Great Atlantic & Pacific Tea Co. v. Bailey

• Decision Date: 26 May 1966
• Citation: 421 Pa. 540,220 A.2d 1
• Parties: The GREAT ATLANTIC AND PACIFIC TEA COMPANY, Inc., Appellant, v. Robert M. BAILEY and Elizabeth S. Bailey and South Park Plaza, Inc., andQuality Markets, Inc., and Super Duper, Inc., Now to the Use of S. M.Flickinger Co., Inc.
• Court: Pennsylvania Supreme Court

Page 1

220 A.2d 1

421 Pa. 540

The GREAT ATLANTIC AND PACIFIC TEA COMPANY, Inc., Appellant, v. Robert M. BAILEY and Elizabeth S. Bailey and South Park Plaza, Inc., andQuality Markets, Inc., and Super Duper, Inc., Now to the Use of S M.Flickinger Co., Inc.

Supreme Court of Pennsylvania.

May 26, 1966.

Rehearing Denied June 23, 1966.

George J. Barco, Yolanda G. Barco, Barco & Barco, Humes & Kiebort, Meadville, for appellant.

Peter E. Blystone, Eckels, Blystone, Fuller & Kinnunen, Meadville, for Robert M. Bailey, Elizabeth S. Bailey and South Park Plaza, Inc.

Vincent J. Pepicelli, Meadville, for Quality Markets, Inc.

F. Joseph Thomas, Meadville, for Super Duper, Inc.

Before BELL, C.J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

OPINION

EAGEN, Justice.

This is an action in equity seeking injunctive relief. For the purpose of this appeal, the facts may be briefly summarized as follows:

In 1954, Robert M. Bailey and Elizabeth S., his wife, were the record owners of farm land in Crawford County, Pennsylvania, on which they proposed to develop a shopping center. At that time, the tract was cut in two by a public highway known as U.S. Routes, Nos. 6, 19 and 322.

On November 23, 1954, the Baileys entered into a written lease with the Great Atlantic and Pacific Tea Company, Inc. (A. & P.), whereby a certain specifically described portion of the land on the north side of the highway was leased to A. & P. for the operation of a food market in a building to be constructed thereon with accompanying parking facilities.

The lease, which was duly recorded, contained, inter alia, the following provision with which we are here particularly concerned:

'If, as and when the Lessors develop the adjoining property for business purposes, it is understood that the parking area of 107,524 square feet will be used in common with the parking to be furnished by the Lessors, but at no time shall the ratio of the total parking area to Lessee's floor area be less than five to one. It is further understood and agreed between the Lessors and Lessee hereof that no other supermarket, grocery, meat or vegetable market will be permitted to occupy space on the adjacent property owned by the Lessors during the term of this lease or the renewals herein granted. The aforementioned property shall be known as South Park Avenue Extension, Meadville, Pennsylvania.'

On July 1, 1957, Baileys entered into a lease with Quality Markets, Inc. (Quality) for a store building to be constructed on a piece of land abutting the original tract owned by them and located to the north thereof. ¹ As of that date, the Baileys did not own this particular land, but title thereto (a piece approximately 250 feet wide) was acquired on September 19, 1962, in the name of a corporation formed and solely owned by them, known as South Park Plaza, Inc. (Plaza). This lease with Quality also contained a restrictive covenant prohibiting occupancy of any part of Park Avenue Plaza ² by any other supermarket except those of Quality and A. & P.

On August 31, 1961, Baileys conveyed to Plaza title to the original tract owned by them, which included the land under lease to A. & P. On October 11, 1961, the Baileys assigned their lease with A. & P. to Plaza. On October 12, 1961, this lease was renewed for an additional term of five years, with options to further renew. The restrictive covenant was incorporated therein by reference.

In August 27, 1963, Plaza purchased and acquired title to an additional piece of land, approximately 250 feet in width, which abutted and was located immediately north of the land acquired in September, 1962. On April 13, 1964, Plaza leased a portion of this most recently acquired land to Super Duper, Inc. (Super Duper) to be used for the erection and operation of a food market. This lease was subsequently assigned to S. M. Flickinger Company, Inc.

This action followed to enjoin the Baileys and Plaza from permitting the use of the land by Super Duper, or others for a food market. Quality and Super Duper were permitted to intervene. After hearing, the chancellor entered an adjudication and decree nisi in favor of the Baileys and Plaza, the original defendants. The decree was later made final. A. & P. appealed.

It is the contention of A. & P. that the original tract owned by the Baileys and the additional lands subsequently acquired in the name of Plaza form one integrated shopping center, and that the restrictive covenant in its lease precludes the Baileys and Plaza from leasing any portion thereof for food market purposes during the term of its lease. On the other hand, the appellees maintain that the land leased to Super Duper, in which neither the Baileys nor Plaza had any interest or title on the dates the A. & P. lease was originally executed and later renewed, is not subject to the restriction.

It is a general rule of contract interpretation that the intention of the parties at the time the contract is entered into governs: Heidt v. Aughenbaugh Coal Co., 406 Pa. 188, 176 A.2d 400 (1962). This same rule also holds true in the interpretation of restrictive covenants: Baederwood, Inc. v. Moyer, 370 Pa. 35, 87 A.2d 246 (1952), and McCandless v. Burns, 377 Pa. 18, 104 A.2d 123 (1954). However, in Pennsylvania, there is an important It is, therefore, established beyond argument that in order for A. & P. to prevail, the restrictive covenant involved must by its expressed terms clearly indicate that the parties intended it to extend to and include after-acquired land. We cannot reach this conclusion. To rule that such is included would read into the covenant something that is just not there. It would enlarge and extend the restriction by implication which has been proscribed by decisions of this Court for many years. Further, even if we assume that an ambiguity exists, it has long been the law that the ambiguity in a restrictive covenant must be construed against the one to be benefited by the restriction. See, Food Fair Stores, Inc. v. Kline, 396 Pa. 397, 152 A.2d 661 (1959).

difference in the rule of interpretation as applied to restrictive covenants on the use of land. It is this. Land use restrictions are not favored in the law, are strictly construed, and nothing will be deemed a violation of such a restriction that is not in plain disregard of its express words: Jones v. Park Lane for Convalescents, 384 Pa. 268, 120 A.2d 535 (1956); Sandyford Pk. C. Assn. v. Lunnemann, 396 Pa. 537, 152 A.2d 898 (1959); Siciliano v. Misler, 399 Pa. 406, 160 A.2d 422, 80 A.L.R.2d 1253 (1960); and, Witt v. Steinwehr Dev. Corp., 400 Pa. 609, 162 A.2d 191 (1960). Also, as stated by Mr. Chief Justice Stern in the first cited case, 384 Pa. at 272, 120 A.2d at 537, in reference to land use restrictions: '* * * [421 Pa. 545] (T)here are no implied rights arising from a restriction which the courts will recognize; that a restriction is not to be extended or enlarged by implication; that every restriction will be construed most strictly against the grantor and every doubt and ambiguity in its language resolved in favor of the owner.'

In support of its position that the parties intended to include after-acquired lands within the restriction, A. & P. emphasizes two parts of the covenant: the use of the words therein, 'if, as and when the lessors develop the Adjoining property for business purposes,' and, 'no other supermarket * * * will be permitted to occupy space on the Adjacent property owned by the Lessors During the term of this lease or the renewals herein granted.' (Our emphasis throughout.) It argues that this language lends itself to no other construction but that after-acquired lands were intended to be included.

As to the latter portion of the above recited language, A. & P. augues that since the covenant could not possibly extend beyond the term of the lease, or its granted renewals, and the covenant specifically speaks of running during the term of the lease, or its granted renewals, it must mean and deal with all lands owned and acquired during that period. This argument overlooks the fact that the parties could have stipulated a shorter period for the restriction to remain in force, and that a specific time limitation on the covenant was, therefore, necessary. We do not construe it to relate to, or to intend, what A. & P. asserts.

Nor are we persuaded that the words 'adjoining' or 'adjacent' connote what A. & P. urges. ³ As noted before, at the time its lease was consummated, the Baileys owned land located on the southerly side of the highway, and separated thereby from that portion of the tract which included the land leased to A. & P. This has since been developed, at least in part, for other business enterprises. It is reasonable to conclude that by the use of the words 'adjoining' and 'adjacent', the parties intended to include this land within the restriction. At the very least, an ambiguity exists and, in such a situation, it must be resolved against A. & P. See, Kessler v. Lower Merion Township School District, 346 Pa. 305, 30 A.2d 117 (1943), and Witt v. Steinwehr Dev. Corp., supra.

A. & P. also urges that the rule of strict construction applied to land use restrictions should be modified, in view of present day needs and practices affecting land holding and development. We find no convincing reason why this long established rule should be modified. If the parties intended to include after-acquired land within the restriction, the lease agreement should have said so.

It may also be argued that the contract involved should be construed as one in restraint of trade and, therefore, more liberally interpreted than one dealing with a restrictive covenant on land use. We cannot comprehend how this would enhance the position of the appellant. Such contracts are no more favored in the law than contracts restricting the use of land.

Decree affirmed. Each party to pay own costs.

COHEN, J., concurs in the result.

ROBERTS, J.,...