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decided: November 26, 1973.


Appeal from decree of Court of Common Pleas of Westmoreland County, No. 3565 of 1968, in case of Frank Hatalowich, William Hatalowich, Amel Hatalowich, and George Hatalowich, trading and doing business as Mon-Valley General Tire Company v. Redevelopment Authority of the City of Monessen.


James J. Manderino, and Manderino and Sparacino, for appellant.

Albert M. Nichols, for appellees.

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

Author: Roberts

[ 454 Pa. Page 482]

The Redevelopment Authority of the City of Monessen appeals from a decree in equity by the Court of Common Pleas of Westmoreland County.*fn1

The decree ordered appellant Authority to pay to appellees Frank, William, and Amel Hatalowich, trading as Mon-Valley General Tire Company, $25,442.46 as damages for breach of a contract for the sale of land.*fn2

[ 454 Pa. Page 483]

On April 10, 1965, appellees submitted to the Authority a document entitled "Proposal."*fn3 This writing, which the parties agree constituted an offer to purchase, outlined plans for the land in question, stated a price, and was accompanied by a check for ten percent of the proposed purchase price. Paragraph seven recites that upon acceptance of the proposal an "Agreement" would be executed and a ten percent deposit made "to complete the purchase . . . in the manner set forth in the Agreement."

Approximately six months later, on October 28, 1965, the Authority at a regular meeting adopted Resolution 165 which approved appellees' proposed use of the tract in question as a tire service and recapping establishment. The resolution continued: "The Redevelopment Authority of the City of Monessen hereby designates the Mon Valley General Tire Company as the sole Developer for said described tract of land and hereby directs the preparation of a final agreement for the disposition of said tract of land from the Redevelopment Authority of the City of Monessen to Mon Valley General Tire Company." No other formal document was ever executed. In reliance on Resolution 165, appellees continued preparations for construction through further architectural consultation and test borings at the site. Appellant retained the deposit for nearly three years, until September 6, 1968, when it tendered a refund and informed appellees that it would not convey.

That appellees' "Proposal" constituted an offer is not disputed. The question is whether Resolution 165 accepted the tendered offer. The Authority maintained at trial and argues in this appeal that no contract was consummated. The chancellor found Resolution 165

[ 454 Pa. Page 484]

    to be an acceptance and concluded that the contract was complete. We find no error in the trial court's determination affirmed by the court en banc. We affirm.

Liminally, it must be emphasized that the scope of our review here is narrowly circumscribed. It is well settled that the chancellor's findings of fact approved by the court en banc have the effect of a jury verdict and will not be disturbed on appeal if supported by competent evidence. While we are always free, and indeed are duty bound, to modify erroneous applications of law, when, as in the instant case, determination of the parties' intent is crucial, the chancellor's factual conclusions if supported by competent evidence will not be overturned. Field v. Golden Triangle Broadcasting, Inc., 451 Pa. 410, 305 A.2d 689 (1973), cert. denied, 414 U.S. 1158, 94 S. Ct. 916 (1974).*fn4

Appellant urges two theories neither of which compels a finding of non assumpsit. Initially, it is argued that Resolution 165 could not be an acceptance because not couched in the offer's terms and not consistent with the acceptance procedure outlined in the offer. The Authority attempts to take advantage of two hornbook rules of interpretation. First, a reply to an offer which purports to accept, but adds qualifications or makes acceptance conditional, is not an acceptance, but rather a counter-offer. See Restatement of Contracts § 60 (1932). Second, when an offer states a manner of acceptance, it becomes the exclusive mode of creating the contract. See id. § 61.

Comparing appellees' offer to Resolution 165, like the chancellor and the court en banc, we preceive no qualifications or conditions in the resolution which would preclude the finding that it accepted appellees'

[ 454 Pa. Page 485]

    offer. Nor do we find any material variance in the terms of agreement recited in each document. The Resolution as well as the offer refers to "Parcel 2"; both relate to a parcel of approximately 28,000 square feet; both describe appellees' projected tire recapping and service facility.*fn5

Likewise, we do not find that the Authority's failure to accept in the manner provided by paragraph ten negates the existence of a contract. That paragraph states: "Acceptance, or rejection, of this proposal shall be made by depositing such acceptance, or rejection, notification in the United States mail addressed to the Proposer at the address set forth below." Although this provision sets out a manner of acceptance, there is no indication that mailing is the exclusive method of acceptance. The intent of this clause is clear; it purports to adopt the "dispatch rule" to insure that loss

[ 454 Pa. Page 486]

    in the mails will not render the Authority's acceptance ineffective.*fn6 Here the Authority's acceptance was accomplished by an official, public act -- Resolution 165.

Next appellant argues that since the offer contemplated execution and delivery of the "Agreement," a final document, and none was executed or delivered, no contract existed. We find this assertion unpersuasive.

Schermer v. Wilmart, 282 Pa. 55, 127 A. 315 (1925), addressed the problem of failure to execute a contemplated formal document. There we held a deposit receipt sufficient evidence of a meeting of the minds to permit a decree of specific performance of a land sale contract. The rationale of Schermer has been applied and amplified. Field v. Golden Triangle Broadcasting, Inc., supra; Goldman v. McShain, 432 Pa. 61, 247 A.2d 455 (1968); Moudy v. West Virginia Pulp & Paper Co., 385 Pa. 39, 121 A.2d 881 (1956); Onyx Oils & Resins, Inc. v. Moss, 367 Pa. 416, 80 A.2d 815 (1951); Taylor v. Stanley Co., 305 Pa. 546, 158 A. 157 (1932). See Melo-Sonics Corp. v. Cropp, 342 F.2d 856 (3d Cir. 1965); In re ABC-Federal Oil & Burner Co., 290 F.2d 886 (3d Cir. 1961).

Recently in Goldman, supra, we recognized that "[s]section 26 of the Restatement of Contracts specifically recognizes that parties may bind themselves contractually although they intend, at some later date, to draft a more formal document: 'Mutual manifestations of assent that are in themselves sufficient to make a contract will not be prevented from so operating by the mere fact that the parties also manifest an

[ 454 Pa. Page 487]

    intention to prepare and adopt a written memorial thereof . . . .'"*fn7

Neither Whitemarsh Township Authority v. Finelli Brothers, Inc., 408 Pa. 373, 184 A.2d 512 (1962), nor Essner v. Shoemaker, 393 Pa. 422, 143 A.2d 364 (1958), require a contrary result. No formal contract was executed in Whitemarsh. The dispute involved Finelli's bid for construction of a municipal project, which though accepted by the township, was unsigned. The township's "instructions to bidders" provided that "[n]o proposal will be considered . . . which is not properly made out and signed in writing by the bidder. . . ." 408 Pa. at 378, 184 A.2d at 515. Because of this express language, the bid was void ab initio. Thus no power of acceptance was created in the township. And since no contractual relationship could be founded upon a void bid, we held failure to execute a formal writing negated the existence of a contract.

An alleged oral land sale contract precipitated the Essner litigation. There, we simply affirmed the chancellor's findings that the parties did not intend to be bound until a written agreement had been executed. This Court held that an oral contract had not been created because "'it was admitted by all parties to the September meeting that the oral provisions of the contract

[ 454 Pa. Page 488]

    were to be discussed with the title company representative subsequent to the meeting, and that the drafts when committed to writing should be forwarded to respective counsel for approval. . . .'" 393 Pa. at 425-26, 143 A.2d at 366. See Taylor v. Stanley Co., supra.

As Schermer and its progeny illustrate, when a later-written memorialization is contemplated, the crucial inquiry in ascertaining the existence of a contract is the intention of the parties. Here, the chancellor and the court en banc found that competent evidence established the requisite intent to contract, and that a contract had in fact been entered into by the parties. Our review of the record discloses no ground for disturbing this conclusion.

Decree affirmed. Each party to pay own costs.


Decree affirmed.

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