Karam v. H. E. Butt Grocery Co., 15397

• Decision Date: 25 June 1975
• Docket Number: No. 15397,15397
• Citation: Karam v. H. E. Butt Grocery Co., 527 S.W.2d 481 (Tex. Ct. App. 1975)
• Parties: 1975-2 Trade Cases P 60,546 Solomon J. KARAM, Jr., d/b/a Consolidated Produce Co. and Bushel Basket, Appellant, v. H. E. BUTT GROCERY COMPANY et al., Appellees.
• Court: Texas Civil Court of Appeals

Page 481

527 S.W.2d 481

1975-2 Trade Cases P 60,546

Solomon J. KARAM, Jr., d/b/a Consolidated Produce Co. and Bushel Basket, Appellant, v. H. E. BUTT GROCERY COMPANY et al., Appellees.

No. 15397.

Court of Civil Appeals of Texas San Antonio.

June 25, 1975.

Rehearing Denied Oct. 1, 1975.

King, Joseph, Baucum & Karam, San Antonio, for appellant.

Matthews, Nowlin, Macfarlane & Barrett, John D. Fisch, Foster, Lewis, Langley, Gardner & Banack, William T. Armstrong, III, San Antonio, for appellees.

CADENA, Justice.

Plaintiff, Solomon J. Karam, Jr., d/b/a Consolidated Produce Co. and Bushel Basket, filed suit against defendants, H. E. Butt Grocery Company (here called 'HEB') and Quincy Lee (here referred to as 'Lee'), seeking a declaratory judgment to the effect that certain restrictive covenants were not applicable to property which he occupied as tenant.

Plaintiff appeals from a summary judgment holding the restrictions enforceable against him.

The land involved may be generally described as lots 8 and 9, N.C.B. 12179, H.E.B.--Walzem Subdivision, in San Antonio. The land is located within a tract bounded by U.S. Highway 81, Interstate Highway 35 and Walzem Road. On December 11, 1970, HEB, which operates a chain of grocery stores, owned approximately 8.7 acres of the land, on which it constructed one of its grocery stores. Lee, a land developer, owned about 23 acres which were located generally to the east of the HEB tract. Lee proposed to build a building on his land and lease the building to Woolco Department Stores.

HEB and Lee desired that the HEB store and the Woolco building, when completed, would constitute an integrated shopping center. In furtherance of this agreement, HEB conveyed to Lee approximately 6.3 acres of the 8.7 acre HEB land in exchange for the conveyance to HEB by Lee of approximately 1.15 acres of the 23 acres owned by Lee, and the payment of $130,000.00 to HEB by Lee. The conveyances took place on December 11, 1970, and as part of the overall plan to establish an integrated shopping center, HEB and Lee, on the same date, executed a 'development and operating agreement.' This agreement referred to the exchange of lands, describing such exchange as taking place simultaneously with the execution of the development agreement. The agreement referred to the fact that Lee and HEB desired to establish various controls and guide lines in respect to the construction, development, maintenance and operation of the shopping center, and to exchange with each other certain easements in and to, over and under and across the entire premises and in and to the common facilities so as to facilitate the use of the entire premises (consisting of the entire tract of approximately 31.7 acres) as an integrated shopping center.

As might be expected, the agreement is rather detailed, but the portions relevant to a disposition of this case may be summarized as follows:

(1). Lee agreed not to lease or permit to be occupied any part of the shopping center or premises on any other property owned by Lee within the 31.7 acre tract for the sale for off-premises consumption of groceries, meat, produce, dairy products, bakery products or frozen foods. This provision, of course, was designed to insulate HEB from competition.

(2). So long as Woolco occupies space in the shopping center, no space in the shopping center with a floor area in excess of 10,000 feet will be leased to or occupied by any person unless such lease is consented to in writing by Woolco, and no other space in the center shall be used or occupied as, or in connection with, a variety store, junior department store, department store or discount store.

(3). The restrictions on use are made incident to and a primary consideration of the purchase and sale of portions of the entire HEB and Lee properties, 'and incident to the Woolco lease, and shall be enforceable by the parties hereto, their successors and assigns . . . and by Woolco, its successors, sublessees and assigns.'

(4). The agreement is made partly for the purpose of inducing Woolco to enter into a lease of premises on the Lee parcel, and is intended to insure to Woolco's benefit. The agreement may not be altered, amended or rescinded without Woolco's written consent, and in event of default by HEB, Woolco will be entitled to enforce the agreement.

(5). The restrictive covenants shall constitute covenants running with the land and shall be binding upon, and inure to the benefit of, Lee, HEB, Woolco, their successors, sublessees and assigns.

This agreement, despite its references to Woolco, was signed only by Lee and HEB.

On the same date, December 11, 1970, Lee and Woolco entered into a lease agreement for a period ending January 31, 1992. This lease covered certain premises on the Lee parcel. The lease instrument referred to the operating and development agreement entered into between Lee and HEB and contained a restrictive covenant substantially similar to that contained in the agreement between Lee and HEB to protect Woolco from competition. The lease further gives Woolco the right to prevent any change in the Lee-HEB agreement and obligates Lee to exercise diligence in enforcing such agreement.

On January 21, 1974, Lee conveyed to B--J Properties, a joint venture composed of Mitchell Battros and Robert C. Jones, the east 1 .97 acres of lot 8, consisting of a tract approximately 150 by 571 located in that portion of the shopping center owned by Lee. This conveyance was in performance of a contract between Lee and Battros executed July 16, 1973.

In December, 1973, Battros leased to plaintiff an area, consisting of 3,600 square feet, located within the land conveyed by Lee to B--J Properties.

It is clear from the record that the business which plaintiff proposes to conduct on the premises leased to him would be in direct competition with HEB and would involve the sale of products enumerated in the restriction intended to protect HEB.

In its first point plaintiff contends that the trial court erred in holding that the restrictive covenant was 'unambiguous, valid and enforceable.' By its second point plaintiff contends that the restrictive...