Wineteer v. Kite

• Decision Date: 06 December 1965
• Docket Number: No. 24257,24257
• Citation: 397 S.W.2d 752
• Parties: Kenneth WINETEER and Bertha Wineteer, Plaintiff-Respondents, v. J. W. KITE and Norma Lee Kite, Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 752

397 S.W.2d 752

Kenneth WINETEER and Bertha Wineteer, Plaintiff-Respondents, v. J. W. KITE and Norma Lee Kite, Defendants-Appellants.

No. 24257.

Kansas City Court of Appeals, Missouri.

Dec. 6, 1965.

Jack H. Denny, Glasgow, W. F. Daniels, Fayette, for appellants.

Raymond C. Lewis, Jr., David L. Knight, Smith & Lewis, Columbia, William B. Nivert, Jr., Glasgow, for respondents.

CROSS, Presiding Judge.

This action was instituted by plaintiffs Wineteer, husband and wife, as a suit for a declaratory judgment against defendants Kite, also husband and wife. Plaintiffs sought the court's declaration that a covenant contained in a sales contract under which they had sold defendants their interest in a supermarket was not binding upon them as an agreement not to compete directly or indirectly with defendants for a specified time in a specified area. In the alternative, and in the event the court adjudged the covenant to be valid and binding upon them as a 'non-competition' agreement, plaintiffs asked the court to declare that the effect of such agreement did not prohibit them from completing construction of a mercantile building they had planned, and renting it to a third party for occupancy as a supermarket.

Defendants filed answer asserting the validity of the noncompetition agreement and praying declarations directly counter to those requested by plaintiffs. Defendants also filed a cross petition praying the court to enjoin plaintiffs from erecting a building for sale or lease to any person for use in conducting a competitive grocery or supermarket business or otherwise engaging in the operation of a grocery or supermarket business, directly or indirectly, for a period of ten years, and within 25 miles of Glasgow, Missouri.

The essential facts of the controversy are established by admissions in pleadings, stipulations of fact, documentary evidence and oral testimony, and are here set out. Plaintiffs came to Glasgow, Missouri, in 1940 where they engaged in the grocery business until in September, 1958, they 'closed up' their grocery store. At about the same time they remodeled another building they owned in Glasgow (part of which they had acquired in 1951 and part in 1958) and leased it to Paul M. Lowther and Mary J. Lowther, his wife, for occupancy as a grocery store, which the Lowthers operated until January, 1963. Plaintiff Bertha Wineteer performed some service for the Lowthers as a cashier in their store in the latter part of 1958 and during part of 1959. Likewise, plaintiff Kenneth Wineteer was employed by the Lowthers as a stock clerk during part of 1959. During the time of their employment by the Lowthers, plaintiffs took no part in the management, control or operation of their business. In November, 1959, plaintiffs purchased a restaurant business in Glasgow and operated it under the name of 'Wineteers' Cafe' until July, 1960.

On January 7, 1963, plaintiffs and the Lowthers as first parties entered into a written agreement with defendants as second parties, whereby the former agreed to sell and convey to the latter their respective interests in the building, fixtures, equipment and stock of merchandise comprising the 'Glasgow U. S. Supermarket'--same being the grocery business the Lowthers had been operating since November, 1958, in the building they had leased from plaintiffs. Pursuant to this agreement plaintiffs duly conveyed the store building and certain of the store fixtures and equipment owned by them to defendants and the Lowthers conveyed to them the remaining portion of the store fixtures and equipment, together with the stock of merchandise. In turn, and as consideration for these conveyances, the defendants paid plaintiffs and the Lowthers the purchase price sums which they were respectively entitled to receive under the terms of the agreement, took immediate possession of the business, and have operated it continuously to the present time.

The written agreement above described contains the following quoted paragraph:

'The party of the first part, Paul M. Lowther and Mary Josephine Lowther hereby covenant and agree that they will not compete with second parties, directly or indirectly, within a radius of 25 miles of Glasgow, Missouri for the ensuing ten years. The first parties, Kenneth and Bertha Wineteer likewise agree not to compete directly or indirectly with second parties within a radius of Glasgow, Missouri of 25 miles for the ensuing ten years'.

Since 1947 plaintiffs have engaged speculatively in the purchase and sale of real estate in Glasgow. Their transactions include the purchase of five or six business buildings and some seven to ten houses. They would 'spend some money on them and fix them up a little bit and rent them for awhile and sell them'. In January, 1964, plaintiffs purchased about 106 acres of land located on Highways 5 and 240 about two blocks outside the city limits of Glasgow. They planned and commenced construction of a building thereon to house a small shopping center which would include space for a supermarket. Plaintiffs intend to lease this portion to 'someone who is going to be engaged in the grocery business', but have not yet determined whether they will be paid 'by monthly rent or by a percentage of the gross (sales) or by some other arrangement'.

After defendants learned of these plans, they went out to the building site where preliminary grading was being done and informed plaintiffs to the effect that they 'couldn't lease the building--for a supermarket' because of 'this contract--(they)--had signed'. Following this challenge of plaintiffs' right to construct and lease the building as they had planned, plaintiffs filed this suit to effect a judicial determination of the question before proceeding further with the project.

After making extensive findings of fact, the essential portion of which generally conforms to the foregoing statement of facts and is virtually undisputed by the parties, the trail court rendered its declaratory judgment decreeing: (1) that the provision in the contract of sale between the parties that plaintiffs would not compete directly or indirectly with defendnats in the grocery supermarket business within a radius of 25 miles of Glasgow, Missouri, for a period of ten years is a 'valid, legal, binding and enforceable agreement on which plaintiffs--are bound', and (2) that 'the actions of the plaintiffs in purchasing a tract of land near Glasgow and grading same coupled with the admitted purpose and intention of erecting a new building thereon and renting or leasing said new building to some unknown person or persons for the operation of a grocery store or supermarket on unspecified terms at a rental based upon an unspecified percentage of the gross receipts of said grocery store or supermarket do not constitute a violation of the agreement of plaintiffs not to compete directly or indirectly with defendants'. It was the further judgment of the court that defendants' prayer for injunctive relief be denied and that the costs of the action be taxed in equal shares against plaintiffs and defendants. Notwithstanding the judgment is in part adverse to the interests of plaintiffs they have made no complaint of it. Defendants prosecute this appeal.

Defendants still assert, as the sole appeal issue in controversy, that plaintiffs by constructing a proposed building and leasing it to a third person for occupancy as a grocery store or supermarket would violate their covenant not to compete with defendants. On this premise the defendants charge the trial court with error in ruling to the contrary and in refusing to enjoin plaintiffs from so constructing and leasing such a building.

Since this is a non-jury case, it is our duty to review it de novo on both the law and the evidence as in suits of an equitable nature. Rule 73.01(d) V.A.M.R. It will not be necessary to defer to the trial court on any questions of credibility of witnesses because the determinative facts are not in dispute. See Willoughby v. Safeway Stores, Inc., Mo.App., 397 S.W.2d 748 and Mueller v. Larison, Mo.Sup., 355 S.W.2d 5. The cited rule further admonishes that the judgment shall not be set aside unless clearly erroneous.

Preliminarily defendants urge that this case should be ruled under general principles of equity which is 'reluctant to permit a wrong to be suffered without remedy' and which 'will not sanction an unconscionable result merely because it may have been brought about by means which simulate legality', citing Weaver v. Jordan, Mo.App., 362 S.W.2d 66.

From plaintiffs' standpoint, our attention is directed to the background of legal authority that trade-restricting covenants are not favorites of the law and are to be strictly construed in favor of the covenantor, Prentice v. Rowe, Mo.App., 324 S.W.2d 457, and that restrictions on the free alienation of land are likewise strictly construed, as the Supreme Court held in Kerrick v. Schoenberg, 328 S.W.2d 595.

Fundamentally, this appeal controversy will be resolved by determining the intention of the parties as expressed in the language of the contract, the covenant in question. That provision will be considered according to the plain, ordinary and usual meaning of the words and phrases it contains, as there is nothing in the record to indicate that any language was used in a legal or technical sense. See Liberty Storage Co. v. Kansas City Terminal Warehouse Company, Mo.App., 340 S.W.2d 189. 'All mercantile contracts ought to be interpreted according to their plain meaning, to men of sense and understanding, and not according to forced and refined interpretations which are intelligible only to lawyers, and scarcely to them,.' Vol. 12 Am. Contracts, Sec. 226, p. 745.

Observing the foregoing rules, the only understanding we are able to derive from the words '(plaintiffs) agree not to compete directly or indirectly with second parties' is to the effect that the parties intended to contract...