Heymann v. Electric Service Manufacturing Co.

194 A.2d 429, 412 Pa. 338, 1963 Pa. LEXIS 420
CourtSupreme Court of Pennsylvania
DecidedOctober 11, 1963
DocketAppeal, No. 93
StatusPublished
Cited by23 cases

This text of 194 A.2d 429 (Heymann v. Electric Service Manufacturing Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heymann v. Electric Service Manufacturing Co., 194 A.2d 429, 412 Pa. 338, 1963 Pa. LEXIS 420 (Pa. 1963).

Opinions

Opinion by

Mb. Justice Benjamin R. Jones,

This assumpsit action was instituted in tbe Court of Common Pleas No. 5 of Philadelphia County by Heymann and Brother (Heymann), real estate brokers, and Production Sales, Inc. (Production Sales), business brokers, for tbe recovery of a brokers’ commission allegedly due from Electric Service Manufacturing Company, Inc. (Seller), on tbe ground that tbe actions of Heymann and Production Sales constituted tbe efficient cause of tbe production of H. K. Porter Company (Porter) as tbe purchaser of all the capital stock of tbe Seller. After a trial, tbe jury rendered a verdict in favor of Heymann and Production Sales and against tbe Seller in tbe amount of $39,450 which sum represented a 5% commission upon $600,000 plus interest to tbe date of tbe verdict. Seller’s motions for judgment n.o.v. and a new trial were refused and judgment was entered on tbe verdict. Prom tbe entry of that judgment this appeal was taken.

On or about November 16, 1954, Seller’s board of directors authorized its operating committee to negotiate tbe sale of one of its several operating plants known as “Plant B” for the price of $600,000. To that end, a brochure and a tabulation of factual data concerning “Plant B” was prepared and “Plant B” was advertised for sale. Initially, tbe Seller on its own directly contacted prospective customers and it was not until tbe Spring of 1955 that tbe Seller sought tbe aid of various sales organizations.

Sometime prior to May 31, 1955, tbe Seller authorized one Donald Rogers to find a purchaser for “Plant B” on a non-exclusive basis for $600,000. Sometime prior to November 8, 1955, Rogers became associated with Heymann and sometime thereafter, at Heymann’s request, Production Sales entered into tbe matter as a co-broker. A representative of Production Sales con[341]*341tacted Porter with respect to the purchase by Porter of “Plant B” and data relating to “Plant B” and its operation, as well as some other facets of Seller’s operations, was made available to Porter. It seems clear on the record that this constituted the first contact between Porter and the Seller.

On January 5, 1956, Rogers advised a member of the Seller’s operating committee that Heymann had arranged for an inspection of “Plant B” by a representative of Porter and, at that time, the Seller instructed Heymann that its authority to sell was limited to “Plant B”, such limitation of authority being the subject of a writing initialled by the Seller on January 6, 1956. Several other meetings took place between representatives of the brokers and Porter.

Some months later all the stock of the Seller was sold to Porter and on the basis of such sale the claim for a broker’s commission was made.

At the outset, we must determine from the pleadings the issues between the parties to this litigation. Paragraph 9 of the complaint sets forth the basis upon which the brokers seek the payment of a commission. In substance, that paragraph alleges that the Seller, finding that no sale of “Plant B” as a separate unit could be made for the price set by the Seller, fixed a date for a meeting of its officers and directors at which the brokers were requested to be present; that in the “early part of May, 1956, 3 p.m.,” seven directors or officers of the Seller — who constituted a majority of Seller’s stockholders — met with one Whitney Goit, a representative of the brokers; that at this meeting the Seller “decided to sell all of its property and assets as a going concern and authorized [Goit] to offer all its assets as a going concern for sale at $3,-000,000”; that Goit communicated this authorization to Heymann and Production Sales and, pursuant to such authorization, they proceeded to interview a num[342]*342ber of new prospects as well as former prospects, including Porter, wbo had manifested an interest in the purchase in its entirety of Seller’s business.

The complaint then averred that the Seller did sell all its properties and assets as a going concern to Porter for $3,000,000; that the Seller, in lieu of cash, accepted the exchange of all its stock for Porter stock; that said exchange of stock and transfer of possession took place by July 27, 1956; that Heymann and Production Sales demanded commissions on the sale but the Seller replied that no commissions were due because there had been no sale but an exchange of stock. In their complaint, the brokers claimed “the sum of $150,000 with interest thereon from July 27, 1956” which sum represented a 5% commission on the total averred sales price of $3,000,000.

In its answer, the Seller admits that a meeting was held in the “early part of May, 1956” but avers that this meeting was not called by the Seller but at the request of Goit for the purpose of permitting Goit to discuss the possibility of a merger between the Seller and some unnamed company or companies or the acquisition by the Seller of the assets of some such company. The Seller denied that at that meeting it decided to sell all of its properties and assets or that it authorized Goit to offer its assets and properties for sale for $3,000,000 or any other price; that the Seller continued to own all its properties and assets until the Seller was dissolved on November 8, 1956; that Seller denied that it exchanged its stock or sold its properties and assets for $3,000,000. The Seller took the position that, while it had authorized the brokers to sell “Plant B” for $600,000, the brokers had not effected such a sale and, therefore, no commissions were due them.

At the trial, it was established that the stock of ■Seller had been actually sold for $1,550,391 and Hey[343]*343mann and Production Sales then claimed $77,519.55, or a 5% commission on the actual sale price of the stock, $1,550,391, with interest.

From the pleadings, the issues drawn between the parties are clear: (a) whether the Seller had authorized the brokers to sell all Seller’s properties and assets as a going concern for $3,000,000? (b) if the Seller had so authorized the brokers, were the actions of the brokers the efficient producing cause whereby Porter and the Seller were brought together to eventually effectuate the sale of all of its properties and assets by a transfer of Seller’s stock?

An examination of the pleadings clearly and unequivocally reveals that the following were not issues in this litigation: (a) whether the Seller had authorized the brokers to sell “Plant B” for $600,000? (b) if so, whether the brokers had produced a purchaser ready, willing and able to purchase “Plant B” at that price? In fact, the Seller conceded that it had authorized the brokers to sell “Plant B” for $600,000 and the facts indicate that the brokers did not produce a ready and willing buyer of “Plant B” as a single unit for $600,000. Furthermore, there is not a scintilla of evidence that “Plant B” was eventually sold for $600,-000, either by a direct sale for that price or by way of allocating that value to “Plant B” in arriving at the overall price eventually paid by Porter for the stock of the Seller.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

King v. Stefenelli
862 A.2d 666 (Superior Court of Pennsylvania, 2004)
Mount Olivet Tabernacle Church v. Edwin L. Wiegand Division
781 A.2d 1263 (Superior Court of Pennsylvania, 2001)
Schaefer v. Stewartstown Development Co.
647 A.2d 945 (Superior Court of Pennsylvania, 1994)
Irving B. Gruber v. Owens-Illinois Inc.
899 F.2d 1366 (Third Circuit, 1990)
Commonwealth v. Rasheed
572 A.2d 1232 (Supreme Court of Pennsylvania, 1990)
Mattia v. Sears, Roebuck & Co.
531 A.2d 789 (Supreme Court of Pennsylvania, 1987)
Solomon v. Presbyterian University Hospital
530 A.2d 95 (Supreme Court of Pennsylvania, 1987)
Martin v. Johns-Manville Corp.
502 A.2d 1264 (Supreme Court of Pennsylvania, 1986)
Berry v. Friday
472 A.2d 191 (Supreme Court of Pennsylvania, 1984)
Donlin v. J.J. Newberry Co.
466 A.2d 174 (Superior Court of Pennsylvania, 1983)
Commonwealth v. Hawkins
441 A.2d 1308 (Superior Court of Pennsylvania, 1982)
Perigo v. Deegan
431 A.2d 303 (Superior Court of Pennsylvania, 1981)
Frank B. Bozzo, Inc. v. Electric Weld Division
423 A.2d 702 (Superior Court of Pennsylvania, 1980)
Fidelity Bank v. Tiernan
375 A.2d 1320 (Superior Court of Pennsylvania, 1977)
Behrend v. Bell Telephone Co.
363 A.2d 1152 (Superior Court of Pennsylvania, 1976)
Hrivnak v. Perrone
331 A.2d 507 (Superior Court of Pennsylvania, 1974)
Bober v. Bober
63 Pa. D. & C.2d 716 (Lawrence County Court of Common Pleas, 1973)

Cite This Page — Counsel Stack

Bluebook (online)
194 A.2d 429, 412 Pa. 338, 1963 Pa. LEXIS 420, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heymann-v-electric-service-manufacturing-co-pa-1963.