Court Opinion

ID: 9650681
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:48:34.668999+00
Date Added: 2024-06-11T18:12:25.106786
License: Public Domain

Opinion by
Me. Justice O’Brien,
This is an action in equity by participants of a profit-sharing trust against Daniel Glosser and Lester D. Edelstein (Trustees), and against William H. Glosser and Samuel H. Cohen, as individuals. An injunction is sought against the trustees, prohibiting them from paying out any funds except on the basis of the schedule felt by plaintiff-appellees to be correct. Furthermore, as incidental to the injunctive relief, an order compelling the repayment by William Glosser, of |39,094.31, paid to him under a different schedule, is sought. The court below, after dismissing, on prelimi*550nary objection, tbe suit against Samnel Cohen, filed an adjudication and entered a decree nisi granting the injunction and compelling the repayment of the funds. This appeal followed the dismissal of appellant’s exceptions and the entry of the decree nisi as a final decree.
The trustees, although in form a defendant, are neutral in the case, merely asking that the court interpret the trust agreement. William Glosser is the appellant. He contends that the court below erred both in taking jurisdiction of the case and in reaching its decision on the merits.
Appellant claims that equity has no jurisdiction to compel him to repay the funds. We do not agree. The court below based jurisdiction on a number of grounds; one was that Glosser had breached his duties as trustee; another was that the suit was a derivative action, with plaintiffs suing for the trustees. We do not have to consider those grounds, for we find that jurisdiction can be sustained on the basis of incidental relief. Although the claim against William Glosser is one cognizable at law, it is incidental to the injunction against the trustees. The court below was, therefore, correct in retaining jurisdiction, and settling both issues in the same case.
A finding of incidental jurisdiction of the legal issue requires proper equity jurisdiction in the first instance. Cella v. Davidson, 304 Pa. 389, 156 A. 99 (1931). Appellant argues this is lacking here, i.e., that the injunction was improperly granted. It is contended first, that Samuel Cohen and other participants in the trust were indispensable parties; and secondly, that injunctive relief is improper because harmful action is not imminent. Once again, we are compelled to disagree. There has been no failure to join an indispensable party, one whose rights are so connected with the claims of the litigants that no decree can be made be*551tween them without impairing such rights. As to the other participants in the trust, to whom benefits will inure from a recovery from Glosser, there is no failure to join them, since paragraph 4 of the complaint indicates the action is brought on their behalf. As to Samuel Cohen, a party to an agreement similar to that under which Glosser was paid, this decree does not preclude his seeking relief in another action.
Nor can we accept the argument that injunctive relief was improper because the threatened harm was too remote. Kelly v. Philadelphia, 382 Pa. 459, 115 A. 2d 238 (1955). The cases appellant cites are nuisance cases, inapposite here. But in any event, the danger was not remote. Samuel Cohen had an agreement that he was to be paid according to Glosser’s interpretation of the trust. Although he had not yet sought payment, it is unreasonable to presume that he would not seek to enforce that agreement, paying him on the basis of sixteen years service, as opposed to the six he would be entitled to under appellee’s interpretation.
That brings us to the merits of the controversy. The question revolves around the interpretation of the words “continuous employment” in paragraph 9 of the trust agreement, providing that resignation benefits are to be “determined by the length of his continuous employment”. Appellant reads “continuous employment” to mean uninterrupted (with some exceptions not relevant here) service from the date of first employment with the company. Appellant bases his argument on the fact that the same term, “continuous employment”, is used in paragraph 2 of the trust agreement, where those eligible for participation in the profit-sharing plan are described. It is admitted by all concerned that in paragraph 2, the term does have the meaning opted for by appellant.
Appellant then relies on the maxim of contract construction that “. . . a word used by the parties in one *552sense is to be interpreted as employed in the same sense throughout the writing in the absence of countervailing reasons”. 3 Williston, Contracts (Eev. ed. 1936) §618, p. 1780. Here, however, there are countervailing reasons. An agreement must be read so as to make sense. The purpose of a profit-sharing plan is to induce employees to remain for the future. Thus, benefits are made contingent upon years of service. Although it may appear inequitable that years of service prior to the adoption of the plan do not count toward benefits, from a business standpoint, there is no reason why they should count. The employee has already remained with the company, and it is thus unnecessary to give him inducements for those past years.
The court below read “continuous employment” to exclude service prior to the date of the plan, and we think the court’s interpretation to be an entirely reasonable one. Obviously, the trustees felt so too, as they required an indemnification agreement from Glosser in the event of surcharge for improper payment, and with regard to five other resigned employees, seemed at least tacitly to adopt the interpretation of the appellees and the court below. Moreover, the present trustees have stated that they intend to make payments in the future consistent with the interpretation found by the court below to be correct. The construction placed upon an agreement by the parties thereto is entitled to weight where the contract is ambiguous. Heilwood Fuel Company v. Manor R. Estate Co., 405 Pa. 319, 175 A. 2d 880 (1961). We cannot agree with appellant that the meaning of the term “continuous employment” is so clear that we may not resort to the parties’ interpretation for aid. Therefore, we hold that the interpretation of the court below was proper.
Finally, we see no merit in appellant’s final contention, that the $39,000 figure is too high because William Glosser will be entitled to benefits from the funds *553set aside for the future improper payment to Samuel Cohen. If the allocation for Cohen is found at a future date to be improper, it will then be possible for Glosser to recover any amounts due him.
Decree affirmed. Costs to be borne by appellant.
Mr. Justice Cohen took no part in the consideration or decision of this case.