Philadelphia Fresh Food Terminal Corp. v. M. Levin & Co.

361 A.2d 886, 239 Pa. Super. 287, 1976 Pa. Super. LEXIS 1919
CourtSuperior Court of Pennsylvania
DecidedMarch 29, 1976
DocketAppeals, Nos. 1944 and 1970
StatusPublished
Cited by15 cases

This text of 361 A.2d 886 (Philadelphia Fresh Food Terminal Corp. v. M. Levin & Co.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Fresh Food Terminal Corp. v. M. Levin & Co., 361 A.2d 886, 239 Pa. Super. 287, 1976 Pa. Super. LEXIS 1919 (Pa. Ct. App. 1976).

Opinion

Opinion by

Price, J.,

[291]*291On January 10, 1972, Philadelphia Fresh Food Terminal Corporation (Terminal Corp.) and certain named individuals who are stockholders and tenants of Terminal Corp., commenced an action in equity on behalf of themselves and all other shareholders and tenants of Terminal Corp. against M. Levin & Company1 (Levin Company) and the Food Center Corporation (Food Corporation) which controls the Food Distribution Center (Center). Terminal Corp. and the named individuals argue that there are certain covenants running with the land, as provided for in the Redevelopment Contract, which restrict the sales of the various commodities within the Center to those areas which are designated for that commodity, and which forbid such sales in any other area. As a result of these covenants, Terminal Corp. and the named individuals contend that fresh fruit and produce in the original container can only be sold from the land leased by Terminal Corp. They therefore seek to enjoin Levin Company from selling fresh fruit and produce inside the Center, but outside the area designated for sales of produce, and they also seek to enjoin Food Corporation from selling or leasing land to anyone except Terminal Corp., for the sale of fresh fruit and produce in the original containers.

The lower court determined that Food Corporation could not sell or lease land for the sale of produce to anyone except Terminal Corp. The court also determined that Levin Company was violating the covenants by selling produce, but that Terminal Corp. and the named individuals were estopped from enforcing the covenants because they had participated in the breach. Terminal Corp., the named individuals, and Food Corporation all appealed this adjudication. We find that the lower court was correct in enjoining Food Corporation from such sales or leases. However, we find that the court erred in [292]*292not enforcing the covenants against Levin Company, and we will, therefore, affirm in part and reverse in part.

The scope of appellate review in equity cases is quite clear. A chancellor’s findings of fact, when approved by the court en banc, have the force and effect of a jury verdict and will not be disturbed on appeal if supported by adequate evidence. Herwood v. Herwood, 461 Pa. 322, 336 A.2d 306 (1975). However, the chancellor’s inferences and conclusions which are drawn from the facts, and the application of the law are always subject to review. Adler v. Montefiore Hospital Association of Western Pennsylvania, 453 Pa. 60, 311 A.2d 634 (1973), cert. denied, 414 U.S. 1131 (1974). These standards apply equally as well in a situation, such as here, where the court en banc consists only of the chancellor himself, as per a local rule of court. Cowen v. Krasas, 438 Pa. 171, 264 A.2d 628 (1970); Jacobson & Company, Inc. v. International Environment Corporation, 427 Pa. 439, 235 A.2d 612 (1967).

The facts, as found by the chancellor,2 reveal that on January 3, 1956, Food Corporation and the Redevelopment Authority of the City of Philadelphia entered into a contract for the purpose of developing a four hundred acre tract of land to be called the Food Distribution Center (Center). The plan called for a geographical relocation of the various elements of the Philadelphia wholesale food industry into the new Center. The goal was to consolidate the industry into a common market area, equipped with clean modern facilities and with sufficient space to accommodate the needs of both buyers and sellers.

The originators of the idea represented to the various merchants that each segment of the industry would be located in a separate and distinct area of the Center. Sales of each commodity would be permitted only in the [293]*293designated area and random expansion would not be allowed.

Wholesalers of fresh fruit and produce in the original containers (fruit merchants) had been primarily located in the Old Dock Street Market. Conditions in this market were less than acceptable. Rats infested the area, their propagation enhanced by the filth which was ever present. Long working days were the norm, and the narrow streets and lack of adequate provision for accommodating trucks engaged in loading and unloading produce resulted in almost total congestion. Under such conditions, the fruit merchants were very receptive to relocating in the Center.

These fruit merchants formed Terminal Corp. to facilitate the relocation. Terminal Corp. leased eighteen acres (Produce Market) within the Center and in turn subleased space to the individual fruit merchants. The Produce Market was enclosed by a fence equipped with a gate to insure regulation of selling hours.

The record indicates that there were numerous meetings between the redevelopers and the fruit merchants prior to the actual move. The redevelopers assured the fruit merchants on many occasions that the sale of fresh fruit and produce in the original containers would not be permitted in the Center outside the confines of the Produce Market. On several occasions, Food Corporation refused to sell or lease space in the Center, but outside the Produce Market, to wholesalers who wished to buy and sell fresh fruit and produce in the original container.

Albert Levin served as president of Levin Company at all times relevant to this action. Levin Company had had operations in the Old Dock Street Market, but their business had been limited to the processing and selling of bananas. In the parlance of the trade, bananas are not considered to be fresh fruit and produce in the original container. Levin Company was, therefore, forced to set up operations outside the Produce Market. On July 20, [294]*2941959, Levin Company purchased a three acre tract across the street from the Produce Market and constructed a builamg to be used in its banana business.

Although Levin Company was not located in the Produce Market, Albert Levin served as secretary-treasurer of Terminal Corp. from 1953 until 1968. He attended many meetings wherein the plans and proposals of the Center were discussed and explained. Albert Levin was well aware of the general restrictions on selling commodities in areas other than those appropriately designated, and of the specific restrictions relating to the Produce Market.

Notwithstanding, Levin Company began to make sales of fresh fruit and produce in the original container from its building across the street from the Produce Market in 1966 or 1967. Members of Terminal Corp. protested these sales to Albert Levin, and he informed them that the volume was small and that his company would cease such operations. Although Levin Company sold no produce from July, 1969 until April, 1970, a firm by the trade name of “House of Bud” sold produce from Levin Company’s building during that time.

Levin Company took over the operations of House of Bud, and in May, 1970, purchased an additional one-half acre of land next to the three it already owned. It later constructed a new building to accommodate its fresh fruit and produce business, and proceeded to sell these goods on a full scale basis.

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361 A.2d 886, 239 Pa. Super. 287, 1976 Pa. Super. LEXIS 1919, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philadelphia-fresh-food-terminal-corp-v-m-levin-co-pasuperct-1976.