Court Opinion

ID: 6395020
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:23:19.584918+00
Date Added: 2024-06-11T15:50:51.974669
License: Public Domain

DISSENTING OPINION
MORGAN, J.,
I would sustain the Redevelopment Authority’s exceptions to the opinion and order dated November 30, 1972, and hold that it is entitled to retain the $80,000 deposit.
*538It seems to me that the determination by the hearing judge followed from his application of the principle that the law abhors forfeitures; hence, the agreement must be strictly construed in order to prevent one. Application of the principle to this case involving a public work troubles me. It has been said that the rule that provisions for forfeitures are regarded with disfavor and construed strictly applies to cases of contract where forfeiture relates to matters admitting to compensation or restoration, but not to forfeitures intended to secure the construction of a work in which the public is interested, where compensation cannot be made for the default: 17 Am. Jur. 2d, Contracts §500.
We cannot overlook that we are dealing here with taxpayers’ money. On the strength of the contract with Lehman, a large tract of land was condemned and, I assume, a very substantial amount of money paid to the condemnees. Lehman’s good faith deposit was in the nature of a bond for performance. The urban renewal plan was fashioned to meet the specific needs of this redeveloper and, except for the Lehman agreement to purchase and redevelop, the condemnation and demolition would not have been done. The administration costs as well as the money already paid out must be very considerable. It appears that some two years after forfeiture, the authority has still not been able to interest another developer in the project. Tax revenues have been, and will continue to be, lost. How else is compensation to be obtained for a default of the redeveloper than by this forfeiture? Accordingly, I feel that this case must be viewed in the light of the principle of law that a contract with public authorities will be interpreted in favor of the public: Henry Shenk Co. v. Erie Co. et al., 319 Pa. 100, 178 Atl. 662 (1935); *539Commonwealth ex rel. v. Nelson-Pedley Construction Co. et al., 303 Pa. 174, 154 Atl. 383 (1931); Idell v. Del. Co. Poor District, 27 Del. Co. 470 (1938).
As to the events themselves, I don’t think that the Lehman notice of February 20, 1970, required the authority to do anything within 30 days. That the letter was sent by regular mail contrary to section 7, part I, of the contract strongly suggests that it was not a demand for tender under section 702(a), part II. Whatever it purported to say, and it is my own feeling that it may be construed as an anticipatory breach of the contract, it was not a written demand for “tender of conveyance of the property, or possession thereof, in the manner and condition . . . provided in this Agreement.” That is precisely what Lehman did not want. The letter was, in fact, a demand for acceptance of enclosed amendments to the contract. To construe the letter as a demand for tender under section 702(a), part II, would mean that Lehman was acceding to tender of performance under the contract without amendment which is patently contrary to Lehman’s intention.
Rather than construing the forfeiture provision so that it operates as an escape clause for Lehman, we must construe this contract to favor the public interest. As to the so-called conditional approval by HUD, on which the majority opinion turns, I simply cannot see why the public interest should receive such slight concern on this point. This redeveloper was looking for a way out, after having caused the public agency to tear down a couple of city blocks and incur great expense. The redeveloper then says that unless the public agency agrees to his contract changes it will be deemed in default. It is perfectly clear that Lehman never contemplated performance of the contract after *540its letter of February 20, 1970. The HUD approval of March 19, 1970, if it was necessary at all at this time, was sufficient. The only condition to the approval by HUD of the redevelopment plan was receipt of a resolution of Harrisburg City Council affirming the need for transient housing. The condition arose from an inadvertence. The redeveloper was well aware that transient housing had, in fact, been approved by Harrisburg City Council as part of the plan and that, through oversight, the approval had not been included in the text of the resolution as adopted and sent to HUD. In its letter of March 19,1970, HUD set forth the precise form of the required resolution on transient housing by reference to Urban Renewal Handbook RHA 7206.1, Chapter 2, sec. 2, app. I, para. 10, and on March 24, 1970, the Harrisburg City Council adopted the resolution in such form. We would hold that there was a difference between saying that the plan would not be approved until a certain resolution was adopted and saying, as did HUD’s letter, that the plan was approved but unless the resolution on transient housing was delivered within a prescribed time, the approval would be declared null and void. We believe that, the required resolution having been delivered within the prescribed time, the HUD approval was effective as of March 19, 1970. To now say, because HUD took 13 days to acknowledge receipt of precisely what it had asked for, that the redevelopment authority did not perform its contract, is an insupportable strictness against the public agency and unwarranted favor to the redeveloper.
Accordingly, I respectfully dissent.