Dover Shopping Center, Inc. v. Cushman's Sons, Inc.

• Citation: 164 A.2d 785,63 N.J.Super. 384
• Decision Date: 17 October 1960
• Docket Number: No. A--199,A--199
• Parties: DOVER SHOPPING CENTER, INCORPORATED, a corporation of the State of New Jersey, Plaintiff-Respondent, v. CUSHMAN'S SONS, INC., a corporation of the State of New York, Defendant-Appellant.
• Court: New Jersey Superior Court – Appellate Division

Page 384

63 N.J.Super. 384

164 A.2d 785

DOVER SHOPPING CENTER, INCORPORATED, a corporation of the

State of New Jersey, Plaintiff-Respondent, v. CUSHMAN'S SONS, INC., a corporation of the State of New

York, Defendant-Appellant.

No. A--199.

Superior Court of New Jersey

Appellate Division.

Argued Oct. 10, 1960.

Decided Oct. 17, 1960.

David Young, 3rd, Boonton, for appellant (Young & Sears, Boonton, attorneys).

Joseph A. Weisman, Newark, for respondent (Hannoch, Weisman, Myers, Stern & Besser, Newark, attorneys; Albert G. Besser, Newark, and Joseph S. Seidel, Springfield, of counsel).

Before Judges GOLDMANN, FREUND and KILKENNY.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

Defendant appeals from a mandatory injunction of the Chancery Division, entered December 3, 1959, ordering it to reopen its retail bakery business at the store premises leased by it from plaintiff at No. 17 Bassett Highway, Dover, and to keep the store open for business during the hours and on the days required by paragraph Third of the lease, with a manager or salesperson in charge and a 'Cushman's' sign on the outside of the premises. The court also dismissed defendant's counterclaim with prejudice and denied plaintiff's demand for money damages, the same having been withdrawn by plaintiff in open court. A stay of the injunction, granted by the Chancery Division on December 21, 1959, was vacated by this court on March 16, 1960.

On July 16, 1956 the parties entered into a written lease for one of a group of stores in plaintiff's shopping center in Dover which defendant undertook to operate as a retail bakery. The lease, a detailed and comprehensive instrument of some 29 pages, resulted from protracted negotiations between the parties during which defendant was represented by counsel. The printed form, as finally executed, contained numerous typewritten insertions and changes, obviously the result of those negotiations. Among its provisions was paragraph Third:

'Third: As one of the inducements for the making of this lease, Tenant hereby agrees, beginning as soon after the commencement of the term as is reasonably possible and continuing during the full remaining term of this lease, to operate its business in the demised premises; to keep its store open daily for the regular conduct of its business therein during the same hours at least as are customarily employed by other similar stores in the neighborhood of the demised premises, and to keep and maintain the show window displays in an attractive and dignified manner: PROVIDED, HOWEVER, that Tenant shall be under no obligation to keep said store open on Sundays or holidays, or on days when it is customary for other stores in Dover, New Jersey, to keep closed, or when it is recognized business practice to keep closed. Tenant hereby agrees to join with the other tenants in the shopping center in any endeavor to formulate a common plan of store hours and business days; and if Tenant and said other tenants shall arrange such common plan, then the store hours and business days of Tenant's store on the demised premises, in lieu of the store hours and business days hereinabove set forth in this Article, shall be those prescribed by said common plan during the continuance thereof. It is further agreed that no failure by Tenant to keep said store open for business by reason of the elements, fire, labor disturbances or other causes beyond the control of Tenant shall be deemed a breach by Tenant of the terms of this Article.'

The lease provided for a minimum annual rental of $7,000 plus a shifting percentage of gross sales in excess of the minimum rent.

Defendant took possession and began business on September 25, 1957, and has continued to pay the minimum rental down to the present time. Operations were discontinued about April 4, 1959, when defendant posted a window sign indicating that the store was closed for alterations. Several telephone calls between plaintiff and defendant, and correspondence during April 1959, confirmed that the ostensible reason for defendant's shutdown was this remodeling. However, on May 1, 1959 defendant wrote plaintiff that it was permanently ceasing operations, indicating that it had found the enterprise unprofitable and had decided it would be less costly to pay the minimum rent than to resume operations.

Plaintiff subsequently instituted its action for a mandatory injunction directing defendant specifically to perform the covenants contained in paragraph Third of the lease. Defendant answered and by way of separate defenses contended, among other things, that (1) equity should not grant specific performance of a contract relating to personal services or requiring court supervision over a long period of time; (2) defendant had continued to pay its minimum rent down to date, but had not enjoyed sufficient business during its period of operation to April 1, 1959 so as to be required to pay any additional rent over and above the minimum; (3) plaintiff had not suffered any substantial or irreparable injury and had an adequate remedy at law; (4) equity should not grant specific performance where the benefits to plaintiff from the store being open would be slight in comparison to the substantial injury sustained by defendant. Defendant also alleged that plaintiff was not entitled to the relief demanded because the lease was executed as a result of plaintiff's misrepresentations, upon which defendant relied in entering into the lease. These were spelled out in the counterclaim whereby defendant sought rescission of the lease because, it was alleged, plaintiff had falsely represented that the shopping center would be completed during 1957, a department store would be built and operating, all sidewalks would be completed immediately, a theatre would be installed and operating in 1957, and parking facilities for 2,000 cars would be constructed within a reasonable time.

The trial judge refused to permit parole evidence offered by defendant with respect to these representations, apparently on the ground that such evidence would contradict the express terms of paragraph Seventeenth of the lease, which provides:

'Seventeenth: Landlord has made no representations or promises with respect to the demised premises except as herein expressly set forth. This lease contains the entire agreement between the parties hereto; and any agreement hereafter made shall not operate to change, modify, terminate or discharge this lease in whole or in part unless such agreement is in writing and signed by the party sought to be charged therewith.'

He also indicated that the representations on which defendant claimed it relied were nothing more than simple promises.

Defendant claims error because the representations were material, and it would not have executed the lease but for them. It argues that the parol evidence was permissible to prove fraud notwithstanding paragraph Seventeenth. There can be no question that parol evidence is admissible to establish that the execution of a contract was procured by fraud, notwithstanding a provision that no representations had been made except those set forth in the agreement. Guilder v. Boonton-Pine Brook-N.Y. Bus Co., 110 N.J.L. 103, 105--106, 164 A. 316 (E. & A.1932); Tams v. Abrams, 120 N.J.Eq. 253, 258--259, 185 A. 521 (E. & A.1936); 32 C.J.S., Evidence, § 979(a), p. 942 et seq. (1942). Fraud may always be shown by parol evidence, since no attempt is being made to alter, vary or contradict the integrated instrument, but only to show that it is not an unimpeachable document, i.e., that it is void or voidable. Harker v. McKissock, 12 N.J. 310, 323, 96 A.2d 660 (1953).

One of the theories advanced by plaintiff in support of the argument that fraud could not be shown by the proffered parol evidence is that it dealt with the subject matter of the lease itself--the alleged fraudulent representations were directly and specifically contradictory to the express terms of the written instrument. Winoka Village, Inc. v. Tate, 16 N.J.Super. 330, 84 A.2d 626 (App.Div.1951), is cited in support. However, plaintiff produces only partial evidence of direct contradiction between the terms of the lease and the alleged representations. The mere fact that both in some degree related to the physical layout or improvement of the shopping center is not sufficient to bar evidence of fraud. The Winoka holding is a narrow one and should be confined to its facts. Conceivably, one of the alleged representations--the proposed 2,000--car parking lot--was contradicted within the Winoka rationale, since paragraph Thirty-fifth (h) provides that 'Landlord represents that the parking area will have accommodations for not less than one thousand vehicles and will have a paved surface.' But the other representations do not appear to be expressly contradicted by the writing, and therefore should be admissible unless barred on another ground.

There is such other ground, and although the trial court did not clearly rest its exclusion of the proffered evidence upon that basis, we may do so...