and reaped the benefit of a substantially improved building without any obligation to pay for the improvements.
Plaintiffs' case rests or falls on the relationship between the defendants and Nathan Kupin. If, in fact, Nathan Kupin participated in the ownership and operation of L.B.T. Co. as the agent of the defendants and, if in that capacity, he agreed to the $ 240,000 improvement program when he should have realized L.B.T. Co. was unable to pay for these improvements, then there would be ground for holding that the defendants were unjustly enriched when, upon termination of the agreement with L.B.T. Co., they obtained a substantially improved office building without any obligation to pay for the improvements.
However, the facts of this case do not justify such a conclusion. Although Nathan Kupin was a long time personal friend of the defendants and one of their limited partners, I am of the opinion, and so find from the evidence, that his participation in L.B.T. Co. was not as an agent of defendants; it was solely on his own initiative and for his own personal benefit. He had not discussed with defendants the formation of L.B.T. Co. or any of its related problems before the corporation was formed. The evidence does not support a finding of express or implied authority in Kupin under general principles of agency law to negotiate for the defendants with respect to the formation and management of L.B.T. Co., or to secure an interest in L.B.T. Co. on their behalf or in any manner to participate in the contracting for the improvements to the Lewis Tower Building, which are the subject of this suit. At the meeting with William Bamberger in Philadelphia in February of 1959, Kupin was not authorized by defendants to promise that he could obtain a reduction in the rent. Indeed there is no evidence that this subject was ever discussed by Kupin and defendants prior to this meeting. Finally, there is no evidence that the defendants ever ratified or participated in the pre-incorporation and post-incorporation activities of Nathan Kupin with regard to L.B.T. Co.
It should be observed at this point that although Kupin was a limited partner in the New York partnership in which the defendants, Herrick and Kamber, were the general partners, that status alone did not vest Kupin with authority to act for or bind the partnership or the general partners. 68 C.J.S. Partnership § 8 at p. 1026; 38 McKinney's Consolidated Laws of N.Y. Annotated, c. 39, Partnership Law, § 98, § 99. See Skolny v. Richter, 139 App.Div. 534, 124 N.Y.S. 152, 155 (1910).
The testimony and evidence does not warrant the conclusion that Kupin's fifty per cent interest in L.B.T. Co. was held for the benefit of the defendants or that Kupin's actions and knowledge as president and fifty per cent stockholder of L.B.T. Co., with relation to the improvements program at the Lewis Tower Building, can be attributed to the defendants.
Likewise, although Arthur Feinstein, the defendants' attorney, was present at the conference with Kupin and Bamberger in February of 1959, he was only 'interested in whether a lease could be worked out where under * * * Mr. Bamberger's aegis, a group would be formed to take a lease of this property.' He 'could have recommended to the owners what * * * (he) thought was the situation * * * (but he) couldn't deliver it (the lease) nor could Mr. Kupin * * * (He) could go back to the owners and make suggestions or recommendations, and they could decide whether or not to make this deal with Mr. Bamberger.'
Neither Kupin nor Feinstein had authority to bind defendants to pay for the cost of the building improvements to be made by the Bamberger group.
It may well be that L.B.T. Co. was overambitious in its improvement plans in view of its limited liquid resources available to pay the short term obligations for these improvements, but there is no basis for imputing to the defendants knowledge of, or acquiescence in, this overambitious program of improvements. Moreover, there is no evidence that any of the plaintiffs dealt with or relied on the credit of anyone other than the corporation, L.B.T. Co. Hence I cannot find that there was any legal reason why the defendants should not have been permitted to exercise their right to terminate the agreement with L.B.T. Co. upon its failure to make the required mortgage and tax payments, even though as a result of this termination, defendants repossessed a substantially improved building without any contractual obligation to pay for the improvements.
The case of DeGasperi v. Valicenti, 198 Pa.Super. 455, 181 A.2d 862 (1962), upon which plaintiffs rely so heavily, is distinguishable from the facts of this case. In that case a husband contracted with the plaintiff for some masonry work to be done on houses that the husband was building on property owned by his wife. There was evidence that under a 'family arrangement' the wife held title to the land on which the husband was building houses, that payments for construction contracts were made from a bank account in the wife's name and that upon sale of a house and lot, the proceeds were used to pay outstanding construction contractors before paying the wife for the lot. Under these circumstances, the Pennsylvania court held that an unpaid creditor of the husband could recover a judgment from the wife on the theory of unjust enrichment.
In this case there is no evidence of a 'family arrangement' between Kupin or L.B.T. Co. and the defendants. The plaintiff suppliers contracted with a corporate operator of the Lewis Tower Building under a written agreement on file in the office of the Recorder of Deeds; they did not contract with the defendants. The defendant owners are not liable for the value of improvements to the Lewis Tower Building under contracts executed between the corporate operator, L.B.T. Co. and the plaintiff suppliers.
The statements made herein will constitute the court's findings of fact and conclusions of law in this case.
And now, this 6th day of July, 1964, the court directs the Clerk of the Court to enter judgment in favor of the defendants, Seymour Herrick and Abraham Kamber, ind. and trading as Lewis Tower Building, and against the plaintiff, Herman Berman, ind. and trading as Scott Construction, and against the intervening plaintiffs, Modern Floor, Inc., General Electric Supply Co. and Hotpoint, Divisions of General Electric Co., Jenkins Elevator and Machine Co. Inc., Westinghouse Electric Supply Co., Division of Westinghouse Electric Co., Franklin Electric Company, and Tripoli Company, Inc., and W. Kramer Associates, Inc.