Appeal, No. 232, Jan. T., 1957, from judgment of Court of Common Pleas No. 6 of Philadelphia County, Sept. T., 1956, No. 4862, in re claim against Escrow Fund under agreement of John Carter et al., sellers and Lester Kardon, buyer, dated September 17, 1954. Judgment affirmed.
Edwin P. Rome, with him Blank, Rudenko & Klaus, for appellant.
J.B.H. Carter, with him David E. Abrahamsen, Pepper, Bodine, Frick, Scheetz & Hamilton and Townsend, Elliott & Munson, for appellee.
Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE BENJAMIN R. JONES, October 7, 1957:
This is an appeal from a judgment entered upon an arbitrator's award in a proceeding under the Act of 1927.*fn1
In June 1954 the Edwin J. Schoettle Co., a Pennsylvania corporation, and its six subsidiaries were available for purchase. Lester L. kardon, interested in purchasing the company and five of its subsidiaries, opened negotiations for that purpose. The negotiations extended from June 24, 1954 to September 17, 1954, on which latter date the parties entered into a written agreement under the terms of which Kardon*fn2 (hereinafter called the buyer) purchased all the issued and
outstanding capital stock of Schoettle Co. and all its subsidiaries (hereinafter called sellers). The total purchase price set forth in the agreement of sale (excluding certain real estate) was $2,100,000 of which amount $187,863.60 was set aside under paragraph 11 of the agreement to be held by the Provident Trust Company of Philadelphia as escrow agent to indemnify the buyer against "the liabilities of sellers by reason of any and all provisions of this agreement."
The present litigation arises from the fact that the buyer has presented a claim against the escrow fund for $69,998.42 as a "liability" of the seller under the agreement. Payment of this claim having been disputed by the sellers, both parties, under the provisions of the agreement, submitted to arbitration and Judge GERALD F. FLOOD was selected as arbitrator. On October 26, 1956 Judge FLOOD, as arbitrator, and, after hearing, awarded to the buyer $3,182.88.*fn3 Buyer's motion to correct the arbitrator's award was dismissed by the Court of Common Pleas No. 6 of Philadelphia County and judgment was entered in the amount of $3,182.88 in conformity with the arbitrator's award. From that judgment this appeal ensued.
The resolution of this controversy depends upon the interpretation of certain portions of the 25-page written agreement of September 17, 1954. The pertinent portions of this agreement are paragraphs 5(g), 9(a), 9(b), 9(c), 10(d) and 15, which read as follows: "5. Representations and warranties. Sellers represent and warrant as follows: [emphasis supplied] ... (g) Absence of certain changes. Since June 30, 1954, there
have not been (i) any changes in Company's or its subsidiaries' financial condition, assets, liabilities, or businesses, other than changes in the ordinary course of business, none of which have been materially adverse, and changes required or permitted hereunder; (ii) any damage, destruction, or loss, whether or not covered by insurance, materially and adversely affecting the properties or businesses of Company and its subsidiaries as an entirety; (iii) any declaration, or setting aside, or payment of any dividend or other distribution in respect of Company's capital stock or that of any subsidiary (except that prior to the date hereof, Company has declared and paid a dividend of Sixteen and Two Thirds Cents ($.16 2/3) per share on all issued and outstanding shares of its said capital stock), or any direct or indirect redemption, purchase, or other acquisition of any such stock; or (iv) any increase in the compensation payable or to become payable by Company or any subsidiary to any of their officers, employees, or agents, or any bonus payment or arrangement made to or with any of them.
"9. Conditions precedent. All obligations of Buyer under this agreement are subject to the fulfillment, prior to or at the closing of each of the following conditions: [emphasis supplied]. (a) Financial condition at closing. As of the time of closing the financial condition of the Company and its subsidiaries in the aggregate shall be no less favorable than the financial condition shown on the statements of said corporations dated June 30, 1954 and warranted to be true and complete in paragraph 5(e) hereof. (b) Representations and warranties true at closing. Sellers' representations and ...