*1 impairment be done without of other
goals. challenged Whether statute
involved here is over-inclusive as to girls boys
or under-inclusive as to should be
dеcided in accordance with the intent of legislature. adopting the uniform years
criteria of under 17 age for the
applicability Family Act, Court legislature expressed has its intent. clearly
It chose to reduce the inclusive- Act girls.
ness of the as to That deci-
sion in itself is a more than sufficient uphold
basis for us to the convictions of
these four male petitioners.
Affirmed. CO., INC., B. TANNER
WILLIAM Tanner, Inc., Appellees,
Pepper &
WIOO, INC., Appellant. 75-1149.
No. Appeals, Court of
United States Circuit. Third
Argued Sept. 26, 1975.
Decided Nov. *3 Gross, Casper, Edgar M. R. William Gross,
Krank, Casper, Notturno & Har- Pa., appellant. risburg, for Hanson, Pa., Harrisburg, for D. Robert appellees. SEITZ, Judge, ROSENN Before Chief GARTH, Judges. Circuit THE OF COURT
OPINION GARTH, Judge. Circuit This breach of contract action in the of the industry context radio requires us questions to resolve concerning the au- thority of an employee to bind princi- pal, occurrence of an anticipatory breach, damages and the recoverable fol- lowing hold, We breach. as did the district that the employee ap- had parent authority to contract on behalf of anticipato- the radio station that an ry breach of the contract did occur. However, we reverse the district court’s determination as to the damages result- ing from this breaсh.
I. PROCEDURAL HISTORY AND FACTS Plaintiff B. William Company Tanner (Tanner) commenced this diversity action WIOO, against defendant (WIOO) Inc. United States District Court for District of Pennsylvania. Middle Tanner corporation is a Tennessee pro- which promotional duces and advertising serv- for use ices radio stations throughout country. is a corporation doing business as a licensed Carlisle, station in radio Pennsylvania. its complaint Tanner claimed produced jingles radio promo- five tions WIOO under con- licensing tracts for which it had not received full measured Eugene monetary value F. Waite compensation.1 WIOO, one-minute employee of executed and an (Waite), an outstanding allegedly on cash obligation behalf contracts of the each $928. all but one of Under station. obligated was Tanner agreements, these A judgment filed July 15, 1974 was promotional materials various to furnish entered in fаvor of the plaintiff Tanner payments cash return for to WIOO $12,628 in the amount of plus interest. number one-minute specified and a Thereafter, WIOO moved to vacate or segment is a radio “spot” A spots.2 amend judgment grant for the advertising purposes. The time sold a new trial. On December 1974, the grant purported Tanner five contracts district court denied WIOO’s motion. of one-minute number large appeal This followed. We jurisdic- until to be “valid used.” tion under 28 U.S.C. § 1291. *4 the dis- jury, a without trial After which includ- opinion an filed court trict II. CHOICE OF LAW fact and findings of following ed the law: of conclusions Since the district juris court had diction on the basis of diversity to establish of citi failed Tanner (1) that zenship, bound by the evi- we are of the choice of preponderance by a state, forum actual law rules of the Pennsylva possessed Waite dence nia. Klaxon Co. v. Mfg. on Stentor Electric the contracts sign authority 487, Co., 1020, 313 61 WIOO; U.S. S.Ct. 85 L.Ed. of behalf (1941). 1477 pre- aby established Tanner (2) that evidence the of ponderance apparent Waite in created WIOO’s Waite’s ac All of and un- station the authority bind finding are relevant to a of tions which contracts; the der authority Pennsyl occurred in apparent constituted conduct WIOO’s (3) that Tanner relied on Whether these vania. the of con- breach anticipatory an tracts; Pennsylvania or in Tennessee actions us because both Penn need not concern unreasonably delayed Tanner (4) that Tennessee adhere to the sylvania and 1Nos. of Contracts enforcement ex authority as apparent of doctrine only Contract therefore 4 and and (First and the Restatements pressed in court;3 the was before 5 No. Second) Accordingly, we feel Agency. of in Pennsylvania law the apply (5) thаt Tanner free was entitled to dam- issue.4 $12,628 of this ages resolution of on Contract No. 5 agreements in issue are 1. license those The (Second) 4. Agency Restatement (1957) 27§ 10, (Plaintiffs 1), May 1966 Exhibit No. dated provides: 2, (Plaintiffs 2), February 1967 Exhibit No. Except for the execution of instruments un- 21, (Plaintiffs 3), August Exhibit 1967 No. der seal or for the conduct of transactions 21, (Plaintiffs 4), Exhibit September 1967 No. required by statute to be authorized in a 15, (Plaintiffs August 1969 Exhibit No. and particular way, apparent authority to do an agreements will hereinafter be of these Each person act is by created as to a third written “No. referred to as —.” spoken or words other conduct of the provided payment principal which, 4 Tan- reasonably 2. No. interpreted, Contract only spots. person causes ner the third to believe that principal consents to have the act done on interpreted the contracts district 3. Thе person his purporting behalf to act superseded can- 3 and providing that No. as for him. superseded 2, and 5 and that No. No. celled Agency (1933); Therefore, Read- 27§ See Restatement at the time this No. cancelled Dredge Valley, only Company 468 F. v. Delaware sue began, Tanner could action Press, 1161, 1972); 4, Revere Inc. 1, 2d 1163 5. Tanner did Nos. Contracts 407, Blumberg, Hence, Pa. 246 A.2d 410 v. 431 No. 5 is at cross-appeal. Contract Jennings Pittsburgh (1968); brought appeal WIOO. on issue Mercantile Furthermore, Pennsylvania is the of Waite rather actions than to the ac- under the con performance place determining of WIOO tions exist- point is not free Although apparent authority. tracts. ence Pennsylvania doubt, interpret we from Pennsylvania law, Under appar that “matters connect providing as law authority flows from the ent conduct of aof performance ed with prinсipal not that of the agent. prevailing law governed Press, Inc. v. Blumberg, In Revere Musser v. performance.” place (1968), 246 A.2d Pa. (1899); A. Stauffer, Supreme Court stated: Dolbow, Corp. v. 193 Pa.Su Credit Atlas Apparent authority power to bind A.2d 649, 165 per. which the principal principal has not the law of look to Therefore, must actually granted but which he leads de parties, Pennsylvania, with whom persons agent deals to two issues: remaining termine granted. he believe that has Persons anticipatory was there whether agent with whom deals can rea recov damages are whether sonably believe that the agent has erable. power principal if, to bind his for in stance, principal knowingly per AUTHORITY APPARENT III. agent to exercise power mits finding that court’s principal agent district or if the holds the out *5 authority to apparent possessing power. as such possessed Waite mixed is a contractually WIOO bind also Mercantile Jennings Pittsburgh See v. may not We law. fact of question 641, 51, Pa. 202 A.2d (1964); 414 54 determina factual court’s aside set tions, Reading Dredge Co. v. Valley, Delaware clearly errone [they are] “unless 1161, (3d 1972). F.2d 1163 Cir. 468 Fed.R.Civ.P.; Kras see 52(a), Rule ous.” The district court found that Waite 1298, 1302 Dinan, 465 F.2d v. nov public himself out to the held as the determining However, 1972). manager of general WIOO and that the by the dis as found the facts whether acquiesced of the station owners in this authority apparent constitute court trict Waite identified conduct. himself in law, may exer the five contracts as “general four of United review.” “independent an cise Moreover, manager.” industry-wide Johnson, 508 v. Hayward rel. ex States publications of the Standard Rate Data (3d Cir. 322, 325 F.2d (SRDS) from February, 1967 Service February, 1971 listed gen- Waite as the A. Creation of Apparent Authority of manager eral WIOO. The district Both owners of WIOO testified that concluded that they “. . . knew Waite used the “general the defendant WIOO created title Eugene manager” and that apparent they in F. Waite did not object.5 authority Furthermore, general manager act as the court found that the station. argues signed
.” here owners of WIOO WIOO numerous improperly payable district court checks to the order looked to the of Tanner (1964); Southern you 54 A.2d 202 And really Q. object didn’t to it? Pickle, 197 S.W. Tenn. Railway Co. A. That is correct. Printing Estate of Co. v. (1917); Rich 205-207; Tr. District Court Memorandum at 4. Tenn.App. McKellar, 330 S.W.2d Thereafter, Swidler, Harold President co-owner of WIOO testified as follows: your brother, You Q. heard Norman Swidler, Treasurer and co-owner of 5. Norman Swidler, say he knew that Mr. Waite was as follows: testified WIOO using “general the title manager,” but he Nevertheless, Q. Mr. Waite did use the way you were, didn’t care. Is that too? “general manager”? term right. A. Thаt is . . . Yes, he did. A. Tr. 307. inquiring as to the ever reason without ger Tanner, testified on direct exami- payment.6 (rebuttal) nation as follows: fact, Q. findings supported you Are familiar These or not with testimony, are not normally signs who they are contracts and therefore may with the radio station? “clearly erroneous” upon Based these be disturbed. A. Yes sir. It gener- would be the conclude, as did the district facts, we manager say al percent —I through of WIOO the owners them, least, the general “knowingly permitted]” actions their manager. public himself out to the to hold Waite Tr. 358. This testimony was uncontrov station, manager” of the “general as the erted.7 Press, Blumberg, supra, Inc. v. Revere Elmore also testified concerning the creating apparent in Waite au thereby usual nature of these contracts: respect parties. to third thority Q. you Have put ever out a con- tract that didn’t mention anything Enter Power to Contracts B. about the time all, element at whether court determined that The district it was for an indefinite period, or is apparent in Waite author- created this the sort thing important is general .a mana- that “. . ity and you you always have a stipula- empow- is like circumstances ger under tion? binding into contracts to enter ered A. That is the ” standard contract. argues . . . WIOO corporation. says, It “valid until used” unless providing that contracts agreement of the parties the contract represented until used” “to be valid changed, is and then it subject agreement as to exceed so unusual home office approval. . . apparent whatever authori- scope of Tr. 366-67. was created. ty *6 law, Pennsylvania an Under In light of Elmore’s testimony we principal his to may bind third agent cannot say the district court was clearly “his acts within the where persons erroneous in its findings. Krasnov v. Di authority which princi scope of nan, supra. We also agree with the dis him permitted pos caused or to has pal trict court that these contracts granting Liberty, v. Heralds of Edwards sess.” spots for an unlimited time are not so 324, 107 A. Pa. extraordinary as to exceed the authority general of a manager or to finding gen- that a court’s The district constitute reasonable notice to a third may contractually party bind a manager eral inadequacy of the general supported in the evi- manager’s station radio power.8 Elmore, credit mana- Mr. E. D. dence. Pepper Studios, district court stated: Dunn, 6. The 7. See Sound Inc. v. F.Supp. (E.D.Mo.1969), where the dis- position Not were the officers to agent trict court found that of a radio they up man knew to check on the be mas- possessed “apparent authority station to do general manager, they querading as the but things general managers those of radio sta- dealings on actual notice substantial were normally tions do.” The court concluded that July (two Tanner. Between with apparent authority signing extended to the signed) the first contract was months after promotional of a contract material identical totalling checks and December more respects in all to the one in our case. were written on $1500 than the WIOO (collectively of Tanner to the order account Pepper Studios, Sound Dunn, supra Inc. v. Exhibit as Plaintiff’s All of admitted at the district court concluded that signed at least one of the the checks general manager apparent authority .... Swidlers promotional contract materials at a cost of 6-7. at Memorandum District Court 3,900 “. one-minute time to be used, upon request . . . .” faith, upon relied apparent authority Reliance C. of Waite. found: district Having concluded that WIOO’s actions five con- into Tanner entered apparent created authority in Waite as general man- ostensible with tracts general manager authorizing him to exe- WIOO; Tan- thereafter ager of cute contracts such as those here in dis- highly- and sent WIOO prepared ner pute and that Tanner reasonably relied jingles and intro- radio personalized on authority, hold, we as did the with the stylized WIOO ductory tapes district that WIOO is contractual- Moreover, contracts all con- logo. ly bound to Tanner under Contract No. 5. specifically attests a clause tain signing on behalf of the party that the IV. ANTICIPATORY BREACH to contrac- is authorized station radio By prepon- the station. The district tually bind court concluded that evidence the record amply supports derаnce “[t]he breach anticipatory its conduct was in re- established defendant.” This conclu entered into to a sion upon was based sponse evidence that manager of general apparent [a]mong other things, Harold Swidler, evidence of re- further No WIOO. an WIOO, officer of and E. Elmore, D. shown. liance need to be Tanner, both established that Swi had, to es- Tanner failed argues prior suit, dler on February 23, apparent au- upon its reliance disavowed all tablish knowledge of the too, may in- Here very Waite. existence thority of (N.T. contracts the district court’s 93-94). review dependently Further Swidler specifically question of fact and as a mixed finding told Elmore that WIOO would not run any of the Tanner spots law. even if sent (N.T. 93-94). Swidler testified he was that a unable to recall provides law reference agent in their conversation. However, invested hаs El who principal “third more testified from *7 signed five contracts Each of the (1) ceeds: WIOO’s refusal perform Waite a state and contained by Tanner was made response in to unreasonable, signing official that “[s]tation ment improper by Tanner; demands (2) WIOO certifies that he has the agreement did not unequivocally refuse to perform; agreement.” make the In authority to (3) and the anticipatory breach, if one noted, Elmore, deed, previously we as occurred, was not accepted by Tanner, Tanner. that manager of testified credit challenges Since WIOO only the applica- entered into with the contracts 95% of tion of the law, facts to the we may signed by gener “the stations radio exercise independent an review of the These p. supra. 267 manager.” al See district court’s determination. by the district court are findings of fact agree We discussing erroneous.” “clearly not doctrine of anticipa- Tanner, good breach, that tory court requires district as an 8, Agency (Second) dealing § Restatement 9. See agent with the to believe that agent (1957): 32 comment c at is authorized. Apparent authority to the ex- exists person for the third tent that it is reasonable
269
occurred. WIOO claims
ry breach
.
. an absolute
element
and un
“accepted”
had not
Tanner
WIOO’s re-
refusal
equivocal
perform
or a distinct
of the contract and that
pudiation
absent
positive
and
statement of inability to do
acceptance there can
be no breach.
so.” McClelland v. New Amsterdam
opinion
court’s
Co.,
The district
does not dis-
Casualty
429,
322 Pa.
198,
185 A.
200
However,
issue.
cuss this
because we
(1936), quoted in McCloskey & Co. v.
good
position
in as
as the
Co.,
district
101,
Min weld Steel
220 F.2d
(3d
104
legal question,
to resolvе his
1955);
court
we
Corbin,
see 4 A.
Cir.
Contracts
to do
may proceed
so ourselves.
See
That element
present
§
Athletic
Salkeld,
Universal
Sales Co. v.
here.
904,
(3d
511 F.2d
Cir.
The district court relied on the
that Pennsylvania
WIOO asserts
law
testimony of Tanner’s credit manager
anticipatory breach requires
more
who
Elmore
testified from his notes as
unequivocal
an “absolute and
than
refus-
telephone
to the
conversation of Febru
perform.” McClelland v. New
al to
Am-
23,
ary
1971 with Harold Swidler. From
Co.,
Casualty
supra
sterdam
185 A. at
telephone
conversation the district
points
200. It
McCormick v. Fidelity
among other things
found that
Co.,
A.
307 Pa.
Casualty
&
“would not run any
WIOO
of the Tanner
(1932), where the Pennsylvania
Su-
spots, even if sent.” We will not review
Court stated:
preme
credibility findings of the
court,
district
hold,
so
Many authorities
and
Government of the Virgin Islands v.
Gereau,
aware there are none
as we are
502 F.2d
far
1974);
Cir.
that,
сontrary,
to the
whenever the
Corp.,
Wilkin v. Sunbeam
F.2d
parties
act of one of the
(10th
1972),
unequivocal
and in light of the
an intent
evidences
not to fulfill
testimony,
Elmore
we
his
cannot say that
executory agreement
spec-
at the time
the district court’s findings were clearly
it,
party may,
ified in
the other
if he
Dinan,
erroneous.
supra.
Krasnov v.
promptly
so
and unequivocally,
does
Elmore’s testimony did not
once;
accept such breach and sue at
reveal
unreasonable or improper de
but,
it,
accept
until he does
the act
by
mands
Tanner as WIOO contends.10
operates
only.
as a tender
If he does
Rather, it
complete
indicated
repudiation
promptly
unequivocally accept
not
of the contract WIOO.11 Accordingly,
tender, the contract
remains in full
reject
we
WIOO’s first
arguments.
two
terms,
according
force and effect
to its
tо it.
parties
for the benefit of both
Finally,
argues
WIOO
holding
anticipato-
court erred
Zuck v. McClure &
resort now accepted having be as though . . . established the even he has (Footnotes omitted.) law. repudiating (cid:127)notified the party that he Pennsylvania subject Supreme 14. The 12. We note of Contract No. 5 is the licens- Court, years recordings after of vocal and seven decision in instrumental to be Fidеlity Casualty supra, used on the air. It cannot be a “transaction cle 2 of the Uniform McCormick discussed & characterized as anticipatory repudiation goods” a con- ... within Arti- reference to tract without McCormick or to Commercial Code. any requirement acceptance. Cameron v. (1939). Eynon, 332 Pa. A.2d While Tompkins, 15. Under Erie R. Co. v. 304 U.S. recognize express we rejection that Cameron is not an (1938), S.Ct. L.Ed. 1188 a state doctrine, acceptance it never- just precedential predictive statute is support to our theless lends conclusion that state law as state court decisions. acceptance longer doctrine is no a viable aspect of law. 16. See Uniform 2-610, Commercial Code § 13. Section 2-610 of the Uniform Commercial Comment 1 which states: Code, Pennsylvania, as enacted 12A P.S. present Under the section when such a 2-610, follows: § states as repudiation substantially impairs the value party repudiates Contract, When aggrieved either party may of the any respect performance yet to a due the time resort to his remedies for breach substantially impair loss of which will ue of the the val- other, aggrieved party may supports interpreta- While this comment our (a) commercially for a reasonable time await longer requirement tion that there no performance by repudiating party; acceptance, recognize Pennsylva- that the (b) any remedy (Section resort to for breach nia Bar Association Note to this section recites 2-711), though pre-Code 2-703 or Section has notified the even he apparently the that cases which adhere to repudiating party requirement. Interestingly, that he the Bar Asso- performance thе latter’s would await has ciation Note also cites the Restatement of Con- retraction; urged Restatement, sup- tracts. Yet the porting rather than (c) suspend perform- acceptance, either case his own rejects any a doctrine of proceed ance or in accordance with the such tracts Bar Association or See Restatement of Con- consideration. provisions right withstanding Hence, of this Article on the seller’s § we do not find the identify goods to the persuasive contract not- Note to the section *9 salvage Pennsylvania breach or to representative today. unfin- of law (Section 2-704). goods ished
271 Damages V. (1951). Corbin, 981 The Contracts A. § 4 Contracts 280 (Second) of § Restatement The district court held that WIOO was 9, 1974), following Draft No. Sec- (Tent. liable Tanner under Contract No. 5 of Contracts 320 of the Restatement tion fоr the outstanding cash obligation of 2-610 of Uniform (1932) and Section and the value of $928 “1560 one-minute Code, provides: Commercial spots as of the date of breach.” Thus, change not injured party does the district court The entered a judgment in repudiation by of a urging $12,628. effect favor of Tanner for in perform spite repudiator argues that the district court or to retract his repudiation repu- erred in its award of damages with re diation. spect to the (1) because the amount unanimity among is damages There commen- of was supported by the acceptance is no longer evidence, that (2) tators neces- damage calculation anticipatory to constitute breach. sary pro-rate failed to the number of spots available to during Tanner the remain rejected law has the ac- Pennsylvania contract, life of the (3) Tanner anticipatory doctrine for breach ceptance to prove failed its profits.18 loss of Be which come within the Uni- of contracts we agree cause with WIOO’s third con Code. 12A Commercial P.S. 2-§ form and, therefore, tention must reverse the justification We know of no 610(b). or judgment district court’s as to damages, applying a different rule to a logic we need not address ourselves to the is outside Code. We contract arguments. first two Pennsylvania that persuaded courts are context, in a today, even non-Code question damages The fol legal those authorities that have follow lowing of a contract is one breach of law acceptance doctrine. In rejected us is reviewable under the error reaching this we do conclusion no more Pennsylvania law standard. recognize a rule single anticipa- than damаges for breach measure of [t]he contracts, all governing breach tory compensation of contract for the or without Uniform Commer- within aggrieved The party loss sustained. Code. cial nothing more recover than will can Plaintiffs compensate him. should be The record here reveals attempts possible nearly in the placed as Tanner to secure perform WIOO’s would have position they same occu under the ance contracts following no pied had there been breach. conversation telephone February Corp., v. Durallium Products Lambert Four months after 1971.17 WIOO refus (1950). 67 72 A.2d See further, Tanner perform ed to obtained Corp., In re Kellett Aircraft also counsel to commence suit. local This ac 1951); Corbin, 5 A. F.2d Contracts, 13, 1972, began on March more tion than (1964). This may loss § following the referenced year tele expenditures the form of additional take finding conversation. phone Our expected profit. failure to realize longer requires no accept Andrews, Pa.Super. 338, Hahn anticipatory of an ance leads to A.2d conclusion that Tanner’s efforts to the burden of In each case it is performance by WIOO secure and its de damages “seeking for breach of party filing complaint its lay not fatal prove ... dam- to its action. plaintiff merit. The pro- 17. See established Tr. 95-97. vided services to the defendant for which it this contention court addressed The district only partially was compensated. plain- The 14) (p. as follows: Memorandum its prove tiff damage need no further to itself. argument defendant’s damage is without actual show failed *10 272 price at spots which such certainty.” Wilcox could be reasonable sold
ages
475,
Tanner even if
by
417 Pa.
ing that universally restricted almost time advance, determine failed to year one the defend- duration reasonable Since provide spots. obligation ant’s no find- specific made district it further since issue ing on as to whether determination no made reasonable been run all the station request remainder during the breach, would re- I following the period findings on further case for mand should be credit whether the issue which no during the time applied requested. *14 America, STATES
UNITED Plaintiff-Appellee, al., et Michael DONNER
John Defendants-Appellants.
Nos. 75-1361-1363. Court Appeals, States
United Circuit. Seventh
Argued June 1975. Dec.
Decided
As 6,1976. Amended Feb. is bound notes authority which were apparent good during made thereon and immediately relied after who persons Liberty, talk, lending greater Heralds credence to Edwards faith.” v. Indem 325; version of the telephone Schenker conversa A. supra, 304, 306 81, 16 A.2d tion. Co.,340 Ins. nity (1940).9 WIOO contends that these facts cannot justify the conclusion that an anticipato- ry breach occurred. The argument pro-
Notes
of the
notes
repudiation
anticipatory
ed
jurisdictions
that in
it
adhere
majority, I find
to this
the
Unlike
contract.1
rule,
filing of suit
the
is a sufficient
whether a Penn
predict
unnecessary
of acceptance.
manifestation
4 A. Cor-
with the facts
confronted
sylvania
bin,
981 at 940 (1951);
§
Contracts
Ac
case,
overrule McCormick
would
of this
Williston,
cord,
11 S.
Contracts
Co.,
§
Pa.
Casualty
Fidelity &
I
ed.
therefore
the re
conclude
(1932) and discard
A. 532
plaintiff accepted the
of a
defendant’s
therein
announced
quirement
repudiation
anticipatory
on
anticipatory
March
of an
acceptance
prompt
with its commencement
of this
right
to a
of
ac
precondition
aas
delay
the
between the repud
tion. Since
performance.
to the date of
prior
action
acceptance
thereof
iation2
tributable,
was at
significance
the
aof
part,
at least in
plaintiff’s
failure to
party’s
accept an anticipatory
efforts to achieve
understandable
a set
first,
repudiation is twofold:
it results in
through negotiations
tlement
with the
obligations
the continuance
of the defеndant,
defendant,
and since the
hav
sides;
second,
contract on both
it
full
benefit of the
plain
received
breaching
enables a
party to retract
its
contract,
under the
performance
tiff’s
repudiation
complete
perform-
its
lapse
time,
prejudiced
was not
ance, or to take advantage
superven-
acceptance
that the
believe
was
I further
ing circumstances which
justify
its
within
sufficiently prompt
meaning
complete
refusal
See,
the contract.
Pennsylvania case law.
v. Fidelity
McCormick
&
Casualty
supra;
Herman,
respect
Clavan v.
to the issue of
damages,
With
(1926);
plaintiff
disagree