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P G METALS CO. v. HOFKIN (03/22/66)

decided: March 22, 1966.

P G METALS CO.
v.
HOFKIN, APPELLANT



Appeal from judgment of Court of Common Pleas No. 3 of Philadelphia County, Dec. T., 1963, No. 4223, in case of P G Metals Co. v. Milton L. Hofkin.

COUNSEL

I. I. Jamison, with him Folz, Bard, Kamsler, Goodis & Greenfield, for appellant.

Abraham L. Shapiro, with him Norman C. Henss, H. Laddie Montague, Jr., and Cohen, Shapiro, Berger and Cohen, for appellee.

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

Author: O'brien

[ 420 Pa. Page 621]

Prior to December 29, 1961, appellant, Hofkin, was a director and secretary of the Penn Galvanizing Company.

[ 420 Pa. Page 622]

He owned 25% of the stock of that company, the remainder being owned by or for other members of his family. On that date, all of the stock and assets of Penn Galvanizing were sold to P G Metals Company, Inc., appellee. Included in the assets transferred to P G Metals was a loan receivable from Hofkin in the amount of $19,430.38, $8,000 of which was borrowed by Hofkin in 1961 and the balance of $11,430.38 prior to December 31, 1949.

In connection with the sale of Penn Galvanizing to P G Metals, P G Metals employed Hofkin under a contract dated December 28, 1961. The contract provided for Hofkin's employment by P G Metals for a period of 5 years for a compensation of $700 per week plus a sum equal to 4% of the annual profits of P G Metals, with a limitation that the total annual compensation, including salary and profits, should not exceed $72,000. The contract provided that P G Metals could terminate the contract only for wilful breach by Hofkin, and that "any dispute arising under this contract" would be settled by a board of arbitrators whose decision "shall be final and binding . . . without any right of appeal."

On July 6, 1962, P G Metals terminated Hofkin's employment and, in accordance with the provisions of the contract, an arbitration board was selected to hear the dispute as to P G Metals' right to discharge Hofkin. The parties agreed that the arbitration be conducted as a common law arbitration and that the findings and judgment of the arbitrators be final, and no appeal be taken therefrom, either as respects the facts or the law. Hearings were held before the arbitrators on 8 separate days, beginning on December 17, 1962, and concluding January 16, 1963. On April 8, 1963, the arbitrators filed their written unanimous report providing, inter alia: "The arbitrators . . . are unanimously of the opinion . . . that P G Metals Co., Inc. was justified in terminating Mr. Hofkin's employment

[ 420 Pa. Page 623]

    by reason of his wilful breach of the employment agreement; that Mr. Hofkin was justly discharged by P G Metals Co., Inc. from employment and is not entitled to recover salary or compensation from P G Metals Co., Inc. under the agreement from July 6, 1962, the date of his discharge; and that Mr. Hofkin's claims against P G Metals Co., Inc. under the agreement should be and they are hereby dismissed." (Emphasis supplied).

Subsequently, P G Metals filed suit against Hofkin, seeking recovery of the $19,430.38 represented by the loan receivable. Hofkin filed an answer to the complaint in assumpsit wherein he raised in new matter the defense of the statute of limitations as it applied to the $11,430.38, allegedly borrowed prior to December 31, 1949. In addition, Hofkin pleaded a counterclaim seeking the recovery of $17,382.70, composed of his salary of $700 for the week ending July 6, 1962, the date of his discharge; a sum equal to 4% of the P G Metals ...


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