Court Opinion

ID: 9676808
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:34:24.369897+00
Date Added: 2024-06-11T18:16:51.450100
License: Public Domain

ON MOTION FOR REHEARING
Appellees direct attention to an amendatory contract executed by the parties subsequent to the contract of September 1952. Omitting formal parts, we quote this contract in full:
“I.
“It is agreed that the original articles of association dated February 15, 1952, and amended May 15, 1956, are hereby amended so as to extend the terms for an additional period of ten years from and after its present termination date, it being the intention of the parties that such original articles of association shall extend through, and including, December 31, 1984. It is agreed that all the terms and provisions of the original articles of association and any subsequent amendments thereto unanimously agreed upon by members of the association shall be, and remain, in full force and effect until December 31, 1984, and no provision of such original articles or amendments thereto shall be changed or altered by reason of this amendment. It is also agreed that Dr. John B. Chester shall be authorized to extend the lease agreement between the LANCASTER MEDICAL CENTER, INC., Lessor, and THE CHESTER CLINIC & HOSPITAL, Lessee, for the additional term covered by this agreement, on the same rental terms now existing between said Lessor and Lessee.
“II.
"It is further hereby agreed that it is the intent of all members of this association for the association to continue under the same terms of the original contract effective January 1, 1952, and as subsequently amended, until December 31, 1984, arid that all provisions of the original articles of association and amendments thereto, shall remain in effect regardless of the death, retirement, or termination of any member of the members of the association, and that nothing shall terminate said association except an unanimous vote *158of the members thereof, or the successive termination of the association of the individual members of the association as provided in the articles of association.
"It is further agreed by each and every member of the association and their respective spouses, that no reimbursement shall be forthcoming to any member or his heirs if association is terminated in any manner including death, disability, retirement, or voluntary or involuntary termination under the provisions of the articles of association except those benefits specifically described in said articles of association, and that said specified benefits, if any, is in lieu of any rights said associate or his heirs might have in any of the assets of the Clinic, and specifically including the value which might be placed on goodwill. It is further agreed by each party and his heirs that no suit in a court of law will be entered into designed to increase the benefits specifically outlined in the original articles of association, as amended, in the event of the death, retirement or termination, for any cause, of said associate.”
It is our opinion that this contract does not alter the conclusion reached by us invalidating the liquidated damage clause of the basic agreement. This subsequent agreement stresses the point that benefits specifically provided for the disassociated member and his heirs are to be accepted in lieu of such member’s interest in the assets of the clinic. There is nothing in the contract to aid appellees in claiming a forfeiture of appellant’s interest in these assets. It has, it seems to us, the very opposite connotation: Assets are to be surrendered for benefits. The idea of forfeiture is completely absent.
Appellees seem to sense the futility of their position when they say:
“The unfortunate language used in the so-called liquidated damage provision cannot properly be said to create a beneficial interest or ownership in assets. The most that can be said of it is that it is evidentiary, but it becomes of no value as evidence in the light of the other contractual provisions wherein it is expressly stipulated that no such interest is or can be acquired by the members of the association.”
The liquidated damage clause may be unfortunate from appellees’ point of view, but it is part of the contract made by the parties and, in our opinion, assumes paramount importance when reliance upon it helps defeat the most unjust of all legal claims, forfeiture.
The motion is overruled.