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BAUMBACH ET AL. v. SEIP (03/18/71)

decided: March 18, 1971.

BAUMBACH ET AL., APPELLANTS,
v.
SEIP



Appeal from judgments of Court of Common Pleas of Erie County, No. 2404-A of 1968, in case of Charles H. Baumbach and Henry J. Galmish et al. v. Norman W. Seip, Margaret D. Seip and Robert C. Kessler.

COUNSEL

Daniel Brocki, with him John M. Wolford, and Dunn, Wolford & Sesler, for appellants.

Herbert J. Johnson, Jr., and Peter G. Schaaf, with them Evans, Johnson, Scarpitti, Bernard, McCullough & Wittmann, and MacDonald, Illig, Jones & Britton, for appellees.

Bell, C. J., Jones, Cohen, Eagen, O'Brien and Pomeroy, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Jones concurs in the result. Mr. Justice Cohen took no part in the decision of this case. Mr. Justice Roberts took no part in the consideration or decision in this case.

Author: O'brien

[ 442 Pa. Page 445]

In early 1968 Robert C. Kessler, trustee of the estate of Christian C. Kessler, asked Charles H. Baumbach, a real estate broker, to seek real estate investment opportunities for the trust. Baumbach knew that Norman W. Seip owned income properties which might be available for sale. Baumbach talked with Seip about the possibility of selling some of them. Seip was interested, so Baumbach proceeded to carry on negotiations between Kessler and Seip, keeping their identities unknown to each other until the last stages of the negotiations (Kessler and Seip had never met).

After going back and forth between the parties, Baumbach drafted a contract for the sale of three parcels of land owned by Seip and his wife -- the Ridgefield Building and two residential properties, all located in Erie -- for a total purchase price of $350,000. Kessler signed the contract, but Seip refused, insisting that the six percent realtor's commission be split with Kessler. Baumbach carried this information back to Kessler, explaining that if Kessler would agree, it would mean a total purchase price of $360,500. Baumbach further showed Kessler how the purchase price could be allocated among the three properties: $176,500 for

[ 442 Pa. Page 446]

    the Ridgefield Building; $103,000 and $81,000 for the other two. Kessler agreed to the increased price, representing his share of the commission, and Kessler and the Seips signed the contract. Kessler gave Baumbach a $5,000 handmoney payment.

However, Baumbach's worries were not over. The written contract provided that it was contingent upon Kessler's obtaining Orphans' Court approval for the purchase by the trust. After two hearings on April 30 and July 2, 1968, the Orphans' Court refused to approve the purchase, which had been objected to by income beneficiaries of the trust who alleged that the purchase of the three parcels would require diversion of income to make the mortgage payments.

At the July 2, 1968, hearing, Kessler's attorney told the court that Seip and Kessler were still negotiating concerning the purchase of two of the three properties, one being the Ridgefield Building, to which Kessler's attorney allocated the same price which Baumbach had allocated, to wit, $176,500.

Immediately after the July 2, 1968, hearing, in the hallway outside the courtroom, Baumbach met with the two parties and their lawyers to discuss the possibility of sale for two of the three properties. Subsequently, Baumbach kept in touch with both parties. Kessler told Baumbach that the deal was going along and that the attorneys were trying to get together on a sale. Seip told Baumbach to stay out of the negotiations, that the lawyers were trying to make a deal, and that Baumbach would be taken care of.

On July 17, 1968, the Seips and Kessler signed a contract for the sale of the Ridgefield Building for the purchase price of $171,360. Kessler advised Baumbach of the time and place of the closing, July 31, 1968, at the office of Seip's attorney. When ...


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