Stevens v. Howard D. Johnson Co., 6038.

Citation181 F.2d 390
Decision Date11 April 1950
Docket NumberNo. 6038.,6038.
PartiesSTEVENS et al. v. HOWARD D. JOHNSON CO.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

Thomas J. Michie and Lyttelton Waddell, Charlottesville, Va., for appellants.

H. Merrill Pasco and Lewis F. Powell, Jr., Richmond, Va. (Hunton, Williams, Anderson, Gay & Moore, Richmond, Va., on brief), for appellee.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

This is an appeal by the plaintiffs from a summary judgment for the defendant in an action to recover damages for breach of a rental contract. Plaintiffs were the owners of a lot which they had purchased and leased to defendant under an agreement to erect a building thereon for which the defendant was to pay the cost of construction above a certain amount. Plaintiffs alleged that defendants had breached the contract by failure to approve contracts for the construction of the building or to take action looking to contracts for construction which it would approve. Defendant denied any obligation to proceed under the contract on the ground that it had not approved the cost of construction of the building and was not liable in the absence of such approval. Plaintiffs demanded a jury trial and defendant moved for summary judgment on affidavits. From the granting of the motion for summary judgment this appeal is taken.

The pleadings and affidavits disclose that plaintiffs had an option to purchase a lot of land near Staunton, Virginia, upon which defendant desired to operate a restaurant, and that they leased it to defendant and, relying upon the lease, proceeded to purchase it so as to comply with the lease. The lease was not an executory contract to take effect in the future, but an out and out lease of the property for a term of ten years with privilege of renewal at the same rental for two additional five year periods. The rental provided was $1,000 per year, plus 10% of the total cost of the new building to be erected on the property, plus 6% of the gross sales of the restaurant to be conducted therein. Other provisions of the contract showing that it was something more than a mere provisional or executory agreement were sections relating to taxes, improvements, trade fixtures, public liability, plate glass insurance, remedies for breach, etc. The section relating to the construction of the new building, which is the section of importance here, is as follows:

"Section II. New Building.

"Lessors agree to construct on the demised premises, a building for the use and occupancy of the lessee, such building to be erected in accordance with approved plans and specifications, which are to be identified by the initialing thereof by the parties to this agreement.

"The total cost of construction, including materials, fees, supervision and all other necessary and incidental expenses, shall be borne by the lessors, up to, but not exceeding forty thousand dollars ($40,000.00). All expenses of construction in excess of said sum of forty thousand dollars ($40,000) shall be borne by the lessee, but payment by lessee of such additional construction cost shall not operate, expressly or impliedly to create any equity for the lessee in the demised premises. And the lessee expressly covenants to indemnify and save the lessors harmless from the payment of any of the costs of such construction in excess of the sum of forty thousand dollars ($40,000.00). It is agreed, however, that all contracts and expenditures relating to the construction in excess of forty thousand dollars ($40,000) shall be submitted to and approved in writing by the lessee before the same become effective.

"Construction shall be commenced as soon as practicable after the execution of this lease, and lessors and lessees agree to diligently prosecute such construction to completion."

Defendant admits in its answer that it was to prepare the plans for the building; and it appears from the affidavits offered in connection with the motion for summary judgment that such plans were prepared and were approved and initialed by the parties as the contract provided. Contractors had indicated that the cost of constructing the building completed would be around $35,000 or $40,000; but, when bids were called for on the plans and specifications, the lowest bid submitted was $54,000, and this did not include certain items which it was estimated would aggregate around $15,000. An affidavit submitted by plaintiffs shows that upon receipt of these bids, defendant refused to approve them and, notwithstanding the request of plaintiffs that the plans and specifications be revised so as to provide a building at a cost which would be approved, refused to take any action along this line or any other action looking to the carrying out of the contract, but on the contrary indicated that it would not proceed further thereunder because a change in the location of a highway had made the property undesirable as a site for a restaurant. In this connection, there was attached to the affidavit a letter of defendant clearly indicating that his change in the highway, and not the matter of cost, was the basis of the refusal to go forward. The letter was as follows:

"I received your letter regarding the Staunton location and can fully appreciate your position. On the other hand, I hope you appreciate our position in that when we signed the lease, we had a rough estimate from Valley Construction of $35,000 and as I have pointed out before, it is economically unwise for us to invest money in the actual building,...

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  • Murray Energy Corp. v. McCarthy, Civil Action No. 5:14-CV-39
    • United States
    • U.S. District Court — Northern District of West Virginia
    • October 17, 2016
    ...fact is involved and inquiry into the facts is not desirable to clarify the application of the law." (citing Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950)). In reviewing the supported underlying facts, all inferences must be viewed in the light most favorable to the pa......
  • Marcas, L.L.C. v. Bd. of Cnty. Comm'rs of St. Mary's Cnty.
    • United States
    • U.S. District Court — District of Maryland
    • September 28, 2011
    ...810 F.2d 1282, 1286 (4th Cir. 1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir. 1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir. 1950). The moving party bears the burden of showing that there is no genuine issue as to any material fact. Fed. R. Civ. P. 56(......
  • United Oil Co. v. Urban Redevelopment Commission of City of Stamford
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    • July 16, 1969
    ...drawn by the trial court might be permissible and thus raise a genuine issue as to the ultimate facts. See also Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir.); Detsch & Co. v. American Products Co., 152 F.2d 473, 475 (9th Cir.); Furton v. City of Menasha, 149 F.2d 945, 947 (......
  • Marcas, L.L.C. v. Bd. of Cnty. Commissioners of St. Mary's Cnty., Civil Action No. WGC–07–196.
    • United States
    • U.S. District Court — District of Massachusetts
    • September 28, 2011
    ...Properties, 810 F.2d 1282, 1286 (4th Cir.1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir.1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir.1950). The moving party bears the burden of showing that there is no genuine issue as to any material fact. Fed.R.Civ.......
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