laken and the appellees, with a view to an amicable adjustment. But Laken refused to discontinue the business to which the appellees objected. This suit in equity was then brought by the appellees to have the lessors enjoined from continuing the rental of the room occupied by Laken for use as a store for the sale of ladies’ or gentlemen’s furnishings. A preliminary injunction to that end was granted, and on final hearing it was made permanent.

The decree allowed the appellants thirty days to accomplish the purpose of the injunction. While Laken was not formally made a defendant in the suit, he knew of its pendency and of its relation to his interests, and could have become a party if he had so desired, and as a witness at the trial he stated his reasons, which were inconclusive, for conducting a men’s furnishing store contrary to the terms of his lease. Ho is, therefore, hound by the decree. Abramson v. Horner, 115 Md. 232 ; Williams v. Snebly, 92 Md. 9 ; Albert v. Hamilton, 76 Md. 304; Parr v. State, use of Cockey, 71 Md. 220 .

The principal defense is that the appellants did not agree to prevent any of their tenants under pre-existing leases from competing with the appellees in the business to winch the latter were restricted, hut the covenant was simply that the appellants “will not rent” any other store in that vicinity for the same purpose. It was the plain intent of the covenant to assure to the appellees the exclusive right to conduct the business specified in their lease on the premises which the appellants owned and controlled. There was ample power to afford that protection. No other tenant then in the building appears to have had the right to use ⁷⁸ any part of the property for the sale of men’s or women’s furnishings, and Laken was expressly limited by his lease to a different line of business under penalty of eviction without notice.

The passive and continued submission by the appellants to the violation by Laken of that restriction, especially in view of their ability to enforce it summarily, was virtually a concession to him of the right to ignore it, and was practically equivalent to a renting on that basis so far as the present question is concerned. From the standpoint of the rights and interests of the appellees, we are unable to discover any just distinction between an affirmative sanction of the competing enterprise and a refusal or neglect to exert a reserved and complete authority for its prevention. Either attitude on the part of the appelants must be regarded as having the same prejudicial effect upon the appellees, and as being directly opposed to the spirit and purpose of the covenant upon which they rely. The duty of the appellants is coextensive with their power to prevent the competition