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YARDS PENNSYLVANIA v. THRIFTWAY FOODS (05/21/68)

decided: May 21, 1968.

YARDS OF PENNSYLVANIA, INC.
v.
THRIFTWAY FOODS, INC., APPELLANT



Appeal from judgment of Court of Common Pleas of Montgomery County, No. 65-5936, in case of Yards of Pennsylvania, Inc. v. Thriftway Foods, Inc.

COUNSEL

Louis C. Bechtle, with him Wisler, Pearlstine, Talone & Gerber, for appellant.

Edward Fackenthal, with him Knox Henderson, and Henderson, Wetherill & O'Hey, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Musmanno. Mr. Justice Roberts concurs in the result. Dissenting Opinion by Mr. Chief Justice Bell. Mr. Justice Cohen joins in this dissenting opinion.

Author: Musmanno

[ 430 Pa. Page 118]

On March 19, 1962, the plaintiff, Yards of Pennsylvania, entered into a written lease with the S. & E. Markets, Inc., for certain premises belonging to the plaintiff and situate in Levittown. Prior to the signing of the lease, representatives of the plaintiff had spoken with representatives of Thriftway Foods, Inc., wholesale distributors of food and groceries, stating that Yards would not sign up with the intended lessees who were customers of Thriftway, unless Thriftway

[ 430 Pa. Page 119]

    would guarantee payment of the rent involved. On March 15, 1962, in anticipation of execution of the lease, Thriftway Foods, Inc., wrote Yards stating: "This letter is to certify that Thriftway Foods, Inc. will guarantee to you lease payments of $20,000 yearly for three (3) years on the premises occupied by the food market in your store in Levittown, Penna.

"All other provisions contained in the lease dated March 19, 1962, between yourselves and Sol and Edward Markus, tenants, we will guarantee for the first three years of this lease . . ."

When S. & E. failed to make required payments under the lease, Yards brought an action of assumpsit against Thriftway for the unpaid rental, asserting that, at the time the defendant wrote its letter of guarantee, it knew that Sol Markus and Edward were negotiating for the forthcoming lease for a corporation formed or to be formed, and of which they were the principal stockholders, known as S. & E. Markets, Inc. The lease was signed by Sol Markus and Edward Markus, as president and secretary, respectively, of the corporation.

The defendant insisted that it had guaranteed payments by Sol and Edward Markus as individuals and not as a corporation and, since Yards did not charge fraud, accident or mistake, the letter of guarantee had to be accepted literally, and was not subject to parol evidence in supposed explanation.

The trial court held that the letter of guarantee contained a latent ambiguity which could only be resolved by a jury, after presentation of the circumstances pertinent to the entire occurrence. In so holding, the court relied on Watters v. DeMilio, 390 Pa. 155, where this Court held that whether the signature "Gregory DeMilio", ...


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