Schmidt v. Hershey

• Decision Date: 20 January 1928
• Docket Number: 80,81.
• Parties: SCHMIDT v. HERSHEY ET AL. HERSHEY ET AL. v. SCHMIDT.
• Court: Maryland Court of Appeals

140 A. 363

154 Md. 302

SCHMIDT v. HERSHEY ET AL.

HERSHEY ET AL. v. SCHMIDT.

Nos. 80, 81.

Court of Appeals of Maryland

January 20, 1928

Appeal from Circuit Court, Frederick County; Glen H. Worthington Judge.

"To be officially reported."

Suit by Harry F. Schmidt against John S. Hershey, lessee of the Francis Scott Key Hotel, and others. From the decree, all parties appeal. Affirmed.

Argued before BOND, C.J., and URNER, ADKINS, OFFUTT, DIGGES, PARKE and SLOAN, JJ.

Alban M. Wood, of Frederick, for Harry F. Schmidt.

Leo Weinburg, of Frederick (Frank L. Stoner and William M. Storm both of Frederick, on the brief), for John S. Hershey and others.

BOND C.J.

These are cross-appeals in a suit by a lessee of space in a hotel to enjoin the landlord and a lessee of other space from selling articles which the complainant claimed he had, by the terms of his prior lease, an exclusive right to sell. The court granted the injunction in respect to some articles, but refused it in respect to others.

Harry F. Schmidt, as assignee of his father, Frank K. Schmidt, held a sublease from John S. Hershey, lessee and proprietor of the Francis Scott Key Hotel, in Frederick, of a cigar and news stand in the hotel. According to its express terms, the lease of the stand was "for the purpose of vending cigars cigarettes, tobaccos, newspapers, periodicals, candy, chewing gum, souvenir post cards, and such other articles proper to be sold at such stands in a first-class hotel." And another clause provided that:

"The said party of the first part will not rent or sublet any other storeroom or any other space in said Francis Scott Key Hotel for the purpose of conducting a cigar or news stand business."

The original sublease was executed in December, 1922, and was extended by agreement beyond the present time. Schmidt also became, in 1923, lessee of one of several storerooms in or under the hotel building opening on the outside street; the original lease for this was made in 1923, and the property was leased for a cigar and news stand. This second lease had no covenant giving Schmidt exclusive rights. On July 1, 1926, another storeroom opening on the outside street was sublet to Luther E. Derr, for a "goodey shop," or, as it was expressed in the lease, "a merchandise business in bakery products and confectionery, ice cream, and soda water," entitling the lessee, Derr, "to serve hot and cold drinks, his own small baking products, ice cream, light sandwiches, etc., either in a wholesale or retail way, or in the form of light lunches, serving to his guests at such times as he may see fit," which business conducted within the lines and intent above described was not to be construed as interfering with the business of the party of the first part. And Alice R. Dean is an assignee of this latter lease. James H. Dean conducts the business for her. It appears from evidence taken in the case that even before the Derr lease, candy, chewing gum, and other small articles sold in a candy shop, and ice cream, had been sold in that store as well as at the cigar and news stand inside the hotel, and they continued to be sold up to the time of suit, all without any objection from the Schmidts, father or son. When Dean took over the sublease from Derr, Derr told him that cigarettes could not be sold in that store because of an exclusive right given to Schmidt, but there is no evidence of notice to Dean or to Derr of an exclusive right or claim to such a right in Schmidt to sell candy and chewing gum, or anything other than cigarettes; on the contrary, it seems clear that there was no notice of such a claim.

Shortly before the institution of the suit Dean, assuming that Schmidt had the exclusive right to sell cigarettes about the hotel property, asked Schmidt to supply him with cigarettes to be sold in the Dean store at Schmidt's retail price for the convenience of Dean's customers, but Schmidt refused, apparently fearing that he might prejudice in some way his rights under his lease. He showed Dean his lease, and then, according to Dean's testimony he (Dean) concluded that Schmidt did not have the exclusive right he claimed. Dean then proceeded to sell the cigarettes in his store. Schmidt protested to Mr. Hershey and his manager, but was merely referred by them to his lawyer and to the court. Schmidt then brought his suit to enjoin sale by Dean of cigarettes,...