Kohl v. Lentz

311 A.2d 136, 454 Pa. 105, 1973 Pa. LEXIS 738

• Court: Supreme Court of Pennsylvania
• Decided: October 3, 1973
• Docket: Appeal, 26
• Status: Published

Opinions

Opinion by

Mr. Chief Justice Jones,

Charles F. Kohl [Kohl] was employed by the Allentown News Agency, Inc. [News Agency] until June 22, 1972, and owned four shares of stock in said corporation.

Prior to February 28, 1969, Kohl had been the owner and sole stockholder of Hamilton News Agency, Inc., engaged in the distribution of magazines, newspapers and periodicals in Allentown and surrounding areas, which company was a direct competitor of News Agency. The sole stockholder of News Agency was William P. Lentz.

Kohl and Lentz entered into an agreement whereby Hamilton News Agency, Inc., was dissolved and Kohl became an employee of News Agency and was given four shares of stock in News Agency in consideration of the agreement. Kohl, on February 28, 1969, was granted a stock purchase agreement, to which agreement Lentz and News Agency were parties. Under the agreement Kohl was given the right to purchase at “book value” Lentz’s stock, both during Lentz’s lifetime as well as after his death, and a formula was set up in the agreement to determine the purchase price, i.e., the “book value” of News Agency’s stock.

Lentz died on June 27, 1971, and thereafter Pearl Lentz, Lentz’s widow, became President of News Agency and its chief executive officer. Little more than a month after Lentz’s death the corporation’s accountant forwarded to Kohl an alleged valuation of News Agency’s corporate stock with an “adjusted book value” of the stock at $338,425.99. Kohl claims that the valuation was inflated as the result of a conspiracy between News Agency’s accountant and Mrs. Lentz and that, as a result of the conspiracy, the value of the corporate stock was placed at a point where it was no longer possible for Kohl to buy and exercise his right to purchase under the agreement.

Kohl instituted an action in equity against Pearl M. Lentz as an individual, although she is described in the complaint as an individual and executrix under Lentz’s Last Will, and News Agency. In this equity action, Kohl alleges that which “appears to centralize on the ownership of the shares of stock and the rights, duties and obligations that flow therefrom by reason of the Stock Purchase Agreement as a consequence of” Lentz’s death. Mrs. Lentz and News Agency filed preliminary objections raising the question of whether jurisdiction in the subject matter of the action is exclusively vested in the Orphans’ Court Division.

The Common Pleas Court of Lehigh County upheld the preliminary objections and dismissed the action for lack of jurisdiction. From that decree this appeal followed.

We believe that the court below acted properly in the circumstances. The Orphans’ Court Act of 1951, 20 P.S. §2080.301, places exclusive jurisdiction in the Orphans’ Court Division of “Specific Performance of Contracts. To enforce specifically the performance by either party of any agreement made by a decedent to purchase or sell real or personal property. . . . Title to Personal Property. Tlie adjudication of the title to personal property in the possession of the personal representative, or registered in the name of the decedent or his nominee, or alleged by the personal representative to have been in the possession of the decedent at the time of his death.”

The shares of stock in News Agency were in the name of the decedent at the time of his death and the ownership of such stock was exclusively a matter to be determined in the Orphans’ Court Division. See Eberhardt v. Ovens, 436 Pa. 320, 259 A. 2d 683 (1969); Perri v. Chiavaroli, 370 Pa. 495, 88 A. 2d 798 (1952).

It is the contention of the appellant Kohl that Ellis v. Ellis, 415 Pa. 412, 203 A. 2d 547 (1964), rather than Eberhardt v. Ovens controlled. Ellis v. Ellis is completely inapposite: immediately upon Ellis’ death, the partnership was dissolved and the question at issue was the valuation and distribution of the partnership interest. There was no question as to whether the estate was entitled to the partnership interest but the valuation and extent of such interest was clearly a matter for the Court of Common Pleas in Equity. On the other hand, in the case at bar the stock sought to be purchased was owned and held in the name of Lentz at the time of his death.

Kohl has a full and complete remedy in the Orphans’ Court Division wherein he could seek specific performance of the agreement between Lentz, the News Agency and himself and the question of valuation of the stock owned by the estate can be determined in that division. Seth under the statute and the case law exclusive jurisdiction of this controversy is vested in the Orphans’ Court Division.

Decree affirmed. Costs on appellant.

Mr. Justice Roberts concurs in the result.