Case Name: Kready, Appellant, v. Bechtel, Lutz & Jost
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1963-07-17
Citations: 411 Pa. 569
Docket Number: Appeal, No. 37
Parties: Kready, Appellant, v. Bechtel, Lutz & Jost.
Judges: Before Bell, C. J., Musmanno, Jones, Cohen, Eagen, O’Brien and Roberts, JJ.
Reporter: Pennsylvania State Reports
Volume: 411
Pages: 569–581

Head Matter:
Kready, Appellant, v. Bechtel, Lutz & Jost.
Argued January 11, 1963.
Before Bell, C. J., Musmanno, Jones, Cohen, Eagen, O’Brien and Roberts, JJ.
Paul N. Schaeffer, for appellant.
David H. Roland, with him George B. Balmer, and Snyder, Balmer & Kershner, for appellee.
July 17, 1963:

Opinion:
Opinion by
Mr. Justice O'Brien,
Appellant, who was employed as a salesman by appellee, purchased, on January 2, 1942, three shares of the stock of appellee. On April 11, 1942, the parties entered into a written agreement which obligates appellee to purchase appellant's shares "upon the death of Kready, or upon his leaving their employ", "at the book value of said stock as appears on a balance sheet of [defendant], as of the 31st of December preceding the death or leaving of their employ", and bound appellant to transfer the shares to appellee upon payment.
Appellee caused a notice to be typed on the stock certificate representing these three shares, to the effect that the certificate was held subject to the terms of the agreement of April 11, 1942. On July 1, 1943, January 3, 1944 and January 2, 1945, appellant purchased five, two and two additional shares, respectively, of appellee's stock. On each of these stock certificates, the same notice of subjectivity to the April 11, 1942 agreement was noted. Some time between January of 1946 and 1950, the testimony on the point being extremely vague, appellant surrendered his stock certificates to appellee. The certificates were returned to him with the word "Void" written across the notice of subjectivity to the April 11, 1942 agreement and with the following notation on them: "This certificate is held subject to the right of Bechtel, Lutz & Jost, Inc. to purchase the shares represented by this certificate upon the death of the registered owner hereof, or upon the registered owner hereof ceasing to be in the employ of Bechtel, Lutz & Jost, Inc. The price shall be the book value of said shares. Agreed to. J. Miller Kready.", On January 2, 1946, appellant purchased three additional shares of appellee's stock and when he-received the certificate it contained the notice last above quoted. This purchase brought appellant's total stock ownership to fifteen shares.
Appellant ended his employment relationship with appellee on January 30, 1959, at which time the value of appellee's capital stock was $1,244.35 per share. Appellant offered to surrender his shares for the aforesaid price, but appellee refused to purchase them, whereupon appellant commenced, by complaint, an action of assumpsit, alleging a breach of the agreement of April 11, 1942. Appellee filed an answer and new matter, setting up as a defense to the action the abroga tion of the April 11, 1942 agreement and relying upon the second notation on the certificate, this second notation being an option to purchase rather than an unconditional obligation to do so. Appellant replied to the new matter, alleging that the second notation was made without his consent or authorization, as was the placing of the word "Void" on the first notation, and neither the alleged cancellation of the first notation nor the second notation's existence affected appellee's obligation to purchase. Appellant further averred that there was no consideration for any agreement between the parties to nullify the agreement of April 11, 1942.
The matter came on for jury trial and, at the close of appellant's case, the trial court, on appellee's motion, entered a judgment of compulsory nonsuit. Appellant's motion to take off the nonsuit was refused by the court en banc, one member thereof dissenting, and this appeal followed.
The court below held that appellant had consented to the nullification of the April 11, 1942 agreement and the substitution therefore of the subsequent option agreement, and that such consent was supported by consideration, namely, appellee's forbearance of its right to discharge appellant from its employ. The reasoning of the court below is summarized in its opinion as follows: "The plaintiff and defendant under the contract of April 11, 1942, had established a legal relationship which required defendant to purchase plaintiff's stock at a book value as of a certain date preceding the death or leaving of the employ of defendant by plaintiff. At the time the plaintiff agreed to the second notation quoted above, changing the contractual obligation of defendant to purchase the stock to an option or right to purchase said stock, the defendant had a clear right to discharge the plaintiff from its employ had it chosen to exercise this right. In our opinion its forbearance to do so, . . . for a period of years follow ing the agreement of plaintiff to accept the changed relationship pertaining to the shares of stock, constitutes legal consideration to support plaintiff's agreement. Jordan v. Sun Life Assurance Co., 366 Pa. 495 (1951) supports this conclusion. See also Langer v. Superior Steel Corp., 105 Pa. Super. 579, and Restatement, Contracts, § 90.
"For the foregoing reasons we are of opinion that the entry of a compulsory nonsuit by the Trial Judge was legally correct and that the motion for its removal and a new trial was properly denied."
In passing upon the propriety of a judgment of compulsory nonsuit, we adhere to the principles that: (1) a nonsuit should be entered only in a clear case; DiGiannantonio v. Pittsburgh Railways Co., 402 Pa. 27, 166 A. 2d 28 (1960); Haddon v. Lotito, 399 Pa. 521, 161 A. 2d 160 (1960); Dunmore v. McMillan, 396 Pa. 472, 152 A. 2d 708 (1959); (2) on appeal from a refusal to take off a compulsory nonsuit, the plaintiff must be given the benefit of all favorable testimony and every reasonable inference of fact arising therefrom and all conflicts therein must be resolved in favor of plaintiff. Idlette v. Tracey, 407 Pa. 278, 180 A. 2d 37 (1962); Davies v. McDowell National Bank, 407 Pa. 209, 180 A. 2d 21 (1962); Smith v. Pittsburgh Railways Co., 405 Pa. 340, 175 A. 2d 844 (1961); Donaldson v. Maffucci, 397 Pa. 548, 156 A. 2d 835 (1959).
The trial record discloses the following testimony by appellant on the circumstances surrounding the surrender by him of his certificates and their return to him: "Q. Tell us about it. A. Mr. Edward Lanshe, who was then secretary of the firm, told me one Saturday, during that date that I just mentioned, that I was to bring in my stock certificates to be examined. My stock certificates were in a bank deposit box, and getting home late the next Friday night, I didn't have time to get them out. When I went over Saturday morning Mr. Lanshe asked me for my stock certificates, and I told him I didn't have them. He said two words to this effect, 'Do you like your job with Bechtel, Lutz & Jost?' I said, 'Yes, sir.' He said, 'Do you want to continue to work here?' I said, 'Yes, sir.' He said, 'Then you see that those stock certificates are here next Saturday.' So the next Saturday I brought them in and presented them to Mr. Lanshe. Some time elapsed, they were handed back to me. Q. By whom? A. Mr. Lanshe. With the top paragraph marked 'void', and the new paragraph underneath. I did not examine that second paragraph as closely as I should have, I did not notice that there was a deviation in the meaning, but having full trust and faith in Mr. Bechtel, and Bechtel, Lutz & Jost, I signed them, and the certificates were given back to me. Q. Which was Paragraph 2? A. Yes."
We cannot, of course, condone appellant's failure to examine the certificates and note the obvious "deviation in meaning", and if this were the matter at issue, we should, in all probability, hold against him. The question, however, is whether there was consideration for his consent to the second notation.
Judge Hess, in his dissenting opinion below, aptly states that: "The majority of this court concludes that forbearance to discharge plaintiff from its employ is a sufficiént consideration for the second endorsement upon the stock certificates which give to defendant the option to purchase the shares upon certain contingencies. . I respectfully dissent from this conclusion____ As I read the record a reasonable interpretation of the testimony of the plaintiff relative to his retaining his job, is that plaintiff would be retained if he brought in his stock certificates for examination. He did surrender the certificates for examination. I fail to see how forbearance to discharge can be related to the endorsement which subsequently appeared on the certificates. This is especially true when ive are considering the propriety of a nonsuit and are required to give to plaintiff the benefit of every reasonable inference arising from the testimony . . . ."
In light of the foregoing standards of review, we agree with Judge Hess that the jury should have been permitted to pass upon the evidence and determine whether the implied, threat of discharge was related to the surrender of certificates for inspection or to the endorsements which finally were placed on them.
Further, we reject the argument that permitting the jury to pass upon the question is violative of the parol evidence rule. The rule is not involved as there is no attempt, here, to vary, alter or contradict the terms of the writing. The question which must be determined is whether the writing constitutes a contract. If consideration, or a substitute therefor, is lacking, no contract exists; the endorsement states no consideration and appellant is merely attempting to prove that there was none.
Giving appellant the benefit of every reasonable inference arising from the testimony, we find that the case is not so clear as to require its being taken from the jury.
Judgment reversed, new trial granted.