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GATEWAY TRADING CO. v. CHILDREN'S HOSPITAL PITTSBURGH ET AL. (04/22/70)

decided: April 22, 1970.

GATEWAY TRADING CO., INC.
v.
CHILDREN'S HOSPITAL OF PITTSBURGH ET AL., APPELLANTS



Appeal from decree of Court of Common Pleas of Washington County, No. 6363, in case of Gateway Trading Co., Inc. v. Children's Hospital of Pittsburgh et al.

COUNSEL

Stephen I. Richman, with him Greenlee, Richman, Derrico & Posa, for appellants.

Richard DiSalle, for appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Pomeroy. Dissenting Opinion by Mr. Justice Cohen. Mr. Justice Jones and Mr. Justice Eagen join in this dissenting opinion.

Author: Pomeroy

[ 438 Pa. Page 331]

This is an appeal from a final decree of the Washington County Court of Common Pleas, sitting in equity, granting plaintiff-appellee's prayer for specific performance of an alleged obligation of defendant Children's Hospital of Pittsburgh to convey to plaintiff certain property situated in Peters Township and declaring invalid a sales agreement for said property which was entered into by the Hospital and the Fourth Allegheny Corporation, defendants-appellants herein.

The facts of the case are as follows: In 1964 one Edith Dawson owned certain land fronting on Route 19 in Peters Township (hereinafter the property) and a building which had been erected thereon. On September 29, 1964 Mrs. Dawson sold the building in question to Gateway Trading Co., Inc. (hereinafter Gateway), the bill of sale giving to Gateway the right to remove the building from the property. Contemporaneously with that sale, Mrs. Dawson leased the property to Gateway for a term of five years at a monthly rental of $150. Attached to the lease was a rider which in pertinent part provided as follows: "[I]t is expressly understood and agreed that if the Tenant be not in default under the terms of this Lease or any renewal thereof, and if the Lessor during the term of this Lease or any renewal thereof receives a bona fide offer acceptable to the Lessor from any person desiring to purchase the demised premises, the Lessor agreed [sic] to give the Tenant ten (10) days notice in writing addressed to the Tenant at the demised premises, by registered mail, setting forth the terms of such offer and the name of the offeror and the lessor's willingness to accept an offer from the Tenant for the purchase of the demised premises for the same amount and in accordance with the same terms as the other offer."

On January 16, 1966, during the term of the lease, Mrs. Dawson died testate. Her will named Adolph L.

[ 438 Pa. Page 332]

Zeman, Esq. as Executor of her estate and Children's Hospital (hereinafter Hospital) as residuary devisee. On September 29, 1966, while settlement of the estate was still pending, Gateway by its President, Paul G. Secoy, transmitted to Mr. Zeman as Executor a check in the amount of $150 in payment of the September rent for the property, then overdue; Secoy further informed Zeman that Gateway was unable to make monthly rental payments of more than $50 to $75 rent in the future, and asked his advice as to the amount of future rental payments. As both Secoy and Zeman testified at trial, Zeman instructed Secoy to suspend further rental payments until arrangements could be made with the Hospital, the devisee. In the following nine months no further rental payments were made or tendered by Gateway.

On December 22, 1966, the Orphans' Court of Washington County by its decree of distribution in Mrs. Dawson's estate awarded the property to the Hospital, which succeeded to all of decedent's rights and obligations under the lease. By a memorandum to the Hospital dated February 2, 1967, Mr. Zeman outlined the situation then existing as to this and other properties devised by Mrs. Dawson. This memorandum stated as follows: "We enclose a letter from Mr. Secoy in which he advises that he is unable to continue to pay the rental at the rate of $150.00 per month as provided for in said lease and offering '$50.00 not to exceed $75.00 per month.' He should be contacted immediately and some understanding reached relative to any reduction in rent, if you are inclined to grant such reduction. Gateway Trading Company, Inc. is delinquent in rent for the month of October, 1966, through February, 1967, at the rate of $150.00 per month."

According to the testimony of John A. Byerly, the Treasurer of the Hospital, he and one William Halboth, a real estate ...


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