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PHILADELPHIA FRESH FOOD TERMINAL CORPORATION ET AL. v. M. LEVIN & CO. ET AL. (03/29/76)

decided: March 29, 1976.

PHILADELPHIA FRESH FOOD TERMINAL CORPORATION ET AL., APPELLANTS,
v.
M. LEVIN & CO. ET AL., APPELLANTS



Appeals from order and decree of Court of Common Pleas, Trial Division, of Philadelphia, Jan. T., 1972, No. 1115, in case of Philadelphia Fresh Food Terminal Corporation, a Pennsylvania Corporation, and Peter Semerjian and Michael Semerjian, Individually and Trading as Semerjian Brothers, and Anthony Leone, James Leone and Vincent Tanzola, Individually and Trading as William B. Tanzola, and Angelo DiGiacomo, on behalf of themselves and on behalf of the class of all others similarly situated v. M. Levin & Co., a Pennsylvania Corporation, and M. Levin Investment Corporation, a Pennsylvania Corporation, and Food Center Corporation and Food Distribution Center, a Non-Profit Pennsylvania corporation.

COUNSEL

Judith R. Cohn, with her Wolf, Block, Schorr & Solis-Cohen, for appellant at No. 1944.

Louis J. Di Giacomo, with him Philips, Curtin & Di Giacomo, for appellants at No. 1970.

Louis J. Di Giacomo, with him Philips, Curtin & Di Giacomo, for appellees at No. 1944.

Howard R. Flaxman, Jerome E. Ornsteen, and Fox, Rothschild, O'Brien & Frankel, submitted a brief for appellees at No. 1970.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Price, J.

Author: Price

[ 239 Pa. Super. Page 291]

On 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 & Company*fn1 (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

[ 239 Pa. Super. Page 292]

    not 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,*fn2 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

[ 239 Pa. Super. Page 293]

    designated area and random expansion ...


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