Weinberg v. Edelstein

Supreme Court of New York, Trial Term · Contracts

Contractsrestrictive covenantslease interpretationleasesrestrictive covenantinjunctionnoticestrict construction

Facts

Plaintiff leased a store in 1949 with the right to sell ladies dresses, coats and suits and ladies sports clothes, and his landlord promised not to rent another store in the building for the retail sale of ladies dresses, coats and suits. Defendant later took an assigned lease, with notice of that restriction, authorizing him to sell ladies hosiery, gloves, lingerie, brassieres, girdles, bathing suits, sweaters, bags and accessories, blouses, skirts and beachwear. After discussions among plaintiff, defendant, and defendant's predecessor, defendant accepted this use clause, and plaintiff knew that defendant's assignor had long sold skirt-blouse combinations. Defendant sold matched skirts and blouses, which plaintiff claimed were really forbidden two-piece dresses.

Issue

When a lease restriction forbids the sale of ladies "dresses," does it also bar a neighboring tenant from selling matched skirt-and-blouse combinations that may resemble two-piece dresses? More specifically, should such garments be classified as dresses or as separately saleable skirts and blouses under these leases?

Rule

A restrictive covenant in a lease is enforceable by injunction against a subsequent tenant with notice, but it is strictly construed against the party seeking enforcement. Where the covenant's terms are ambiguous, the court determines the meaning of the goods described by examining the language of both leases, the parties' intent, trade customs and usage, and the policy against undue restrictions on the free use of land. Matched skirt-and-blouse ensembles are not "dresses" within such a covenant when they are sportswear items sold as separate blouses and skirts at individual prices and intended to be worn separately or together, rather than single-unit dress-industry garments normally worn only as one costume.

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In a shopping arcade in Buffalo, Nora Levin leases a boutique with the landlord's promise not to lease any other unit in the arcade for the retail sale of women's coats. A year later, Owen Pike takes an assignment of another unit after being told about Nora's restriction, and his lease authorizes him to sell outerwear accessories and shawls. He begins selling full-length women's coats.

If Nora seeks an injunction, what is the strongest doctrinal conclusion?

Explanation. The majority recognized that restrictive covenants may be enforced by injunction against later tenants or takers with notice. The key question is whether the covenant clearly covers the conduct. Here, selling full-length women's coats directly matches the prohibited category of women's coats, so the restriction is applicable and enforceable against Owen because he took with notice. (Derived from Weinberg v. Edelstein (n.d.).)