Greenfeld v. Supervisors' Dist. No. 3 of Perry County, Miss. , 205 F.2d 323 ( 1953 )

HOLMES, Circuit Judge.

This appeal is from a final judgment that cancelled a contract dated April 22, 1948, between appellants and appellees, who will be referred to as lessee and lessor, respectively. There is no serious dispute about the validity of the contract under the law of Mississippi. The question is one of its interpretation. This court will not undertake to make a contract for the parties.

The lessee' agreed to' equip the building at its own expense with niachinery for the operation therein of a shirt or- garment manufacturing plant or establishment which implied that it would be used for that purpose. It also agreed to surrender the premises at the termination of the lease in as good condition as when received by it* except for damage or destruction by fire or other casualty, and “except for ordinary and reasonable wear and tear” (as a shirt or garment manufacturing plant being necessarily implied.)

The lessee further agreed that, during the first twelve months of its possession, its payroll for the factory to be operated therein would be not less than 50% of the cost of the building to the lessor; and, for each year thereafter during the primary term of the lease, the lessee guaranteed that its minimum payroll for people employed in said factory' would be not less than 100% of said cost, which annual guarantee was to continue until the total amount of the lessee’s payroll payments equalled fifteen times said cost of the building. The aforesaid guarantee was subject to the limitation, among others, that the entire liability of the lessee for failure to meet the minimum guaranteed payroll was limited to 10% of the deficiency.

We think that the lessor is not entitled to a cancellation of the lease, but is entitled to an injunction restraining the lessee from using the leased premises as a warehouse in conjunction with its factory at Union, Mississippi, or for any purpose other than a shirt or garment factory operated upon the leased premises and uses necessarily incidental to the factory so operated.

The judgment appealed from is reversed, and the cause remanded to the district court for further proceedings not inconsistent with this opinion.