No. 2332 October Term, 1978, Appeal from the Order of the Court of Common Pleas of Montgomery County, Civil Division, Equity at No. 77-8238.
Marvin L. Wilenzik, Norristown, for appellants.
Edward F. Kane, Norristown, for appellee.
Cercone, President Judge, and Watkins and Hoffman, JJ. Hoffman, J., concurs in the result.
[ 283 Pa. Super. Page 62]
This is an appeal from a final order of the court below vacating a preliminary injunction previously granted by the court and dismissing plaintiffs' complaint. This equity action was commenced by appellants Joel Straup, Preston Straup and Emerson Kriebel who sought injunctive relief enjoining the appellee, the Times Herald, from interfering with appellants' newspaper "distributorships." The events giving rise to this appeal are as follows.
In 1927, the appellant Emerson Kriebel purchased a newspaper "distributorship" from the appellee, the Times Herald, for $2,000.00. The distributorship involved a certain geographic area as well as the then existing customer list. Kriebel's "distributorship" gave him the right to act as the exclusive distributor of the Times Herald Newspaper in a specified geographic area. The term or duration of the distributorship was, according to Kriebel's testimony, for a lifetime. From 1927 to 1974, there was no written contract between the Times Herald and Kriebel.
Appellant Preston Straup purchased for $10,000 his exclusive "distributorship" in 1946 from William McLaughlin, himself a distributor who purchased the route from his predecessor, John Rockey. The purchase by Preston Straup was approved by the circulation manager of the Times Herald. On June 28, 1946, the "distributorship" became the subject of a written agreement between Straup and the Times Herald, which agreement provided for a one-year term and the right to terminate upon seven days notice. From that time until 1974, Straup worked without any written contract with the Times Herald.
Appellant, Joel Straup, purchased his Times Herald exclusive "distributorship" from Charles Childs in 1974 for $15,000.00. This purchase was acknowledged and approved then by appellee's circulation manager, although no written contract between appellee and Joel Straup existed at that time.
[ 283 Pa. Super. Page 63]
Each of the three appellants was responsible for maintaining bookkeeping records for his route and each assumed responsibility for bad debts and risk of loss. Each appellant employed paperboys to deliver the newspapers in his area. Appellee controlled the retail price of the newspapers sold by appellants and also directed all promotional campaigns.
On January 16, 1974, appellants Kriebel and Preston Straup signed one year contracts with the Times Herald, each contract containing a seven day cancellation clause. On February 25, 1975, Joel Straup signed the same contract.
Beginning in October, 1974, appellants began to receive newspapers from appellee without the advertising sections inserted. Appellants then retained an attorney to negotiate a contract with the appellee with a view to increasing their compensation and obtaining an assumption by the defendant of the insertion of advertising circulars. No contract was ever executed. Finally, appellants' attorney notified the appellee that, beginning May 1, 1977, it must assume responsibility for the insertion of the circulars or the appellants would make no deliveries. When appellee refused to so agree, appellants refused to pick up the newspapers for delivery. Consequently, appellee immediately began to contract directly with many of the paper deliverers formerly used by appellants. The Times Herald thus began distributing its newspapers directly to its readers in the affected areas, a practice which conformed to the distribution method utilized by appellee for the balance of its circulation, appellants being the only remaining "dealers" of the Times Herald. This situation continued until May 9, 1977, when appellants commenced this litigation.
Appellants charge that the trial judge erred in not holding that appellants possessed exclusive distributorships which were to remain effective for so long as the holder satisfactorily delivered newspapers, in not holding that appellee is equitably estopped from terminating appellants' distributorships and, also, in not holding that appellee intentionally interfered with appellants' property rights.
[ 283 Pa. Super. Page 64]
As to the first of these assignments of error, the record does not bear out appellants' contention. "The general rule is that when a contract provides that one party shall render service to another, or shall act as his agent, or shall have exclusive sales rights within certain territory, but does not specify a definite time or prescribe conditions which shall determine the duration of the relation, the contract may be terminated by either party at will . . . (citations omitted). It is true that such a result does not follow in every instance, because it is the intention of the parties which is the ultimate guide, and, in order to ascertain that intention, the court may take into consideration the surrounding circumstances, the situation of the parties, the objects they apparently have in view and the nature of the subject matter of the agreement." Lubrecht v. Laurel Stripping Co., 387 Pa. 393, 396, 127 A.2d 687, 689 (1956) quoting Slonaker v. P. G. Publishing Co., 338 Pa. 292, 296, 13 A.2d 48, 50 (1940). See also Bravman v. Bassett Furniture Industries, Inc., 552 F.2d 90, 92 (1977).
The appellants, plaintiffs below, had the burden of overcoming the presumption that any contract which may have existed between the parties was terminable at will. Lubrecht, supra. The necessary proof would involve a consideration of several factors including the circumstances surrounding the execution of the contract, the situation of the parties, the objects they apparently sought and the nature of the subject matter of the agreement. An evaluation of these factors would suggest whether the contractual relationship contemplated by the agreement was to endure for a reasonable time or for some particular period.
The "terminable at will" presumption may be rebutted not only by evidence showing a contrary understanding by the contracting parties, but also by showing that a plaintiff-agent gave a defendant principal consideration in addition to the agent's normal services. "It is the settled law of agency that if the agent or employee furnishes a consideration in addition ...