Asa G. Candler Inc. v. Georgia Theater Co.

George, J. On October 22, 1908, E. P. Ansley entered into an agreement with . Ben Kahn by which Ansley agreed to erect a theater with certain equipment and furnishings at a designated location in the City of Atlanta, the theater to be constructed in accordance with plans made by a named architect, subject to such alterations as Kahn might desire. The agreement provided that Kahn was to lease the theater when completed at the annual rental of $7500 for the term of five years, “with the privilege of renewal for another period of five years at an increased rental of $1000 per year.” The agreement contained the following clause, around which the controversy in this case revolves; “The said Kahn also agrees that the house will be operated at all times during the term of this lease or any renewal thereof as a first-class theater catering to the best class of people.” The theater was built with stage and dressing-rooms necessary to a regular theatrical performance. It was equipped according to the contract. About one third of the theater building is taken up with the stage and dressing-rooms, wholly unnecessary to a moving-picture show. From the completion of the theater in 1910, and during the term of the original lease, the lessee operated therein “high-class vaudeville,” at all times in connection therewith moving pictures, and for certain periods moving pictures exclusively, and at considerable expense. On February 26, 1915, and agreeably to the contract, the lease was renewed for an additional term of five years beginning March 1, 1915, and ending February 26, 1920, “upon the terms and conditions set out in said original agreement,” etc. By mesne conveyances the title to the building passed into the plaintiff, and the lease thereof, by successive transfers, to the defendant. In the spring of 1917 the Jessee ceased conducting vaudeville perform [190] anees, and announced the intention to exhibit thenceforth moving pictures in said theater; whereupon the plaintiff brought this suit in equity to enjoin the exhibition of moving pictures in said theater building, basing its contention on. the ground that such conduct on the part of the lessee would be a breach of the provisions of the lease requiring the house to be operated “as a first-class theater catering to the best class of people.” The contention is that a first-class moving-picture, show, although it caters to the best class of people, is not a “first-class theater” within the meaning of the provision of the contract. Upon the hearing for interlocutory injunction it was conceded and is here conceded that the lessee had and was exhibiting first-class moving pictures, showing first-class productions by the leading “artists of the screen,” and that the theater so conducted catered to and in fact attracted the best class of people. The injunction was refused, and the plaintiff excepted. 1-3. In the absence of restrictive covenants, it is generally said that the tenant has no right to use the demised premises for a pur'pose not contemplated by the parties, and materially different from that for which the premises were apparently intended. 16 E. C. L. 736, § 228. The lessor may always, by express provision, limit the general rights of the lessee as regards the use of the demises premises. Equity will enforce restrictive covenants of a lease, though irreparable damage will not result frtai a breach of the covenants. Joyce on Injunctions, §§ 584, 489; Jones on Landlord and Tenant, §§ 383, 384. The covenant in the lease under consideration is not in form a restrictive covenant, but imposes an affirmative duty upon the lessee. The duty to operate the house at all times “as a first-class theater catering to the best class of people” limits the general rights of the lessee as regards the use of the demised premises, and is in effect an implied negative covenant against the use of the building for any purpose other than that named. 2 High on Injunctions (4th ed.), § 1151a. 4. The lease under consideration was executed in 1908. At that date moving pictures were in a very crude state of development. The contract by its terms was to continue over a period of five years, with the privilege of renewal for a like period of years. It was renewed in 1915. At the latter date moving pictures had reached a very high state of development; but words in a contract [191] are ordinarily to be given their primary meaning at the time of the execution of the contract; and words of art, or words connected with a peculiar trade, are to be given the significance attached to them by experts in such art or trade. However, this rule is one of construction, and, like every such rule, is subordinate to the intention of the parties. The primary meaning of the word “theater” in 1908 did not include a moving-picture show, even if such exhibitions were within the secondary meaning of the word. The word “theater” from the Greek, means literally, “a place for seeing.” As defined by all the standard authorities, a theater is a building especially adapted to dramatic, operatic, or spectacular representations; a playhouse. This court in Lee v. State, 56 Ga. 477, considered a theater as a building. The adjective “theatrical,” as used by all the standard authorities, means, of or pertaining to the theater, especially in the matter of dramatic or spectacular representations; befitting the stage; dramatic. In a decision rendered by the Supreme Court of Alabama long before moving pictures were known (Jacko v. State, 22 Ala. 73), it was held that the word “drama” is “broad enough to cover any representation in which a story is told, a moral conveyed, or the passions portrayed, whether by words and actions combined, or by mere actions alone.” In Ex parte Lingenfelter, 64 Tex. Cr. 30 (142 S. W. 570, Ann. Cas. 1914C, 765), the Court of Criminal Appeals of Texas said: “A theater is but a reproduction of some play, or scene, by acting, by pantomimes, or by tableau; a moving-picture exhibition is also but a reproduction of these same scenes and plays.” This language was not precisely in point upon the question before the Texas court, and under our rule would be regarded as obiter. In 1911, in a case dealing with the right to make a moving picture of a copyrighted book, the Supreme Court of the United States held that a moving picture was a dramatic production. Kalem v. Harper, 222 U. S. 55 (32 Sup. Ct. 20, 56 L. ed. 92, Ann. Cas. 1913A, 1285). The word “theater,” as employed in the clause of the contract in the instant case, is descriptive of the character of the performance within the building, rather than of the building itself. The- precise question presented by this record is whether the word “theater,” when so used, is broad enough to permit the exhibition by the lessee of moving pictures exclusively. It can not be left out of view that the primary purpose [192] of the lessor, evidenced by the 'contract, was to protect the property to the end that its value might be increased rather than decreased. The lessor therefore covenanted that the building must be operated as a theater and “as a first-class theater catering to the best class of people.” He desired for his theater a reputation and a name. Taking into cohsideration the primary meaning of the words in the covenant at the date of the contract, we are of the opinion that the covenant requiring the lessee to operate the building “as a first-class theater” limited the rights of the lessee to use the building for the exhibition of theatrical performances as those terms were understood, and excluded, the right of the lessee to use the building for a moving-picture show. Two moving-picture shows were in operation in the City of Atlanta in 1908; but these shows were staged in ordinary storehouses, while the lessor constructed a building with a large stage and ample dressing-rooms. The stage and anterooms cover about one third of the floor space of the theater building, and are wholly unnecessary in a moving-picture show. The word “theater” in 1915, the date of the renewal of the lease, perhaps included a moving-picture show; but neither in 1908 nor in 1915 was a moving-picture show included within the meaning of a “first-class theater,” as employed by the parties to the lease contract. 5. The construction placed upon a covenant in a lease, as in case of all contracts, by the parties thereto, as shown by their acts and conduct, is entitled to much weight and may be conclusive upon them. 5 Elliott on Contracts, § 4556. Many decisions might be cited to the effect that where a particular use has been made of the demised premises to the knowledge of the lessor, who without objection continues to accept the rents and profits from the lessee, the former will be estopped to deny the latter’s right to so use the premises under the terms of the lease. Herscher v. Brazier, 38 Ill. App. 655; Oglesby v. Hughes, 96 Va. 115 (30 S. E. 439); District of Columbia v. Gallaher, 124 U. S. 505 (8 Sup. Ct. 585, 31 L. ed. 526). The lessee, both during the original period of the' lease and after its renewal, exhibited moving pictures at all times in connection with spoken drama, and during certain periods moving pictures exclusively, in the demised premises. In order to do so, the record shows that the lessee expended a large sum of money. The lessor, with knowledge of these facts and [193] without objection, continued to accept the monthly rentals for the use of the theater building. In these circumstances we are unwilling to hold that the judge of the superior court erred in refusing to enjoin the lessee as prayed. On the contrary, we rule that the interpretation placed upon the contract by the parties, as shown by their acts and conduct, authorized the judge to deny to the lessor the harsh remedy that is now sought to be invoked against the lessee. Florida Central R. Co. v. Cherokee Sawmill Co., 131 Ga. 815 (2), 821 (74 S. E. 523). We more readily reach this conclusion because the denial of the injunction by the judge in this ease has the effect to preserve the existing status of the parties until the jury can determine the question of estoppel involved. The evidence of theatrical managers, playwrights, and dramatic critics, to the effect that moving pictures presenting the leading artists of the country in plays of dramatic excellence are first-class theatrical or dramatic performances, was admitted'and considered by the court. This evidence was objected to upon the ground that it was not confined to the status of the moving picture at the date of the execution of the original lease, and upon the further ground that the same was mere opinion evidence. We are of the opinion that this evidence should have been excluded, but upon the ground that the contract is free of ambiguity and that the words contained in the covenant do not require the aid of extrinsic evidence to give effect to the plain and expressed intention of the parties. Consideration of this evidence will not, however, require a reversal, inasmuch as the injunction, was denied generally; and as we have seen, the judge did n'ot err in refusing to grant the injunction upon the ground of estoppel. Judgment affirmed. All the Justices concur, except Fish, C. J., absent.