*1 complained, all the conditions which he had nearly of not allowed to with exception being mingle Under the other we do prisoners. circumstances, not think the that the be invalidated. requires plea law
This no means endorsement of the opinion kind forced to appellant undergo. of treatment We concern problems shall not allow over security created facilities and personnel shortages inadequate punishment to be a facile excuse for individuals mental prior trial, endangering physical if under- health of and for inmates, shortchanging, rehabilitative that modern stan- function mining dards of humaneness serve. How- require prisons reform can be our concern for ever, prompting prison no this case. substitute for the facts issues affirmed. order of court below is Appellant. Logan, Litten v. Jonathan Inc., *2 Argued September Before 1971. P. Wright, J., Watkins, Montgomery, Jacobs, .Hoffman, Spaulding, and Cercone, JJ. refused
reargument 1972. K. him Wal- R. with McConnell, Christopher John for Bockius, & appellant. Lewis ters, and Morgan, for Maser, ap- him L. Rush, Irving Morris L. pellees.
Opinion by 1971: J., December Cercone, defend- Inc., Jonathan Logan, This is an appeal by verdicts upon from a judgment in the cоurt ant beloAV, for Motions assumpsit. in an action *3 the by denied and for new trial were n.o.v. judgment court below. Irving his father Bernard Litten,
Plaintiffs are Philadel- and his brother-in-law Harold Romm, Litten, a of Princess phia Inc., residents and Fair, owners its corporation, York and subsidiary New corporation, in the companies are engaged which Roliman, Inc., and of women’s apparel, distribution sale manufacture, at and business maintaining principal place offices York. York, New Broadway, a New York Defendant is nonresident corporation, in engaged business It also Pennsylvania. doing sale and distribution manufаcture, women’s and Its President Chairman of the Board at apparel. action took place time the events involved this Schwartz. David here is an oral The issue whether contract alleged have entered into been between by plaintiffs plain- defendant November 1960, tiffs written plaintiffs on signed defendant contract of the party the rights is determinative 1961, litigants. money damages to recover the right
Plaintiffs assert oral contract on basis an accounting an other provi- included among November purchase Bernard Litten option plaintiff sions, a share. at De- of defendant’s stоck shares 5,000 $15.00 on other action defends this fendant, hand, of November that a later contract ground written no reference favor containing of the parties. Bernard Litten, governs rights Plaintiffs under the compelled contend duress they and coercion of the defendant to enter into the written had because defendant maneuvered into an untenable economic from which crisis they could extricate themselves only signing agree- ment In prepared by defendant. a trial presided over by Judge Leo issue was Weinrott, submitted to a jury plaintiffs. found for the Defendant contends company the court below should have motion granted its for judgment n.o.v. because: (1) evidence did not support any finding of duress on the part, of defendant but did reveal that plaintiffs had ratified disputed written agreement after its execution; and (2) oral agreement came within the operation of the Statute of Frauds and was required to have been reduced to writing. Defendant also contends that it is entitled to a new trial because the trial failed court to (1) properly instruct the jury to what constitutes duress sufficient to vitiate the *4 in question; (2) instruct as to possible a find- of plaintiffs’ ing ratification aftеr the execution of contract and the of legal effect such a finding; and (3) instruct as to the applicability and effect of the Statute of Frauds.
We are of the opinion there is no reason to disturb the jury’s verdict of by entry a judgment n.o.v. or of grant a new trial.
278 for judgment merits of motions tlie
In determining
Pennsyl-
Court
Supreme
or for new trial,
n.o.v.
280
420 Pa.
Trans. Co.,
Phila.
in
Connolly
vania,
for judgment
motion
“In
considering
stated:
(1966),
infer-
all reasonable
together
the evidence
n.o.v.,
most favor-
in
light
therefrom is considered
ences
States
Lewis v. United
winner.
able to the verdict
Pritts
414
A. 2d 20 (1964);
Pa.
202
626,
Rubber Co.,
Chambers
A. 2d 386 (1964);
Pa.
309,
v. Wigle,
This evidence law, have determined that the plain- could jury executed the written tiffs or “economic du- compulsion”
1961 under “business into defendant maneuvered dur- ress” other. their with each negotiations ing of plaintiffs The evidence behalf is substantially as follows: in June it did not because
Defendant, have, line women’s wear- havе, particular but desired manufactured offered to pur- ing apparel plaintiffs, Fair chase two Princess plaintiffs’ corporations, for a term employ plaintiffs of three Roliman; years, a stock to Bernard and to Litten. give Plain- In the latter to sell. part September tiffs refused corporations two were in an in- plaintiffs’ but were financially solvent and bind, ventory had a At excess $140,000.00. net plain- worth time financial drastic difficulties tiffs because from obtained their could have creditors an they ex- could payment; of time have tension factored their *5 creditors); (as suggested by reсeivable accounts Blouse a Marlene have sold their business to could financing. or have obtained additional could Company, at of the accountant who urging Nevertheless, for and defendant plaintiffs worked both parties, purchase for of plain- resumed the sale and negotiations corporations. tiffs’
In November and defendant 1960, plaintiffs orally for all agreed exchange plaintiffs’ two the corpora- defendant would corporations, pay off tions’ bank creditors; corporations’ loans pay which were and their guaranteed plaintiffs wives; to pay plaintiffs monies excess of any remaining from payments the assets the corporation; employ plaintiffs for a term of one year, beginning 1, at January stipulated salaries and give Ber- nard one of the Litten, an to plaintiffs, purchase 5,000 shares of defendant stock at per said share, $35.00 option to be during exercised the year’s employment.
In reliance these mutual oral upon promises plain- tiffs made no further to effort resolve their financial through situation other channels means.
In further upon reliance the oral agreement and upon the good faith аnd integrity plain- defendant, at tiffs, insistence defendant’s President Chairman of the and on Board, the advice of their transferred attorney, to assigned on defendant, November the entire stock of 22, 1960, the two corpora- At tions. the same time, plaintiffs waived or relin- their to rights quished repayment of loans they had made to the corporations. two Thus, defendant became owner corporations sole two and plaintiffs Avere on left defendant depending carry out its oral prom- Defendant ises. made initial payment of $15,000 creditors on November 28, 1960. Defendant refused in full on the creditоrs to pay December 22, 1960, the still fixed, date refused pay January 5, had extended. been for date time payment plaintiffs threatened immediately The creditors after four days On bankruptcy. delivered defendant last date fixed payment, defendant stated written *6 basically was day. agreement to be that signed had plain- and upon one orally agreed from the different for It include to did not provision tiffs refused sign. no contained liquidation, of monies from return excess no em- and one Bernard year to Litten, stock the insisted that neither Defendant clause. ployment plaintiffs nor be unless paid the banks would creditors defend- the as agreement prepared by signed written to who happened Plaintiffs’ attorney. attorney, ant’s they defendant’s advised them attorney, be a brother of to Bernard Litten then sign. had no but alternative him had telling that he telephoned David Schwartz, his their that he was a to “putting gun stolen business, agree- to a different sign and them requiring was head”, that if agreements Schwartz replied ment, not that would be the end of transac- were signed, tion he not creditors. Paced imme- ; pay would diate financial disaster without immediate legal plaintiffs sign were relief, compellеd agreement 1961. requests plaintiffs on Continuous January President and Chairman of defendant’s the Board of November that oral 1960 be hon- for In no relief brought plaintiffs. ored because fact, Litten’s insistence plaintiff Bernard the oral be lived all up to, defendant promises plaintiffs work defendant had were begun fired within who half to two months month and a after a they began and after the termination Before of his work. employ- attempted to prevail Bernard upon their ment, then who was, already stated, brother of counsel defend- to have defendant agree to the counsel, ant’s originаl action legal against or to institute terms defendant, just but told it “just work, was take easy, pressed, plain- let me work on it”. further when Later, in- tiffs’ fee counsel a retainer required prior §5,000 posi- which fee stituting suit, tion to services Plaintiffs later pay. acquired their their behalf present counsel who instituted suit in 1962.
Under the plaintiffs’ as above evidence, summarized, justified jury finding all pursued avenues could have which plaintiffs to find their been problems solution to financial had closed off because of the economic inescapable peril slowly defendant had but them inexorably placed after the date agreement. oral once Plaintiffs, they had turned all over of the of their corpo- two rations independence defendant had lost of decision, arms length most time and advantages, and, important, circumstance to control future their corporations *7 which they prior did have to the events which tied their economic the destiny to decisions of defendant. their
Accepting evidence most favorable them, prior to November plaintiffs could have 1960, solved their initial economic difficulties. It was not until de- fendant had into put them an inextricable financial crisis plaintiffs that compelled sign the written contracts. No amount of lawyer’s advice or plaintiffs’ business experience could have assisted plaintiffs.1 If plaintiffs had refused to sign, bankruptcy would have been the result. Defendant and only defendant had the choice of preventing for bankruptcy corporation and personal financial disaster for plaintiffs. The only recourse plaintiffs on 1961 January 9, was to sign the written contract. This the kind of con- duress 1 Therefore, by relied on eases defendant there can be contracting party no duress where the is free to consult with applicable. counsel are here
282 York courts.2 decisions of the New
templated by 2d 422 191 N.Y.S. v. 18 2d 494, Misc. State, Pearlman 22 Inc., Realty Co., v.Wou (1959); Galbreath-Ruffin 79 also N.Y.S. 886 See (1959). 2d Misc. 2d 195 463, v. Uniontown Co. Roofing A.L.R. Tri-State 657; refer having 17 (1958), 187 Pa. Ct. Superior Simon, or “business compulsion” interpretation ence to York courts; Restate the New by “economic duress” Sec Jur. 17A Am. 493; Section ment, Contracts, 7. tion of the in the applicability
The elements important compulsion are or business doctrine economic duress of circumstances there exists such (1) pressure involuntarily compels injured party which results his execute an which will against not have does injurеd party economic (2) loss, Hornstein v. Paramount remedy: an immediate legal 22 415- 2d 37 N.Y.S. 2d 996, 1007, Misc. Pictures, on this cases defendant cited (1942). 416 32 2d Leitman, Nixon v. Misc. point, including Envelope 448 United N.Y.S. 2d States (1962), 2 A.D. N.Y.S. 2d City Co. York, Superior Smith v. 204 Pa. Ct. Lenchner, 2d 816 (1956), because those cases the inapplicable are (1964), of financial bring defendants did not about state found plaintiffs themselves at distress In the instant final time signing. case, blow was prepared fatal potentially by defendant, actions created the its situation which left no but to alternative sign as written. *8 as to the conclusion No issue is raised that since the trans York, placе applies in New the law of took that state
actions to However, may passing in this we in case. note the issues involved and, Pennsylvania therefore, law does not differ if it that applied, here result reached would be be the same. court the trial Contrary contention, to defendant’s or duress coercion did charge adequately jury for it clearly be a defendant, must force exerted by by one person, that: whenever stated “Duress exists into to enter con- act induced another, is unlawful indi- under as to tractual relations such circumstances that he of the exercise frеe cate has been deprived . will. . . the means employed,3 Now, regardless of duress is threat thereof shown the force whenever particular is sufficient the will of the per- overcome son. (Emphasis supplied.)
“A of contract not ordinarily threatened breach is in itself if the promised coercive but failure to receive performance will result irreparable injury busi- the threat ness, compul- involve duress. Business may sion species the common duress, duress, law but duress clothed modern for this reason dress, common early doctrine of law duress has been ex- panded compulsion. include business “Business compulsion is not established merely by proof consent was secured fi- pressure nancial but a threat of serious circumstances, financial loss be may sufficient to constitute duress and to be an at ground relief where suit law or equi- ordinary ty might not be adequate There remedy. how- must, be more than a mere ever, threat which might possibly result injury at some future such as a time, threat injury credit in indefinite future. It must be that, conjunction with other circumstances and business coerced fears necessity, party a loss of business does so unless he enter into the contract de- manded.” (Emphasis supplied.)
In so charging the the trial jury, court was follow- the Restatement of the ing Law Section Contracts, and 17A Am. Jur. Section quoted as7, employed by This indicates some means defendant. *9 284 v. Simon, Uniontown Co. Roofing in Tri-State
court of gov (also York the law in interpreting supra, v. Para in Hornstein set out in this as case) erning supra. mount Pictures, contract the written contention that
Defendant’s did contract the written fair the issue ignores of the oral the provisions not contain all all over to turn plaintiffs agreed upon which to defendant. corporations of their two concerning of error contention In its suppоrt de- to ratification, refusal to instruct trial court’s charge refusal judge’s on the trial fendant relies A to the those reading jury 27 and 28. its points directed verdict been equal would have points4 defendant. exception trial did not take
Defendant an exception nor did it take of the facts, review judge’s on ratification. charge court’s failure respecting Pa. 453 (1966), 423 In Zeman v. Canonsburg Boro., 402 su Pa., “In v. Segriff Johnston, the court stated: : not 113) . “a party may the Court said (page pra, on a if it is take his chances verdict, and, sit by silent, matter if could complain which, error, then adverse, the trial if to the during brought been eradicated have Keefer v. timely. Byers attention properly court’s A. 2d Commonwealth Raz 477]; Pa. 159 v. [398 Bell A. 264.” 210 Pa. Yellow Cab 609, 611, mus, 160 A. 437. “A Pa. 2d ad- 338-39, proper Co., April under oath and Court Plaintiffs of 1961 as- 4“27. January 9, validity contract of of the written 1961 and serted thereby. they are bound January 9, 1961, if the contract of had been Even ob- “28. duress, a contract is voidable and not void. economic tained nothing done to set contract aside. To have Plaintiffs stated, contrary, relied on the as was to obtain the efforts books and records defendant’s defeat Fair.” Princess trials be requires
ministration of that new justice ample opportunity on errors counsel had granted and funda- to correct. It when errors are basic only the trial mental cannot be corrected at Court will them general exception: consider under a (cases there ’.” cited)” *10 prejudici- was not
Furthermore, charge court’s deficient because of to the ally failure to instruct as doctrine of Such ratification of the written contract. instruction case was to the facts of the unnecessary because plaintiffs’ from de- acceptance employment plaintiffs’ acceptance assump- of dеfendant’s fendant, tion of their as of bank personal guarantors liabilities and loans, under oath in plaintiffs’ statements defend- ant’s action of were all replevin consistent with terms of the oral agreement relied by plaintiffs admitted by defendant. For the cases reason, relied on by defendant are all The fact distinguishable. that plaintiffs had not in asserted writing until lawsuit seventeen months after January 9, the written contract had been procured by business compulsion or economic duress, standing did not alone, require the issue of ratification to be submitted to the in jury, view the other evidence in the case. For the same reasoning, defendant also cannot in succeed its alternative contention that it en- was titled to a n.o.v. judgment plaintiffs’ because ratifica- tion of the appeared as a matter of law.
The factual presented issues by evidence were properly delineated the trial by judge to be (1) wheth- er or not there was coercion or business compulsion sufficient to vitiate the January 9, written con- tract; if (2) such coercion and compulsion was found to whether or not exist, the oral agreement as alleged by plaintiffs was fact enterеd into in Novem- ber 1960. there no evidence
Defendant also contends that
was
of an
promise
grant
unconditional
defendant
by
plaintiffs.
such
or of due demand thereof
option
the evidence
most
again taking
light
However,
favorable
there is sufficient evidence
plaintiffs,
the case to
as
of the
support
finding
part
agree-
that,
ment between the
David
President
parties,
Schwartz,
of defendant
for and in behalf of the
acting
company,
pur-
Bernard Litten the
gTanted
defendant,
chase
shares of
of defendant
5,000
company.
Whether those shares were to come from Mr. Schwartz
from
directly
the company would be
as
immaterial,
the value of such shares
of the
part
constituted
consid-
eration on which the transaction
defendant
between
was based. As to
company
lack
ex-
exercise of
press
view
the attitude of
option,
and Mr. Schwartz in
company
refusing to prepare
a written agreement
containing
option,
repeat-
requested
Bernard
edly
Bernard Litten
Litten,
*11
required
not
to make a
gesture
useless
or go through a
vain
in
As stated
Sunseri
ceremony.
v.
362
Mancuso,
Pa.
: “The court
(1949)
in
opinion
below
its
inter
a
Where
said,
alia,
party avows his intention not
to live up to his
tender is
contract,
unnecessary since,
as was said
Suchan v.
357 Pa.
Swope,
“. . .
the
too
law is
its
pragmatic
to
philosophy
require the
of a
doing
vain
useless
.
act:
. .” Prior
to the
settlement date the respondents had repudiated their
contract and signified that
it constituted “no deal”.
This fact had been communicated by the respondents’
to Mrs. Sunseri. Under
agent
all these circumstances
it was
evident
formal
quite
tender would be a vain
”
the law
does not
ceremony
require.’
Defendant contends that
the oral agreement could
upon by plaintiffs
not be relied
because it did not com-
Statute of
Frauds of
ply
York requiring
of goods
the sale
contracts
worth $500.00 or more
However,
be enforceable.
in order to
ill writing
to be
rely
to
defendant
permit
to
a
anomaly
be an
it would
containing
writing
on an absence
writing
aof
the absence
is whether
issue
very
when the
practiced upon
of duress
the result
was
to
itself
avail
the defendant
To permit
defendant.
permit
be to
case
Frauds
such a
would
the Statute
to
contrary
fraud
to
perpetrate
it
use
statute
to
the per
to prevent
of such a statute
intendment
in McKinley
Hessen,
As stаted
petration of a fraud.
to
be quite antagonistic
. . It would
202 N.Y.
“.
if it
to prevent
fraud,
spirit
designed
of a statute
In
Products
McKay
fraud.”
be availed of
cover
might
As to the value Bernard by not obtained it of the stock is Litten, first the its jury, by that verdict noted favor to be of with, of Bernard to the shares neces- 5,000 stock, regard found he entitled virtue of sarily thereto by defend- the November 1960 oral and that the agreement ant to deliver wilfully deliberately the refused same to him to written plaintiffs sign and caused agreement sans of such by reason duress. Under for the measure of circumstances, proper damages to failure deliver was the difference of share per $15.00 to be Bernard of paid and the value the by highest up to the date of trial and not 1968) (April to date for up the fixed merely delivery (1961). See Gervis 294 Pa. for a of Kay, (1928) review the New York and law in this Pennsylvania connection. It therefore, trial court not err in follows, did instruct- for ing the as to the jury damages basis for calculating failure to deliver the stock.
Nor can agree we with defendant’s contention the matter accounting as to the amounts re- ceived in the assets liquidation Fair Princess Solimán is be submitted arbitration in accordance with the terms of the January written agree- ment. The its verdict jury by vitiated the said written agreement right accounting is bаsed on agreement oral November 1960. no being There reason our disturbance in favor of the jury’s verdict plaintiffs, judgment of the court below is affirmed. accordingly Opinion
Dissenting J.: Montgomery, I find this record cannot any reason permit on an oral to recover agreement en- allegedly into November, tered parties face written contract a complete executed on January the advice of counsel. 9, 1961, of duress advanced argument by plaintiffs modify written contract so a reason as to permit alleged antecedent oral recovery *13 not tenаble. The duress asserted is eco- by plaintiffs nomic duress. It be may assumed that the defendant made overtures to their business plaintiffs purchase in June of when were had had they solvent but business reverses with credi- suggesting compromise tors and that they refused to sell at This that time. fact does not their support January, argument 1961, when they signed the written were contract, they under any economic duress from the defend- emanating ant.
Unquestionably, by had January 9, plaintiffs got themselves into a situation where their solvency was questionable. Their at time were liabilities over $270,000 and they threatened with bankrupt- cy their ’еy creditors. It was at this time and situation that the defendant agreed to pay the (1) liquidating value companies plaintiffs, was be determined on the basis of directions set forth the agreement and (2), employ plaintiffs for a year, subject to termination either on party one week’s notice. In return, defendant towas receive 40 shares of common 700 of the preferred stock of Fair Princess Blouse and 20 shares common stock of Roliman, Inc., certified to be all of stock of outstanding those two corporations held in the name of Bernard Litten.
The defendant performed its рart off paying the creditors and employing plaintiffs. Although plaintiffs were subsequently discharged before the of one expiration year, written contract provided their dismissal upon one no- giving week’s tice, was given. majority, allowing on recovery theory
economical duress, “If says, plaintiffs had refused to would sign, bankruptcy have been the result. Defend- ant and defendant had only the choice of preventing financial and personal for the corporation
bankruptcy recourse for The only for plaintiffs. disaster contract. the written sign 9, 1961, the decisions contemplated by kind of duress This New York courts.” of the All to the York contrary. decisions
I
find the
Blaivas,
Inc.
26 A.D.
Laboratories,
Medical
state
*14
2d
20 N.Y.
aff’d,
2d 371 (1966),
271 N.Y.S.
2d 536,
v.
Glicman
Barker
(1967) ;
2d 268
282 N.Y.S.
654,
419
238 N.Y.S.
585,
227 A.D.
Company,
Painting
also
§492,
supports
of Contracts,
Restatement
(1930).
was
bankruptcy
Plaintiffs’
view.
pending
my
of the defendant and
act
wrongful
by any
caused
well versed in busi
signed by persons
was
agreement
which
the advice
counsel,
and upon
ness practices
of duress. Carrier v.
contention
William
nullifies any
A. 2d
Pa.
233
427,
426
Company,
Penn Broadcasting
Superior
204 Pa.
Ct.
Lenchner,
v.
Smith
519 (1967);
fi
need
Furthermore,
A. 2d 626 (1964).
205
500,
sufficient
to avoid
not considered
assistance is
nancial
distress.
Joseph
eсonomic
theory
on the
contract
a
18 A.D.
York,
New
2d
239
357,
Inc. v. City
F. Egan,
v.
Lawlor
National Screen Ser
420
N.Y.S. 2d
(1963);
934
reversed on
(1954),
211 F. 2d
vice Corporation,
99 L. Ed.
In Wou v. Realty Co., Inc., Galbreath-Ruffin Misc. 2d 195 N.Y.S. 2d 886 the duress was (1959), asserted one of at trial parties. plaintiff after to vacate the agreeing leased for a con premises sideration aby certain date do refused to so unless additional paid would compensation. This have re sulted great the other hardship party, had made expense at plans great have the building *15 as, of demolished date the their had tenant agreed To vacate. avoid this loss tenant was promised more money to accomplish his removal. On the theory of he duress denied was this additional consideration. case no present involves such situation. These from parties negotiated until September, 1960, Janu- for the ary 9, 1961, purchase plaintiffs’ business. this During period plaintiffs refused the various offers made while appellant, during same period their business was deteriorating. During this period had numerous oral they but understandings it was not until 9, when the 1961, business had reached that bankruptcy point, crystallized they their un- into and entered derstandings the final written agree- All ment. during period dealt they at arm’s length businessmen and experienced as with the advice of 292 all theory on the age-old therefore,
counsel; final- are as being considered negotiations preliminary may in their writing, ized stated fraud, absence oral testimоny be altered by elements none of those I find accident mistake. hold the parties in this case and would present terms of the written agreement. defendant, if was done by
Furthermore, any wrong following months until seventeen such not charged had execution of contract and after plaintiffs Their afforded. all of the the contract accepted benefits contract as of the acceptance indicates long delay York, v. New City F. Inc. Joseph Egan, written. v. Construction Port Electrical Corp. Chester supra; 2d 284 134 N.Y.S. A.D. Terraces, 966, Hastings Inc., (1954). Ber- If oral agreement giving however, allеged stock in defendant’s nard Litten an purchase sepa- a as a at fixed considered corporation price York Stat- the New undertaking, satisfy rate it fails is covered that stat- ute Frauds. Corporate goods for the sale of contracts ute, requires writing. stocks Corporate the value of to be $500 under this statute. N.Y. Sess. goods are held be York (now c. 571, §85, Law as amended 8-319). Agar Commercial Code, Uniform §§2-201 aff’d, 144 Misc. N.Y.S. Orda, 152, 258, 274, 276, 239 A.D. 264 N.Y.S. N.Y. 939, aff’d, no con- separate N.E. there is 479; furthermore, a shown to claim. sideration support For I reverse the reasons, would foregoing judg- and enter judg- ments entered favor *16 ment n.o.v. for the defendant. I dissent. respectfully
Therefore, joins Jacobs, dissenting opinion. J.,