Wilcox v. Regester, Appellant.
Supreme Court of Pennsylvania
March 16, 1965
209 A.2d 475 | 417 Pa. 475
DISSENTING OPINION BY MR. JUSTICE COHEN:
In view of the reasonable expectations and customary conduct of the traffic world, it is anomalous to fail to recognize that, if the alleged facts are found, the defendant had, as a matter of law, a duty under the common law of negligence to signal to plaintiff that it was coming to a stop. In this respect, the standard of conduct required of defendant was not a question for the jury. It was a question of law. Thus, while the trial court may have erred in deriving the duty from The Vehicle Code the error was harmless. Accordingly, I would affirm.
Wilcox v. Regester, Appellant.
John W. Frazier, 3rd, with him Joseph I. Diamond, and Crawford & Frazier, for appellees.
OPINION BY MR. JUSTICE ROBERTS, March 16, 1965:
On March 1, 1963, appellant, Robert Regester, agreed to sell his restaurant liquor license to Two West Avenue Corporation for $12,500. Of this sum, $2,000 was paid directly to appellant and $10,500 was deposited in an escrow account. The agreement of sale was conditioned upon the approval of the transfer of the license by the Pennsylvania Liquor Control Board. Appellant agreed that he would execute all forms required by the board for the purpose of transferring the license. No date was fixed for the consummation of the sale.
Two West Avenue Corporation assigned all of its right, title and interest in this agreement to appellees, James Wilcox and Harry Yarrow. In turn, appellees reassigned the agreement for $20,000 to John Dutton and C. N. Agnew and, later, to Traders Investment Corporation (Traders), the nominee of Dutton and Agnew. The reassignment from appellees to Dutton and Agnew provided that it would become null and
In accordance with the agreement of sale, appellant and Traders filed an application with the Liquor Control Board seeking to transfer the license. After processing the application, the Liquor Control Board notified Traders that it would not complete its investigation until appellant and Traders executed a new agreement of sale reflecting the full consideration of $20,000.2 Appellant, now aware of the $20,000 reassignment, refused to enter into such a new agreement unless he received a portion of this increased consideration.
Subsequently, appellant declared that the original agreement of sale had been violated and that, in accordance with that agreement,3 he was retaining the $2,000
Appellees filed a complaint in equity seeking to compel appellant to transfer the license to them. The chancellor made findings of fact and conclusions of law sustaining appellees’ right to specific performance or damages for loss of profits. The court concluded that appellees had fully performed their obligations pursuant to the terms of the agreement and that appellant had wrongfully withheld his co-operation, thereby preventing appellees from completing their sale to Traders.
A decree nisi was entered directing appellant to execute the necessary papers to effectuate the transfer of the license to appellees. In the alternative, the decree directed appellant to return to appellees the $2,000 retained as liquidated damages, to release the escrow fund of $10,500, and to pay appellees $7,500 for loss of profits. Exceptions were filed, argued and dismissed. The decree nisi was made absolute and this appeal followed.
Appellant raises two questions by this appeal. First, are appellees, as assignors of the contract, real parties in interest in whose behalf such action might be instituted? Second, was the refusal of appellant to execute the new agreement requested by the Liquor Control Board a breach of appellant‘s agreement to sell so that appellant is now liable to appellees?
Conditional assignments present added difficulties. Nevertheless, an assignment is not ineffective merely because it is conditional, and such a conditional assignment will not extinguish the assignor‘s right as a real party until the condition occurs. Restatement, Contracts §150(2) and comment b (1932); 4 Corbin, Contracts §875 (1951). Importantly, however, an assignment of a right will not be effective if it purports to make a material change in the duties or responsibilities of the obligor, unless the obligor assents to such changes. Restatement, Contracts §151(a) (1932); see Gordon v. Hartford Sterling Co., 319 Pa. 174, 178, 179 A. 234, 236 (1935); 4 Corbin, Contracts §870, at 475 (1951).
With these principles in mind, we examine the contentions of the parties. Appellees point out that their assignment to Traders was conditioned upon the approval of Traders by the Liquor Control Board. They claim that upon the refusal by the Board to approve the transfer of the license to Traders, this assignment became null and void. Appellees’ conclusion is that since the condition on which the assignment was based never occurred, their rights were never extinguished.
Under the terms of the original agreement of sale, appellant was obliged to execute all papers and do all necessary acts required by the Liquor Control Board. In the event that the proposed transferee should be rejected by the Liquor Control Board, each of the parties was to be immediately released from his respective obligations under the agreement. Appellees now claim, however, that their conditional assignment has caused appellant to remain bound by the agreement, notwithstanding the rejection of Traders by the Liquor Control Board. If this were so, appellant would be subjected to the new and additional burden of doing all things necessary in submitting a second application to the Liquor Control Board. Thus, instead of being bound to comply with the terms of his agreement once, appellant would now be bound to comply twice.
The burdens which appellees seek to impose on appellant manifest themselves not only in the additional acts required of appellant, but also in the extension of the period of time during which appellant would be bound. We recognize, of course, that the original agreement of sale contained no required completion date, and that, consequently, time was not of the essence in this contract. The time for completion, however, is not unlimited and it must be reasonable in light of the existing circumstances. E.g., Iseman v. Joe F. Sherman Co., 377 Pa. 426, 433, 105 A. 2d 160, 164 (1954); L.C.S. Colliery, Inc. v. Globe Coal Co., 369
Appellant‘s unwary assent to the assignment to Dutton and Agnew does not bar him from objecting to the additional burdens which appellees now seek to impose upon him. These extra burdens would constitute an impermissible modification of the original obligations of appellant. An agreement may be modified with the assent of both contracting parties if the modification is supported by consideration. E.g., Pellegrene v. Luther, 403 Pa. 212, 215, 169 A. 2d 298, 299 (1961); Stoner v. Sley System Garages, 353 Pa. 532, 533-34, 46 A. 2d 172, 173 (1946).
In this case, however, appellees failed to inform appellant of the conditional nature of the assignment to Dutton and Agnew. Nor did appellees inform appellant of their intent not to relinquish their right to enforce the original contract in the event that Traders was rejected by the Liquor Control Board. Neither did appellees, of course, secure an effective consent. Moreover, only the unconditional terms of the assignment to Traders were endorsed on the original agreement of sale; no reference was ever made to the further conditions contained in the agreement of assignment to Dutton and Agnew. Appellees may not now claim that appellant assented to these additional obligations since they have concealed from appellant the facts which would impose these obligations upon him. The undisclosed terms—unassented to by appellant—are not enforceable against him.
Upon being informed of the true nature of this assignment, appellant did indicate a willingness to assume these extra obligations if, in exchange, he received added consideration. Since appellees refused
Appellant was prepared at all times to consummate the transaction as originally contemplated, as he was legally required to do. But he should not now, in the absence of legally binding contractual provisions, be subjected to additional and unexpected demands resulting from appellees’ conditional assignment to Dutton and Agnew.
Nor can we agree with the court below that appellant‘s refusal to execute a new agreement was a breach of the original agreement of sale and the sole cause of appellees’ loss of their intended sale, thereby rendering appellant liable for the loss of appellees’ bargain. The requirement by the Liquor Control Board that appellant execute a new agreement for $20,000 with Traders resulted directly from the assignment to Dutton and Agnew by appellees. The execution of such a new agreement would be a contrivance, requiring performance not mandated by or reflected in the actual agreement entered into and contemplated by appellant. Such a new agreement would require the establishment of a second escrow fund for the benefit of appellees. We will not allow appellees, by their own assignment, to impose upon appellant the potential complications and burdens of a new and different agreement, containing terms which are contrived and fictional, if appellant has neither assented to nor received added compensation or other valid consideration for the additional commitments and burdens.
Furthermore, it has not been satisfactorily demonstrated that appellant, by his refusal, was, in fact, the sole cause of the failure of the Liquor Control Board to approve the transfer and that he is, therefore, liable for damages in the amount of $7,500 for
The reasons for denying appellees the right to enforce their supposed contract are not applicable to bar them from asserting their right to recover the $2,000 held by appellant as liquidated damages and to secure the return of the $10,500 held in escrow. Dutton and Agnew have completely relinquished all of their rights under the assignment. The money now held by appellant belongs only to appellees. No prejudice results to appellant by allowing appellees to sue for the return of their money. Although the assignment by appellees resulted ultimately in the failure of the Liquor Control Board to approve the transfer of the license, we do not believe that these actions constituted such fault or omission5 which would subject appellees to liquidated damages. Accordingly, we agree with
The decree is therefore limited to the items of recovery we have specified and is amended accordingly.
Decree, as modified, affirmed. Each party to pay own costs.
Mr. Chief Justice BELL concurs in the result.
CONCURRING OPINION BY MR. JUSTICE COHEN:
While I join in the majority opinion I feel that a few additional observations might be merited.
The Pennsylvania Liquor Control Board Act, as amended,
The instant litigation provides a good example of why we should adhere firmly to the idea that a liquor license is a privilege personal to the licensee, that it is not an asset to be traded through the usual market mechanisms, and that its transfer is permitted only to the degree and in the manner provided by the Act and Board regulations.