Bata v. Central-Penn Nat. Bank of Philadelphia

Decision Date15 November 1966
Docket NumberCENTRAL-PENN,No. 138,138
Citation224 A.2d 174,423 Pa. 373
PartiesThomas J. BATA v.NATIONAL BANK OF PHILADELPHIA, and Jan A. Bata. Appeal of Jan T. BATA, Individually and as representative of Jan A. Bata, deceased, in
CourtPennsylvania Supreme Court

Harold E. Stassen, A. Evans Kephart, Philadelphia, Roger A. Johnsen, Philadelphia, of counsel, for appellants.

Lewis H. Van Dusen, Jr., Philadelphia, Robert MacCrate, New York City, N.Y., for Thomas J. Bata.

George M. Brodhead, Philadelphia, for Central-Penn Nat. Bank.

Before BELL, C.J., and MUSMANNO, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

OPINION OF THE COURT

ROBERTS, Justice.

On March 27, 1962, Thomas J. Bata and the late Jan A. Bata executed a settlement agreement purporting to terminate fifteen years of almost continuous litigation. 1 The agreement provided that the parties would exchange stock certificates and instruments of assignment in various Bata companies, that they would execute comprehensive general releases as well as some 150 special releases, and that they would terminate each of the thirteen lawsuits then pending between them. In addition Thomas J. Bata agreed to pay Jan the sum of $3,400,000 of which $2,700,000 was paid upon the execution of the agreement and the remaining $700,000 placed in two escrows of $200,000 and $500,000. Central-Penn National Bank was named escrow to hold monies and documents until the conditions of release and delivery were performed.

In June 1963, Jan A. Bata performed the conditions contained in the first escrow and received the $200,000; he was to receive the remaining $500,000 upon terminating a pending English law suit, transferring shares of British Bata Shoe Co., Ltd. to Thomas J. Bata, and registering the bearer shares of Dutch Bata Shoe Company. When it became apparent that these conditions were not going to be performed, Thomas J. Bata brought an action in equity seeking specific performance. Initially the action was removed to a federal district court, but was subsequently remanded to the Court of Common Pleas of Philadelphia County. 2 In his answer Jan A. Bata denied that the settlement agreement required him to co-operate in terminating the Engligh suit and, under new matter, raised the affirmative defense that the settlement agreement was void because it was entered into as the result of duress, coercion, and the force of adverse judgments which were themselves fraudently obtained in other jurisdictions. In addition, appellant filed a counterclaim in which he reaverred the allegation of fraud and prayed that the court, inter alia, adjudge him 'to be legally and equitably entitled to the ownership of all of the shares of the 'Bata Enterprises. " The lower court granted appellee's motion for judgment on the pleadings and this appeal was prosecuted on behalf of Jan A. Bata and by Jan T. Bata, his successor in interest. 3 For reasons stated hereinafter we are compelled to affirm the decree of the court below.

Under Pa.R.C.P. 1034, 12 P.S. Appendix, a motion for judgment on the pleadings may be granted in cases which are so free from doubt that a trial would clearly be a fruitless exercise. Such a motion is in the nature of a demurrer; all of the opposing party's well-pleaded allegations are viewed as true but only those facts specifically admitted by him may be considered against him. Bureau of Child Care v. United Fund of Philadelphia, 416 Pa. 617, 207 A.2d 847 (1965); Poole v. Great American Ins. Co., 407 Pa. 652, 182 A.2d 509 (1962). Unlike a motion for summary judgment, 4 the power of the court to enter a judgment on the pleadings is further circumscribed by the requirement that the court consider only the pleadings themselves and any documents properly attached thereto. Nederostek v. Endicott-Johnson Shoe Co., 415 Pa. 136, 138, 202 A.2d 72, 73 (1964); Emery v. Metzner, 191 Pa.Super. 440, 445, 156 A.2d 627, 630 (1959).

In the present case the pleadings are quite extensive because of a large volume of exhibits attached by the parties, the authenticity of which has been admitted by both sides. Because of their complexity, before this and the lower court, it is necessary to delineate precisely what aspects of the record, in addition to the stipulated facts and exhibits, we may presently consider. By the motion for a judgment on the pleadings appellee sought a favorable judgment both with respect to his own complaint and to defendant's counterclaim. As to the former we may consider only the complaint and appellant's answer, including the new matter, but with respect to the latter, we may consider appellant's counterclaim, the reply (appellee's answer containing new matter relating to the counterclaim), and the counter-reply (appellant's answer to the new matter). Herman v. Stern, 419 Pa. 272, 276, 213 A.2d 594, 596 (1965); Luria Steel & Trading Corp. v. Dittig, 414 Pa. 197, 199 A.2d 465 (1964).

Despite appellant's assertion to the contrary, the language and spirit of the settlement agreement clearly envisioned that he would fully co-operate in terminating the English action. Indeed he himself recognized this when he wrote to his English solicitors on March 27, 1962, and left to their discretion the manner in which they and appellee's solicitors would settle the action. While appellant later, in a letter signed by his counsel and dated February 18, 1963, withdrew his consent to the termination, the validity of this withdrawal depends upon appellant's principal claim that the entire settlement agreement is unenforceable as induced by fraud, duress, and coercion. 5 In the procedural posture of this case, however, we are confronted not with the merits, as such, but solely with the issue of whether the allegations were sufficiently pleaded to warrant a trial.

Averments of fraud are meaningless epithets unless sufficient facts are set forth which will permit an inference that the claim is not without foundation nor offered simply to harass the opposing party and to delay the pleader's own obligations. For this reason our rules require that fraud in either a complaint or reply must be 'averred with particularity.' Pa.R.Civ.P. 1019(b). Admittedly the line between pleading facts and evidence is not always bright; therefore, we frequently condone the inclusion of statements, which except for this requirement, would be considered impertinent. See Williams v. Rose, 403 Pa. 619, 170 A.2d 577 (1961); Custis v. Serrill, 303 Pa. 267, 272, 154 A. 487, 489 (1931); Goodrich-Amram § 1019(b)-1 (1962). While it is impossible to establish precise standards as to the degree of particularity required in a given situation, two conditions must always be met. The pleadings must adequately explain the nature of the claim to the opposing party so as to permit him to prepare a defense and they must be sufficient to convince the court that the averments are not merely subterfuge. See Sokoloff v. Strick, 404 Pa. 343, 172 A.2d 302 (1961); Hornsby v. Lohmeyer, 364 Pa. 271, 72 A.2d 294 (1950); Rice v. Braden, 243 Pa. 141, 89 A. 877 (1914). Especially when viewed against the background of the prior litigation, our reading of the pleadings in this case, particularly the averments of fraud, duress and coercion contained in appellant's answer, confirms the conclusion of the court below that they are 'an exercise in obfuscation.'

In seeking to avoid his remaining obligations under the settlement agreement, appellant appears to be making three separate arguments, although each is related to the issue of fraud. First he alleges that his assent to the agreement is invalid because it was the direct result of duress and coercion exerted by the appellee prior to and during the negotiations. In addition he maintains that the principal inducing factor was the force of adverse judgments which are alleged to have been obtained through 'gross fraud' perpetrated on the courts of sister jurisdictions. Finally he asserts inadequate consideration to support the agreement. We shall discuss each argument separately.

Appellant's assertion that he was under duress or coercion when he signed the agreement is singularly without merit. Aside from the fact that these allegations are unparticularized, we find it inconceivable that appellant was subject to any degree of restraint or danger, let alone an amount sufficient to invalidate his assent. See Yulsman v. DuBois, 346 Pa. 310, 30 A.2d 323 (1943); Smith v. Lenchner, 204 Pa.Super. 500, 205 A.2d 626 (1964). Duress is 'that degree of restraint or danger, either actually inflicted or impending, which is sufficient to severity or apprehension to overcome the mind of a person of ordinary firmness.' Smith v. Lenchner, supra at 500, 205 A.2d at 628. The pleadings establish that this is not a case where an ignorant person, unrepresented by a lawyer, was forced into an unconscionable settlement by the threat of economic catastrophe; rather it is one where the party seeking to avoid is an experienced litigant who, during the entire period of negotiations, was represented by able counsel. Cf. Otto v. Powers, 177 Pa.Super. 253, 110 A.2d 847 (1955). Moreover, in June 1963, four months after appellant's counsel withdrew his consent to terminating the English action on the ground of fraud, appellant completed the conditions of the $200,000 escrow and received the benefits thereunder. There is no allegation that at this time appellant was under any form of duress; thus, his actions must be viewed as a ratification of the agreement and a waiver of any claim of duress. See In re Thorne's Estate, 344 Pa. 503, 25 A.2d 811 (1942); Annot. 77 A.L.R.2d 426 (1959). However, with respect to the alleged fraud, the ratification merely extinguished his right to rescind; all other remedies, including the relief prayed for in the counterclaim, remained unimpaired. Tilghman v. Dollenberg, 418 Pa. 604, 610, 213 A.2d 324, 327 (1965); Sixsmith v. Martsolf, 413 Pa. 150, 196 A.2d 662 (1964).

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