Before KALODNER, GANEY and FREEDMAN, Circuit Judges.
This matter is now before the Court on an appeal from the lower court's order granting the individual defendants' motion to dismiss the complaint for failure to state a cause of action against them.
This Court has jurisdiction of the case by virtue of the diversity of citizenship of the parties, the plaintiffs, Melo-Sonics Corporation and Southwest Oil Corporation, being corporations existing and organized under the laws of the State of Delaware, having their principal place of business and offices in the State of Delaware. Prior to filing this cause of action, the name of the plaintiff, Melo-Sonics Corporation, was changed from Southwest Oil Corporation to Melo-Sonics Corporation, Southwest Oil Corporation being a wholly owned subsidiary of plaintiff, Melo-Sonics Corporation, and the name of the plaintiff, Southwest Oil Corporation, was changed from Southwest Oil Corporation to Melo-Sonics Corporation. The defendants, David Cropp and Robert W. Lingo, are citizens of the State of Pennsylvania, residing in Meadville, Pennsylvania. The defendant, Chalmers C. Jordan, is a citizen of Pennsylvania, residing in Saegertown, Pennsylvania. The defendant, Glass-Tite Industries, Inc., is a corporation organized and existing under the laws of the State of Rhode Island, having its principal place of business and offices in Providence, and doing business in Pennsylvania with an office and place of business in Saegertown, Pennsylvania, Glass-Tite being the successor to Saegertown Glass Seals, Inc., having assumed all assets and liabilities of the Saegertown Glass Seals, Inc., including this claim, and has succeeded to its corporate interest.
The claim involves a suit for breach by the individual defendants and inducement to breach by the corporate defendant of a contract with the plaintiffs for purchase of stock held by the defendants in Saegertown Components, Inc., L.C.B. Tool, Inc., and Allegheny Electronics, Inc., for $1,500,000, and in their complaint seek compensatory damages in the amount of $3,056,700, plus punitive and exemplary damages.
The pertinent facts concerning the alleged purchase of the stock of the defendants are as follows: Sometime prior to February 13, 1960, it would appear from the telegrams adverted to later, there was some discussion by certain representatives of Southwest Oil Corporation with the individual defendants concerning the purchase of stock of Saegertown Components, Inc., L.C.B. Tool, Inc., - all of the outstanding stock being owned by the individual defendants - as well as for their 42 per cent stock interest in Allegheny Electronics, Inc. On that date one Vincent Pepicelli, on behalf of the individual defendants, telegraphed Arthur Kania, attorney for the Southwest Oil Corporation, as follows:
"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 STOCK-HOLDERS 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) 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.
Kania, in a reply telegram, which was undated, and sent to all of the individual defendants, but in care of David Cropp, was as follows:
"DAVID CROPP, CHALMEY JORDAN, ...