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December 1, 1960


Appeal, No. 335, Jan. T., 1959, from judgment of Court of Common Pleas No. 7 of Philadelphia County, Dec. T., 1956, No. 3419, in case of Howard Scott v. Philadelphia Parking Authority. Judgment reversed; reargument refused January 5, 1961.


Hirsh W. Stalberg, with him Harry Shapiro, and Shapiro, Rosenfeld, Stalberg & Cook, for appellant.

Henry J. Morgan, with him Edwin P. Rome, and Blank, Rudenko, Klaus & Rome, for appellee.

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

Author: Cohen

[ 402 Pa. Page 152]


Howard Scott, appellee, now deceased, brought this action in assumpsit to recover monies allegedly due under an employment contract between appellee and the Philadelphia Parking Authority, appellant, increasing appellee's annual salary as managing director of the Authority to $15,000. The Authority answered, denying the validity of the contract and contending that because it was entered into by prior members of the Authority for a proposed term to extend beyond the appointed terms of each of the prior members, it could not bind the succeeding members of the Authority. In addition, the Authority filed a counterclaim for those monies paid to appellee at the rate of $15,000 a year which exceeded the $10,000 rate for which the appellee had previously contracted. The court below, finding the agreement to be fair, just and reasonable, prompted by the necessities of the situation and advantages to the public at the time it was entered into, entered judgment for the appellee. This appeal followed.

The Philadelphia Parking Authority is a public corporate body created by the Philadelphia City Council under the authority of the Act of June 5, 1947, P.L. 458, as amended, 53 PS § 341 et seq. Its primary purpose is to promote the public safety, convenience and welfare by providing off-street parking facilities so as to alleviate parking and traffic problems. The Authority has five members appointed by the Mayor of the City of Philadelphia to serve without compensation for staggered five year terms so that the term of one member will expire each year. Under its enabling legislation, Act of June 5, 1947, supra, the Authority is granted "all powers necessary or convenient for the carrying out of the aforesaid purposes" including the power "... (7) To appoint officers, agents, employees and servants; to prescribe their duties and to fix their compensation;" and the power "... (10)

[ 402 Pa. Page 153]

To make contracts of every name and nature, and to execute all instruments necessary or convenient for the carrying on of its business." § 5, 53 PS § 345.

Appellee was the first managing director of the Philadelphia Parking Authority. His employment commenced sometime in 1950 at a starting salary of $300 a month. As of September, 1953, however, appellee was under written contract with the Authority, dated April 23, 1952, providing for a three year term of employment as managing director at a salary of $10,000 a year. On September 23, 1953, having determined that the $10,000 annual salary was not commensurate with the responsibility the appellee had been obliged to assume, the then members of the Authority unanimously resolved to offer appellee a new contract of employment for a term of three years at an annual salary of $15,000, to be effective September 1, 1953.

The offer was accepted by the appellee. The three year term included therein clearly extended beyond the appointed term of office of every member then on the Authority.*fn1

Shortly thereafter, the members of the Authority who authorized the new agreement were replaced by new members. Nevertheless, payments at the rate of $15,000 a year were made to appellee until January 27, 1954, after which date the new members of the Authority, questioning the validity of the agreement in issue, reduced the appellee to the basis of his $10,000 salary without prejudice to his claim to be paid at the rate of $15,000. Appellee remained as managing director until November 30, 1956, at which time he was discharged. He then instituted suit, claiming damages for some $13,125 which represents, with appropriate

[ 402 Pa. Page 154]

    adjustments, the difference between the two salaries. The Authority's counterclaim was based on the asserted overpayments between September 1, 1953 and January 27, 1954 (i.e., payments at the $15,000 instead of the $10,000 annual rate).

We are asked to determine the validity of a contract which gives an appointed employee of a public authority a tenure for a period of three years at a fixed salary. The primary issue as we see it is not, as the parties have argued, whether the instant contract is unenforceable as an attempt to bind the succeeding members of the Authority, but whether the making of the ...

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