Court Opinion

ID: 9651551
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:25:55.877203+00
Date Added: 2024-06-11T18:12:35.563634
License: Public Domain

*422Dissenting Opinion by
Me. Justice Benjamin B. Jones:
On September 15, 1955, Claude E. Mays, trading' as Mays Gulf Service (Mays), with the financial assistance of Gulf Oil Corporation (Gulf), purchased a gasoline service station in Reiffton, Berks County. To finance this transaction Mays borrowed $25,000 from the Mellon National Bank and Trust Company. This loan was evidenced by two notes signed by Mays: one note for $6928.75 payable in five years and another note for $18,071.25 payable in fifteen years, both notes bearing interest at three and one-half (3%%) percent annually. Mays’ obligation to the Mellon Bank was unconditionally guaranteed by Gulf.
To secure Gulf’s guaranty, Mays and his wife gave Gulf a mortgage, with accompanying bond, for $25,000 covering the gasoline station. On the same date, Mays and Gulf entered into two other separate agreements: a sales agreement and a lease option agreement. Under the sales agreement Mays agreed to purchase over a period of fifteen years all his requirements of “Gulf motor fuels” for resale at his gasoline station but not “less than 90,000 gallons of such motor fuels per annum”. Under the lease option agreement1 Mays and his wife gave to Gulf “an irrevocable option” to lease the gasoline station for $200 per month, the option being for a fifteen year period and to be exercised upon the happening of any one or more certain specified conditions.2
*423From the time the sales agreement was entered into until the time of hearing in the court below Mays has purchased each year more than the minimum required gallonage of Gulf motor fuels.3
At the time Mays and Gulf entered into the sales. agreement, Gulf had no Fair Trade agreements with any of its retail dealers. On January 12, 1959, Gulf, acting pursuant to the Pennsylvania Fair Trade Act,4 entered into Fair Trade agreements with its retail dealers establishing minimum retail prices for the sale of Gulf motor fuels.5 Mays did not sign an agreement with Gulf. Each non-signing retail dealer, including Mays, was duly notified that Gulf had entered into these agreements with other dealers and advised of the terms thereof.6 All Gulf’s retail dealers, including those who had not signed agreements, with the exception of Mays, observed and complied with the stipulated prices.
Despite warnings by Gulf, Mays continued to sell such fuels at prices one cent less than the stipulated prices.7
*424On March 26, 1959 Gulf filed an equity action against Mays in the Court of Common Pleas of Berks County seeking to enjoin Mays from continuing to sell Gulf motor fuels at less than the stipulated prices. After a preliminary hearing, a preliminary injunction was denied. The matter then went to final hearing and, on December 30, 1959, a permanent injunction was granted by a divided court.8 This decree permanently enjoined Mays from selling Gulf motor fuels at less than the stipulated prices. That decree is the basis of this appeal.
The majority of this Court would now reverse this decree and remand the record to the court below for further testimony upon the ground that Gulf has not shown its right to obtain equitable relief against a “non-signer” price cutter under the Fair Trade Act. The rationale of the majority opinion is that Gulf failed to prove that its gasoline was “in free and open competition with commodities of the same general class produced or distributed by others”.
In its complaint Gulf alleged that “Gulf brand gasoline is sold to the consuming public by retailers, including defendant, from vending equipment which bears Gulf’s trade marks and brands, and is in fair and open competition throughout Pennsylvania with gasolines of the same general class produced by others”. Mays in his pleading admitted this averment. The majority opinion takes the unique position that the Commonwealth9 has an interest “in seeing that unlawful price fixing is not indulged in” and that, by reason *425of such interest on the part of the Commonwealth, it was encumbent upon Gulf, even though Mays admitted such fact, to prove that its gasoline was “in fair and open competition with commodities of the same general class produced by others”. In other words, the generally accepted principle that a properly alleged fact averred in a complaint and admitted in the adversary’s answer must still be proved if the Commonwealth— although not a party to the litigation — has a paternal interest therein.
The chancellor found: “5. Gulf brand gasoline is in fair and open competition with commodities of the same general class”. The fact was averred in the complaint, admitted by the answer thereto and such portion of the pleading was admitted, with propriety and without objection, into the record of this case. No principle of law has been more frequently reiterated or more constantly adhered to by this Court than the rule that findings of fact by a chancellor, approved by the court en banc, will not be reversed by an appellate court if there is adequate evidence to sustain them: Whitehall Laboratories v. Wilbar, 397 Pa. 223, 235, 236, 154 A. 2d 596; Masciantonio Will, 392 Pa. 362, 367, 141 A. 2d 362; McRobert v. Phelps, 391 Pa. 591, 597, 138 A. 2d 439; DeLuca v. DeLuca, 388 Pa. 167, 168, 130 A. 2d 179. The present majority opinion completely ignores this well-established and salutary principle of law.
The majority opinion takes the position that there must be evidence upon this record, aside from the admission in the pleadings, to sustain the chancellor’s finding of fact, a position novel, unique and without precedent in our law. While there was no oral testimony to establish the fact of “fair and open competition” there was no necessity for any such testimony inasmuch as that fact had been expressly conceded: *426Commonwealth Trust Company v. Cirigliano, 352 Pa. 108, 112, 41 A. 2d 863; Allegany Gas Company v. Kemp, 316 Pa. 97, 110, 174 A. 289; Acme Realty, Inc. v. Lafayette Building & Loan Association, 134 Pa. Superior Ct. 384, 391, 4 A. 2d 240. An admission of fact contained in a pleading upon which a party goes to trial is conclusive against him (Lacaria, Administrator v. Hetzel, 373 Pa. 309, 313, 96 A. 2d 132; Wilkinsburg Real Estate and Trust Company v. Lewis, 173 Pa. Superior Ct. 372, 377, 98 A. 2d 746; Mack v. Reading Company, 173 Pa. Superior Ct. 296, 298, 98 A. 2d 399) and such fact is binding upon the reviewing court [McDonald Construction Co. v. Gill et al., 285 Pa. 305, 307, 308, 132 A. 368; Bush v. Atlas Auto Finance Corp., 129 Pa. Superior Ct. 459, 466, 467, 195 A. 757). A search of the reported cases in this area of the law reveals not a single instance in which this Court has reversed a finding of fact based upon an admission in the pleadings. The reason for the absence of any such authority is- readily apparent.
The chancellor’s finding of fact that Gulf gasoline was “in fair and open competition with commodities of the same general class” was fully justified by the record. The record further supports a finding that Gulf has by proper pleading and proof established its rights to the privileges of the Fair Trade Act (Act of June 5, 1935, P. L. 266, as amended by the Act of May 25, 1956, P. L. (1955) 1756, §1, 73 PS §§7, 8) and has adequately exhibited its right to obtain the necessary equitable relief.
Furthermore, the majority opinion states that it has “serious misgivings” concerning other matters in connection with this litigation and proceeds to render doubtful the authority of certain aspects of Sinclair Refining Co. v. Schwartz, 398 Pa. 60, 63, 157 A. 2d 63 (decided within the last nine months). In my opinion, *427the principles enunciated in Sinclair are correct and should not be disturbed in any respect. To cast doubt on Sinclair can only create uncertainty and confusion in this area of the law.
I disagree with the opinion of the majority of the Court in this case. In my opinion, the majority’s determination is without precedent and completely ignores principles of law adhered to for many years by this Court, and, therefore, I dissent.
Mr. Justice Bell joins in this opinion.

 The purpose of this agreement apparently was to insure uninterrupted operation of the station and avoid the necessity of any foreclosure.

 If Mays and his wife should cease to operate the station; if they should breach the sales agreement; if the sales agreement should terminate, by operation of law or other cause not attributable to Gulf, or by mutual consent.

 During- 1938, Mays purchased from Gulf more than 220,000 gallons which it resold to its customers and, in May 1939, Mays’ sales exceeded 24,000 gallons.

 Act of June 5, 1933, P. D. 266; Act of June 12, 1941, P. L. 128, No. 66, as amended; Act of May 25, 1956, P. L. (1955), 1756, 73 PS § §7, 8.

 Of 1846 retail dealers in Pennsylvania, 1546 signed agreements; of 63 retail dealers in Berks County, 56 signed agreements.

 Paragraph 7 of Mays’ answer admits receipt of such notice.

 Paragraph S of Gulf’s complaint avers that Mays wilfully and knowingly advertised, offered for sale and sold at retail Gulf brand gasolines at prices lower than those established under the Pair Trade Agreements; that thereafter [despite two warning notices] Mays “still continued wilfully and knowingly to advertise, offer for sale and sell Gulf Brand Gasoline at less than the applicable minimum retail prices” established by Gulf. The corresponding paragraph of Mays’ answer admits receipt of the warn*424ings from Gulf and admits that Mays continued, after receipt of such notices, to advertise, offer for sale and sell Gulf brand gasolines at one cent less than the prices set forth in the notices.

 Judges Shanahan and Readinger voted for the injunction. Judge Hess filed a dissenting opinion.

 The Commonwealth is not a party to this litigation.