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PENNSYLVANIA FUNDS CORPORATION v. VOGEL. (03/22/60)

March 22, 1960

PENNSYLVANIA FUNDS CORPORATION, APPELLANT,
v.
VOGEL.



Appeal, No. 61, Jan. T., 1960, from decree of Court of Common Pleas of Lehigh County, Sept. T., 1958, No. 4, in case of Pennsylvania Funds Corporation v. Weston Charles Vogel, Income Planning Corporation. Record remitted with directions; reargument refused April 19, 1960.

COUNSEL

O. Jacob Tallman, with him Robert L. Trescher, and Forman and Rosenberg, and Butz, Hudders, Tallman & Rupp, and Montgomery, McCracken, Walker & Rhoads, for appellant.

Paul A. McGinley, with him William E. Schantz, for appellees.

Before Jones, C.j., Bell, Musmanno, Jones, Cohen, Bok and Eagen, JJ.

Author: Eagen

[ 399 Pa. Page 2]

OPINION BY MR. JUSTICE EAGEN.

Weston Charles Vogel, the individual defendant-appellee, prior to his graduation from college sometime in March 1953, became affiliated with First Investors' Corporation, predecessor of appellant, in the capacity of a salesman as an independent contractor. From July 1, 1954, the date upon which appellant corporation became activated, to January 13, 1956, Vogel served as manager of Pennsylvania Funds without a written contract. On the latter date, for the first time, he acquired the status of an employee of appellant by entering into a formal written contract, and it is the legal effect of certain provisions thereof which forms the basis of this issue.

[ 399 Pa. Page 3]

On June 30, 1958, Vogel by resignation terminated his employment with appellant. Almost immediately, he became the president, a director and a principal stockholder of the Income Planning Corporation, defendant corporate appellee, engaged in direct competition in the securities field to the business of his former employer.

Alleging violation of certain restrictive clauses in the employment contract, executed between the appellant and Vogel, this action in equity was instituted. The lower court found that the covenants had clearly been violated but awarded only partial relief. This appeal ensued.

An examination of the record discloses that the questions for decision are two: Should the appellees have been enjoined from selling shares of mutual fund, periodic payment plans or paid-up plans to the public-at-large until July 1, 1960? Did the lower court err in not incorporating in its decree an order directing defendants to sever their contractual relations with former employees of appellant, when one of the court's conclusions of law specifically stated that appellant was entitled to such relief?

Specifically, appellee, Charles Weston Vogel, by the contract of January 13, 1956, covenanted and agreed that: "(b) He will not during the term of this contract, and for a period of two years after termination hereof, for himself, or as agent of, or on behalf of, any person, association, partnership, or corporation, directly or indirectly, within the State of Pennsylvania, engage in the sale of, or in the business of the sale of mutual fund shares, periodic payment plans or paid-up-plans, except on behalf of the company during the term of this contract."

Deferring, for the moment, consideration of the legality of the above-quoted ...


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