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SUN DRUG COMPANY v. WEST PENN REALTY COMPANY ET AL. (07/13/70)

decided: July 13, 1970.

SUN DRUG COMPANY, INC., APPELLANT,
v.
WEST PENN REALTY COMPANY ET AL., APPELLANT



Appeals from decrees of Court of Common Pleas of Allegheny County, Jan. T., 1967, Nos. 976, 977 and 978, in cases of Sun Drug Company, Inc. v. West Penn Realty Company et al., Same v. Banksville, Inc. et al., and Same v. West Penn Realty Company et al.

COUNSEL

Harold Gondelman, with him Baskin, Boreman, Sachs, Gondelman & Craig, for defendants.

Frank J. Gaffney, with him Louis Caplan, and Thorp, Reed & Armstrong, for defendant.

William T. Marsh, with him Reed, Smith, Shaw & McClay, for plaintiff.

Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Mr. Justice Pomeroy took no part in the consideration or decision of this case. Opinion in Support of Orders by Mr. Justice Roberts. Mr. Chief Justice Bell joins in this opinion. Concurring and Dissenting Opinion by Mr. Justice Cohen. Mr. Justice Jones and Mr. Justice O'Brien join in this opinion.

Author: Per Curiam

[ 439 Pa. Page 455]

In appeals Nos. 4, 5 and 22 March Term, 1969, the decree of the court below (at No. 976 January Term, 1967 of the Court of Common Pleas of Allegheny County) is affirmed by an equally divided court.

In appeals Nos. 6 and 7 March Term, 1969, the decree of the court below (at No. 977 January Term, 1967 of the Court of Common Pleas of Allegheny County) is reversed. The appeal at No. 23 March Term, 1969 is dismissed.

In appeals Nos. 8, 9 and 24 March Term, 1969, the decree of the court below (at No. 978 January Term, 1967 of the Court of Common Pleas of Allegheny County) is affirmed by an equally divided court. Each party to bear own costs.

Disposition

In appeals Nos. 4, 5 and 22, Nos. 8, 9 and 24, the decrees of the court below are affirmed; in appeals Nos. 6 and 7, the decree of the court below is reversed, and the appeal at No. 23 is dismissed.

Opinion in Support of Orders by Mr. Justice Roberts:

I believe that these contractual provisions are not restrictive covenants which must be strictly construed. As I said in my dissent in Great A. & P. Co. v. Bailey, 421 Pa. 540, 547, 220 A.2d 1, 4 (1966):

"It should be noted that we are not here faced with a challenge to the validity of the covenant. It is recognized and accepted that such covenants are valid and enforceable in this Commonwealth so long as they do not result in an unreasonable restraint of trade. See Hoffman v. Rittenhouse, 413 Pa. 587, 198 A.2d 543 (1964); Cleaver v. Lenhart, 182 Pa. 285, 37 Atl. 811 (1897). There is no contention or suggestion that the present covenant, even if interpreted as urged by A & P, would work such an unreasonable restraint; the present restriction cannot be said to be greater than is required for the protection of the one for whose benefit

[ 439 Pa. Page 456]

    it was imposed or to cause an undue hardship upon the person restricted. See Restatement, Contracts, ยง 515 (1932); cf. Harris Calorific Co. v. Marra, 345 Pa. 464, 29 A.2d 64 (1942). Thus the sole issue before this Court is whether the covenant was intended by the parties and should be construed to bind after acquired property adjacent to and made part of the shopping center.

"In considering the proper approach to the construction of a restrictive covenant in a commercial context, it is increasingly recognized that 'parties are entitled to a degree of freedom in contracting to protect their own economic interests and that [the] controlled development of a given business center may be desirable. . . .'" 421 Pa. at 549-50, 220 A.2d at 5.*fn1

Feeling as I do that we should not construe lease provisions such as the instant one with any unusual parsimony, I believe that Sun is entitled to protection from Sterling's competition in two of the three instances now present before this Court. In construing these leases, the touchstones of interpretation ought to be the similarity of the businesses from the point of view of the consumers and the extent to which customary business practice would consider the two operations to be coextensive. Using these standards, I think it clear that the provisions of the ...


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