Appeals from judgment of Court of Common Pleas No. 3 of Philadelphia County, Dec. T., 1963, No. 3600, in case of Morton Zeidman and Shep's, Inc. v. National Products Co., Inc.
John Rogers Carroll, for plaintiff.
Oscar S. Schermer, with him Schermer and Schermer, for defendant.
Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Roberts.
In the early part of 1961 Morton and Sylvia Zeidman purchased $19,000 worth of kitchen and bar equipment from the National Products Company in order to refurbish their recently acquired restaurant. Unfortunately, the business did not fare well and shortly after the Zeidmans commenced operation they began to negotiate for the sale of the business to one Donnelly. At that time the vice-president of National, Jules Caplen, contacted the Zeidmans' attorney and asked to be allowed to attempt to find a purchaser other than Donnelly, whom Caplen thought unable to handle the business. Caplen's interest in the Zeidman venture stemmed from the fact that National stood to
take a substantial loss if the Zeidmans or their successors in interest defaulted on the installment sales contract under which the equipment had been purchased.
Caplen eventually suggested that the business be sold to two individuals, Klein and Jablonski, whom he knew to be capable and responsible restaurant operators. As an inducement Caplen stated that if the Zeidmans accepted his suggested purchasers he would indemnify the Zeidmans against payment of the restaurant's outstanding debts. The Zeidmans' attorney then called Caplen and told him the Zeidmans would agree to sell the restaurant to Klein and Jablonski, but only after they received a signed indemnification agreement from Caplen. As a result of these negotiations, Caplen signed and delivered to the Zeidmans the following agreement:
National Products Company