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SHIELDS v. HOFFMAN (11/10/64)

decided: November 10, 1964.

SHIELDS
v.
HOFFMAN, APPELLANT



Appeal from judgment of Court of Common Pleas of Allegheny County, April T., 1963, No. 5, in case of John P. Shields and Rosella Shields, his wife, v. Harlan L. Hoffman.

COUNSEL

Dana M. Taylor, Jr., with him Behrend, Phillips & Taylor, for appellant.

John A. Metz, Jr., with him Robert F. Stone, Guy L. Warman, and Fine, Perlow & Stone, and Metz, Cook, Hanna & Kelly, for appellees.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts.

Author: Roberts

[ 416 Pa. Page 50]

John P. Shields and his wife, the appellees, filed this action to quiet title in order to release their real estate from the lien of a mortgage and the accompanying bond which were executed in favor of Harlan L. Hoffman, the appellant. This appeal is from the order of the court below granting appellees' motion for judgment on the pleadings.

Prior to June 4, 1958, Shields and Hoffman were partners doing business as Virginia Erection Company, an enterprise engaged in painting water towers. On that date, they entered into "a partnership liquidation agreement" whereby Hoffman sold to Shields his interest (40%) in the assets of the business for $22,500, receipt of which was acknowledged in the agreement.

For an additional $22,500, Hoffman agreed with Shields, his heirs, successors and assigns, to refrain from engaging in the painting or painting contracting business for a period of five years in certain specifically designated states and portions of states. This additional amount was to be paid in equal installments of $4,500, commencing June 4, 1959, and continuing until the balance was paid. The agreement further provided that if Hoffman breached his covenant then he forfeited his right to receive the next ensuing annual payment of $4,500, and that in the event of more than one breach, he forfeited his right to receive an additional payment for each successive breach.*fn1

[ 416 Pa. Page 51]

With Hoffman as mortgagee, Shields and his wife executed the bond and mortgage in question on certain of the Shields' real estate to secure the payment of the additional $22,500 promised in a separate writing in return for the restrictive covenant. The terms and conditions of the bond and mortgage are the same as those recited in the partnership liquidation agreement.

The complaint alleged, and appellant Hoffman did not deny, that after June 4, 1958, Hoffman, in violation of his covenant, engaged in the prohibited business in Iowa, Ohio, Michigan, New Jersey and Indiana, thereby committing seven distinct breaches.

Appellant Hoffman filed an answer pleading new matter and alleging that Shields, on July 24, 1958, less than two months after the execution of the agreement, sold to Virginia Erection Corporation, all his right, title and interest in the business which Shields had been carrying on himself after purchase of Hoffman's interest. By this new matter, appellant further pleaded that Virginia Erection Corporation had instituted legal proceedings in New Jersey and obtained equitable relief against the appellant for breach of ...


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