filed: October 2, 1981.
GEORGE ZVONIK, JR.
ANDREW J. ZVONIK, APPELLANT. GEORGE ZVONIK, JR. V. ANNA ZVONIK, ANDREW J. ZVONIK AND PAULINE ZVONIK, HIS WIFE, AND PAUL ZVONIK, APPELLANTS
No. 238 Pittsburgh, 1980, No. 237 Pittsburgh, 1980, Appeal from the Order of the Court of Common Pleas, Somerset County, No. 12 Civil 1978 and No. 13 Civil 1978.
William F. Patterson, Johnstown, for appellants.
James B. Yelovich, Somerset, for appellee.
Spaeth, Johnson and Popovich, JJ. Johnson, J., files a concurring and dissenting opinion.
[ 291 Pa. Super. Page 312]
These are consolidated appeals from an Order entered by the court en banc dismissing appellants' exceptions to the Chancellor's findings. For the reasons set forth below, we affirm the lower court's Order.
It is settled that "'the findings of fact of the [c]hancellor who heard the testimony without a jury, approved by the court en banc, are entitled to the weight of a jury's verdict; that such findings are controlling and that the court's decree should not be reversed unless it appears that the court abused its discretion or that the court's findings lack evidentiary support or that the court capriciously disbelieved the evidence.'" (Citations omitted) Hankin v. Hankin, 279 Pa. Super. 179, 196, 420 A.2d 1090, 1099 (1980); accord Silo Realty Corp. v. Redevelopment Authority of The City of Philadelphia, 289 Pa. Super. 67, 432 A.2d 1053 (1981). The chancellor's findings are entitled to particular weight in a case in which the credibility of the witnesses must be carefully evaluated, because he has had the opportunity to hear them and to observe their demeanor on the stand. Sorokin v. Krasner, 289 Pa. Super. 324, 433 A.2d 88 (1981); Kimball v. Barr Township, 249 Pa. Super. 420, 378 A.2d 366 (1977). "'In such case, the party favored by the finding is entitled to have the evidence viewed in the light most favorable to him and to have all conflicts in the testimony resolved in his favor.'" (Citations omitted) Johnston Truck Rental Co. v. Fowler-McKee, 281 Pa. Super. 271, 274, 422 A.2d 164, 165 (1980). So viewed, the facts, as gleaned from the trial transcript, are as follows:
In 1972, George Zvonik-appellee orally agreed with Anna Zvonik, his mother, that he would provide the labor and materials to repair her home and construct a two-room addition thereto. Appellee also agreed to pay all the utilities
[ 291 Pa. Super. Page 313]
and property taxes. The mother in turn promised that appellee and his family could live with her and that prior to her death she would convey the property to him. In reliance upon said agreement, appellee moved into the premises and sold lots that he owned to get some of the capital needed to make the improvements desired by the mother. (N.T. 2/26/79, at 61 & 65) Appellee's wife also borrowed money ($200-$300 from the credit union) to supplement what the appellee obtained. Id.
After the appellee substantially completed the work on the homestead, the mother conveyed the property by deed to her daughter-in-law, Pauline Zvonik-appellant (Pauline). Thereafter, Pauline instituted an action in ejectment and appellee relinquished possession of the property. With this action, family relations deteriorated; e. g., appellee was involved in an altercation with Pauline's husband, Andrew Zvonik-appellant (Andrew), which led to the filing of criminal charges (Aggravated Assault). However, pursuant to a "stipulation" reached in open court on February 25, 1974, the charges were nolle prossed. The parties agreed that an impartial building contractor would appraise the "fair value" of the work performed by the appellee; that Andrew would pay that amount and appellee would accept it in full and final compromise of his claim. (N.T. 2/25/74, at 2-6) As agreed, a contractor (Lloyd Zimmerman) was selected by the appellee, and he submitted an appraisal on June 12, 1975 (delineating the cost of the work done) totaling $8,520.00. See note 7 infra. Andrew was supplied with the estimate but failed to pay the amount stated or any part thereof. Moreover, on May 29, 1975, Andrew and Pauline transferred the property in question to their son (Paul), but retained a life estate therein.
It was January 20, 1978, before the appellee took any legal recourse. At that time, he filed two Complaints in Assumpsit -- No. 12 Civil 1978 and No. 13 Civil 1978 -- which resulted in rulings in his favor, and the exceptions filed therein were dismissed by the court en banc. This appeal followed.
[ 291 Pa. Super. Page 314]
our position. For example: in Scott v. Purcell, 264 Pa. Super. 354, 399 A.2d 1088 (1979) the appellant proved the existence of an oral agreement whereby Purcell consented to act as his agent in buying a piece of property. Purcell, after several months of negotiations, succeeded in getting the parties to agree to a purchase price. However, shortly after Purcell informed appellant that he was having difficulty obtaining financing for the project, a deed from the seller to Oaklander Associates was recorded. Oaklander Associates consisted of Oakland Corp., of which Purcell was vice president and his wife and two others were shareholders.
Although the Court in Scott reversed the trial judge's granting of a non-suit as to Oaklander Associates, holding that the evidence was sufficient to warrant the imposition of a constructive trust, the Court's observations on why Oaklander Associates was unjustly enriched are equally applicable to the case at bar, viz. :
"The case is otherwise with respect to unjust enrichment. In Buchanan v. Brentwood Federal Savings and Loan Association, [457 Pa. 135, 320 A.2d 117 (1964)], the Supreme Court stated that the imposition of a constructive trust on the property in question would be proper if the appellants were able to show on remand that the appellees had been unjustly enriched; such a showing would amount to 'a general assertion that the ends of public policy and substantial justice demand that a constructive trust be impressed.' Buchanan v. Brentwood Federal Savings and Loan Association, supra 457 Pa. at 155, 320 A.2d at 128. Recently, we said that to sustain a claim of unjust enrichment, 'appellant must show that she wrongfully secured or passively received a benefit that it would be unconscionable for her to retain.' Roman Mosaic and Tile Co., Inc. v. Vollrath, 226 Pa. Super. 215, 218, 313 A.2d 305, 307 (1973); See generally Moreland v. Metrovich, 249 Pa. Super. 88, 375 A.2d 772 (1977); Kimball v. Barr Township, supra; Restatement of Restitution §§ 160, 194 (1937). Here, appellant has made no showing that Oaklander Associates 'wrongfully secured' the property in
[ 291 Pa. Super. Page 316]
question, but he has shown that it 'passively received a benefit that it would be unconscionable for [it] to retain.' The fact that Oaklander Associates may not on the present record be held to have known of Purcell's wrongful acts does not refute the basic point that it was given a chance to buy the property, only because Purcell violated his duties to appellant as appellant's agent." Id., 264 Pa. Super. at 367, 399 A.2d at 1095.
Keeping the aforesaid in mind, we turn to the facts instantly. At trial, appellee testified that his mother approached him with the offer that, ". . . you build me two rooms and everything on my side. She says youns [sic] can move in the old part . . . . She says, you keep me as long as I live. Then the house is yours." (N.T. 2/6/79, at 61) On cross-examination, appellee reiterated the terms of the oral agreement.*fn3 Id. at 79. This accounting was corroborated by a disinterested witness (Nicholas Bruno), who stated that the mother "requested if [appellee] build [sic] her two rooms, that he could live in the house. And in due time . . . . [s]he would give him a deed for the house."*fn4 Id. at 12 & 22.
[ 291 Pa. Super. Page 317]
The evidence at trial further disclosed that the appellee moved into the premises, cared for the mother and for a year and a half incurred all the expenses attendant to the upkeep of the house. Despite his expenditure of time and money ($8,520.00) to improve substantially the condition of the premises, see Messinger v. Washington Township, 185 Pa. Super. 554, 137 A.2d 890 (1958), the mother did not comply with her part of the bargain.*fn5 (N.T. 2/6/79, at 64)
[ 291 Pa. Super. Page 318]
Instead, she conveyed the property to Pauline for one dollar, who in turn transferred it to her son, Paul, for the same amount.
As was the case in Scott v. Purcell, supra, appellee here made no showing that Pauline and Paul "wrongfully secured" the property in question, but we find that he has shown that they "passively received a benefit that it would be unconscionable for [them] to retain." Id., 264 Pa. Super. at 367, 399 A.2d at 1095. The fact that appellants may not on the present record be held to have known of the mother's wrongful acts, but see Farmers National Bank of Bloomsburg v. Albertson, 203 Pa. Super. 205, 199 A.2d 486 (1964) (absent actual knowledge, circumstances can impose upon one the duty to have knowledge, e. g., close family relationship) does not refute the basic point that they were the beneficiaries of appellee's agreement, Restatement of Restitution §§ 1 & 204, whereby he contributed to the maintenance and improvement of the premises. To divest the appellee now of the opportunity to recoup the "fair value" of his services would be truly unjust. See, e. g., Harkins v. Zamichieli, supra; Hall v. Milham, 225 Ark. 597, 284 S.W.2d 108 (1955); Eastwood v. Eastwood, 167 Kan. 471, 207 P.2d 393 (1949); Corbin on Contracts § 19, p. 27 (1952) ("A quasi contractual obligation is one that is created by the law for reasons of justice, without any expression of assent and sometimes even against a clear expression of dissent . . . . It must be admitted, or indeed asserted, that considerations of equity and morality play a large part in the process of finding a promise by inference of fact as well as in constructing a quasi contract without any such inference at all."). Moreover, appellee seeks recovery under a theory of unjust enrichment and not as a party to a contract seeking
[ 291 Pa. Super. Page 319]
to enforce the contract against a third party. (Appellee's "ANSWER TO PRELIMINARY OBJECTIONS," Record No. 7); see Crossgates Realty Inc. v. Moore, 279 Pa. Super. 247, 420 A.2d 1125 (1980).
Consequently, we cannot in good conscience be a party to a course of action which permits the party litigants (Pauline & Paul) to retain a benefit, see Restatement of Restitution § 1 Comment b ("The word 'benefit,' . . ., denotes any form of advantage."),*fn* secured at the expense of another, and at the same time say that injustice will not result from the denial of restitution to the appellee; therefore, we affirm the Order below.
No. 13 Civil 1978
As for appellee's suit on the breach of the "stipulation" entered into in open court, Andrew asserts not to be bound by same for two reasons. First, he argues, since he filed a voluntary petition in bankruptcy on May 1, 1979, in the United States District Court for the Western District of Pennsylvania and listed the amount owed to appellee in his schedule of outstanding debts, the fact that all of his debts were "discharged by order of said Court dated July 10, 1979[,] . . . effectively terminates the action at No. 13 Civil 1978." (Appellants' Brief at 5) Second, because the contractor selected was not "impartial," having "done business with the [appellee] for many years prior to the appraisal," and "was unable to describe what work had been done" with any degree of particularity, his testimony was "of no value whatsoever." Id. at 11.
In regard to the initial averment, given the fact that Andrew failed to raise such defense in his "EXCEPTIONS" filed on August 29, 1979, (Record Nos. 22 & 24), it is waived. In re Custody of Frank, 283 Pa. Super. 229, 233, 423 A.2d 1229, 1232 (1980) (SPAETH, J.) ("When an action in assumpsit
[ 291 Pa. Super. Page 320]
is tried by a judge sitting without a jury, a party who objects to the judge's decision must file exceptions, and '[m]atters not covered by exceptions are deemed waived . . . .' Pa.R.Civ.P. 1038(d)."); see also Carnicelli v. Bartram, 289 Pa. Super. 424, 433 A.2d 878 (1981); Yellow Freight System, Inc. v. Workmen's Compensation Appeal Board, 56 Pa. Commw. 1, 3, 423 A.2d 1125, 1127 (1981), cf. Birdman v. Medley, 261 Pa. Super. 23, 395 A.2d 285 (1978) (to confront the appellee (and the trial judge) with a discharge in bankruptcy as a defense to a suit on a spur of the moment, without affording them the opportunity to assemble their relevant evidence or legal research, perpetrates an injustice and raising the issue initially on appeal renders it waived); 2 Goodrich-Amram 2d § 1038(d):1. Thus, the merits of a claim raised for the first time on appeal will not be considered. See Policino v. Ehrlich, 478 Pa. 5, 385 A.2d 968 (1978); see generally Logan v. Cherrie, 444 Pa. 555, 282 A.2d 236 (1971); American Vending Co. v. Brewington, 289 Pa. Super. 25, 33 n. 5, 432 A.2d 1032, 1036 n. 5 (1981); Birdman v. Medley, supra.
The second point, in which Andrew attacks the "impartiality" of the contractor and his alleged failure to recall in detail the improvements made by the appellee four (4) years prior to the date of trial, fares no better than the first, for it is likewise waived.*fn6 Pa.R.C.P. 1038(d).
[ 291 Pa. Super. Page 321]
Although the present appeal is only before this Court on the two issues just mentioned, the court below in its Opinion stated that to permit Andrew "to escape payment for the improvements to the property," in light of the "stipulation" made in open court, "would be manifestly unjust," and went on to elaborate its reasons for believing so. In addition, both appellants and appellee have addressed the issue of the legitimacy of the "stipulation" in their briefs submitted to this Court. Accordingly, it is appropriate that the issue be discussed. See Beneficial Consumer Discount Co. v. Hamlin, 263 Pa. Super. 393, 405, 398 A.2d 193, 200 (1979).
After the appellee filed a criminal complaint against Andrew, the parties appeared in court and set forth a proposal whereby appellee would drop the charges in exchange for Andrew agreeing to, inter alia, pay the "'fair value' of the work done on the[ ] premises" by the appellee, the appraisement of which would be made by an impartial contractor chosen by appellee's counsel; and "[w]hatever figure he c[a]me[ ] up with [would] be binding upon both of the parties." (N.T. 2/25/74, at 2-3) The lower court, after
[ 291 Pa. Super. Page 322]
ascertaining that the parties heard, understood and consented to the "stipulation," approved it.
Andrew would now have this Court sanction his attempt to eschew the obligations arising out of the "stipulation," on the basis that there was "no meeting of the minds therein." (Appellants' Brief at 6) We do not agree.*fn7
To start with, "[a]ny matter which involves the individual rights or obligations of the parties inter se may properly be made the subject of a stipulation between them." Foote v. Maryland Casualty Co., 409 Pa. 307, 313, 186 A.2d 255, 258 (1962); accord Kardibin v. Associated Hardware, 284 Pa. Super. 586, 599, 426 A.2d 649, 655 (1981);
[ 291 Pa. Super. Page 323]
held that the price is sufficiently certain in order to have an enforceable obligation. See, Williston, Contracts, Vol. 1, § 41 (3d Ed. 1957); 17 Am.Jur.2d, supra. Moreover, the law recognizes in the area of enforceability of contracts the maxim, ' id certum est quod certum reddi potest ' (that is certain which can be made certain). Suchan v. Swope, [357 Pa. 16, 53 A.2d 116 (1947)]; Windsor Manufacturing Company v. S. Makransky & Sons, 322 Pa. 466, 186 A. 84 (1936); Rossmassler v. Spielberger, 270 Pa. 30, 112 A. 876 (1921); Northern Central Railway Company v. Walworth, 193 Pa. 207, 44 A. 253 (1899). Here the parties specifically provided that the option price for the sale of the real estate would be determined by the 'current market value at the end of the final term.' This provision, in our opinion means fair market value and meets the necessary standards required by law with respect to the certainty of the purchase price so as not to preclude specific performance of the option agreement."
Id., 430 Pa. at 406, 243 A.2d at 447-448; see also Western Newspaper Union v. Shaltz, 164 Pa. Super. 301, 303, 64 A.2d 493, 495 (1949) ("The item of the express contract to make corrections for 'approximately $5.00 a week' (if corrections did not run over 20% of the items) is not bad because of indefiniteness. The law does not require certainty but only reasonable certainty: Restatement, Contracts, § 32."); see generally Bredt v. Bredt, 230 Pa. Super. 111, 326 A.2d 446 (1974) (a support agreement made in open court and not formalized or completed was held enforceable); Kirk v. Brentwood Manor Homes, Inc., 191 Pa. Super. 488, 492, 159 A.2d 48, 51 (1960) ("'it is . . . well settled that the terms of a contract need not be expressed with exactness but only with reasonable certainty' . . . . 'The law does not favor, but leans against, the destruction of contracts because of uncertainty. Therefore, the courts will, if possible, so construe the contract as to carry into effect the reasonable intention of the parties if that can be ascertained'."); accord Yellow Run Coal Co. v. Alma-Elly-Yv Mines, Ltd., 285 Pa. Super. 84, 426 A.2d 1152 (1981).
[ 291 Pa. Super. Page 325]
Instantly, as in Portnoy, an essential contractual element, i. e., the price one side was willing to accept and the other side was willing to pay in concluding an agreement, was left to some future date. In Portnoy, "the option price for the sale of the real estate would be determined by the 'current market value at the end of the final term.'" 430 Pa. at 406, 243 A.2d at 448. Here, the parties agreed that the amount Andrew would be obligated to pay, and the appellee would be bound to accept, was to be "the fair value of the work done," "[w]hatever figure" that might be, as determined by a third party after an appraisal was conducted.
We find, as did the Court in Portnoy, that the "fair value" provision "meets the necessary standards required by law with respect to the certainty of . . . price so as not to preclude . . . the [appellee from obtaining restitution under the terms of the] agreement." Id.; see Sun Oil Co. v. Traylor, 407 Pa. 237, 242, 180 A.2d 235, 238 (1962) ("as nature abhors a vacuum the law abhors unreliability in compacts and undertakings solemnized in writing or by any other method which expresses a meeting of the minds."); Western Newspaper Union v. Shaltz, supra; Kirk v. Brentwood Manor Homes, Inc., supra ; Restatement (Second) of Contracts § 94.*fn8
It should be noted that Andrew does not aver that he was unable to pay the amount due the appellee. See 1 Williston on Contracts § 204A. This fact is well illustrated by the following exchange:
[ 291 Pa. Super. Page 326]
Q What was your intention at the time this stipulation was made; did you intend to pay [appellee] whatever this figure was?
A Yeah, but I didn't figure it would come to $8,000. Whatever it cost.
Q All right. Was it your intention to pay, though?
A Yeah, I would have paid.
Q Whatever amount that was determined to be?
A But not this high.
Q You didn't expect any $8,000?
Q Could you in fact pay this?
A Well, I would have, but not this high. No way. "
(N.T. 2/6/79, at 125-26) (Emphasis added)
From the preceding dialogue, it is evident that Andrew refused to abide by the terms of the agreement solely because he was remiss in not "figur[ing] the bill was going to be $8500." Id. at 129. This is no reason to vitiate the agreement. As was stated quite aptly in New Charter Coal Co. v. McKee, 411 Pa. 307, 312, 191 A.2d 830, 833 (1963):
" The law demands of every man who bargains with another that he should do so only after due reflection of the possible consequences of his bargain and if he misjudges the consequences that could have been expected by a reasonably intelligent man, he cannot rely on the law to remedy his fecklessness. Absent some legally recognized infringement of the law of contract by one party, the law will not reform a written contract so as to make a contract for the parties that they did not make be[t]ween themselves and certainly never to rescue a party who did not reasonably foresee the consequences of his bargain." (Emphasis added) Cf. Durham Terrace, Inc. v. Hellertown Borough Authority, 394 Pa. 623, 148 A.2d 899, 904 (1959) ("the quasi-contractual principle of unjust enrichment does not apply to an agreement deliberately entered
[ 291 Pa. Super. Page 327]
into by the parties 'however harsh the provisions of such contracts may seem in light of subsequent happenings.'").
Additionally, "[i]t has been said that parties sui juris bind themselves by their lawful contracts, and courts cannot alter them because they work a hardship. The mere fact that the parties have made an improvident bargain will not lead a court to make unnatural implications or artificial interpretations." (Citation omitted) Harnish v. Shannon, 392 Pa. 419, 141 A.2d 347, 351 (1958).
Thus, upon a thorough examination of the record, we conclude that Andrew (by his own admission) intended to enter into and be bound by the agreement ("mutuality of assent") with the appellee. He should not now, after discovering that he underestimated the extent of his liability, be permitted to escape his contractual obligation. "He cannot do this for the simple reason that he had agreed to do otherwise, and he must keep his bargain. He cannot play fast and loose with the court," Bookwalter v. Bookwalter, supra, 75 Pa. Super. at 580, by asking it at one stage of the litigation to be a party to and approve a "stipulation" nolle prossing the charges filed against him and then turn around and ask the judiciary to sanction his breach of that same agreement. The courts should not be parties to or condone such conduct. Moreover, inasmuch as Andrew failed to prove the existence of any fraud, accident or mistake in regard to the making or execution of the agreement, see Buffington v. Buffington, 378 Pa. 149, 106 A.2d 229 (1954); 1 Williston on Contracts § 204A; 35 P.L.E. Stipulations § 8 (1961); see also Berberich v. Berberich, 383 Pa. 349, 352, 118 A.2d 445, 448 (1955), he should not be relieved of his obligation to pay the amount due the appellee.
Based on the aforesaid, we affirm the Order of the lower court.
JOHNSON, Judge, concurring and dissenting:
I join the majority in holding that Andrew Zvonik is liable to Appellee on the basis of the parties' in-court agreement;
[ 291 Pa. Super. Page 328]
however, I must dissent regarding Pauline and Paul Zvonik's liability to Appellee.
The majority states, "Furthermore, the most significant requirement for recovery on a quasi contract is that the enrichment to the defendant must be unjust. . . ." The majority does not proceed to explain how or why it would be unjust for the donee-beneficiary (Pauline Zvonik) or her son to retain the house that Anna Zvonik gave to Pauline in breach of her (Anna's) alleged contract with George. Although Pauline and Paul "passively received a benefit," the majority does not explain how or why "it would be unconscionable" for them to retain this benefit. Even though the courts focus on the result of unjust enrichment, as the majority asserts, not every enrichment is unjust, and not in every case where a benefit is passively received is it unconscionable for the party to retain that benefit. See Meehan v. Cheltenham Township, 410 Pa. 446, 450, 189 A.2d 593, 596 (1963).
As the court stated in Meehan, which the majority cites as authority for the principles of unjust enrichment:
[T]he mere fact that one party benefits from the act of another is not of itself sufficient to justify restitution. There must also be an injustice in permitting the benefit to be retained without compensation.
Id., 410 Pa. at 450, 189 A.2d at 596. The court in Meehan proceeds to cite the following example from section 110 of the Restatement of Restitution to determine whether or not retention of a benefit is unjust:
Section 110 deals with the situation where a third party benefits from a contract entered into between two other parties. It provides that, in the absence of some misleading by the third party, the mere failure of performance by one of the contracting parties does not give rise to a right of restitution against the third party. The Restatement gives as an example of this principle the situation where A purchases a ring from C, a jeweler, for his fiancee B and then defaults in the payments. The Restatement states
[ 291 Pa. Super. Page 329]
that C cannot recover the ring or its value from B. [Footnote omitted, and emphasis added.]
Id., 410 Pa. at 450-51, 189 A.2d at 596.
If one applies the foregoing example to the instant case, it is clear that George Zvonik does not have a cause of action against either Pauline or Paul Zvonik for the benefits that he (George) conferred upon Anna Zvonik pursuant to their alleged oral contract. Anna requested that George make the improvements to her house as A purchased the ring from C in the foregoing example. Anna subsequently gave the house to Pauline and breached her promise to George as A gave the ring to B and defaulted in his payments to C. As C does not have a cause of action against B, so George does not have a cause of action against either Pauline or Paul. As it is not unjust or unconscionable for B to retain the benefit that she passively received, so it is not unconscionable for either Pauline or Paul to retain the benefits that they passively received.
Although the majority relies greatly upon Scott v. Purcell, 264 Pa. Super. 354, 399 A.2d 1088 (1979), in which the Superior Court applied the theory of unjust enrichment, we note that the opinion by the Supreme Court of Pennsylvania, 490 Pa. 109, 415 A.2d 56 (1980), (KAUFFMAN, J.) affirmed the Superior Court's order on principles other than unjust enrichment. The opinion by the Superior Court, upon which the majority relies, held that Oaklander Associates, the recipient of the property that was obtained because of Purcell's violation of his duties as Scott's agent, had "passively received a benefit that it would be unconscionable for [it] to retain." 264 Pa. Super. at 367, 399 A.2d at 1095. The Superior Court did not explain why it would be unconscionable for Oaklander Associates to retain the benefit. The court merely states:
The fact that Oaklander Associates may not on the present record be held to have known of Purcell's wrongful acts does not refute the basic point that it was given a chance to buy the property, only because Purcell violated his duties to appellant as appellant's agent.
[ 291 Pa. Super. Page 330]
George cannot, therefore, substitute either Pauline or Paul in place of Anna Zvonik who breached her promise to George.
For the foregoing reasons, I would reverse the lower court's order in No. 12 Civil 1978, and affirm the order in No. 13 Civil 1978.