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GULF OIL CORPORATION v. MAYS (10/10/60)

October 10, 1960

GULF OIL CORPORATION
v.
MAYS, APPELLANT.



Appeal, no. 157, Jan. T., 1960, from decree of Court of Common Pleas of Berks County, No. 2813 Equity Docket, 1959, in case of Gulf Oil Corporation v. Claude E. Mays, individually and trading as Mays Gulf Service. Decree reversed; reargument refused November 22, 1960.

COUNSEL

George B. Balmer, with him Raymond C. Schlegel, Harry W. Speidel, and Snyder, Balmer & Kershner, for appellant.

John T. Clary, with him Richard A. Bausher, George B. Clothier, Roy D. Jackson, Jr., and Stevens & Lee, and Obermayer, Rebmann, Maxwell & Hippel, for appellee.

Before Jones, C.j., Bell, Musmanno, Jones, Cohen and Eagen, JJ.

Author: Cohen

[ 401 Pa. Page 414]

OPINION BY MR. JUSTICE COHEN

On September 15, 1955, Claude E. Mays purchased a gasoline service station in Berks County and began trading as Mays Gulf Service (Mays). On the same date Mays and Gulf Oil Corporation (Gulf) entered into a sales agreement whereby Mays agreed to purchase from Gulf 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." The contract was to extend fifteen years.

From the time the sales agreement was entered into until the time of hearing in the court below, Mays purchased more than the minimum required gallonage of Gulf motor fuels each year.

When 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

[ 401 Pa. Page 415]

    pursuant to the Pennsylvania Fair Trade Act,*fn1 entered into Fair Trade agreements with its retail dealers establishing minimum retail prices for the sale of Gulf motor fuels.*fn2 Mays did not sign an agreement with Gulf. Each nonsigning retail dealer, including Mays, was duly notified that Gulf had entered into these agreements with other dealers and advised of the terms thereof. 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.

On March 26, 1959 Gulf filed an equity action against Mays in the Court of Common Pleas of Berks County seeking to enjoin him from continuing to sell Gulf motor fuels at less than the stipulated prices. After a hearing, a preliminary injunction was denied. The matter then went to final hearing and, on December 30, 1959, a final injunction decree was entered by a divided court. This decree permanently enjoined Mays from selling Gulf motor fuels at less than the stipulated prices and is the basis of this appeal.

Mays' contentions are three-fold: (1) by reason of the sales agreement of 1955, etc., Mays became a dealer in a "captive" status and hence not within the Fair Trade Act provision; (2) in the absence of proof of any specific damage caused by Mays' sales of Gulf motor fuels at less than the stipulated prices, Gulf is not entitled to ...


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