Title: Ewing v. Adams
Citation: 573 So. 2d 1364
Docket Number: 07-CA-59014
State: Mississippi
Issuer: Mississippi Supreme Court
Date: December 19, 1990

573 So. 2d 1364 (1990) Max EWING v. James F. ADAMS, Jessie R. Adams, Jr. and John H. Thames, Jr. No. 07-CA-59014. Supreme Court of Mississippi. December 19, 1990. Robert H. Norman, Roberts &amp; Clisby, Oxford, for appellant. S.T. Rayburn, Andrew K. Howorth, Hickman Rayburn &amp; Goza, Oxford, for appellee. EN BANC. HAWKINS, Presiding Justice, for the Court: Max Ewing has appealed a final judgment of the chancery court of Lafayette County that he had waived his lessor's right to restrict the use of his property by the lessees to a drive-in movie business. We address the restrictions of a lease clause "to be used as a drive-in movie theater," and find that, while not restricting the use of the property to that particular purpose, neither does it mean that the lessee has a completely unrestricted right of business use of the property. We also find Ewing did not waive his contractual right under the facts. Accordingly, we reverse and remand. On December 12, 1951, W.H. McNeely, owner of five acres of open land on the north side of Highway 6, and just west of the corporate limits of Oxford at the time, entered into a long-term lease contract of the realty with J.F. and J.R. Adams. The contract, after a metes and bounds description, recites the property as "being the land upon which is located the drive-in movie theater... ." The term of the lease is five years, beginning March 1, 1952, at a yearly rent of $1,200 payable in equal monthly installments in advance. The lease gives the lessees (party of the second part) the option to renew over successive five-year periods up to 75 years: The contract contains covenants by the lessees to pay the rent when due, and "[T]he said parties of the second part, will not occupy or use or permit to be occupied or used, the said premises for any business deemed unlawful." The contract contains the following provisions as to the use and occupancy of the premises: As to the covenants the contract recites that "the covenants and agreements herein contained are binding on the parties hereto, their heirs, legal representatives and assigns." On September 16, 1967, McNeely and Lessor executed an extension lease contract on this realty with J.R. Adams, Mr. J.F. Adams and J.R. Adams, Jr., as Lessees. It contains essentially the same provisions as the first lease. The rent is the same, and it contains the same covenants by the Lessees as to paying the rent when due and not to use the premises for any "business deemed unlawful." The lease period begins as of March 1, 1967, for a five-year period, renewable in successive five-year periods, up to 65 years. The lease contract also has the following provisions as to the Lessor's covenants and the use of the property: On August 20, 1970, McNeely as Lessor executed an Agreement with Martin Theatres of Alabama, Inc., as "Sub-Lessee" and assignee of the Adamses, extending the previous lease for a five-year period ending August 31, 1977, with options to renew for successive five-year periods up to 60 years following August 31, 1977. On February 6, 1973, McNeely by warranty deed conveyed the five-acre tract along with other realty to Max Ewing, subject, however, to the above lease contracts. On June 26, 1986, James F. Adams, Jesse R. Adams, Jr., and John H. Thames, Jr., filed a complaint in the chancery court of Lafayette County against Max Ewing claiming there was a dispute between the parties as to whether the plaintiffs were restricted to using the property as a drive-in movie theater and seeking a declaratory judgment that "the defendant has no right to restrict the plaintiffs' use." On August 25, 1986, Ewing filed an answer and counterclaim to the complaint, in his answer claiming the property was restricted to use as a drive-in movie theatre, and joining in the prayer for a declaratory judgment, but that the judgment be precisely opposite of the plaintiffs' prayer. The counterclaim alleged that the plaintiffs had used the property for flea markets and other unauthorized uses, had not kept the property in reasonable repair and had abandoned the property, and the property was an eyesore to the community. For these alleged breaches Ewing claimed he was entitled to possess the property. On November 28, 1986, the Adamses moved for a declaratory judgment that *1367 they had unrestricted use of the property. The chancellor treated the motion as one for summary judgment. The parties stipulated that the premises had been used for other purposes than a drive-in movie and that the lessor had continued to accept rental checks. On February 2, 1987, Ewing also moved for a summary judgment. On June 26, 1987, the chancellor rendered an opinion that by the terms of the lease the property was restricted to use as a movie drive-in theater. On July 6, 1987, the Adamses filed a motion with the court to reconsider, and that testimony as to the intent of the parties should be permitted. On August 12, 1987, the chancery court found that it was the intent of the parties that the property be used solely for a drive-in theater, and granted partial summary judgment to the defendants declaring that the lease "unequivocally restricts the use of the property described therein to the operation of a drive-in movie theatre. The provisions of the lease applicable thereto clearly constitute a restrictive covenant." On November 9, 1987, a hearing was held before the chancellor on whether Ewing had waived his contractual right. J.R. Adams, Sr., testified that McNeely's attorney drafted the contract in 1951, and that it was his understanding the property could be used for any lawful purpose. Ewing testified that the property ceased being used as a drive-in theater in 1978, had not been tended to, and was grown up in bushes and weeds. In 1980 or 1981 the property had been used for a flea market, and upon another occasion for a "beer bust." The record is not clear as to how often any flea markets occurred. Ewing said it happened "two or three times." He had notified his attorney to write a letter complaining of this use of the property. There was a letter written by Barrett J. Clisby, dated May 29, 1980, to Jesse Roland Adams, objecting to use of the property as a flea market, and informing him that if it was repeated legal action would be taken. Ewing also testified that there had been occasions when the Adamses' rent payment checks were returned due to insufficient funds. The chancellor rendered an opinion that Ewing had waived his right to cancel the contract or restrict the use of the property to a drive-in movie theater by failing to file a lawsuit following its use as a flea market and as a beer bust. He then held that the Adamses had unrestricted use of the realty. Ewing has appealed. The first inquiry is what restriction, if any, does the lease impose upon the use of the property? The Adamses claim none, Ewing claims total. We conclude that neither is correct. In Delta Wild Life &amp; F., Inc. v. Bear Kelso Plant., Inc., 281 So. 2d 683 (Miss. 1973), this Court addressed the question of whether a lease of unimproved wooded land for pasture purposes, and to erect fences or other improvements thereon as "Lessee may need in and about such operations," restricted use of the land to pasture purposes, or could the lessee clear the land, cultivate it and use it for row crops. We then held: 281 So. 2d at 687. In Forman v. United States, 767 F.2d 875 (Fed. Cir.1985), the owners leased a building to the Federal Government "to be used for postal purposes." The lease authorized the Government to sublet or assign all or a part of the premises, "but shall not be relieved from any obligation under this lease by reason of any such subletting or assignment." The postal service sublet a part of the building to a realtor, attorneys, a secretarial service, and other private businesses. The landlords claimed the subletting was restricted to governmental agencies. The court disagreed, and clearly illustrated the general principle. 767 F.2d at 880-881. Also, 49 Am.Jur.2d Landlord and Tenant § 240 (1970) and cases annotated. We must hold, therefore, that the chancellor erred in his holding that the words "to be used for a drive-in movie theater" restricted the lessees' use of the property to this sole purpose. We likewise find that the chancellor erred in his conclusion that Ewing had waived his rights under the lease. In Planters Bank &amp; Trust Co. v. Sklar, 555 So. 2d 1024, 1031 (Miss. 1990), we noted that because the existence vel non of a waiver "was a factual determination, this Court's *1369 scope of review is limited and governed by the manifest error/substantial evidence standard." In this case the variance in use consisted of a very few isolated instances, and Ewing protested. The fact that he filed no lawsuit to protect whatever rights the lease gave him did not in law constitute waiver. There was no consistent pattern of varied uses of the property, or persistent use for other purposes than a drive-in. Far more sustained passivity by Ewing would have been required to constitute a waiver. In Campbell Paint &amp; Varnish Co. v. Hall, 131 Miss. 671, 687, 95 So. 641, 644, 49 Am.Bankr.Rep. 611 (1923), this Court defined "waiver," as follows: Ballentine's Law Dictionary 1356 (3rd ed. 1969) gives the following helpful definitions of "waiver": In this case there was nothing about Ewing's conduct to fairly evidence any intention to waive whatever rights he had under the lease to restrict the use of the property. Matheney v. McClain, 248 Miss. 842, 161 So. 2d 516 (1964). We therefore find the chancellor manifestly in error in concluding there was a waiver on Ewing's part. Then are the words "to be used for a drive-in theater" no restriction whatever on the lessees' use of the property? No. 51C C.J.S. Landlord and Tenant § 337, p. 861, after setting for the general law above noted, states further: Also, 49 Am.Jur.2d § 240, pp. 256-257, states that words descriptive of the use of the premises cannot be construed as restricting the lessee "to the distinctive use which the words may suggest. They will not be construed, at the instance of the lessor, as proscribing the use of the premises for something similar or related to the designated purpose." [Emphasis added] In Bevy's Dry Cleaners &amp; Shirt Laundry, Inc. v. Streble, 2 Ohio St.2d 250, 208 N.E.2d 528 (1965), a landlord dry cleaning business leased adjacent premises to carry on a "general laundry business," and coin-operated laundry machines. Thereafter, the lessee installed some coin-operated dry cleaning machines. In holding the lease did not preclude the use of the premises for dry cleaning, the Ohio Supreme Court held: 2 Ohio St.2d at 254, 208 N.E.2d at 532. Neither in this case can we go further than the above announcement. The Adamses sought a declaratory judgment for unrestricted use of the land. The Adamses did not seek a declaratory judgment to authorize some particular variant use of the property. Instead, they sought declaratory judgment for completely unrestricted business use, so long as it was lawful. On the other hand, Ewing sought a declaratory judgment restricting the Adamses solely to a drive-in movie theater, now obsolete businesses in this state. As we have noted, neither extreme position is correct. The answer lies somewhere between. If the Adamses by proper pleading amendment set forth specifically the variance or variances in use they seek, then proceedings shall be conducted consistent with our holding. Without any further amendment within a reasonably short time upon remand, this case should be dismissed. REVERSED AND REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION. ROY NOBLE LEE, C.J., and ROBERTSON, SULLIVAN, ANDERSON and PITTMAN, JJ., concur. BLASS, J., DAN M. LEE, P.J., and PRATHER, J., dissent. BLASS, Justice, dissenting: I concur with the majority insofar as it holds that the language of the lease does not restrict the land to the sole purpose of a drive-in-movie-theatre. However, the majority does not delve deep enough into an analysis of property law and I cannot agree with the holding. The language at issue in the lease is as follows: The lease provided for a term of five years which in effect made it an estate for years. Moynihan defines an estate for years as one which "must have a fixed and certain period of duration." C.J. Moynihan, Introduction to the Law of Real Property 65 (1962). A lease is a conveyance in that it creates in the lessee an estate for years, but it is also a contract because of promises made by the parties. Moynihan, supra, at 69. Because of the hybrid nature of a lease, an interpretation of its language calls for a review of both contract and real property law. "The law of covenants sounds in contract while the law of conditions lies in property." 3 G. Thompson, Commentaries on the Modern Law of Real Property § 1111 (1980). Contract law is applicable to the interpretation of covenants and "[i]f the covenant is broken the remedy of the covenantee is to sue for injunctive relief or for damages, but the breach of the covenant neither automatically terminates the estate nor gives the covenantee a power to terminate." Moynihan, supra, at 105. Mississippi traditionally has applied property law in lease interpretation. This is evidenced the fact that Mississippi has not adopted an implied warranty of fitness, thus making caveat emptor the general rule. "A lessee takes lease premises as he finds them with no implied covenant of fitness." Cappaert v. Junker, 413 So. 2d 378, 380 (Miss. 1982). Therefore, since Mississippi favors property law over contract law in dealing with leases, the language at bar should be construed as a condition and not a covenant. An estate is subject to termination upon the breach of a condition subsequent. Moynihan, supra, at 104 (emphasis added). The lessor in the case at bar unsuccessfully attempted to create a right of entry for condition broken. The "modern trend is to refuse to construe the conveyance as creating an estate on condition in the absence of a provision that the transferor shall have a right to re-enter or words of similar import, such as that the land shall `revert' or that the conveyance shall be `void' on the happening of the specified event." Moynihan, supra, at 104. If the lessor had intended to create a right of entry for condition broken or an estate analogous to a determinable fee[1], he should have looked to real property law and specifically drafted the lease in accordance therewith. The operative language is not specific enough to create an estate subject to a condition subsequent, therefore making the language surplusage. Since the lessor did not expressly reserve the right of re-entry, then the lessee is entitled to lawful use of the premises for the duration of the lease. This black letter law was stated by this Court in Strand Enterprises, Inc. v. Turner, 223 Miss. 588, 78 So. 2d 769 (1955) as follows: Strand, 223 Miss. at 603, 78 So. 2d at 773 (quoting Rich v. Swalm, 161 Miss. 505, 137 So. 325 (1931) and Collins v. Wheeless, 171 Miss. 263, 157 So. 82 (1934)). Because the lessor did not expressly reserve a right of re-entry through the use of a condition subsequent, the lessee can use the property for any lawful purpose. However, the lessor is not without remedy if he has in fact been harmed. He may not re-enter, but if he can show irreparable harm then he may choose to seek an injunction or if he can prove damages then he may seek monetary relief. DAN M. LEE, P.J., and PRATHER, J., join this opinion. [1] At common law a distinction was made between a re-entry for condition broken and a reverter. However, both resulted in the owner regaining possession of his land.