Appeal from judgment of Court of Common Pleas, Civil Division, of Allegheny County, July T., 1970, No. 2962, in case of Amerofina, Inc. v. U.S. Industries, Inc.
Gilbert J. Helwig, with him Eric P. Reif, and Reed, Smith, Shaw & McClay, for appellant.
William D. Sutton, with him Thorp, Reed & Armstrong, for appellee.
Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Jacobs, J.
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This case, evolving from a complex history of facts, represents a suit by Amerofina, Inc. [hereinafter Amerofina]
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against U. S. Industries, Inc. [hereinafter USI] to recover a "finder's fee" which Amerofina alleges is due it for services rendered under an oral contract. Amerofina alleges that USI agreed to compensate Amerofina for its assistance in locating and procuring acquisition candidates for USI's program of corporate growth and amalgamation.
USI does not deny the existence of the oral contract, but it asserts that under the terms of the contract Amerofina was required to do more than locate and introduce suitable acquisition candidates. USI asserts that Amerofina was required to act as a "broker", an engagement which required active negotiation on behalf of USI. USI also asserts that irrespective of the semantic characterization of Amerofina's contractual undertaking, it must prove as a condition precedent to recovery that it was the "efficient procuring cause" of the acquisition. The evidence produced, USI asserts, was insufficient to satisfy this burden.
The jury returned a verdict for Amerofina in the amount of $220,000. Post-trial motions were denied, and USI brings this appeal.
The factual background of this case is a difficult terrain to cross, but the journey is necessary for a proper resolution of the issues. During the time pertinent to this case USI was a large conglomerate composed of more than one hundred subsidiaries and divisions operating in various fields. Amerofina was engaged in the business of investment banking and stock brokerage, with principal offices in Pittsburgh, New York, Italy and Switzerland. In the summer of 1968 Herbert Kerr, a vice president of USI travelled to Pittsburgh to meet with Samuel Garvin, a vice president of Amerofina, who had been retained by a banking institution to find a purchaser for the bank. Kerr decided that the bank would not be a suitable acquisition for USI; however, he entered into an agreement with Garvin under which Amerofina would
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find and present to USI suitable companies for acquisition. Garvin testified that Kerr asked Amerofina to represent USI "on a finder's fee basis," and that he accepted the offer.
Kerr acknowledged that the parties had discussed USI's interest in acquisitions, that he had furnished Garvin with certain acquisition criteria, and that he had agreed that USI would pay a "reasonable fee" or a "mutually agreeable fee" in connection with acquisitions made by USI.
The first acquisition made by USI pursuant to this contract was a group of five affiliated corporations known as Berkeley Schools. Garvin introduced the parties, supplied USI with financial information, and helped to persuade one of the principal shareholders of Berkeley not to pull out of the deal because of a delay on the part of USI. Amerofina was paid $85,000 by USI which the Berkeley-USI acquisition agreement characterized as being ...