Appeal from decree of Court of Common Pleas of Crawford County, Sept. T., 1964, No. 2, in case of The Great Atlantic and Pacific Tea Company, Inc. v. Robert M. Bailey, Elizabeth S. Bailey, South Park Plaza, Inc. et al.
George J. Barco, with him Yolanda G. Barco, and Barco and Barco, and Humes and Kiebort, for appellant.
Peter E. Blystone, with him Eckels, Blystone, Fuller & Kinnunen, for appellees.
F. Joseph Thomas, for intervening defendant.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Eagen. Mr. Justice Cohen concurs in the result. Dissenting Opinion by Mr. Justice Roberts. Mr. Justice Musmanno and Mr. Justice O'Brien join in this dissenting opinion.
This is an action in equity seeking injunctive relief. For the purpose of this appeal, the facts may be briefly summarized as follows:
In 1954, Robert M. Bailey and Elizabeth S., his wife, were the record owners of farm land in Crawford County, Pennsylvania, on which they proposed to develop a shopping center. At that time, the tract was cut in two by a public highway known as U.S. Routes, Nos. 6, 19 and 322.
On November 23, 1954, the Baileys entered into a written lease with the Great Atlantic and Pacific Tea Company, Inc. (A. & P.), whereby a certain specifically described portion of the land on the north side of the highway was leased to A. & P. for the operation of a food market in a building to be constructed thereon with accompanying parking facilities.
The lease, which was duly recorded, contained, inter alia, the following provision with which we are here particularly concerned: "If, as and when the Lessors develop the adjoining property for business purposes, it is understood that the parking area of 107,524 square feet will be used in common with the parking to be furnished by the Lessors, but at no time shall the ratio of the total parking area to Lessee's floor area be less than five to one. It is further understood and agreed between the Lessors and Lessee hereof that no other supermarket, grocery, meat or vegetable market will be permitted to occupy space on the adjacent property owned by the Lessors during the term of this lease or the renewals herein granted. The aforementioned property shall be known as South Park Avenue Extension, Meadville, Pennsylvania."
On July 1, 1957, Baileys entered into a lease with Quality Markets, Inc. (Quality) for a store building to be constructed on a piece of land abutting the original tract owned by them and located to the north thereof.*fn1 As of that date, the Baileys did not own this particular land, but title thereto (a piece approximately 250 feet wide) was acquired on September 19, 1962, in the name of a corporation formed and solely owned by them, known as South Park Plaza, Inc. (Plaza). This lease with Quality also contained a restrictive covenant prohibiting occupancy of any part of Park Avenue Plaza*fn2 by any other supermarket except those of Quality and A. & P.
On August 31, 1961, Baileys conveyed to Plaza title to the original tract owned by them, which included the land under lease to A. & P. On October 11, 1961, the Baileys assigned their lease with A. & P. to Plaza. On October 12, 1961, this lease was renewed for an additional term of five years, with options to further renew. The restrictive covenant was incorporated therein by reference.
On August 27, 1963, Plaza purchased and acquired title to an additional piece of land, approximately 250 feet in width, which abutted and was located immediately north of the land acquired in September, 1962. On April 13, 1964, Plaza leased a portion of this most recently acquired land to Super Duper, Inc. (Super Duper) to be used for the erection and operation of a food market. This lease was subsequently assigned to S. M. Flickinger Company, Inc.
This action followed to enjoin the Baileys and Plaza from permitting the use of the land by Super Duper, or others for a food market. Quality and Super Duper
were permitted to intervene. After hearing, the chancellor entered an adjudication and decree nisi in favor of the Baileys and Plaza, the original defendants. The decree was later made final. A. & P. appealed.
It is the contention of A. & P. that the original tract owned by the Baileys and the additional lands subsequently acquired in the name of Plaza form one integrated shopping center, and that the restrictive covenant in its lease precludes the Baileys and Plaza from leasing any portion thereof for food market purposes during the term of its lease. On the other hand, the appellees maintain that the land leased to Super Duper, in which neither the Baileys nor Plaza had any interest or title on the dates the A. & P. lease was originally executed and later renewed, is not subject to the restriction.
It is a general rule of contract interpretation that the intention of the parties at the time the contract is entered into governs: Heidt v. Aughenbaugh Coal Co., 406 Pa. 188, 176 A.2d 400 (1962). This same rule also holds true in the interpretation of restrictive covenants: Baederwood, Inc. v. Moyer, 370 Pa. 35, 87 A.2d 246 (1952), and McCandless v. Burns, 377 Pa. 18, 104 A.2d 123 (1954). However, in Pennsylvania, there is an important difference in the rule of interpretation as applied to restrictive covenants on the use of land. It is this. Land use restrictions are not favored in the law, are strictly construed, and nothing will be deemed a violation of such a restriction that is not in plain disregard of its express words: Jones v. Park Lane For Convalescents, 384 Pa. 268, 120 A.2d 535 (1956); Sandyford Pk. C. Assn. v. Lunnemann, 396 Pa. 537, 152 A.2d 898 (1959); Siciliano v. ...