Uptown Food Store, Inc. v. Ginsberg

123 N.W.2d 59, 255 Iowa 462, 1 A.L.R. 3d 765, 1963 Iowa Sup. LEXIS 727
CourtSupreme Court of Iowa
DecidedJuly 16, 1963
Docket50969
StatusPublished
Cited by17 cases

This text of 123 N.W.2d 59 (Uptown Food Store, Inc. v. Ginsberg) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Uptown Food Store, Inc. v. Ginsberg, 123 N.W.2d 59, 255 Iowa 462, 1 A.L.R. 3d 765, 1963 Iowa Sup. LEXIS 727 (iowa 1963).

Opinion

Thornton, J.

-Plaintiff’s suit is to enforce a negative cove *464 nant contained in a lease. Plaintiff-corporation leased realty, equipment and fixtures from defendants for the purpose of merchandising “groceries, meats, produce and allied lines of merchandise customarily sold in supermarkets and no other.” The lease provides the rental shall be paid on a percentage basis with a minimum and maximum. The term was for five years commencing September 28, 1954. The lease provided for renewal periods and plaintiff is in possession at all times pertinent under an agreed renewal. The lease contained the following paragraph :

“13. Lessors expressly grant to the Lessee all rights and privileges in and to the trade name ‘Uptown Food Stores’ under which trade name the Lessors have heretofore conducted a food store business in the City of Keokuk, Lee County, Iowa. The Lessors further expressly agree not to engage in the business of food retailing, either directly or indirectly, in the City of Keokuk, Lee County, Iowa, other than at the store presently operated by them and located at 810 Main Street, Keokuk, Lee County, Iowa, or in any way to compete with the business of the Lessee in the City of Keokuk, Lee County, Iowa, during the term of this lease or any extension or renewal thereof except as hereinabove provided for.”

The lease was signed, “T. A. Ginsberg, Helen K. Ginsberg, Lessors.”

Plaintiff contends defendant T. A. Ginsberg has violated the negative covenant in paragraph 13 by financing, assisting in financing and assisting his 26-year-old son, Ronald Ginsberg, in the operation and management of a supermarket known as the Big G Discount Store in Keokuk.

The trial court held the covenant of defendants-lessors was joint and not several and was not violated by the acts of T. A. Ginsberg alone. It also held the actions of T. A. Ginsberg did not violate the terms of the covenant.

Plaintiff urges for reversal here the covenant was several as well as joint, i.e., one of the covenantors acting alone could violate the covenant, and the acts of T. A. Ginsberg violated the covenant. Another proposition to sustain the trial court is raised by appellee. The trial court did not mention it but defendant *465 so pleaded in his answer. It is, that the provision itself is invalid because of the provision permitting defendants to operate their store at 810 Main 'Street and enforcement would not be to protect plaintiff but is an invalid and unenforceable penalty against defendant. The action was dismissed by the court as to defendant Helen Ginsberg' before trial. This is not argued here.

It is apparent, if the trial court was correct on either proposition passed on, or defendant is correct on the matter urged to sustain the decree, the decree of the trial court must be affirmed. On the other hand it is necessary for plaintiff to* prevail as to all to obtain a reversal.

I. Our review in this equity action is de novo. Rule 334, Rules of Civil Procedure. The scope of review is the entire action. Cuthbertson v. Harry C. Harter Post No. 839 of V. F. W., 245 Iowa 922, 927, 65 N.W.2d 83, 87. Defendant may properly sustain the decree by pleaded propositions not reflected in the trial court’s findings and conclusions, Brandt v. Schueha, 250 Iowa 679, 682, 96 N.W.2d 179, 181, and matters not argued here are waived, rule 344(a) (4) (Third), Rules of Civil Procedure.

II. The trial court’s conclusion of law that defendants are bound jointly and not severally, i.e., that one of the signers cannot alone violate the covenant, but to violate the covenant they must act jointly, finds support in Streichen v. Fehleisen, 112 Iowa 612, 84 N.W. 715, 51 L. R. A. 412; Rapalee v. Malmquist & Son, 165 Iowa 249, 145 N.W. 279; and Barron v. Collenbaugh, 114 Iowa 71, 86 N.W. 53. See also Williams v. Mercury Record Corporation, 295 F.2d 284 (7th Cir. 1961).

In Streichen defendant and his brother ran a lumberyard under the name of Boone Lumber Company. They sold the “real estate, office, sheds, and scales of the Boone Lumber Company.” The covenant of the two partners was, “* * # the undersigned hereby agree that they will not start a new or fourth lumberyard in the city of Boone, * * Bach signed individually. It was claimed there as here the manner of signing indicated an individual agreement. We held the contract was joint, stating at page 615 of 112 Iowa, page 716 of 84 N.W.: “* * * for he had never agreed not to engage in the business as an individual. *466 His contract, as a member of the partnership, was that the firm would not enter said business within the time specified. • The contract might have been so drawn as to" cover the individual acts of each partner, and it may have been the intention of the plaintiffs to reach such a result, but it does not do so -; and the law, not favoring "contracts in restraint of trade, will construe it strictly. Greenhood Public Policy, 735; Haldeman v. Simonton, 55 Iowa 144 [7 N.W. 493].”

"We.further pointed out in Streichen that section 3465, Code of Iowa, 1897, now section 613.1, Code of Iowa, 1962, which provides, “Where two or more persons are bound by contract * * * whether jointly only, or jointly and severally, or severally only, * * * the action * * * may * * * be brought against any or all of them” had no application because there was not a violation of the contract. , ■

In Papalee the action was against the partnership and its members individually. The covenant under consideration was, “said John Malmquist & Son will not directly or indirectly engage in the marble and granite business.” The firm name was signed “John Malmquist & Son.” We again held an act of an individual partner did not violate the' covenant. We said at page 251 of 165 Iowa, page 280 of 145 N.W.:

“The fact that this contract provides that said John Malm-quist & Son will not directly or indirectly engage in such business does not change the rule, because it is the firm which is not to engage in the business directly or indirectly.”

It was again pointed out the contract might have been drawn to cover the acts of the individual partners.

" In the Barron ease, supra, an action for damages for breach óf a contract not to engage in the livery business, the contract provided, “agrees * * * that he [first party] will not re-engage in the'livery business * * # during the time said parties of the second part may be engaged in said livery business on the above-named premises.” One of the second parties assigned his interest in the contract to the other, the plaintiff. We there held because of the wording of the contract the defendant covenantor could re-engage in the livery business after second parties ceased to., do business as a partnership.

*467 In each of the above cases we cited Haldeman v. Simonton, 55 Iowa 144, 7 N.W.

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123 N.W.2d 59, 255 Iowa 462, 1 A.L.R. 3d 765, 1963 Iowa Sup. LEXIS 727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/uptown-food-store-inc-v-ginsberg-iowa-1963.