Burnett v. Holiday Inns of America, Inc.

• Decision Date: 07 June 1965
• Docket Number: No. 5-3619,5-3619
• Citation: 391 S.W.2d 27,239 Ark. 642
• Parties: John BURNETT and Bessie Lee Burnett, Appellants, v. HOLIDAY INNS OF AMERICA, INC. Appellees.
• Court: Arkansas Supreme Court

Page 27

391 S.W.2d 27

239 Ark. 642

John BURNETT and Bessie Lee Burnett, Appellants, v. HOLIDAY INNS OF AMERICA, INC. Appellees.

No. 5-3619.

Supreme Court of Arkansas.

June 7, 1965.

Thomas & Finch, Little Rock, for appellants.

Ben M. McCray, Benton, for appellees.

WARD, Justice.

On March 5, 1964 John Burnett and his wife, appellants, entered into a written contract with Holiday Inns of America, Inc., appellees. In this contract appellants agreed 'to enter into a lease within thirty (30) days from date hereof * * *' covering 3 acres of land (definitely described) upon which appellees were to construct a 48 room motel.

According to the contract the lease was to contain, among other things, the following items:

1. The lease to run 10 years and to be renewable for 9 additional 10 year periods.

'2. Lessee shall pay to lessor the sum equivalent to three per cent (3%) of gross room sales plus one per cent (1%) of all food and beverage sales. Lessee guarantees lessor a minimum monthly rental of $150 per month.'

3. Appellees to have right to purchase property at the end of 10 years for $35000.

4. If appellees should build a filling station on the property they were to pay an additional sum of $50 per month.

5. Provision for tax payments, and appellees' right to connect onto a sewer line.

6. Appellees to have the right to build onto the 48 room motel as needed.

Before the 30 days (mentioned in the contract) had expired the agent of appellees tendered to appellants a written lease (covering in detail each item in the contract) consisting of 8 pages in the transcript. Appellants refused to accept and sign the proffered lease because, they said, it did not conform to the terms of the contract.

On May 4, 1964 appellees filed a complaint in chancery court to force appellants 'to specifically perform their contract', and to execute the lease previously presented to appellants. To the above complaint appellants filed an answer, pointing out wherein the lease differed from the contract. After a full hearing the trial court found that the lease did not conform to the contract, but gave appellees 20 days to offer a conforming lease, pointing out the changes for appellees to make in the lease. Later, the court, after having found the suggested changes had been made, ordered appellants to execute the lease.

In our opinion there were material differences between the contract and the lease prepared by appellees, and consequently, appellants were justified in rejecting the same.

While the contract called for 3% of 'gross room sales' the proffered lease contained the following deductions: credits or refunds made to customers, guests or patrons; customary motel rebates and allowances; customary commissions and fees paid to travel agents for business referral; all sums and credits received in settlement of claims for loss or damage to merchandise; telephone, telegraph, laundry, drycleaning, valet, house service, food beverage and other charges normally and usually changed to or included in guest room statements or bills; rental value of rooms complimented by the lessee and the rooms occupied by members of the lessee's staff, including the family of the innkeeper.

The contract obligated appellees to pay to appellants 1% 'of all food and beverage sales' but the lease excepted therefrom all sales by vending machines; refunds made to guests or patrons; rebates to hotels and restaurants;...