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BAUER v. P. A. CUTRI COMPANY BRADFORD (05/09/69)

decided: May 9, 1969.

BAUER
v.
P. A. CUTRI COMPANY OF BRADFORD, INC. (ET AL., APPELLANTS)



Appeal from decree and judgment of Court of Common Pleas of McKean County, Dec. T., 1967, No. 2, in case of Jack R. Bauer et ux. v. P. A. Cutri Company of Bradford, Inc. et al.

COUNSEL

R. T. Mutzabaugh, with him Mutzabaugh & Mutzabaugh, for appellant.

James K. Angell, with him Angell and Angell, for appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Cohen and Mr. Justice Pomeroy concur in the result. Dissenting Opinion by Mr. Chief Justice Bell.

Author: Roberts

[ 434 Pa. Page 307]

In 1961, appellee sold his insurance agency in Bradford, Pennsylvania to Rand for $2,500.00 in cash and an unliquidated amount to be computed from a formula based on a percentage factor multiplied by yearly renewal figures over a period of years. Appellee also agreed to sign a covenant-not-to-compete, the exact terms of which are no longer relevant. Rand proceeded to organize the Bradford Area Insurance Center Agency, Inc., which employed appellee on a commission basis and paid him $500.00 per month to apply to the purchase price of the Agency still owed by Rand.

Subsequently Rand transferred his interest in the Agency to Cutri. In 1964 Cutri and appellee apparently agreed upon $5,000.00 as the sum still owed to appellee from the initial purchase by Rand, and Cutri agreed to pay that sum to appellee. At the same time, Cutri and appellee orally agreed that appellee would continue with the Agency as a salaried employee, to be paid $500.00 per month, a sum which later was raised to $550.00 per month. Appellee once again entered into a covenant-not-to-compete, which was part of the instrument which contained the agreement that the agency would pay appellee $5,000.00. The agreement stated "That Bradford Area Insurance Center Agency, Inc. agrees to pay over to the Seller [appellee] Five Thousand and ($5,000.00) Dollars upon the

[ 434 Pa. Page 308]

    execution of this Agreement, receipt of which is hereby acknowledged by the Seller, in full satisfaction of original agreement." (Emphasis supplied.)

Despite this acknowledgement, appellee was not paid the $5,000.00, although Cutri did help appellee to obtain a loan in that amount. Appellee continued to work for the Agency, which became the P. A. Cutri Company of Bradford, Inc. until 1967. At that point, the Agency and its rights and obligations were purchased by Sturm, appellant in this action. Appellant had also been an employee of the Agency, and appellee had known of appellant's interest in purchasing the company. Appellant likewise knew of the 1964 agreement between appellee and Cutri, and of appellee's acknowledgement of the receipt of the $5,000.00 owed to him. Appellee gave no indication that the money had not in reality been paid to him, and prior to instituting this suit, made no claim for it.

After taking over the Agency, appellant informed appellee that the latter's salary was being discontinued, and threatened to enjoin appellee from selling insurance in the area if appellee attempted to do so. Appellee countered by bringing this suit in equity to have the covenant-not-to-compete declared null and void and to recover the $5,000.00 which had never been paid to him. The court below found for appellee on both counts, and after dismissing appellant's exceptions, entered a final decree and judgment. Appellant has waived his objections to that part of the decree that strikes down the covenant-not-to-compete, and appeals only from the $5,000.00 judgment.

Appellant first claims that it was error for the court below to hear testimony concerning appellee's non-receipt of the $5,000.00 in question. Appellant maintains that this testimony violated the parol ...


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