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LITTEN v. JONATHAN LOGAN (12/13/71)

decided: December 13, 1971.

LITTEN
v.
JONATHAN LOGAN, INC., APPELLANT



Appeal from judgment of Court of Common Pleas, Trial Division, of Philadelphia, June T., 1962, No. 4723, in case of Bernard Litten, Irving Litten and Harold Romm v. Jonathan Logan, Inc.

COUNSEL

John R. McConnell, with him Christopher K. Walters, and Morgan, Lewis & Bockius, for appellant.

Morris L. Rush, with him Irving L. Mazer, for appellees.

Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, Spaulding, and Cercone, JJ. Opinion by Cercone, J. Dissenting Opinion by Montgomery, J. Jacobs, J., joins in this dissenting opinion.

Author: Cercone

[ 220 Pa. Super. Page 276]

This is an appeal by Jonathan Logan, Inc., defendant in the court below, from a judgment upon verdicts for plaintiffs in an action of assumpsit. Motions for judgment n.o.v. and for new trial were denied by the court below.

Plaintiffs are Bernard Litten, his father Irving Litten, and his brother-in-law Harold Romm, Philadelphia residents and owners of Princess Fair, Inc., a New York corporation, and its subsidiary corporation, Roliman, Inc., which companies are engaged in the manufacture, sale and distribution of women's apparel, maintaining offices and principal place of business at 1407 Broadway, New York, New York.

Defendant is a nonresident New York corporation, doing business in Pennsylvania. It is also engaged in the manufacture, sale and distribution of women's apparel. Its President and Chairman of the Board at the time the events involved in this action took place was David Schwartz.

The issue here is whether an oral contract alleged by plaintiffs to have been entered into between plaintiffs and defendant in November 1960, or a written contract signed by plaintiffs and defendant on January

[ 220 Pa. Super. Page 2779]

, 1961, is determinative of the rights of the party litigants.

Plaintiffs assert the right to recover money damages and an accounting on the basis of an oral contract of November 1960, which included among other provisions, an option to plaintiff Bernard Litten to purchase 5,000 shares of defendant's stock at $15.00 a share. Defendant, on the other hand, defends this action on the ground that a later written contract of November 9, 1961, containing no reference to stock option in favor of Bernard Litten, governs the rights of the parties. Plaintiffs contend they were compelled under the duress and coercion of the defendant to enter into the written contract because defendant had maneuvered plaintiffs into an untenable economic crisis from which they could extricate themselves only by signing the agreement prepared by defendant. In a trial presided over by Judge Leo Weinrott, this issue was submitted to a jury which found for the plaintiffs.

Defendant company contends that the court below should have granted its motion for judgment n.o.v. because: (1) the evidence did not support any finding of duress on the part of defendant but did reveal that plaintiffs had ratified the disputed written agreement after its execution; and (2) the oral agreement came within the operation of the Statute of Frauds and was required to have been reduced to writing. Defendant also contends that it is entitled to a new trial because the trial court failed to (1) properly instruct the jury as to what constitutes duress sufficient to vitiate the contract in question; (2) instruct as to a possible finding of plaintiffs' ratification after the execution of the contract and the legal effect of such a finding; and (3) instruct as to the applicability and effect of the Statute of Frauds.

We are of the opinion there is no reason to disturb the jury's verdict by entry of a judgment n.o.v. or the grant of a new trial.

[ 220 Pa. Super. Page 278]

In determining the merits of motions for judgment n.o.v. or for new trial, the Supreme Court of Pennsylvania, in Connolly v. Phila. Trans. Co., 420 Pa. 280 (1966), stated: "In considering a motion for judgment n.o.v., the evidence together with all reasonable inferences therefrom is considered in the light most favorable to the verdict winner. Lewis v. United States Rubber Co., 414 Pa. 626, 202 A.2d 20 (1964); Pritts v. Wigle, 414 Pa. 309, 200 A.2d 386 (1964); Chambers v. Montgomery, 411 Pa. 339, 192 A.2d 355 (1963), and in reviewing on appeal, we stated in Vignoli v. Standard M. Freight, Inc., 418 Pa. 214, 210 A.2d 271 (1965): 'The grant or refusal of a new trial will not be reversed on appeal, absent an abuse of discretion or error of law which controlled the outcome of the case.' See Chambers v. Montgomery, supra."

This being the law, there was ample evidence from which the jury could have determined that the plaintiffs executed the written agreement of January 9, 1961 under "business compulsion" or "economic duress" into which defendant maneuvered plaintiffs during their negotiations with each other.

The evidence on behalf of plaintiffs is substantially as follows:

Defendant, in June 1960, because it did not have, but desired to have, the particular line of women's wearing apparel manufactured by plaintiffs, offered to purchase plaintiffs' two corporations, Princess Fair and Roliman; to employ plaintiffs for a term of three years, and to give a stock option to Bernard Litten. Plaintiffs refused to sell. In the latter part of September 1960, the plaintiffs' two corporations were in an inventory bind, but were financially solvent and had a net worth in excess of $140,000.00. At that time plaintiffs were not in drastic financial difficulties because they could have obtained from their creditors an extension of time for payment; could have factored their

[ 220 Pa. Super. Page 279]

    accounts receivable (as suggested by the creditors); could have sold their business to a Marlene Blouse Company, or could have obtained additional financing. Nevertheless, at the urging of the accountant who worked for both parties, the plaintiffs and defendant resumed negotiations for the sale and purchase of plaintiffs' corporations.

In November 1960, plaintiffs and defendant orally agreed that in exchange for all the stock of plaintiffs' two corporations, defendant would pay the corporations' creditors; pay off the corporations' bank loans which were guaranteed by plaintiffs and their wives; pay to plaintiffs any monies remaining in excess of such payments from the assets of the corporation; employ plaintiffs for a term of one year, beginning January 1, 1961, at stipulated salaries and give Bernard Litten, one of the plaintiffs, an ...


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