Hardware Center, Inc. v. Parkedge Corp.

• Decision Date: 02 June 1981
• Docket Number: Nos. 41402,41403,s. 41402
• Citation: 618 S.W.2d 689
• Parties: HARDWARE CENTER, INC., Plaintiff-Appellant-Respondent, v. PARKEDGE CORPORATION, Defendant-Appellant-Respondent.
• Court: Missouri Court of Appeals

Page 689

618 S.W.2d 689

HARDWARE CENTER, INC., Plaintiff-Appellant-Respondent, v. PARKEDGE CORPORATION, Defendant-Appellant-Respondent.

Nos. 41402, 41403.

Missouri Court of Appeals, Eastern District, Division Four.

June 2, 1981.

Shulamith Simon and David W. Martin, Husch, Eppenberger, Donohue, Elson & Cornfield, St. Louis, for defendant-appellant-respondent, Parkedge Corp.

Robert C. Jones and Harold A. Tzinberg, Ziercher, Hocker, Tzinberg, Human & Michenfelder, Clayton, for plaintiff-appellant-respondent, Hardware Center, Inc.

SATZ, Judge.

This is an appeal from a declaratory judgment. We reverse.

The cause was tried on stipulated facts. Defendant Parkedge Corporation is the owner of Concord Plaza Shopping Center (Center). Defendant leased premises in the Center to National Food Stores, Inc. (National). In 1972, National and defendant amended their lease (head lease). In one provision of the amendment, defendant explicitly withdrew "its objections to (National's) subletting" its premises to plaintiff, Hardware Center, Inc. Plaintiff entered into a lease with National and became a sublessee. The sublease is not part of the record before us.

The amendment to the head lease also changed the rent provisions. In the amendment, the "lessee" agreed to pay a proportionate share of the "lessor's" costs of "lighting, operating, maintaining, and repairing" the Center's parking lot. Plaintiff sought a judicial construction of this provision. ¹ Specifically, plaintiff sought a declaration that this provision did not require it to pay a proportionate share of the cost incurred by defendant in annually patching holes in the parking lot and resurfacing 10-20% of the existing pavement. Plaintiff also sought a declaration that the provision did not obligate it to pay a share of the cost of annual premiums for liability insurance on the parking lot. Defendant billed plaintiff for the cost of patching and resurfacing each year from 1973 through 1977. Plaintiff paid these billings. Defendant also billed plaintiff for the insurance premiums in 1976 and 1977. Plaintiff paid both of these billings but paid the 1977 billing under protest.

The trial court declared the costs of the resurfacing were properly charged to plaintiff but the court declared the costs of the insurance premiums were not properly plaintiff's responsibility. However, the court refused to order reimbursement of the 1976 premium payment because plaintiff had made this payment without protest. The court did award plaintiff recovery of the 1977 premium charge.

Both plaintiff and defendant appeal. Plaintiff contests the declaration that the costs of resurfacing the parking lot were properly allocated to it. Defendant contests the declaration that a proportionate share of the costs of the insurance premiums were not chargeable to plaintiff. In addition, as its threshold contention, defendant argues plaintiff is a sublessee and, as a sublessee, plaintiff has no standing to seek a declaratory judgment construing the rent provisions of the head lease between plaintiff's sublessor and defendant. We agree with defendant that plaintiff has no standing to seek a declaratory judgment in this case. We reverse on this ground and, thus, do not reach the other issues and arguments raised in this appeal.

Plaintiff sought relief under our Declaratory Judgment Act. § 527.010 RSMo 1978 et seq. Under § 527.020 of the Act, "(a)ny person interested under ... a written contract" or any person "whose rights status or other legal relations are affected by a ... contract" has the right to have determined any question of construction "arising under the ... contract." ² Under our case law interpreting the language, a plaintiff seeking a declaration of rights under the Act must have a "legally protectible interest" in the relief sought. ³ State ex rel. Chilcutt v. Thatch, 359 Mo. 122, 221 S.W.2d 172, 176 (1949); Absher v. Cooper, 495 S.W.2d 696, 698 (Mo.App.1973); Waterman v. City of Independence, 446 S.W.2d 471, 474 (Mo.App.1969). The plaintiff must present a set of facts from which he has legal rights against the defendant he names. He must be entitled to some consequential relief immediate or prospective. The judgment sought must be one which will declare a fixed legal right and accomplish a useful purpose. State ex rel. Chilcutt v. Thatch, supra at 176. See Absher v. Cooper, supra at 698; Borchard, Declaratory Judgments, 2d ed. pp. 48-50.

Defendant here argues that plaintiff has no legally protectible interest in the head lease between defendant and plaintiff's sublessor, and, thus, defendant reasons, plaintiff has no standing to bring this suit to have that lease construed. More specifically, defendant argues that plaintiff has no legally protectible interest because plaintiff is a sublessee and, as a sublessee, plaintiff cannot enforce the provisions of the head lease between its sublessor and defendant, Employees Consumer Organization, Inc. v. Gorman's Inc., 395 S.W.2d 162, 166 (Mo.1965) and, as a sublessee, plaintiff usually cannot be sued on the provisions in that lease. ⁴ Geer v. Boston Little Circle Zinc Co., 126 Mo.App. 173, 103 S.W. 151, 154 (1907). Plaintiff tacitly admits that a sublessee normally cannot enforce the provisions in a head lease nor have those provisions enforced against it. Plaintiff, however, attempts to distinguish this case from the usual case and attempts to show it has a legally protectible interest sufficient to secure judicial construction of the provisions of the head lease in question.

Plaintiff first contends the instant lease is not the usual head lease between a lessor and a sublessor. Plaintiff argues the amendment to the head lease was entered into by defendant and plaintiff's sublessor for the express purpose of allowing plaintiff to become a sublessee. This tri-party relationship, plaintiff argues, makes plaintiff a third-party beneficiary to the amended head lease, and, as a third-party beneficiary, plaintiff has the right to seek a judicial construction of the covenants in the lease. We disagree.

Missouri has adopted the Restatement's classification and definition of third-party beneficiaries to contracts. See Mertens v. MGR Inc., 507 S.W.2d 433, 435-36 (Mo.App.1974); Restatement of Contracts, § 133. Beneficiaries to contracts are divided into three classes: donee beneficiary, creditor beneficiary and incidental beneficiary. Laclede Inv. Corp. v. Kaiser, 596 S.W.2d 36, 42-43 (Mo.App.1980); Stephens v. Great Southern Savings and Loan Ass'n., 421 S.W.2d 332, 335 (Mo.App.1967); Restatement of Contracts, § 133. Both donee and creditor beneficiaries have enforceable rights against the promisor; the incidental beneficiary does not. Laclede Inv. Corp. v. Kaiser, supra at 43; Stephens v. Great Southern Savings and Loan Ass'n., supra at 335. Thus, for plaintiff here to have enforceable rights, it must be either a donee or creditor beneficiary. It is neither.

A person is a creditor beneficiary if performance of the promise will satisfy an actual, supposed, or asserted duty of the promisee to the beneficiary. Restatement of Contracts, § 133. Plaintiff clearly does not fall into this category. National owed it no duty which defendant agreed to undertake. Likewise, plaintiff is not a donee beneficiary. A person is a donee beneficiary of a promise if the purpose of the promisee in obtaining the promise is to confer upon the beneficiary the right against the promisor to some performance neither due, asserted nor supposed to due from promisee to the beneficiary. Restatement of Contracts, § 133. However, the purpose or intent necessary to create a donee beneficiary is the promisee's "intent that the promisor assume a direct obligation to (the beneficiary)." Stephens v. Great Southern Savings and Loan Ass'n, 421 S.W.2d 332, 335 (Mo.App.1967). The mere desire to confer a benefit on the third party or to advance his interests or promote his welfare is not sufficient. Id. at 335; see also, Laclede Inv. Corp. v. Kaiser, supra at 42.

For purposes of determining a party's status as a beneficiary, a single contract may be divided into a number of promises. A person may be a donee beneficiary of some promises and an incidental beneficiary of others. See Laclede Inv. Corp. v. Kaiser, supra at 43. Here, the only express promise which arguably contemplates plaintiff as beneficiary is the promise to allow National to sublet to plaintiff. There has been no breach of this promise and defendant has proposed no action which might constitute a breach. Defendant has continually recognized National's right to sublet to plaintiff and has accepted plaintiff as a lawful sublessee. Understandably, plaintiff does not seek construction of this promise. The other covenants in the lease amendment including the one plaintiff asked the court to construe, run from defendant to National and vice-versa. Obviously, National could not, by contracting with defendant, impose any duties on plaintiff regarding payment of the costs of maintaining the common areas. Also, it is very unlikely that National's purpose or intent in entering into those covenants concerning the common areas was that defendant incur an obligation to plaintiff. There is a strong presumption that people contract to benefit themselves and not third persons, Laclede Inv. Corp. v. Kaiser, supra at 42. This presumption has not been overcome here.

Moreover, plaintiff has not distinguished this case from the holding and rationale of Employees Consumer Organization, Inc. v. Gorman's Inc., supra. There, the lessor, lessee and sublessee consented to the sublease and affirmed the terms of the head lease. Nonetheless, our Supreme Court did not deviate from the general rule. It prohibited the sublessee from enforcing the covenants of the head lease because privity was lacking. Id. at 166. That ruling is applicable to the present case.

Plaintiff posits a second theory to justify its standing. Plaintiff argues that its...