For reversal -- Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.
[55 NJ Page 232] The Law Division held that the defendants were under no obligation to operate a diner on the premises they leased from the plaintiff's predecessor and that they
could continue as lessees for the full term of the lease so long as they paid the monthly rental. The plaintiff appealed to the Appellate Division which affirmed in an unreported per curiam. We thereafter granted the plaintiff's petition for certification. 54 N.J. 242 (1969).
Tooley's Truck Stop has been operated in Jersey City since the early forties. It is located on a large tract of land abutting Route 1, is open for business around the clock, and has suitable facilities for long truck haulers and other truck drivers who may obtain gasoline, oil, propane, ice, sleeping quarters, etc. Since the availability of food was obviously called for and there was no restaurant in the immediate area, the original owners of the Truck Stop, Messrs. Siegel and Frank, installed a diner on the property adjacent to their other facilities. They operated the diner for about a year and then sold it to Messrs. Brown & Eagle who leased the land on which the diner operation was located. Later Messrs. Brown & Eagle sold the diner to John Pakkisas and Gus Crealus who in turn leased the land and continued to operate the diner on an around the clock basis, as had their predecessors.
In 1959 the individual defendants became interested in purchasing and operating the diner. They knew that the Truck Stop and the diner were being operated on a twenty-four hour, seven day a week basis. They negotiated with Mr. Siegel for a long lease. The plaintiff sought to establish that, during the negotiations, there was a mutual understanding that the lessees would be affirmatively obligated to continue the operation of the diner on a twenty-four hour, seven day a week basis but the trial judge found that the plaintiff had not carried the burden of establishing such understanding. However, there was no real dispute that the individual defendants knew the nature and needs of the Truck Stop's business and the nature of the diner's previous operations. Thus it is clear from Mr. Christakos' testimony that he knew the diner was adjacent to the Truck Stop and that they were both operated on an around the clock basis. Mr. Chrisanthopouls
testified that he, along with the other individual defendants, was present at the original meeting with Mr. Siegel; that he knew that the Truck Stop and the diner were open on an around the clock basis; that it was his intention to keep the diner open on a similar basis so long as the business warranted; and that in any event he intended to keep the diner open each day for some period of time.
In May 1959 Messrs. Siegel and Frank executed a twenty-year lease to the individual defendants for the premises on which the diner was located. The lease contained no specific provision with respect to the hours of operation. It did provide that the leased premises were "to be used and occupied only for the operation of a dining car and dispensing of food and soft drinks." It further provided that the landlords would not rent or permit the use of any other portion of their property "for any business selling and serving food and soft drinks in any form." A printed provision of the lease contained the customary clause that if the premises "shall become vacant" the landlords may reenter, relet and apply the rent received towards the lessees' rental obligation.
The individual defendants took possession of the diner, commenced operation on a twenty-four hour, seven day a week basis and continued such operation without interruption for several years. In the interim the Truck Stop was conveyed to the plaintiff corporation with Mr. Siegel and his son Edwin as the principal stockholders and the diner was conveyed to the defendant corporation with the defendant Christakos as its principal stockholder. Beginning in 1964 the diner's operations became sporadic. It was closed on some Saturdays and Sundays and during some nights but the situation did not become critical until January 1967. Mr. Siegel testified that at that time he found the diner closed, that he complained to Mr. Christakos, and that thereafter the diner was reopened. However, between January and June the diner was closed on various occasions for substantial periods of time. In June the plaintiff served notice on the
individual defendants that their lease was being terminated because they had failed to use and occupy the leased land for the operation of a dining car and for dispensing of food and soft drinks. Some months after the receipt of this notice, the defendants subleased the diner to Mr. Teddy Marose who reopened it in December. Mr. Marose testified that although he tried to make it operable the Board of Health directed him to close for a time during which certain corrections had to be made. At the time of the trial in the Law Division the diner was actually closed, purportedly for repairs for "a couple of weeks."
The plaintiff's complaint in the Law Division was filed in November 1967. It sought a declaratory judgment that the plaintiff had the right to terminate the lease because of the failure of the defendants to use and occupy the leased premises for the operation of a dining car and the dispensing of food and soft drinks. In their answer, the defendants admitted periodic closings and curtailment of hours but denied any legal obligation on their part to operate in any specified manner and denied any right in the plaintiff to terminate the lease. During the trial, the plaintiff's position was that the defendants were obligated to operate around the clock and that, in any event, if that were not so they were obligated to operate at reasonable times and in reasonable manner. The defendants' position was that they were under no obligation to operate the diner at all and that so long as they paid their rent, which was being duly tendered, they were entitled to retain their lease-hold interest in the plaintiff's land. The Law Division agreed with the defendants' position and entered judgment which determined that the "defendants are not required to operate and keep open for business the diner located on the leased premises other than as they deem desirable."
After the entry of the Law Division's judgment, dated June 19, 1968, the defendants boarded up the diner and admittedly it is not in operation. In August 1968 the plaintiff moved before ...