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BATA v. CENTRAL-PENN NATIONAL BANK PHILADELPHIA (ET AL. (06/28/72)

decided: June 28, 1972.

BATA
v.
CENTRAL-PENN NATIONAL BANK OF PHILADELPHIA (ET AL., APPELLANT)



Appeals from order and final decree of Court of Common Pleas, Trial Division, of Philadelphia, June T., 1963, No. 2495; and from supplementary decree of Court of Common Pleas, Trial Division, Philadelphia, June T., 1963, No. 2495, in case of Thomas J. Bata v. Central-Penn National Bank of Philadelphia and Jan T. Bata, individually and as personal representative of Jan A. Bata, deceased.

COUNSEL

Harold E. Stassen, with him James E. Riely, Joseph N. Bongiovanni, Jr., Stassen and Kostos, and Stassen and Kephart, for appellant.

Lewis H. Van Dusen, Jr., with him Morris R. Brooke, Robert MacCrate, Drinker, Biddle & Reath, and Sullivan & Cromwell, for appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Manderino concurs in the result. Concurring and Dissenting Opinion by Mr. Justice Eagen.

Author: Roberts

[ 448 Pa. Page 357]

We have consolidated for consideration appellant Jan T. Bata's appeal from a February 3, 1970, decree of the Philadelphia Common Pleas Court (No. 491 January Term, 1970) and appellant's appeal from a supplementary decree of that same common pleas court entered October 5, 1971 (No. 135 January Term, 1972).

These appeals represent the latest chapter in a twenty-five year dispute over control of the worldwide network of Bata enterprises. This dispute was purportedly terminated by a settlement agreement in 1962, but since 1963 the courts of this Commonwealth have been occupied almost continuously with litigation centering around the settlement agreement. In fact, on two prior

[ 448 Pa. Page 358]

    occasions this Court has written full opinions on various aspects of the litigation concerning the settlement agreement. Bata v. Central-Penn National Bank of Philadelphia, 433 Pa. 284, 249 A.2d 767 (1969) [hereinafter cited as Bata II ]; Bata v. Central-Penn National Bank of Philadelphia, 423 Pa. 373, 224 A.2d 174 (1966), cert. denied, 386 U.S. 1007, 87 S. Ct. 1348 (1967) [hereinafter cited as Bata I ].

The litigation in the courts of this Commonwealth, as we shall describe in detail, has been generated by appellant's patent violations of the 1962 settlement agreement and protracted by appellant's defiance of the decrees of the courts of this Commonwealth. The decrees from which appellant now appeals awarded appellee compensatory damages for the injuries he suffered as a result of appellant's numerous breaches of the settlement agreement and as a result of appellant's contempt of the decrees of the trial court. The decrees from which appellant now appeals also enjoined appellant from any further violations of the settlement agreement. We find no error in the trial court's decree of February 3, 1970, nor in its supplementary decree of October 5, 1971. Accordingly we affirm.

I

The factual background of these appeals is a lengthy and complicated one:

A. The 1962 Settlement Agreement

"On March 27, 1962, [appellee] Thomas J. Bata and the late Jan A. Bata*fn1 executed a settlement agreement

[ 448 Pa. Page 359]

    purporting to terminate fifteen years of almost continuous litigation. The agreement provided that the parties would exchange stock certificates and instruments of assignment in various Bata companies, that they would execute comprehensive general releases as well as some 150 special releases, and that they would terminate each of the thirteen lawsuits then pending between them. In addition, [appellee] Thomas J. Bata agreed to pay Jan the sum of $3,400,000 . . . ." Bata I at 375-76, 224 A.2d at 177-78.

Two particular portions of this 1962 settlement agreement should be noted. First, as a part of the comprehensive settlement agreement, appellant agreed

[ 448 Pa. Page 360]

    to cooperate in terminating an action then pending in the Chancery Division of the High Court of Justice of England [hereinafter referred to as the English action] by the entry of an agreed form of "Tomlin Order." This English action involved the conflicting claims of appellant and appellee to certain corporate shares and the accumulated dividends thereon.

Second, by a document dated March 14, 1962, which was incorporated as a part of the comprehensive settlement agreement, appellee and appellant entered into certain agreements concerning N. V. Nederlandesche Schoen-en Lederfabrieden Bata-Best, a Dutch corporation [hereinafter referred to as Bata-Best]. By this document it was agreed, inter alia, that:

" Article IV

"The accumulated earned surplus in Bata-Best shall be capitalized and additional shares shall be issued therefor to the holders of shares of Bata-Best in proportion to their share ownership, which is recognized to be 55% in Leader A. G. and 45% in [appellant] Jan A. Bata . . . .*fn2

". . . .

" Article VI

"The shares of Bata-Best shall be changed to registered shares and these registered shares, in all other respects the same as present bearer shares, shall be issued

[ 448 Pa. Page 361]

    to the holders of the present bearer shares in exchange therefor . . . .

". . . .

" Article VIII

"Recognizing the importance of harmonious operations of Bata-Best, [appellant] Jan A. Bata undertakes that he will not commence or take part as a party in any lawsuit concerning any affairs of Bata-Best . . . ."

In order to guarantee the performance of appellant's agreements to cooperate in terminating the English action and to cooperate in registering the shares of Bata-Best, an escrow arrangement was established as a part of the comprehensive settlement agreement. According to this escrow arrangement appellee deposited $500,000 of the $3,400,000 that he had agreed to pay appellant with the Central-Penn National Bank of Philadelphia [hereinafter referred to as Central-Penn]. Appellant deposited certain stock certificates and other documents with the same institution. It was agreed that the $500,000 would be delivered to appellant and the stock certificates and other documents would be delivered to appellee upon the termination of the English action and the registration of the Bata-Best shares.

B. Appellee's 1963 Action for Specific Performance of the Settlement Agreement and the Final Decree of 1965

By mid 1963, despite his undertakings in the comprehensive settlement agreement, appellant had not cooperated in terminating the English action nor had he cooperated in effecting the registration of the Bata-Best shares. Accordingly, on July 16, 1963, appellee filed a complaint in equity alleging that: "Defendant [appellant] Jan A. Bata has wrongfully refused to cooperate in obtaining an order of the High Court of Justice

[ 448 Pa. Page 362]

    in London to conclude the litigation pending in that Court and to take the steps which are necessary to be taken by him to permit the registration of the bearer shares of the Dutch Bata Company." Appellee prayed that Central-Penn be directed to deliver the stock certificates and the other documents which it held in escrow to appellee and requested "such other, further and different relief as to the Court may seem just and equitable, together with the costs and disbursements of this action."

Appellant filed an answer alleging in new matter that the settlement agreement was void because it was entered into without consideration and was the result of duress and the force of adverse judgments which were fraudulently obtained in other jurisdictions.

After extensive pleadings, including a reply and a counter reply, appellee moved for judgment on the pleadings. On September 9, 1965, Judge Alessandroni entered judgment on the pleadings in favor of appellee, completely rejecting appellant's*fn3 claims of lack of consideration, duress, and fraud. The trial court's final decree of October 18, 1965, [hereinafter referred to as the Final Decree] specified: "1. The settlement agreement concluded between the parties on March 27, 1962 is valid and binding. Defendant [appellant] Jan T. Bata, Executor, is ordered specifically a. To cooperate in terminating the action pending in England . . . by consenting to the entry of an order in the form of the attached 'Tomlin Order' in accordance with his instructions heretofore given under date of March 27,

[ 448 Pa. Page 3631962]

to his English Solicitors . . .; and b. To cooperate in the registration of the outstanding bearer shares of the Dutch Bata [corporation]. . . . in accordance with the agreements dated March 14, 1962 among Thomas J. Bata, Jan A. Bata and Leader, A. G." In addition the Final Decree directed Central-Penn to deliver the stock certificates and the other documents which it held in escrow to appellee, and to retain the $500,000 which it held in escrow "pending the further order of this court, which hereby retains jurisdiction to supervise the carrying out of the provisions of this judgment."

Appellant perfected an appeal to this Court, and on November 15, 1966, we unanimously affirmed the Final Decree. Bata I. We noted: "Despite the 1962 settlement agreement, appellant has persisted in advancing his claim to control of the Bata Enterprises. Settlement agreements are designed to forestall not foster litigation, and while like any other contract, there are circumstances under which they may be avoided, these circumstances do not include thinly veiled averments of fraud and duress, whose purpose is to conceal disappointment with the settlement . . . . The orderly administration of justice requires that the protracted litigation which culminated in a total settlement by the parties now be deemed concluded."*fn4 On April 17, 1967, the ...


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