Friedman Textile Co. v. Northland Shopping Center, Inc.

• Decision Date: 17 February 1959
• Docket Number: 30002,Nos. 30001,s. 30001
• Citation: 321 S.W.2d 9
• Parties: FRIEDMAN TEXTILE COMPANY, Inc., a Corporation (Plaintiff), Respondent, v. NORTHLAND SHOPPING CENTER, INC., a Corporation, and Northland Libson Shops, Inc., a Corporation (Defendants), Appellants.
• Court: Missouri Court of Appeals

Page 9

321 S.W.2d 9

FRIEDMAN TEXTILE COMPANY, Inc., a Corporation (Plaintiff), Respondent, v. NORTHLAND SHOPPING CENTER, INC., a Corporation, and Northland Libson Shops, Inc., a Corporation

(Defendants), Appellants.

Nos. 30001, 30002.

St. Louis Court of Appeals, Missouri.

Feb. 17, 1959.

Motion for Rehearing or for Transfer to Supreme Court Denied

March 13, 1959.

Lewis, Rice, Tucker, Allen & Chubb, Joseph W. Lewis, Herbert A. Mack and Sigoloff & Sigoloff, J. E. Sigoloff, St. Louis, for appellants.

Husch, Eppenberger, Donohue, Elson & Jones, Carroll J. Donohue, and Shulamith Simon, Schwartz, Schwartz & Landsman, Burnett Schwartz, St. Louis, for respondent.

DOERNER, Commissioner.

This is an appeal by both defendants from a judgment and decree of the Circuit Court of the City of St. Louis granting plaintiff certain injunctive relief and a monetary judgment for actual and punitive damages. In the interests of convenience and clarity the parties will be referred to in the following manner: Friedman Textile Company, Inc., as plaintiff; defendant Northland Shopping Center, Inc., as defendant Northland; and defendant Northland Libson Shops, Inc. as defendant Libson.

Defendant Northland owns and, through its managing agent, G. F. Nooney and Co., manages the largest shopping center in the St. Louis area, situated on a 60-care tract on Lucas and Hunt Road and West Florissant Road in the City of Jennings, St. Louis County, Missouri. Three buildings form a north and south line stretching across the middle of the area. The center building is designated as building 'A', the one to the south as building 'C', and that to the north as building 'B'. A fourth building, called 'D', runs westwardly from the northwest corner of building 'B', to form an 'L' therewith; and a fifth, termed 'E', is independently situated some distance north of building 'D'. Because of the terrain, buildings 'B' and 'C' have an upper and a lower level, occupied on both levels by stores and shops. Famous-Barr Co., operated by May Department Stores Co., occupies all of building 'A', and 42 various other retail businesses are operated in the remaining four buildings.

While the shopping center was in the planning stage, plaintiff, in May of 1954, contacted defendant Northland with the object of negotiating a lease for a children's department store. Numerous conferences occurred between that date, culminating in a lease dated November 9, 1954, which by mutual consent was superseded by the lease here in question, dated December 16, 1954. By the terms of the present lease defendant Northland leased to plaintiff a store on the upper level of building 'C' for a term of ten years, at a yearly minimum rental of $13,612 per year, plus 5% of plaintiff's gross anual sales in excess of $272,240 as additional rent. Paragraph 5 of the lease provided 'Lessee covenants and agrees that it will use the Demised Premises continuously throughout the term hereof for the purpose of conducting therein the following business or businesses, namely: A children's store defined in Lease Rider No. 1 attached hereto and made a part hereof * * *.'

Lease Rider No. 1, thus referred to, read:

'In keeping with the overall plan for a well-balanced shopping center, Lessor agrees that during the term of this lease, except as hereinafter otherwise provided, it will not lease to any other person, firm or corporation any space on the upper level of Building 'B' or 'C' of Northland Shopping Center for use as a children's store. 'Children's Store' shall be construed as the type of store engaged primarily in handling and offering for sale children's merchandise including but not limited to clothing, shoes, furniture, toys and accessories.

'Notwithstanding the above restriction, it is understood and agreed that Lessor may lease an area of approximately 1300 square feet in the upper level of Building 'B' for a children's store, as above defined and one additional store on the lower level in Building 'B' or in Building 'D' for a 'children's store' as above defined.

'Also notwithstanding the above provisions and restrictions, it is agreed that the leasing of stores carrying a full line of children's toys and items closely associated thereto, and stores described as 'Children's Shoe Stores' shall not constitute violations of this Rider.'

The space leased to plaintiff is 'L' shaped, the longer leg of the 'L' consisting of an area approximately 27 feet wide and 135 deep and the smaller leg of an area approximately 27 feet wide by 54 feet deep.

On December 2, 1954, defendant Libson entered into a lease with defendant Northland for a store on the upper level of building 'C' measuring approximately 36 feet wide by 126 feet deep, for a term of fifteen years, at a minimum rental of $10,530 per year plus a percentage rent of 5% of gross sales in excess of $210,600 per year. The use clause provided that the demised premises were to be used '* * * for the purpose of conducting therein the following business or businesses, namely: Misses, Junior, and Women's apparel and accessories * * *.' The store thus leased by defendant Libson was immediately adjacent to, and to the south of, the store leased to plaintiff. One other shop intervened between plaintiff's shop and Famous-Barr.

The shopping center officially opened on August 19, 1955, at which time plaintiff, Famous-Barr, and a few other enterprises commenced to do business. Defendant Libson opened its store shortly thereafter. Plaintiff's merchandise included a complete line of girls' and boys' wearing apparel, from infants to the 12-13 age group for girls and from infants to the 12-14 age group for boys. Small items of toys and accessories were also sold by plaintiff. For about a year after it opened its store, defendant Libson sold only junior, misses and women's wearing apparel, including hosiery, lingerie, foundations, dresses, sportswear and accessories, beginning at the age of 15 years and up.

Defendant Libson is corporately related to Libson's Shops, Inc., which operated 13 other shops in the St. Louis area, all of which sold misses, junior, and women's apparel and accessories. In 1950 or 1951 the Libson Store in Maplewood, Missouri added a line of children's wear, as a pilot project, Libson's Shops, Inc., having then decided that if the experiment proved profitable a similar line would be added to such other Libson Stores as had room to accommodate it. In 1956 the Libson interests decided to add the line of children's wear to three additional stores, including the shop operated by defendant Libson at the Northland Shopping Center. Late in June 1956, Harry Lieberman, president of defendant Libson, contacted Elmer L. Helm, an employee of defendant Northland, who had handled much of the negotiations connected with the leasing of the various stores in the shopping center. Lieberman testified that when he first talked to Helm he understood Helm to say that under the terms of defendant Libson's lease it could handle the line of children's wear. Helm testified, however, that he understood that defendant Libson only wanted to add a line of larger girls' wear, which would overlap junior and misses, and that he did not authorize defendant Libson to add a line of 'tots and teens,' as he termed the younger girls' line.

Sometime in July 1956, defendant Libson placed a sign in its show window announcing its intention to soon open 'A Complete New Childrens Department--Tots to Teens--Ages 3 thru Preteens.' Upon seeing the sign plaintiff telephoned Helm and protested against the contemplated sale by defendant Libson of children's wear. Helm then informed defendant Libson that it did not have permission to sell younger children's wear in its store. Defendant Libson removed the sign from its window, but protested that in reliance on the assurance Helm had given it, it had purchased merchandise and fixtures with which to open the new department, and requested defendant Northland to amend its lease so as to permit it to do so.

The record shows that numerous conferences and telephone contacts occurred between the two defendants relative to the question of whether or not defendant Libson's lease would be amended as requested. In brief, defendant Northland appears from the record to have changed its mind several times during the course of these negotiations, first rejecting the request, then indicating that it would grant it, and then reversing itself. The situation was complicated, to some extent, by the fact that defendant Northland had granted May Department Stores Co. an option to purchase its stock, by the terms of which defendant Northland had agreed not to make any lease or other rental agreements without the prior written consent of May Department Stores Company; and by the initial disapproval by the May Company of the requested amendment to defendant Libson's lease.

Defendant Northland's several reversals of its intentions regarding amending defendant Libson's lease seem to have coincided with its changing attitude towards plaintiff's continuing protests to it, and to May Department Stores Company. When defendant Northland reconsidered its initial advice to defendant Libson that it could not sell young children's wear it appears to have recognized plaintiff's objections--but on the grounds that to do so would have been a violation of the use clause of defendant Libson's lease, and not on the grounds that it would have been a violation of plaintiff's lease. Defendant Northland was unhappy about what it regarded as plaintiff's unsatisfactory sales volume, and by plaintiff's failure to sell fabrics and drapes, a right which it had obtained by a subsequent rider to its lease. At one point defendant Northland appeared willing to defer action on defendant Libson's request for an amendment until after the end of 1956 if plaintiff gave up its right to sell textiles. Plaintiff's evidence was that it attempted to surrender this right, but could not reach defend...