Blakeley v. Pilgrim Packing Co.

• Decision Date: 14 January 1976
• Citation: 4 Mass.App.Ct. 19,340 N.E.2d 511
• Parties: Gerald W. BLAKELEY, Jr., trustee, et al. v. PILGRIM PACKING CO. et al. 1
• Court: Appeals Court of Massachusetts

Page 511

340 N.E.2d 511

4 Mass.App.Ct. 19

Gerald W. BLAKELEY, Jr., trustee, et al.

v. PILGRIM PACKING CO. et al. ¹

Appeals Court of Massachusetts, Middlesex.

Argued Nov. 17, 1975.

Decided Jan. 14, 1976.

Walter G. Van Dorn, Boston (Dean P. Nicastro, Quincy, with him), for plaintiffs.

Oscar J. Toye, Boston, for defendants.

Before HALE, C.J., and KEVILLE and ARMSTRONG, JJ.

HALE, Chief Justice.

The plaintiffs appeal from the dismissal of their bill in equity to restrain certain activities of the defendants, alleged to violate restrictive covenants in a deed and in a separate restrictive agreement. The suit was referred to a master, who reported subsidiary findings and ultimate conclusions. He made a summary of evidence under Superior Court Rule 90 (1954) (see now Rule 49(7) (1974)) in response to certain objections made by the plaintiffs. ²

The plaintiffs are the trustees of two Massachusetts trusts, Ninety-Three Industrial Center Trust (the Trust) and Cabot, Cabot & Forbes Co. (Cabot), the developers of a 10.3 acre industrial park in Woburn. The Trust is a wholly owned subsidiary of Cabot. By a deed dated August 10, 1962, the Trust conveyed a parcel in the industrial park to the defendant Win-Burn Realty Associates, Inc. (Win-Burn). The deed contained certain restrictions on the use of the property. ³

The defendant Pilgrim Packing Co. (Pilgrim) operated a plant for the processing and packing of meat products such as sausages, bolognas, and cooked salami on the Win-Burn property. In a separate letter agreement, also dated August 10, 1962, Pilgrim agreed to certain restrictions on the operation of a retail store associated with the factory and on use of the premises generally.

In settlement of an earlier suit brought by the plaintiffs to enforce the August 10, 1962, deed restrictions and the separate letter restrictions, the defendants and the plaintiffs on December 1, 1967, executed a document entitled 'Restrictive Agreement,' which was recorded. That agreement embodied the essential terms of the 1962 letter agreement. Win-Burn and Pilgrim agreed that for a period of thirty years they would not 'engage in any retail selling activities on said lot 1, except those only as are necessary to dispose of excess products not sold or distributed through their normal wholesale or other non-retail selling operations.' Other provisions limited the use of signs and parking. ⁴

In early 1970 Pilgrim's assets were sold to Joseph DeCosta, Inc. (DeCosta), and all of the capital stock of Win-Burn was sold to the stockholders of DeCosta. (Pilgrim's operations on the premises appear to have then ceased.) DeCosta took possession of the premises, title to which remained in Win-Burn, and operated Pilgrim's business. Later in 1970 or in early 1971, it sublet the retail store to one Sullivan, who has since operated it. ⁵

The plaintiffs contended that the defendants' use of the premises violated their covenants with respect to parking and maintenance of the property and that the sales in the retail outlet exceeded those permitted by the Restrictive Agreement. It sought an injunction enforcing those covenants. The master found that Win-Burn maintained sufficient facilities for parking, loading and unloading; that the street parking was limited to use contemplated by the parties and did not violate the agreement; that reasonable care was exercised in maintaining the exterior appearance of the premises; and that temporary outside storage of wooden pallets on which meat supplies were delivered (before those pallets were picked up by a sanitation company) was not detrimental to the appearance of the industrial park. With respect to the retail business, the master found that the retail store conducted $100,000 in annual gross sales at an annual cost of goods sold of approximately $75,000. He further found that prior to executing the Restrictive Agreement limiting retail sales the parties contemplated that the sale of 'processed meats, cheeses, olives and sandwiches' would continue and that it was reasoanble and necessary to have condiments for the sandwiches available for sale. He also found the sale of soft drinks 'reasonably incidental to and necessary for the successful sale of the sandwiches and meats which are authorized to be sold under the Restrictive Agreement.'

The master reached the following ultimate conclusions: (1) that the bill should be dismissed as to Pilgrim since it no longer occupied the premises or continued to violate the agreement; (2) that there were no violations of the restrictive covenants contained in the 1962 deed; (3) that Win-Burn violated the retail sales agreement by reason of the sale of 'newspapers, cookies, instant breakfast preparations, cheese dips, gelatins, and cigarettes;' (4) that the display of signs describing products for sale in the store or indicating that a retail store was located there violated the agreement, and (5) '(u)nless as a matter of law the change of ownership in the capital stock of . . . (Win-Burn) may not be considered as a factor for such purposes, . . . that by having knowledge of all of the retail activities on the premises since at least April of 1967, and by failing to take any reasonably prompt action to stop such activities, the plaintiffs have impliedly represented to the new owner of such stock that the continuation of such retail activities would be permitted.' That last ultimate conclusion apparently embraced the defendants' affirmative defenses of laches and estoppel. The judge adopted the master's report over the plaintiffs' objections and, apparently on the basis of laches or estoppel, dismissed the bill.

The plaintiffs contend on appeal that the dismissal of the bill was improper as there was no basis for the finding of laches or estoppel, and we agree.

In reviewing the master's ultimate conclusion numbered (5) above, which was drawn solely from his subsidiary findings, it is our duty to draw our own inferences and reach our own conclusions from those findings. Jones v. Gingras, --- Mass.App. ---, --- ^a 331 N.E.2d 819 (1975). The defense of laches must be affirmatively demonstrated, not by a mere showing that the plaintiffs delayed in the assertion of rights but by a positive showing that any such delay operated to prejudice the defendants. Stewart v. Finkelstone, 206 Mass. 28, 36, 92 N.E. 37 (1910). Three Sons, Inc. v. Phoenix Ins. Co., 357 , 278, 257 N.E.2d 774 (1970); Erickson v. City of Walthan, --- Mass.App. ---, ---, ^b 314 N.E.2d 139 (1974). The only subsidiary finding of the master relevant to the defense of laches was that 'the plaintiffs have at all times been aware of the nature and extent of the retail activities on the premises.' The...