Capri Operating Corp. v. Bluestone

217 So. 2d 770, 1969 La. App. LEXIS 5537
Louisiana Court of Appeal·Decided January 6, 1969·No. No. 3441·Published·Cited by 1 cases

Opinion

JOHNSON, Judge.

The defendant in this case is the original lessee from the owner of a theater at 1040 Royal Street in New Orleans. The defendant granted a sublease to plaintiff, a corporation in which defendant was a stockholder and officer, and, after about IS months occupancy and operation of the theater by and on behalf of plaintiff, the defendant notified the plaintiff that the contract of sublease was terminated. On September 1, 1968, the defendant arbitrarily took over possession and operation of the theater individually. Plaintiff filed this suit to enjoin the defendant from continuing to occupy and operate the leased premises in derogation of the rights of plaintiff. After trial of the rule to show cause why a preliminary injunction should not issue the Civil District Court for the Parish of Orleans rendered judgment decreeing “That said rule for preliminary writ of injunction be and the same is hereby dismissed.” Plaintiff has appealed.

In addition to the prayer for the injunction, plaintiff also prays for other relief against defendant including judgment for sums of money, but we are not concerned with those issues now. The rule nisi was made returnable on September 24, 1968. On that date the defendant filed an exception of improper use of summary process, an exception of no cause of action and an answer. Before commencing to take testimony the trial court referred both exceptions to the merits. It is improper to refer an exception of no' cause of action to the merits because that exception must be decided on the pleadings. However, at the end of the trial of the rule, the trial court announced that inasmuch as this trial was only on the rule for a preliminary injunction and not on the merits it was not necessary to pass on the exceptions. The court was correct in that statement insofar as the exception of no cause of action applies to the other issues and this court likewise will not rule on that exception as to other issues, but as the exception relates to the application for writ of preliminary injunction, it is overruled. This proceeding is the summary process referred to in the other exception. In view of the conclusion we have reached that the injunction should issue, the use of summary process is proper. There is no merit in that exception and it is overruled.

The pertinent facts which brought about this controversy between these parties disclosed by the pleadings and testimony are that on January 23, 1963, Frank Ruffino, the owner of the property on which the theater in question is located, and defend[772] ant, Joel Bluestone, entered into a written contract of lease. That lease contains a stipulation that “Lessee is not permitted to rent or sub-let or grant use or possession of the premises to any other party without the written consent of the Lessor, and then only in accordance with the terms of this lease.” The defendant operated the theater individually until June 1, 1967, when he granted the sublease to the plaintiff corporation without first obtaining written consent of lessor. Preparatory to the execution of the contract of sublease the defendant, Robert M. Hartgrove and Don Kay, made the following memorandum of agreement:

“Memorandum of agreement between Robert M. Hartgrove, Joel Bluestone and Don Kay:
“We have this date agreed to the following:
“Upon payment by Robert Hartgrove and Don Kay to Joel Bluestone of $5000.00 ($2,500 each) each of the 3 OK [interlined] parties will share equally in the operation and profits or losses of the Royal Theatre, New Orleans, Louisiana (1040 Royal Street)
“Upon payment of the above sum it is intended a corporation will be formed to operate the named theatre and each of the parties will be equal shareholders. Operating name and policy to be decided by a majority vote of the stockholders.
“It is intended the effective date XXXX of the new operating company to assume the operation of the theatre will be June 1,1967.
“Upon issuance of the corporation charter, and activation of the new operation the terms of this agreement shall have been fulfilled as it applies to each individual named.
“Signed and agreed to this 6th day of May, 1967 in New Orleans, La.
“ /s/ Joel Bluestone ,/s/ Robert M. Hartgrove
Joel Bluestone Robert M. Hartgrove
/s/ Don Kay
Don Kay
5/31/67
“Received the total sum of $5,000.00 from Robert M. Hartgrove and Don Kay which sum shall be returned in the event sublease is not effected & executed by Mrs. Ruffino.
/s/ Joel Bluestone”

The corporation was organized with these three men who signed the above memorandum of May 6, 1967, as the only stockholders. Inasmuch as Bluestone had his residence apartment and office in the theater building, it was agreed that he may continue to occupy the apartment and office personally; that he would operate the theater as manager in the name and for the corporation, and that Don Kay would keep the books, book the films to be shown and handle the advertising. Hartgrove lived in Dal[773] las, Texas, and did not participate actively in the daily management of the business. All receipts from ticket sales were deposited by Bluestone in the bank in a corporation account. This arrangement continued until September 1,1968. On August 21,1968, Bluestone notified plaintiff that he was terminating the sublease as of September 1, 1968, and that he would then take over individual possession and operation of the theater for his own account. He says he did that because he had made a bad deal and did not want to get in any deeper and because the corporation was insolvent and could not make any money. Also another circumstance that prompted him to terminate the sublease arrangement with the plaintiff was that they never were able to obtain the consent of the original lessor to the sublease to plaintiff. Defendant, for that reason, considered the sublease to be wholly invalid and nonexistent.

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Capri Operating Corp. v. Bluestone, 217 So. 2d 770, 1969 La. App. LEXIS 5537 (La. Ct. App. 1969).

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