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NATIONAL PRODUCTS COMPANY v. ATLAS FINANCIAL CORPORATION (12/22/75)

decided: December 22, 1975.

NATIONAL PRODUCTS COMPANY, INC.
v.
ATLAS FINANCIAL CORPORATION, APPELLANT



Appeal from order of Court of Common Pleas of Montgomery County, No. 67-13748, in case of National Products Company, Inc. v. Atlas Financial Corporation.

COUNSEL

A. Richard Gerber, with him Gerber, Davenport & Wilenzik, for appellant.

Oscar S. Schermer, with him Schermer and Schermer, for appellee.

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

Author: Spaeth

[ 238 Pa. Super. Page 154]

This is an appeal from the denial of a motion for a new trial in an assumpsit action.

By written agreement of August 25, 1966, appellant, Atlas Financial Corporation, agreed to lend $260,000 to the 215 Broad Corporation, part of this amount to be applied to the repayment of an earlier loan by Atlas to 215 Broad, and the balance, some $229,000, to be used in the renovation of a restaurant located at 213-15-17 South Broad Street in Philadelphia. 215 Broad's interest in the restaurant may be explained as follows.

As recited in the agreement, 215 Broad had contracted to lend money to Stanley Green's Broad Street Corporation to enable Stanley Green's to renovate the restaurant. Stanley Green's was a tenant in the 215 Broad Street building, which constituted the sole asset of 215 Broad. The president and sole shareholder of 215 Broad was Irving Feldman, and Feldman and his brother-in-law, Stanley Green, each owned one-half of the stock in Stanley Green's.

Under the agreement, Atlas would distribute the $229,000 to 215 Broad only upon compliance by 215 Broad with certain conditions. Thus, 215 Broad agreed, inter alia, to provide Atlas with verified copies of the bills covering the restaurant alterations, improvements, equipment and fixtures, and also with an architect's certification that the work had been done, and to permit Atlas to inspect the premises.

In September, 1966, Feldman and the manager of the restaurant met with Jules Caplan, vice-president of appellee, National Products Company, a wholesale distributor of food service equipment. Over a two to three-day

[ 238 Pa. Super. Page 155]

    period, the restaurant manager selected approximately $16,000 of merchandise. National, however, refused to deliver the merchandise since it was given no assurance that it would be paid. Feldman told National that Joseph Rappaport, Esquire, attorney for both 215 Broad and Stanley Green's, would arrange for National to be paid.

National provided Rappaport (at his request) with a list of the merchandise the restaurant manager had selected. On September 30, 1966, Rappaport transmitted this list to Atlas, and wrote a covering letter to Myron W. Harris, Esquire, Atlas's vice-president and house counsel, who had drafted the August 25 loan agreement. Rappaport's letter indicated that for various business reasons it was essential that the equipment be delivered by National as soon as possible. The letter concluded as follows:

"Pursuant to our discussion in this matter, we request that you forward letter to National Products Company as soon as possible, stating that upon certification of delivery of the merchandise in this order on restaurant premises, you will issue a check to their order and charge same to on account of proceeds of loan made to 215 Broad Street Corporation in a sum ...


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