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MORRISVILLE SHOPPING CENTER v. SUN RAY DRUG CO. (03/14/55)

March 14, 1955

MORRISVILLE SHOPPING CENTER, INC.
v.
SUN RAY DRUG CO., APPELLANT.



Appeal, No. 60, Jan. T., 1955, from order of Court of Common Pleas of Bucks County, March T., 1954, No. 68, in case of Morrisville Shopping Center, Inc. v. Sun Ray Drug Co. Order affirmed.

COUNSEL

Bernard Eskin, with him Wolf, Block, Schorr & Solis-Cohen, for appellant.

George F. Shinehouse, Jr., with him T. Sidney Cadwallader, II, Grim, Cadwallader, Darlington & Clark and Zink, Shinehouse & Holmes, for appellee.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey and Musmanno, JJ.

Author: Bell

[ 381 Pa. Page 578]

OPINION BY MR. JUSTICE BELL

Plaintiff is the owner of a newly developed shopping center in Morrisville, bucks County. The center has facilities for about twenty stores with varying floor space and a substantial customer parking area.

One hundred and forty-seven retail drug stores in Pennsylvania, New Jersey, Delaware, Maryland and West Virginia are operated under defendant's name. In addition to a drug department and other characteristics of a modern drug store, these stores generally include a soda fountain and luncheonette, a tobacco department and also facilities for the sale of a large variety of commodities.

Plaintiff leased to defendant by written lease dated December 16, 1952, a store unit in the Morrisville center which was by its terms to include all of the above mentioned facilities. The premises were still under construction when the lease was entered into and were not completed until October 9, 1953, when the

[ 381 Pa. Page 579]

    store was opened and the 20 year term of the lease began. The rent payable by the tenant during the first five years of the lease was designated as five and one-half per cent of the gross sales (excepting tobacco), and the average rentals during this period determined the minimum rental for the second five years. The minimum rental for the last ren years was based on the average rentals during the first ten years. The lease prohibited (1) an assignment, mortgage, pledge or encumbrance of the lease; and (2) a subletting of the whole or any substantial part of the demised premises without the written consent of the landlord, except as otherwise provided in Article 4 thereof. The tremendous importance of the gross sales and in turn the merchandising ability of the tenant or sublessee is obvious and it is therefore easy to understand the reason for the subletting provision and the forfeiture provisions of the lease.

On September 25, 1953, about two weeks before the store opened, defendant entered into a written agreement with two individuals, William Bielitsky and Bernard Benjamin. The agreement was entitled "Agreement of Sale". It described the parties as "Licensor" and "Licensee" and provided, inter alia, for the purchase of the drug store at the Morrisville Center by Bielitsky and Benjamin, the purchase price being the total of invoices rendered to the "Licensee" for equipment, fixtures, stock, supplies and lighting. The record indicates that this total was $46,000; and after a down payment of $10,000., Bielitsky and Benjamin had five years in which to pay the balance.

On the same day, to wot, September 25, 1953, the same parties, namely, defendant and Bielitsky and Benjamin, entered into a "License Agreement" which authorized the "Licensees", Bielitsky and Benjamin, ...


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