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GILLETTE COMPANY v. MASTER. (06/28/62)

June 28, 1962

GILLETTE COMPANY, APPELLANT,
v.
MASTER.



Appeal, No. 184, Jan. T., 1962, from decree of Court of Common Pleas No. 3 of Philadelphia County, March T., 1961, No. 4909, in equity, in case of The Gillette Company v. David T. Master, Neil Aaron and Elmer Aaron, individually and co-partners trading as Master Drug Company and Aaron's. Decree affirmed.

COUNSEL

Francis Hopkinson, for appellant.

Melvin Lashner, with him David Harrison, Paul Shalita, and Adelman & Lavine, for appellees.

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

Author: Cohen

[ 408 Pa. Page 203]

OPINION BY MR. JUSTICE COHEN

Plaintiff-appellant, the Gillette Company (Gillette), a Delaware corporation, manufactures through its divisions shaving, cosmetic and pharmaceutical products which are sold at retail throughout Pennsylvania. Pursuant to the enabling provisions of section 1 of the Act of 1935, June 5, P.L. 266, as amended, 73 PS § 7,*fn1 Gillette entered into so-called fair trade agreements with certain retail outlets in the Commonwealth establishing minimum retail prices for the sale of its products. Appellees, individuals and co-partners

[ 408 Pa. Page 204]

    trading as Master Drug Company (Master) and Aaron's, have not entered into fair trade agreements with Gillette, but have received notice of the existence of such agreements between appellant and others. Nonetheless, by their own admission, appellees have been retailing appellant's products at their two drug stores at less than the fair-traded prices in contravention of section 2 of the Act of 1935, which declares such sales to be unfair competition and actionable as such.*fn2

Gillette filed an action in equity to enjoin Master from continuing to sell its items below the fair-traded price. By stipulation, the parties agreed that the sole issue to be determined by the court below on a rule to show cause why a preliminary injunction should not issue was to be whether or not Gillette has standing to maintain its action despite the admitted fact that it had not obtained a certificate of authority to do business in Pennsylvania, pursuant to section 1001 of the Business Corporation Law (Act of 1933, May 5, P.L. 364, § 1001, 15 PS § 2852-1001).*fn3

In the stipulation between the parties, it was agreed that if the decision of the court below on the foregoing issue was in favor of Gillette, the court, without further hearing, might enter a preliminary injunction

[ 408 Pa. Page 205]

    against appellees, enjoining them from selling Gillette products below the established minimum fair trade prices. It was further stipulated, however, that either party would have the right to appeal from the decision of the court below, and that any of the issues foreclosed on the preliminary hearing by the stipulation might be raised and litigated at a final hearing if one were held.

In its opinion, the court below held that, as a matter of law, the instant action is based on the tort of unfair competition, and hence, is not barred by the provisions of section 1014 of the Business Corporation Law of 1933.*fn4 Because of its holding, the court considered it unnecessary to decide whether or not Gillette was "doing business" within the Commonwealth so as to require it to procure a certificate of authority. The lower court then went on to hold that under the decision of this court in Gulf Oil Corporation v. Mays, 401 Pa. 413, 164 A.2d ...


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