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MELO-SONICS CORP. v. CROPP

March 31, 1964

MELO-SONICS CORPORATION and Southwest Oil Corporation, Plaintiffs,
v.
David CROPP, Chalmers C. Jordan, Robert W. Lingo and Glass-Tite Industries, Inc., Defendants



The opinion of the court was delivered by: WILLSON

The complaint in this case filed February 12, 1964, alleges a cause of action under the diversity statute for breach of a written contract. It is alleged that on February 13, 1963, the defendants, Cropp, Jordan, and Lingo, offered by telegram to sell to plaintiffs all of their shares of capital stock in three corporations for a total price of $ 1,500,000.00. The offer is set out in a copy of the telegram marked Exhibit 'A' and attached to the complaint. Plaintiffs say that by an answering telegram on the same date they accepted the offer of the defendants.

A copy of the answering telegram is marked Exhibit 'B', and is attached to the complaint. It is alleged thereafter that the parties met from time to time for the purpose of formalizing the agreement, and that plaintiffs were at all times ready, willing, and able to formalize the agreement and to consummate the purchase of defendants' stock in accordance with the exchange of telegrams, but that the defendants refused to perform the agreement.

 Counsel have been heard at the argument on the motion of the three individual defendants to dismiss. Defendant, Glass-Tite Industries, Inc., being only secondarily liable filed no motion. Defendants contend and counsel for the plaintiffs agreed at the argument that the contract, if any, is to be found in the exchange of telegrams. Defendants' telegram reads:

 'SVC MEADVILLE PENN

 1960 FEB 13 PM 4 34

 YR P HMAO19 327 PME RD AND REPEAT BACK ARTHUR J. KANIA ATTY AT LAW 7131 RIDGE AVE BGD VINCENT J. PEPICELLI ATTY FOR 3 SELLING STOCKHOLDERS QUOTE THE OFFER OF SOUTHWEST OIL CORPORATION TO PURCHASE CAPITAL STOCK OF MY THREE CLIENTS IN SAEGERTOWN COMPONENTS, INC. L.C.B. TOOL CO. INC. AND ALLEGHENY ELECTRONICS, INC. IS NOT ACCEPTABLE AS IT READS. HOWEVER, MY THREE CLIENTS ARE WILLING TO SELL THEIR CAPITAL STOCK IN SAID CORPORATIONS FOR THE TOTAL PRICE OF ONE MILLION FIVE HUNDRED THOUSAND ($ 1,500,000.00) DOLLARS SUBJECT TO FORMALIZING A PRELIMINARY AGREEMENT ALONG LINES PREVIOUSLY DISCUSSED. WILL BE IN YOUR OFFICE AT 10:00 AM ON FEBRUARY 15, 1960 WITH MY CLIENTS FOR PURPOSE OF FORMALIZING SUCH AN AGREEMENT. UNQUOTE

 GV PHILA 13

 PS'

 The answering telegram from plaintiff, Southwest Oil Corporation, reads:

 'DAVID CROPP, CHALMEY JORDAN, ROBERT LINGO c/o DAVID CROPP R.D. #3 MEADVILLE, PENNA TELEGRAPHIC OFFER BY YOUR ATTORNEY VINCENT J. PEPICELLI CONCERNING SALE OF CAPITAL STOCK OF SAEGERTOWN COMPONENTS, INC., L.C. B. TOOL CO., INC., AND ALLEGHENY ELECTRONICS, INC. AS STATED IN SAID TELEGRAM AND ALONG LINES PREVIOUSLY DISCUSSED ACCEPTED BY SOUTHWEST OIL CORPORATION. THIS ALSO CONFIRMS MEETING DATE AND TIME TO FORMALIZE AGREEMENT.

 SOUTHWEST OIL CORPORATION BY ARTHUR J. KANIA'

 Defendants' contention is expressed in the motion of the individual defendants to dismiss wherein it stated:

 '1. Plaintiff's Exhibit 'A' (expressly rejecting a previous offer and making reference to previous discussions (not agreements) shows on its face that it was not intended as an expression of defendants' fixed purpose to sell until defendants had given a further expression of assent in the nature of a formalized written agreement. (Restatement -- Contracts -- Section 25.)'

 '2. Plaintiffs' Exhibits 'A' and 'B' show on their face that they are nothing more than preliminary expressions and that the senders thereof recognize the necessity of a formal written contract to be subsequently negotiated (along lines previously discussed) which would set forth any and all legal obligations between the proposed parties thereto; therefore, plaintiffs' Exhibits 'A' and 'B' do not constitute a complete contract upon which an action can ...


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