decided: January 30, 1970.
FOOD FAIR STORES, INC.
Appeal from judgment of Court of Common Pleas, Trial Division, of Philadelphia, March T., 1966, No. 4737, in case of Bernard Z. Rose et al. v. Food Fair Stores, Inc.
Lester H. Novack, for appellant.
David N. Bressler, with him David V. Shapiro, for appellee.
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. Mr. Chief Justice Bell took no part in the consideration or decision of this case.
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In 1958 Food Fair Stores purchased all of Bernard Rose's interest in Best Markets,*fn1 a twenty-two store retail grocery concern, for some 23,500 shares of Food
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Fair common stock. These shares were not registered under the Securities Act of 1933*fn2 and their transfer to Rose was legal only if it did not constitute a "public offering."*fn3 With this in mind, Food Fair insisted that as part of the written agreement Rose sign and give them an "investment letter" -- really a formal declaration that he was taking the stock for investment purposes only and had no present intention to resell or distribute the stock within the foreseeable future.
In 1966 Rose filed a complaint in which he contended that at the time of the sale Food Fair had orally promised to either register the securities or to otherwise render them transferable soon after the sale and that Food Fair's failure to do so had locked him into an extremely unprofitable investment and had caused him great financial harm. Food Fair denied the allegations and moved for summary judgment, arguing that the only allegations in Rose's complaint which could
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produce a genuine issue as to a material fact were rendered incapable of proof by the parol evidence rule, and that the complaint thus stripped stated no cause of action. The trial court granted Food Fair's motion for summary judgment and Rose appealed. We affirm.
The applicability and effect of the parol evidence rule are properly considered in the context of a motion for summary judgment. See Sokoloff v. Strick, 404 Pa. 343, 172 A.2d 302 (1961); Mathers v. Roxy Auto Co., 375 Pa. 640, 101 A.2d 680 (1954); Bardwell v. The Willis Co., 375 Pa. 503, 100 A.2d 102 (1953); O'Brien v. O'Brien, 362 Pa. 66, 66 A.2d 309 (1949).*fn4 There is no logical reason for forcing the parties to go to trial when there could be no genuine issue as to a material fact, regardless of the reasons for the lack of such issues. Of course, if there are factual issues bearing on the applicability of the parol evidence rule or other genuine issues as to material facts, then the case ought properly proceed to trial.
The heart of Rose's complaint is that Food Fair orally represented to him that he would be free to sell the stock he was receiving in one or, at most, two years. Food Fair argues that, regardless of the accuracy of Rose's allegations, he is debarred from proving them by the parol evidence rule. If Food Fair's contention as to the applicability of the parol evidence rule is correct the case was properly disposed of on summary judgment since there were no other material factual controversies.
Briefly stated, the parol evidence rule seeks to preserve the integrity of written agreements by refusing to permit the contracting parties to attempt to alter
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the import of their contract through the use of contemporaneous oral declarations.*fn5 Although the rule is certainly more complex than this simple summation indicates, we need not consider its more sophisticated aspects because this case involves a classic example of its proper application.
The investment letter signed by Rose and given to Food Fair as part of the transaction is preclusive of Rose's ability to prove the alleged oral representations, since the alleged representations are fundamentally inconsistent with the language and meaning of the investment letter.*fn6 The statements made by Rose in the investment
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letter constituted his formal declaration that he had no present intention to resell or distribute the stock and that he intended to hold the stock as a long term investment. Any understanding by Rose that he would enjoy an unrestricted ability to sell the stock within a relatively short period of time is inconsistent with his declarations in the investment letter. Further, had Rose's version of the transaction actually been set forth in the letter, Food Fair would have been subject to prosecution for violating the Securities Act of 1933. Because the alleged oral representations would directly contradict the clear meaning of the written contract we agree with the trial court that the parol evidence rule precludes proof of the oral representations and that the case was a proper one for summary judgment.*fn7 We further believe that summary
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judgment was entered in favor of the appropriate party and therefore affirm that judgment.