Stranahan v. Jennings

61 Pa. D. & C.2d 275, 1972 Pa. Dist. & Cnty. Dec. LEXIS 114
CourtPennsylvania Court of Common Pleas, Montgomery County
DecidedDecember 8, 1972
Docketno. 66-5325
StatusPublished

This text of 61 Pa. D. & C.2d 275 (Stranahan v. Jennings) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Montgomery County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stranahan v. Jennings, 61 Pa. D. & C.2d 275, 1972 Pa. Dist. & Cnty. Dec. LEXIS 114 (Pa. Super. Ct. 1972).

Opinion

SMILLIE, J.,

— After trial on a suit involving a contract, the jury awarded the plain[276]*276tiff, Frank R. Stranahan, $221,112. Motions for judgment n. o. v. and for a new trial were argued before the court en banc consisting of David E. Groshens, P. J., Frederick B. Smillie, J., and Robert W. Tredinnick, J. Defendant argued only for a new trial and not for judgment n. o. v.

In considering the motion for a new trial, the court has reviewed the evidence in the light most favorable to the verdict winner and has given such winner the benefit of all reasonable inferences that may be fairly drawn: Donnelly & Suess, Inc. v. Lilley, 393 Pa. 32 (1958).

By agreement dated December 5, 1961, Frank Stranahan was admitted to the firm of Jennings, Mandel and Longstreth as a limited partner. Under the agreement, Stranahan was to contribute and maintain in his capital account securities with a market value of $1,800,000, which Stranahan did, including therein 50,000 shares of Champion Spark Plug common stock. According to the agreement, Stranahan could at any time substitute cash or securities of equal value for the stock so contributed.

During the course of 1962, the firm experienced financial difficulties. In May, 1962, the general partners, Warner, Jennings, Mandel and Longstreth, were suspended from the firm by the New York Stock Exchange. The suspended partners were forbidden to deal with the public. The firm had a shortage of capital; its bank credit had been curtailed. The New York Stock Exchange demanded that the firm obtain additional capital.

In April, 1962, the general partners met with Stranahan and Shelton F. Claar, Stranahan’s personal investment manager, to request an additional contribution from Stranahan. The partners felt that if they could obtain the additional capital from Stranahan the firm [277]*277might be able to weather the storm of financial crisis. The contribution of Stranahan in response to such request took the form of the net proceeds from securities as evidenced in plaintiff’s exhibit P9-D.

On December 28, 1962, Stranahan entered into an agreement with John E. Jennings to fix the terms of Jennings’ repayment to Stranahan of Jennings’ share of the firm’s losses. The relevant provisions of the agreement are as follows:

“(3) Jennings shall pay to Stranahan the sum of $150,000 in 25 successive installments, as follows: the sum of $3000 on or before the 1st day of May in each of the years 1964,1965 and 1966;

“Upon Jennings’ failure to make the payment of any installment set forth above . . . all of the obligations, direct or contingent, of Jennings to Stranahan shall become due and payable immediately, without notice or demand.

“(5) Notwithstanding any of the provisions of paragraph 3 and 4 hereof:

“D. If and when ‘the total losses sustained by Stranahan as a result of his membership in the Firm’ shall have been reduced to $1,000,000, Jennings shall be relieved of any further obligations to Stranahan pursuant to paragraphs 3 and 4 hereof. For the purposes of this agreement, ‘the total losses sustained by Stranahan as a result of his membership in the Firm’ shall be calculated by adding to all payments made by Stranahan to or for the benefit of the Firm (including, but not limited to, all payments made by Stranahan to creditors of the Firm), all expenses incurred by Stranahan in connection with the liquidation of the Firm and the outstanding amount of obliga[278]*278tíons to creditors of the Firm assumed by Stranahan upon liquidation of the Firm and subtracting from the sum thereof all payments made to Stranahan by Jennings and/or other general partners of the Firm and the net proceeds of the sale by Stranahan of any securities or other property received by him upon the liquidation of the Firm.

“(6) Jennings agrees that as of the date first above written (i.e., December 28, 1962) the Firm shall be dissolved and liquidated and that all of the Firm’s assets shall be distributed to Stranahan upon his assumption of all of the remaining liabilities of the Firm. . . .” (Italics supplied.)

On June 28, 1962, Stranahan agreed to his role in bringing about the orderly liquidation of the firm.

In the motion for a new trial, defendant contends that the court committed error:

1. In admitting exhibits P-9A through P-9D and P-10 introduced into evidence by plaintiff through the main financial manager, Shelton F. Claar.

Exhibit P9-A incorporates the total of P9-B through D, less the total obligations of the partners to Stranahan upon their individual reimbursement agreements.

Exhibit P9-B was a list of checks from Stranahan’s bank accounts to or for Jennings, Mandel and Longstreth. (The original checks were in court and made available to defendant. Claar actually drew the checks and signed them on behalf of Stranahan.)

Exhibit P9-C reflected the obligations owed by the partnership to various banks as of December 28, 1962. Claar had personal charge of negotiating with the various banks listed and had entered into agreements with them for the repayment of the obligations outstanding. It does not include the interest on the various loans.

Exhibit P9-D reflected net proceeds of securities [279]*279contributed by Stranahan as a result of the April, 1962, meeting of the general partners with him. Claar was present at the meeting. The securities listed in P9-D had been sold by the partnership prior to liquidation and used for its benefit.

Exhibit P9-10 was prepared by Claar, together with Arthur Young and Company in January, 1971, from Stranahan’s income tax returns and contains:

(a) a summary of exhibits P9-A through P9-E;

(b) costs of settling a law suit against the firm;

(c) interest on bank obligations and other expenses from 1963 through 1969 which Claar had paid or authorized the payment of;

(d) receivables collected from the partners under their individual agreements with Stranahan; and

(e) proceeds from the sale of individually itemized securities.

2. In permitting the jury to interpret the intent of the ambiguous agreement as to paragraph 5D of the agreement, providing:

“D. If and when ‘the total losses sustained by Stranahan as a result of his membership in the Firm’ shall have been reduced to $1,000,000, Jennings shall be relieved of any further obligations to Stranahan pursuant to paragraphs 3 and 4 hereof. For the purposes of this agreement, ‘the total losses sustained by Stranahan as a result of his membership in the Firm’ shall be calculated by adding to all payments made by Stranahan to or for the benefit of the Firm (including, but not limited to, all payments made by Stranahan to creditors of the Firm), all expenses incurred by Stranahan in connection with the liquidation of the Firm and the outstanding amount of obligations to creditors of the Firm assumed by Stranahan upon liquidation of the Firm and subtracting from the sum thereof all payments made to Stranahan by Jennings [280]*280and/or other general partners of the Firm and the net proceeds of the sale by Stranahan of any securities or other property received by him upon the liquidation of the Firm”; and

3. In refusing to allow defendant’s expert to testify as to his

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Cite This Page — Counsel Stack

Bluebook (online)
61 Pa. D. & C.2d 275, 1972 Pa. Dist. & Cnty. Dec. LEXIS 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stranahan-v-jennings-pactcomplmontgo-1972.