Lilac Variety, Inc. v. Dallas Texas Co.

• Decision Date: 25 September 1964
• Docket Number: No. 16408,16408
• Citation: 383 S.W.2d 193
• Parties: LILAC VARIETY, INC., et al., Appellants, v. DALLAS TEXAS COMPANY et al., Appellees.
• Court: Texas Court of Appeals

Page 193

383 S.W.2d 193

LILAC VARIETY, INC., et al., Appellants, v. DALLAS TEXAS COMPANY et al., Appellees.

No. 16408.

Court of Civil Appeals of Texas, Dallas.

Sept. 25, 1964.

Rehearing Denied Oct. 23, 1964.

Locke, Purnell, Boren, Laney & Neely and Larry M. Lesh, Dallas, for appellants.

Goldberg, Fonville, Gump, Strauss & Hauer, Dallas, for appellee.

DIXON, Chief Justice.

Lilac Variety, Inc. and T G & Y Stores, a Corporation, have appealed from a summary judgment in favor of Dallas Texas Company, a Corporation. By its judgment the court in effect construed a lease contract so as to hold that under the undisputed facts appellants were not entitled to cancellation of the agreement. Both sides had filed motions for summary judgment.

On May, 12, 1958 Holaday Development Company, owners and developers of a suburban shopping center, entered into a lease agreement covering a period of 15 years with T G & T Stores whereby the latter company leased premises for the operation of a retail store. The present controversy revolves around the interpretation to be given to the provisions of the fourth section of the contract. Material portions of said section are as follows:

'CONSTRUCTION. 4 It is further understood and agreed that the Lessor shall at its sole expense furnish, install and construct the leased premises and the shopping center in accordance with the plans, Exhibit 'A'; specifications, Exhibit 'B'; and plat plan, Exhibit 'C'; attached hereto and made a part of this contract.

'It is further understood and agreed * * * that Eighty (80%) percent of the completed building area shall be occupied by reputable tenants, and they shall be doing business within one hundred twenty (120) days from the time of Lessee's opining for business, and said tenants shall include:

'Supermarket--A.C.F. Wrigley Stores

'department Store--W. T. Grant Co.

'Drug Store--Ward Drugs

'Auto Supply--Western Auto Supply Co.

'It is the agreement and understanding of the parties hereto that all buildings shown on Exhibit 'C' shall be and remain in existence at all times during the term of this lease or any extension thereof, and that the supermarket, department store, and other major tenants shall remain as tenants and located as per proposed location on Exhibit 'C' at all times during the term of this lease or any extension thereof.

'In the event Lessor fails to comply with any of the above provisions, Lessee shall give immediate written notice of such default to Lessor, and in the event that Lessor fails to cure said default within sixty (60) days from the date of such written notice, the Lessee, at its option, may cancel this lease.'

On September 6, 1958 T G & Y Stores subleased the premises to appellant Lilac Variety, Inc. which company thereafter began operation of a retail store. Within the 120-day period specified in the lease A.C.F. Wrigley Stores, having leased adjoining premises, opened and began operation of a supermarket.

Shortly prior to April 26, 1962 A.C.F. Wrigley Stores closed the doors to its leased premises and discontinued operation of its supermarket. The said premises have since remained vacant except for use by A.C.F. Wrigley Stores for storage of the fixtures formerly used by the company in the operation of its supermarket.

On May 3, 1962 appellants by letter notified Holaday Development Company, Inc. that A.C.F. Wrigley Stores had discontinued operation of its supermarket and that Holaday was therefore in default of the fourth section of the lease with appellants. The letter was sent in compliance with the sixty-day notice required by the lease.

On August 27, 1962 Holaday by letter informed appellants that on August 15, 1962 Holaday had sold the entire shopping center to Dallas Texas Company, and all existing leases had been assigned to Dallas Texas Company.

On August 30, 1962 appellants notified George S. Klein, agent for Dallas Texas Company, of the alleged default in their lease agreement, enclosing a copy of their letter of May 13, 1962 to Holaday.

An exchange of correspondence subsequently took place between appellants and George S. Klein Company. Klein stated that every effort was being made to obtain a suitable supermarket for the location; and expressed the hope that appellants would continue to operate their store. In reply appellants reiterated their claim of default, but said that if Klein should secure 'as a tenant a supermarket which would be an acceptable substitute,' they would be willing to consider waiving the requirement as to A.C.F. Wrigley Stores.

It is apparent from the record that no such substitute supermarket was obtained by Klein. The premises formerly used by A.C.F. Wrigley Stores for the operation of a supermarket remained vacant except for use for storage of the supermarket fixtures. Appellants submitted to Dallas Texas Company an instrument cancelling the lease, but appellees refused to sign said instrument or to cancel appellants' lease.

Evidently A.C.F. Wrigley Stores is still bound by the terms of its lease agreement, for Wrigley has continued to pay its rent under its lease contract notwithstanding the fact that it discontinued operation of its supermarket some time prior to April 26, 1962.

This suit was filed by appellants April 4, 1963. Appellants pray for a declaratory judgment decreeing that 'said lease is cancelled and of no further force and effect.' American National Insurance Company, holder of a mortgage against the shopping center, was also made a party defendant, but it filed a disclaimer and is not involved in this appeal.

OPINION

In two points on appeal appellants attack the court's action in overruling their motion for summary judgment and in sustaining that of appellee. In two counterpoints appellees defend the court's action.

The parties agree that the lease contract in question is unambiguous, yet they disagree as to its meaning. Appellants say it means that a supermarket operated by A.C.F. Wrigley Stores shall remain in existence in the shopping center throughout the term...