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MURPHY v. HAWS & BURKE (09/22/75)

decided: September 22, 1975.

MURPHY, ET AL., APPELLANTS,
v.
HAWS & BURKE



Appeal from order of Court of Common Pleas of Montgomery County, No. 74-12024, in case of L. Francis Murphy and Robert E. Slota and Murphy and Slota v. Haws & Burke, a professional corporation.

COUNSEL

Bernard V. DiGiacomo, for appellants.

Harold W. Spencer, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Jacobs, J.

Author: Jacobs

[ 235 Pa. Super. Page 486]

This case arose from the termination of a professional relationship between the individual plaintiffs-appellants, attorneys-at-law, and the law firm of Haws & Burke. The sole issue before this Court is whether the instant suit is barred by virtue of previous litigation. We hold that the claims of the individual plaintiffs are barred; but that the claim of the professional corporation, Murphy & Slota, for reasons stated hereinafter, is not.

Subsequent to the severance of their relationship with Haws & Burke, the individual plaintiffs brought two suits in equity against the professional corporation. The first sought an order directing the delivery of certain files. The second sought the recovery of a percentage of the gross profits of the firm under the alternative allegations that the plaintiffs (a) had been partners in the law firm; (b) had been shareholders in the professional corporation; or (c) had been employees of the firm or corporation under an express or implied agreement requiring the payment to each appellant of wages and salary in the amount of 14 1/2 percent of the gross profits of the firm. The chancellor found, inter alia, (1) that each individual plaintiff was at all times an employee of the firm; (2) that each was employed pursuant to an oral agreement under which he received compensation in the nature of salary and bonus; (3) that "[t]he [individual plaintiffs] received, in addition to their salary, bonus distributions paid from time to time by their employer, HAWS & BURKE, and neither employee was ever consulted or participated in the fixing of the amount, nature or time of and for such bonus distributions;"*fn1 and (4)

[ 235 Pa. Super. Page 487]

    that for the years prior to 1969 the individual plaintiffs received unequal distributions of salary and bonus. The chancellor found as a conclusion of law that the individual plaintiffs failed to prove that they were other than employees of the firm,*fn2 and he entered a decree nisi dismissing the complaint.

The individual plaintiffs filed exceptions to the adjudication which challenged, inter alia, (1) the findings that the plaintiffs were employees; (2) the finding that they were employed under an agreement pursuant to which they were to receive "compensation in the nature of salary and bonus;"*fn3 (3) the finding that the distributions to the plaintiffs were in the nature of "salary and bonuses;"*fn4 and (4) the implication in the chancellor's conclusion of law number two*fn5 "that plaintiffs were each only entitled to a base salary and that all other compensation or distributions made to them were solely gratuitous on the part of Thomas J. Burke."*fn6 The exceptions were dismissed*fn7 and an appeal was taken to the Supreme Court which, in an opinion by Justice Pomeroy, affirmed the decrees.*fn8

The individual plaintiffs then commenced the instant suit in assumpsit. Reasoning that the Supreme Court has determined their status to have been that of mere employees, and consequently that they were not entitled to a

[ 235 Pa. Super. Page 488]

    distribution of profits, the individual plaintiffs now seek to recover in quantum meruit the reasonable value of their services rendered to the corporation. The argument is superficially alluring, yet upon closer examination it is readily ...


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