Springdale Gayfer's Store Co. v. D. H. Holmes Co., 1 Div. 259

• Citation: 281 Ala. 267,201 So.2d 855
• Decision Date: 17 August 1967
• Docket Number: 1 Div. 259
• Parties: SPRINGDALE GAYFER'S STORE CO., Inc., et al. v. D. H. HOLMES CO., Ltd., et al.
• Court: Supreme Court of Alabama

Page 855

201 So.2d 855

281 Ala. 267

SPRINGDALE GAYFER'S STORE CO., Inc., et al. v. D. H. HOLMES CO., Ltd., et al.

1 Div. 259.

Supreme Court of Alabama.

Aug. 17, 1967.

Marion Rushton, of Rushton, Stakely & Johnston, Montgomery, Robt. T. Cunningham, of Cunningham & Bounds, Mobile, for appellants.

John L. Toler, of Chaffee, McCall, Phillips, Burke, Toler & Hopkins, New Orleans, La., Robt. C. Black and Thos. B. Hill, Jr., of Hill, Hill, Stovall & Carter, Montgomery, for appellee, D. H. Holmes Co., Ltd.

T. Massey Bedsole of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, for appellees, Springdale Stores, Springdale Plaza and Delaney.

COLEMAN, Justice.

Complainants appeal from a decree dismissing their bill of complaint after separate demurrers of respondents had been sustained to the bill as last amended. Complainants say that the bill had equity and, therefore, that the court erred in sustaining demurrers which were addressed to the bill as a whole.

Statement of the case.

Complainants are two corporations, namely: Springdale Gayfer's Store Co., Inc., an Alabama corporation, hereafter called Gayfer's; and The Northwestern Mutual Life Insurance Company, a Wisconsin corporation, hereafter called Northwestern.

Respondents are a resident of Alabama named E. E. Delaney and three corporations, namely: Springdale Stores, Inc., a Mississippi corporation, hereafter called Springdale Stores; Springdale Plaza, Inc., an Alabama corporation, hereafter called Springdale Plaza; and D. H. Holmes Co., Ltd., a Louisiana corporation, hereafter called Holmes.

This suit concerns the use of a tract of land consisting of seven connected fortyacre parcels as shown on the map or plat here set out. The purpose of the suit is to prevent Holmes from operating a department store on the 7.9-acre parcel of the land which is marked HOLMES.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Complainants allege that on May 13, 1953, Delaney Realty Co., Inc., an Alabama corporation, purchased the entire tract which contains approximately 270 acres; that by deed dated November 30, 1953, Delaney Realty Co., Inc. conveyed the 270-acre tract to Southern Furniture Manufacturing Co., Inc., a Mississippi corporation, whose name has been changed to Springdale Stores; that by deeds dated October 19, 1953, and April 10, 1956, Southern Furniture Manufacturing Co., Inc. conveyed to Springdale Plaza a part of the 270-acre tract which lies in the northeast corner of the intersection of the interstate highway and Government Street Road. The part thus conveyed to Springdale Plaza contains approximately forty acres, is shown on the above plat as fronting on the highway and road, and is that part of the plat enclosed within the hatched boundary lines. This 40-acre tract is sometimes called the Springdale Plaza Shopping Center.

Complainants allege that by written agreement dated December 27, 1955, Gayfer's agreed to purchase from Springdale Plaza that portion of Springdale Plaza's forty acres which is marked 'GAYFERS' on the plat, which contains 10.37 acres, and whose shape on the plat resembles the letter Y; that said agreement provided that Springdale Plaza, its successors and tenants would not, without Gayfer's written consent, enter into leases with Holmes; that Gayfer's subsequently purchased the 10.37-acre tract; that prior to October 28, 1958, Gayfer's sold the 10.37-acre tract to Northwestern; and that Northwestern leased the tract to Gayfer's for a primary term of twenty-five years with certain renewal options.

Complainants further allege that, on October 28, 1958, Gayfer's, Springdale Plaza, and Northwestern entered into an agreement, which was recorded in the office of the Judge of Probate on December 22, 1958, a copy of which is attached to and made a part of the bill of complaint; that the agreement provided, in substance, that Springdale Plaza, its successors, grantees, and tenants would not, without written consent of the other two parties to the agreement, enter into leases with Holmes, its subsidiaries or affiliates.

Complainants allege that, at the time of execution of the 1958 agreement, it was 'the intent, desire and agreement of all the parties' thereto that Holmes was not to be allowed to acquire the right to use or occupy or acquire any interest in the 270-acre tract so long as tenants occupying the Gayfer's 10.73-acre parcel operate a store in the Springdale Plaza Shopping Center.

Complainants aver that the 1958 agreement 'does not expressly limit the area the prohibitions of Paragraph 6 of said agreement were to cover,' but the parties intended and agreed that the prohibitions were to cover 'all property' owned by Delaney and by any corporations controlled by him, which would include the entire 270-acre tract, and the parties intended and agreed 'that such provisions should be reduced to writing and incorporated in the' agreement; that during the time Gayfer's was negotiating with Delaney relative to putting a department store on the 270-acre tract, he was acting not only for himself but also as President and on behalf of all respondents except Holmes; that, during said negotiations, Delaney was informed that the property was low and swampy; that to build the store he desired would be costly and it would be necessary for Gayfer's to expend 'ex(c)eptionally large sums of money in advertising to promote its store and the center as a whole'; that he was informed by Gayfer's that the shopping center on the Springdale Plaza property could not prosper without having a major store of the type to be operated by Gayfer's located therein; that Delaney acknowledged that he knew that such a store would be the prime attraction and essential element to attract other tenants; that it is customary in such shopping centers to make concessions to the major store tenant and this was discussed with Delaney; that Gayfer's agreed to provide such store facility without cost to the owner and to share proportionally in the cost of the common facilities, and, in consideration of such agreement, Delaney agreed that Holmes would not be permitted to operate in competition 'with it'; that 'With this fully understood and agreed upon by all the parties thereto, Paragrph 6 was included in said Three Party Shopping Center Agreement. Paragraph 6 of said Three Party Shopping Center Agreement Purposely did not expressly limit the area which the prohibitions contained therein were to cover, it being understood and agreed by all the parties thereto that said prohibitions would cover all of the land owned or controlled by E. E. Delaney and the other Respondents' except Holmes; that 'In agreeing upon said prohibitions The Complainants were well aware that E. E. Delaney and the other Respondents * * * (except Holmes) Owned or controlled the adjacent land' (Emphasis Supplied) in the 270-acre tract, and that Paragraph 6 of the agreement, if limited to the 40-acre Springdale Plaza tract, would be of no protection to complainants unless it covered such adjacent property in view of the fact that complainants' store building was to be located in close proximity to the adjoining land so owned and controlled.

Complainants aver that at the time of execution of the agreement, the parties thereto discussed the probability of other stores being attracted to the area and parking problems arising therefrom; that they discussed the detrimental effect heavy industry would have on a department store; that, to provide for these contingencies, Section 13 and Section 3(b) were added to the agreement, it being the intent and agreement of the parties that complainants' store and other stores should not be faced with a parking area shortage due to available parking space being used by customers of other stores, and that the success of 'their store' and other tenants would not be jeopardized by heavy industry moving into the area; that the parties intended and agreed that all restrictive agreements were to apply to the entire 270-acre tract.

Complainants aver that the name of Southern Furniture Manufacturing Co., Inc., was changed to Springdale Stores, Inc.; that on November 12, 1963, Springdale Stores sold to Holmes the 7.9-acre HOLMES tract shown on the plat; on information and belief, that prior to November 12, 1963, complainants were informed that Holmes was negotiating with Delaney relative to leasing property, in the vicinity of the Springdale Plaza Shopping Center, from Delaney; that, immediately, Holmes and Springdale Plaza were given notice, by letters dated October 25, 1963, of complainants' rights under the 1958 agreement; that, after receipt of the letters, Holmes and Springdale Stores, to avoid the 1958 agreement, made a purchase and sale instead of a lease; that Holmes is planning to construct and operate a department store on the Holmes 7.9-acre tract in violation of the agreement, and that respondents are planning further to breach the agreement as to additional parcels in the 270-acre tract.

Complainants allege that Delaney is President and 'primary stockholder' of Delaney Realty Co., Inc., Springdale Stores, and Springdale Plaza; that all the above named corporations have been and are now controlled and directed by Delaney, and that they are merely instrumentalities of Delaney and have been manipulated 'in such a manner as to attempt to evade the obligations of' Springdale Plaza and Delaney under the 1958 agreement.

Complainants pray that the court enjoin Springdale Stores, Springdale Plaza, their agents, officers, directors, affiliates, etc., and Delaney from selling, leasing, or conveying any part of the 270-acre tract to Holmes; that the court restrain Holmes from operating a store on the 270-acre tract; that the 1958 agreement be reformed to express the true intent of the parties by expressly providing that all restrictive provisions of the 1958 agreement apply to the entire 270-acre tract; and for general relief.

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