Kroger Co. v. Bonny Corp.
Kroger Co. v. Bonny Corp.
Opinion of the Court
1. The lease is on a printed form of Kroger Co. and contains an initial stipulation that it is "at a rental of $2,253 per month payable in advance by tenant.” A typed
We first consider the lease in the absence of aliunde evidence as to the intention of the parties to see whether the provisions as written are ambiguous, and whether they indicate a duty on the part of the tenant to continue in business for the duration of the leasehold. The lease is for more than five years, contains no provisions against assignment, and states that it shall bind the assigns of both parties. Certainly it must be considered, prima facie, as being assignable. See Warehouses, Inc. v. Wetherbee, 203 Ga. 483 (5, 6) (46 SE2d 894). This in itself weighs against an implied intent to require the tenant to continue in business throughout the term of the lease. The trial court correctly held the lease to be assignable. There
2. In attempting, however, to arrive at the true intention of the parties in entering into the contract, the court properly took into consideration the composition of the shopping center as a whole, the content of the leases entered into with other tenants, and the rental payments made over the years. From this it appears that the plan of the shopping center included four major stores and
Does the formula for determination of rent require that the tenant not cease his business activities on the property? See 38 ALR2d, Anno. p. 1113 et seq., construction and application of provision in lease under which landlord is to receive percentage of lessee’s profits or receipts. The general rule is, as there abstracted from Cousins Invest. Co. v. Hastings Clothing Co., 45 Cal. App. 2d 141 (113 P2d 878), and Masciotra v. Harlow, 105 Cal. App. 2d 376 (233 P2d 586), that "covenants would be implied only where the implication must arise from the language used or was indispensable to effectuate the
Ingannamorte v. King Supermarkets, 55 N. J. 223 (260 A2d 841) and Lilac Variety, Inc. v. Dallas, Texas Co., (Tex Civ. App.) 383 SW2d 193 were cited by the trial court for the proposition that Kroger’s presence in the shopping centrex might well be a factor in attracting business there, which is true, but these cases did not involve percentage rentals. The former involved a lease covenant for the store "to be used and occupied only for a supermarket” and the latter involved a commitment to a third party tenant as to the use of remaining property. In Slidell Investment Co., Inc. v. City Products Corp., (La.
The lease under consideration, considered either singly or in connection with other evidence regarding the operation of the shopping center, placed no obligation on the tenant to continue the operation of a supermarket on the premises for the full term of the lease. Accordingly, the appellee landlord would not be entitled to damages so long as the minimum rent continued to be paid.
Judgment reversed.
Dissenting Opinion
dissenting.
Bonny Corporation owned a shopping center, and it leased to Kroger Company one of its largest units for a period of 15 years, with renewal options. The lease was on a printed form supplied by Kroger Company, providing for rental at the rate of $2,253 per month. At the end of the printed form there was a typed paragraph which stated: "Tenant agrees to pay to landlord a sum equal to 1% of its sales in excess of $2,704,000 per year hereinafter called the minimum sales base.” During the last year of
The question here is whether the tenant could avoid payment of the rental stipulated to be paid, including $2,253 per month, plus 1% of gross sales in excess of $2,704,000 per year. Kroger contended it had the right to vacate the premises before the termination of the lease, so long as it paid the $2,253 per month.
1. The contract was provided by Kroger, and any ambiguity or doubtful part therein must be construed most strongly against Kroger. Benevolent Burial Assn. Inc. v. Harrison, 181 Ga. 230, 239 (181 SE 829); Howkins v. Atlanta Baggage &c. Co., 107 Ga. App. 38 (1) (129 SE2d 158).
2. When a contract is partly printed and partly written, the written part is entitled to most consideration. Code § 20-704 (7). Typed provisions prevail over printed matter. Taylor v. Dunaway, 79 Ga. App. 754, 758 (54 SE2d 381). Therefore, as to the question of whether the $2,253 per month (which was in the printed part of the contract) was of equal importance with the 1% of the gross receipts provided for (in the typed part of the contract), the typed part would be entitled to more consideration. Under no circumstances here could it be said that Bonny would have leased to Kroger but for the consideration of 1% of the gross receipts as typed at the end of the lease agreement.
3. The majority opinion cites many foreign decisions to support its contention that Kroger had no obligation to operate a store and pay 1% of the gross sales (beyond $2,704,000 per annum) to Bonny. But this court is not bound by foreign decisions. See: Hooper v. Almand, 196 Ga. 52, 67 (25 SE 778); Etowah Heading Co. v. Anderson, 73 Ga. App. 814 (38 SE2d 71); Martin v. Henson, 95 Ga.
This is especially true here, as we have decisions of our own state on the question. Our own decisions will not be set aside in favor of foreign authorities. In Sinclair Refining Co. v. Davis, 47 Ga. App. 601 (171 SE 150), it is held that where a gas and oil service station is leased for a term, the rent to be a designated sum of money per gallon on all gasoline sold, and not less than $10 per month, when the lessee stops selling gasoline, he breaches the contract. Again in Sinclair Refining Co. v. Giddens, 54 Ga. App. 69 (1) (187 SE 201), a similar lease was executed and this court held: ". . . it is clearly within the contemplation of the parties to the contract that the lessee shall, during the term of the lease, operate upon the premises a service station for the sale of gasoline. . .” (Emphasis supplied.) And his failure to do so was accounted as a breach of its lease agreement. In Hodges v. Ga. Kaolin Co., 108 Ga. App. 115 (132 SE2d 86), it was shown that Hodges had leased lands to Georgia Kaolin for the purpose of mining minerals, and payment for which was to be on a royalty basis, at 15 cents per ton, later amended to 16.2 cents per cubic yard. After 1954 Georgia Kaolin "has done nothing on plaintiffs land” and Hodges sued for $167,612 principal for the kaolin "that could have been mined from the land but wasn’t.” The lower court sustained a general demurrer to petition, and this court reversed, and held that Hodges had the right to sue Georgia Kaolin for damages, and at p. 120: "Thus, where a right to mine coal or other minerals is granted in consideration of the reservation of a certain portion of the product to the grantor, the law implies a covenant on the part of the grantee to work the mine in a proper manner and with reasonable diligence, so that the lessor or grantor will derive the income which both parties had in contemplation when the contract was entered into.” (Emphasis supplied.)
4. To uphold Kroger in moving out and leaving the store vacant, with no gross receipts, thereby defeating Bonny’s right to collect the full rental contemplated by the parties in the added typed stipulation at the end of the lease, would be to allow Kroger to violate the terms of the lease at its own option, to the loss and disadvantage of
The lease would not have been entered had plaintiff not anticipated receipt of percentage rental. The lease does not state that defendant had to continue the operation of a supermarket on the premises for the full term of the lease, but since the lease authorized increases due to sales and the evidence showed an increase of sales, a jury question remains as to whether or not plaintiff is entitled to damages by the alleged violation of the lease since it clearly appears that rent other than the base amount shall be due. This court in construing the contract cannot re-write the contract by cutting out the percentage rental clause. This court simply cannot, and must not, decide issues of fact by weighing evidence in reviewing summary judgment cases. See Holland v. Sanfax Corp., 106 Ga. App. 1, 4 (126 SE2d 442); McCarty v. National Life &c. Ins. Co., 107 Ga. App. 178 (1) (129 SE2d 408). Clearly, jury questions remain for determination.
5. For all of the foregoing reasons, I would affirm the judgment of the lower court, and respectfully dissent from the majority opinion in this case.
I am authorized to state that Presiding Judge Pannell joins in this dissent.
Reference
- Full Case Name
- Kroger Company v. Bonny Corporation
- Cited By
- 26 cases
- Status
- Published