No. 2830 October Term, 1978, Appeal from the Order of the Court of Common Pleas of Montgomery County, Civil Action - Equity, at No. 76-97.
Benjamin E. Zuckerman, Norristown, for appellant.
Walter W. Rabin, Philadelphia, for appellee.
Hester, Hoffman and Catania,*fn* JJ.
[ 274 Pa. Super. Page 501]
This is an appeal from the order of the lower court en banc dismissing appellant's exceptions to the chancellor's decree nisi. We find no merit in the contentions raised by appellant on this appeal and, accordingly, affirm the order of the lower court.
In 1974, the parties were engaged in litigation concerning the ownership of a computer program system known as PASS. The litigation was terminated by a written settlement agreement, dated July 15, 1974. In that agreement, appellee acknowledged appellant's ownership of PASS; appellant agreed to pay appellee a specified percentage of sales of PASS for a four year period; appellee was permitted to
[ 274 Pa. Super. Page 502]
audit appellant's books to verify that appellant was making proper payments; and if such an audit revealed that appellant had underpaid appellee by 10% or more, appellee was entitled to audit and collection expenses, plus reasonable attorneys' fees. Subsequently, a certified public accountant retained by appellee audited appellant's books and determined that appellant had failed to make all the payments required by the 1974 agreement. The parties resolved this dispute in a second settlement agreement, dated April 22, 1976. This agreement provided, inter alia, that in lieu of the payments required under the 1974 agreement, appellant was to pay appellee $96,000.00 over a 30 month period as well as the legal and accounting fees incurred by appellee in enforcing its payment rights; that as long as appellant remained current in its obligations under this agreement, appellee would not be liable for any additional legal and accounting fees; and that when appellant had made all payments under this agreement, appellant would be free of all claims by appellee under the 1974 agreement. The last paragraph of the 1976 agreement states: "In the event [appellant] fails to make any of these payments, [appellee] will be restored to its full rights under the  Agreement and may proceed to enforce them regardless of the terms of this document provided that [appellant] receives credit for any payments it has made hereunder." Appellant failed to make all the payments required by the 1976 agreement, and appellee elected to pursue its rights to recover payments under that agreement, rather than under the 1974 agreement. Appellee also sought to recover legal and accounting fees.
Following the trial, the chancellor entered a decree nisi, ordering appellant to pay the arrearages under the 1976 agreement, resume the payments under that agreement, and pay $6,000.00 in legal fees and $2,000.00 in accounting fees. The lower court en banc dismissed appellant's exceptions to the decree nisi and entered a final decree. This appeal followed.
Appellant first contends that the lower court erred in allowing appellee to proceed under the 1976 agreement
[ 274 Pa. Super. Page 503]
because that agreement contains an automatic reversion to the 1974 agreement should appellant fail to make the monthly payments. Appellant argues that an examination of the prior versions of the last paragraph of the 1976 agreement and of the surrounding circumstances demonstrates that the parties did not intend appellee to have the option of proceeding under ...