Marvin Drug Co. v. Couch

The penalty of $2,033.77 damages and $250 attorney's fee, visited upon plaintiff in error, Marvin Drug Company, for an alleged breach of a written contract, has no basis either in pleading or proof. The amount is grounded on losses calculated on far-fetched anticipation of sales in a retail drug store, which necessarily depended upon the number of customers, over whom plaintiff in error had no control, and the amount of their purchases for the period — necessarily pure conjecture.

Defendant in error was plaintiff in the court below and plaintiff in error was defendant; they will be so designated here.

In 1933, plaintiff, A. B. Couch, owner of one of two drug stores on Hillcrest Avenue, in the vicinity of Southern Methodist University, entered into negotiations with Z. E. Marvin, Sr., President of Marvin Drug Company, a corporation, for a lease of the building in which he was then conducting a retail drug store, resulting, finally, in the execution of a written contract, the alleged breach of which is involved in this suit. The contract is quite lengthy, expressing many conditions and covenants not material here, except to show the exactness of the contracting parties in making the agreement depicting their contractual relationship. The contract, as I interpret it, leaves nothing for implication, except, perhaps, an obligation that the lessee will fairly exercise its own known business methods and principles in conducting a drug store in the leased premises.

At the expense of being prolix in this dissent, it is deemed advisable to quote the contract in full, as follows:

"This Agreement of Lease, Made this 12th day of December, A.D. 1933, by and between A. B. Couch, known herein as Lessor, and Marvin Drug Company, a corporation, known herein as Lessee, (The terms "Lessor" and "Lessee" shall be construed in the singular or plural number according as they respectively represent one or more than one person.) Witnesseth, That the said Lessor does by these presents Lease and Demise unto the said Lessee the following described property, to-wit: Lying and being situated in the City and County of Dallas, State of Texas, and being premises known as 6401 Hillcrest Street in the City of University Park, Texas, and fronting approximately twenty-five (25) feet on Hillcrest Street and extending back approximately seventy-five (75) feet along McFarlin Blvd. and being the corner store space heretofore occupied by the University Pharmacy, together with furniture and fixtures described in exhibit "A" which is attached hereto and made a part thereof, for the term of five years, beginning the 12th day of December, 1938, to be occupied as a drug store and not otherwise, paying therefor the sum of Five Per Cent of the gross cash received from sales and money collected on accounts on business done from the leased premises during the first year of the lease term and six per cent of the said gross cash received for the last four years of the said term, as hereinafter set forth, upon the conditions and covenants following:

"1. That the Lessee shall take good care of the property and its fixtures, and suffer no waste; keep the plumbing work, closets, pipes, and fixtures belonging thereto in repair; and keep the water pipes and connections free from ice and other obstructions, to the satisfaction of the municipal and police authorities, during the term of this lease, and at the end or other expiration of the term shall deliver up the demised premises in good order and condition, natural deterioration and damage by fire and the elements only excepted, all alterations, additions, and improvements, except trade fixtures, put in at the expense of Lessee shall be the property of the Lessor and shall remain upon and be surrendered with the premises as a part thereof at the termination of this lease.

"That the Lessee shall pay the water tax imposed on the hereby leased premises as the same shall become due during the term of this lease.

"2. That the Lessee shall promptly execute and fulfill all the ordinances of the city corporation applicable to said premises and all orders and requirements imposed by the Board of Health, Sanitary and Police Departments, for the correction, prevention and abatement of nuisances in or upon or connected with said premises during the said term, at Lessee's expense.

"3. That the Lessee shall not assign this agreement or underlet the premises, or any part thereof, (except as may be mentioned herein) or make any alteration in the building (except as may be mentioned herein), without the consent of the Lessor in writing; or occupy or permit or suffer the same to be occupied for any business or purpose deemed extra hazardous on account of fire.

"4. In case of damage by fire or tornado, the Lessee shall give immediate notice to Lessor, who shall thereupon cause the damage to be repaired forthwith and allow the Lessee a fair abatement or diminution of rental in proportion to the extent to which the premises are untenantable; but if the leased premises or the buildings of which the leased premises are a part, shall by the Lessor or Lessee be deemed so damaged as to be unfit for occupancy, or if the Lessor shall decide to rebuild, the lease shall cease and the rent be paid to the time of the fire or tornado.

"5. That in case of default in any of the covenants herein Lessor may enforce the performance of this lease in any modes provided by law, and this lease may be forfeited at Lessor's discretion if such default continue for a period of ten days after Lessor notifies said Lessee of such default and his intention to declare the lease forfeited, such notice to be sent by the Lessor by mail or otherwise to the demised premises; and thereupon (unless Lessee shall have completely removed or cured said default) this lease shall cease and come to an end as if that were the day originally fixed herein for the expiration of the term hereof, and Lessor's agent or attorney shall have the right, without further notice or demand, to re-enter and remove all persons and Lessee's property therefrom without being deemed guilty of any manner of trespass. If, on account of breach or default by Lessee of any of Lessee's obligations hereunder, it shall become necessary for the Lessor to employ an attorney to enforce or defend any of Lessor's rights or remedies hereunder, then, in any such event, any reasonable amount incurred by Lessor as attorney's fee shall be paid by Lessee.

"6. In the event that the Lessee shall become bankrupt or shall make a voluntary assignment for the benefit of creditors, or in the event that a receiver of the Lessee shall be appointed, then, at the option of the Lessor and upon five (5) days' notice to the Lessee of the exercise of such option, this lease shall cease and come to an end.

"7. Lessor agreed to pay to the Realtor negotiating this lease the customary leasing fee in accordance with the commission schedule of the Dallas Real Estate Board, and the usual fee on any renewal of this lease.

"8. As part of the consideration hereof, it is agreed between the parties that the Lessee shall be and is hereby granted an option to renew this lease contract for an additional five years for a rental of six per cent of the said gross cash received.

"9. It is further agreed between the parties as a part of the consideration hereof that the rental shall be paid by the Lessee to the Lessor monthly on the 10th day of each calendar month for the preceding month; and that the Lessee shall furnish to the Lessor a monthly statement of cash register readings of gross cash receipts by Lessee; and that should the Lessor at any time be not satisfied with the said readings, he may at his own expense audit and check Lessee's books and reports.

"10. It is further understood and agreed that A. B. Couch warrants and represents the building to be in first class condition and in a good state of repair and the said Lessor hereby covenants and warrants to maintain the same at his expense in good state of repair and good condition during the term of this lease; and that there shall be no liabilities on the Lessee for the upkeep and repair the need for which is caused by Lessee's negligence; Lessor agrees to replace any broken plate-glass windows; Lessor agrees to paint said store both inside and outside at the beginning of this lease and thereafter as needed.

"In Testimony Whereof, The parties to this agreement have hereunto set their hands in duplicate, the day and year above written."

It is observed that there is not a single expression in the contract which could possibly give rise to an implied agreement that Marvin Drug Company was to conduct and operate a drug store in the leased premises "in the usual and customary manner in which neighborhood drug stores are operated in the City of Dallas"; that is, open at 7 o'clock, a. m. and close at 12 o'clock in the evenings. Plaintiff's petition shows that the contract lacks such express agreement, nevertheless it is alleged that, "there was an implied agreement and covenant that defendant would operate the drug store in the premises in the usual and customary manner in which drug stores in that vicinity were operated". The verdict of the jury and judgment of the trial court, affirmed herein by the majority opinion, were based upon the assumption that there was such an implied agreement. Query: On what theory of law can it be said that the written contract implies an oral agreement as to when the drug store shall open and close? The contract is nowise alleged to be ambiguous; plaintiff does not seek to change or alter its terms, or to add conditions or covenants inadvertently left out through accident or mistake; and there are no allegations that defendant knew of any such custom in the conduct of drug stores in the vicinity of the University.

In the case of Pierson v. Canfield, Tex. Civ. App. 272 S.W. 231, 233, Justice Looney, speaking for this Court, said: "* * * the instrument, or instruments, exchanged and forming a part of the transaction constitute the final and exclusive evidence of the intent of the parties and of the covenants entered into."

The implied covenant, which has been ingrafted upon the written contract between the parties in the case at bar, i. e., to conduct and operate the drug store "in the usual and customary manner in which drug stores in that vicinity are conducted", is tantamount to the court's making a contract for the parties. No implied covenant can be read into an unambiguous written contract, which contains express covenants of its terms effectuating the intention of the parties. Plaintiff's petition does not allege that the custom relied upon was a general custom, or one of which all parties to the lease had notice. Mere allegations that the leased premises were not used as a drug store "in the usual and customary manner in which neighborhood drug stores in that vicinity are operated, in that the store would be opened not later than seven o'clock A. M. in the morning and closed not earlier than twelve o'clock in the evening"; and, further, "that it is usual and customary for neighborhood drug stores to be opened at a comparatively early hour in the morning and to remain open until late at night", and, still further, that "by reason of defendant's breach of the implied covenant and agreement in the lease to operate the drug store in the customary manner in which drug stores are operated in the City of Dallas and University Park", go far afield in stating a cause of action against the lessee for failure to open and close the drug store to conform to an alleged custom, in the face of an unambiguous, express written contract. Indeed, implication arises in all such contracts that the lessee will not suspend operation, but the manner of its operation, the hour of its opening and closing, are matters wholly within the judgment and sound business discretion of the operating party, provided he acts in good faith. The record shows, uncontradicted, that to keep the drug store open for eighteen hours each day, from seven a. m. to twelve p. m., was unsound business practice, resulting in loss. The rule is announced in Brewster v. Lanyon Zinc Co., 8 Cir., 140 F. 801, quoted with approval by our Supreme Court in Freeport Sulphur Co. v. American Sulphur Royalty Co., 117 Tex. 439, 6 S.W.2d 1039, 1044, 60 A.L.R. 890, wherein the court said: "Whatever, in the circumstances, would be reasonably expected of operators of ordinary prudence, having regard to the interests of both lessor and lessee, is what is required."

So, in the case at bar, can it be said that it was within the contemplation of the parties that the lessee would open the drug store at seven o'clock a. m. and close at twelve o'clock p. m., when the sales during the early and late hours would not, in the exercise of sound business discretion, justify such operation. Courts cannot make contracts for parties, and can declare implied covenants to exist only when there is a satisfactory basis in the express contracts of the parties which makes it necessary to imply certain duties and obligations to effect the purposes of the parties in the contracts made. Our Supreme Court, in Freeport Sulphur Co. v. American, supra, said: "Before a covenant will be implied in the express terms of a contract, and in some cases in view of the customs and practices of the business to which the contract relates, it must appear therefrom that it was so clearly in the contemplation of the parties as that they deemed it unnecessary to express it, and therefore omitted to do so, or that it is necessary to imply such covenant in order to give effect to and effectuate the purpose of the contract as a whole". Thus, the custom and practice of other operators of drug stores, of opening at an early morning hour and closing at midnight, cannot be said to be within the contemplation of the parties, as that they deemed it unnecessary to express it, or that it is necessary to imply such covenant in order to give effect to and effectuate the purpose of the contract as a whole. The only implication that could reasonably be expected by the contracting parties, is that, the lessee will conduct in good faith a drug store to the mutual interest of both the lessor and lessee, exercising the well-known business ability of the operators of Marvin Drug Company. The alleged custom or usage relied upon obviously finds no support in the contract. The length of time such custom or usage had prevailed in the vicinity is not shown, nor that the defendant had notice of such usage and custom, which are necessary elements in pleading custom and usage. 17 C.J. p. 450, Sec. 9, 10; i. d. p. 454, Sec. 15; Taylor v. Mueller, 30 Minn. 343, 15 N.W. 413, 44 Am.Rep. 199; Schumacher v. Trent, 18 Tex. Civ. App. 17, 44 S.W. 460. In the absence of pleadings that the lessee actually knew of such custom and usage, or the antiquity thereof in the vicinity, justifying an inference that the lessee knew of it, or that the parties to the lease had such action in view in making the contract, there are no legal grounds for the judgment rendered in this case.

It is further observed that the contract expressly provides: "(5) That in case of default in any of the covenants herein, lessor may enforce the performance of this lease in any modes provided by law, and this lease may be forfeited at lessor's discretion, if such default continue for a period of ten days after lessor notifies said lessee of such default and his intention to declare the lease forfeited, * * *. If, on account of breach or default by lessee of any of lessor's obligations hereunder, it shall become necessary for the lessor to employ an attorney to enforce or defend any of lessor's rights or remedies hereunder, then, in any such event, any reasonable amount incurred by lessor as attorney's fee shall be paid by lessee." These provisions, obviously allow the lessor a remedy for any default in any of the covenants expressed therein, and on account thereof, obligate the lessee to pay the attorney's fee. It is not contended, in pleadings or proof, that the lessee defaulted in any covenant expressed in the contract or that the lessor employed an attorney to enforce rights or remedies thereunder. The lessor, having an express remedy for breach of any covenants in the contract, to the exclusion of all others, is limited to the remedy expressed. Where contracting parties have an express remedy, no implied covenant effecting the breach can be the basis of a suit. Furthermore, can it be said that it was the contemplation of the lessor and lessee to pay attorney fees for anything other than a breach of the express covenants? The terms of the contract, in my judgment, answer the question in the negative.

For the reasons above stated, the cause should have been reversed and here rendered for the defendant; at most, the cause should be reversed and remanded, for reasons herein mentioned.

This cause was submitted to a jury of twelve men. During the course of the trial, over the objections of the defendant, the trial judge dismissed one of the sworn jurors for reasons satisfactory only to himself, and too, according to the defendant, with the right to withdraw its announcement of ready. The Constitution of Texas, Art. 5, Sec. 13, Vernon's Ann.St., provides: "When, pending the trial of any case, one or more jurors not exceeding three, may die, or be disabled from sitting, the remainder of the jury shall have the power to render the verdict." Article 2204, Revised Statutes of Texas, 1925, provides: "Pending a trial of a civil case in the district court, where one or more jurors may die or be disabled from sitting, if there be as many as nine of the jurors remaining, those remaining may render and return a verdict; but in such case the verdict must be signed by each juror rendering it." In the case of Houston T. C. R. Co. v. Waller, 56 Tex. 331, our Supreme Court had this to say, pertinent here, on the above constitutional provisions:

"It appears by bill of exceptions in this case, that pending the trial, and ``after the depositions of several witnesses had been read, a communication in writing was handed to the judge presiding which purported to be from the wife of the juror Thomas H. Bradbury to the said Bradbury, informing him that one of their children was sick, and requesting him to come home if he could. The judge presiding being of the opinion that this information disabled the said juror from sitting, and thereupon peremptorily discharged him, said Bradbury, from the jury, and ordered the trial to proceed with the remaining eleven, over the objection of the defendant's attorneys.' This bill of exceptions is approved with the following explanation: ``The court asked the juror if the intelligence in the written communication of his wife satisfied him that it was necessary for him to be at home to attend his sick child. The juror answered it did, and manifested in his answer such distress as such intelligence would naturally create in a parent. And the court was satisfied, in his present state of mind, that said juror was disabled thereby from further acting as a juror.'

"Our opinion is that a juror is not ``disabled from sitting' within the meaning of the constitution by mere distress of mind. Such distress, caused by information of sickness in his family, calling for his presence at home, might be a sufficient cause for suspending the progress of the trial, if in the judgment of the court the emergency required such a course. But this is not the character of disability which the constitution classes side by side with death. If a juror becomes so sick as to be unable to sit longer, he is plainly disabled from sitting. Ray v. State, 4 Tex.App. [450] 454. If by reason of some casualty or otherwise he is physically prostrated, so as to be wholly incapable of sitting as a juror, or loses his mental powers, so as to become insane or idiotic, then too he would be disabled from acting as a juror. But, without deeming it proper to attempt to define fully the meaning of the expression used in the constitution, we are satisfied that the causes which disable the juror from sitting, and justify the extreme course of allowing, over a party's objection, a verdict to be rendered by the remainder of the jury, must be of a nature more directly showing his physical or mental incapacity than mere mental distress occasioned by the sickness of others, and the feeling that duty to the sick demanded his presence elsewhere. Extreme cases of the kind, however strongly they may appear to the court to release the juror, do not belong to the class provided for by the constitution or statute.

"We think that it appears from the bill of exceptions that the court, over the objections of the defendant, ordered the trial to proceed with eleven jurors, and that this error of the court is fatal to the judgment."

So, in the case at bar, the trial court peremptorily discharged a juror, without questioning him as to his fitness, and without the defendant having an opportunity to question him on his disqualification. After the trial, in a qualified bill of exception, the trial judge for the first time assigned his reasons for discharging the juror, and requiring the defendant to proceed with the trial before the eleven. The conclusion of the majority that such action was proper, not presenting a reversible error, is a dangerous precedent for courts. I am not in accord with the holding. Litigants have a legal right to question jurors on their qualifications and fitness for jury service; it does not lie within the powers of a trial judge to peremptorily discharge a juror over the objection of the litigants, because, forsooth, the action of the juror indicates to the mind of the judge, that such juror was not qualified to sit in the case.

For the reasons above indicated, I am of the opinion the judgment should be reversed and here rendered for the defendant; accordingly, I register my dissent.