Conaway v. 20th Century Corp.

• Decision Date: 22 September 1980
• Citation: 420 A.2d 405,491 Pa. 189
• Parties: , 29 UCC Rep.Serv. 1387 H. James CONAWAY, Jr., Receiver of First State Life Insurance Company of America, Inc., Appellee, v. 20TH CENTURY CORPORATION, Appellant.
• Court: Pennsylvania Supreme Court

Page 405

420 A.2d 405

491 Pa. 189, 29 UCC Rep.Serv. 1387

H. James CONAWAY, Jr., Receiver of First State Life Insurance Company of America, Inc., Appellee, v. 20TH CENTURY CORPORATION, Appellant.

Supreme Court of Pennsylvania.

Argued May 20, 1980.

Decided Sept. 22, 1980.

[491 Pa. 192] Clyde W. McIntyre, Harrisburg, for appellant.

Bruce E. Cooper, Stewart L. Cohen, Harrisburg, for appellee.

Before EAGEN, C. J., and O'BRIEN, ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ.

OPINION

EAGEN, Chief Justice.

H. James Conaway, Jr., the receiver of First State Life Insurance Company of America, Inc. (Conaway) filed a complaint in assumpsit against 20th Century Corporation (Century). Conaway's action sought to recover damages for failure to comply with an alleged oral contract between the parent corporation of First State Life and Century. According to the complaint, the contract concerned a promise by Century to purchase 500,000 shares of capital stock of First State Life for $250,000.

On November 6, 1974, Century filed preliminary objections to the complaint in the nature of a demurrer alleging, inter alia, that the cause of action was barred by the statute of frauds. On September 29, 1975, the trial court sustained Century's preliminary objections and dismissed Conaway's complaint. The court's order dismissing the complaint stated: "AND NOW, this 29th day of September, 1975, (Century's) demurrer is sustained in accordance with the above opinion, and the action dismissed." The opinion indicated that the demurrer was being granted on the basis of the statute of frauds; that, given this ruling, the other issues raised by the preliminary objections did not have to be discussed; that an implication in Conaway's brief on preliminary objections that other writings might exist to satisfy the statute of frauds could not cure the deficiencies of the complaint; that, if such writings existed, "the proper procedure would be to petition the court for reconsideration of the demurrer, attaching the writings"; and, that "(i)n this manner the court may consider whether such material overcomes the bar of the statute of frauds and whether (Conaway) should be granted leave to amend the complaint." No appeal was timely taken from that order.

On October 20, 1975, the trial court entered an order allowing Conaway twenty days from that date to file a petition for reconsideration. On November 7, 1975, a petition for reconsideration was filed. Attached to the petition were several writings which Conaway alleged satisfied the statute of frauds. After Century responded to the petition and after Conaway responded to new matter raised by Century, the matter was argued before the trial court en banc. On March 19, 1976, the trial court issued a per curiam 'Memorandum on Petition for Reconsideration" and order. The memorandum stated, inter alia, that the court had "reviewed the items attached to (Conaway's) petition and find ... they do not overcome the bar of the statute. " The memorandum clearly addressed the merits of whether the writings attached to the petition for reconsideration satisfied the statute of frauds. The order merely denied the petition for reconsideration.

On April 15, 1976, Conaway appealed only the March 19, 1976 order of the trial court to the Superior Court. On July 12, 1978, a divided Superior Court reversed both the March 19, 1976 order which denied reconsideration and the September 29, 1975 order which sustained Century's preliminary objections, and remanded for further proceedings. ¹ In an opinion by Judge Price, the majority ruled that the writings attached to Conaway's petition for reconsideration "afford(ed) a basis for believing that the offered oral evidence rest(ed) on a contract actually made," and that the court erred in granting the demurrer. We granted Century's petition for allowance of appeal.

Century initially contends that the Superior Court lacked jurisdiction over Conaway's appeal to that court because the appeal was untimely. We cannot agree.

Before discussing the jurisdictional issue, we are constrained to point out, as did the majority of the Superior Court, ² that Century's preliminary objections in the nature of a demurrer which raised a waivable statute of frauds were improper since such a claim is properly raised in new matter. See Pa.R.C.P. 1017 and 1030; Duffee v. Judson, 251 Pa.Super. 406, 380 A.2d 843 (1977). But we shall overlook this procedural defect because, as the Superior Court pointed out, no objection on this ground was raised. Cf. Lamp v. Heyman, 469 Pa. 465, 366 A.2d 882 (1976).

With regard to jurisdiction of the appeal, the Superior Court acknowledged that the appeal would be untimely if from the order of September 29, 1975, but ruled the appeal was timely because it was from the order of March 19, 1976. As to the failure to appeal the order of September 19, 1975, the Superior Court indicated that, in its view, the trial court had, in effect, granted reconsideration and thereby caused the time to appeal to run anew from the entry of the decision on reconsideration pursuant to Pa.R.A.P. 1701(b)(3) thereby excusing the failure to timely appeal the order of September 19, 1975.

While we do not agree with the Superior Court's rationale, we do agree that the appeal was timely filed in that court.

We need not detail all of our reasons for differing with the Superior Court because it suffices to point out that, if Pa.R.A.P. 1701(b)(3) were to be applied instantly, ³ the order of October 20, 1975 did not expressly grant reconsideration and the order of March 19, 1976, even if viewed as granting reconsideration, was not filed within the time prescribed for filing a notice of appeal from the order of September 29, 1975. Hence, the requirements of Pa.R.A.P. 1701(b)(3) were not met, and this case may not be viewed as one wherein reconsideration was timely granted and the time in which to appeal thereby caused to run anew.

Obviously, the Superior Court's rationale was an attempt to overcome the blatant injustice which would have resulted had it held the appeal untimely where the trial court's order, via its reference to its opinion, invited the presentation of additional writings, i. e. essentially the presentation of evidence or an amendment to the complaint subject to court approval. We concur with the judgment of the Superior Court that an injustice would have resulted if the appeal were held untimely because, in effect, the order of September 29, 1975 was not final, and hence, not appealable. Accordingly, no appeal from that order was required.

In T. C. R. Realty, Inc. v. Cox, 472 Pa. 331, 337, 372 A.2d 721, 724 (1977), we said:

"In ascertaining what is a 'final order,' we have looked beyond the technical effect of the adjudication to its practical ramifications. Bell v. Consumer Discount Company, 465 Pa. 225, 348 A.2d 734 (1975). We have variously defined a final order as one which ends the litigation, or alternatively disposes of the entire case. Piltzer v. Independence Savings and Loan Association, 456 Pa. 402, 404, 319 A.2d 677, 678 (1974); James Banda, Inc. v. Virginia Manor Apartments, Inc., 451 Pa. 408, 409, 303 A.2d 925, 926 (1973). Conversely phrased, an order is interlocutory and not final unless it effectively puts the litigant 'out of court.' Ventura v. Skylark Motel, Inc., 431 Pa. 459, 463, 246 A.2d 353, 355 (1968)."

Instantly, the order of September 29, 1975 purported, on the one hand, to put Conaway out of court, but, on the other hand, invited him back into court. The order dismissed the action, and sustained the demurrer "in accordance with the above opinion." The "above opinion" invited via "reconsideration" the presentation to the court of writings it had not yet considered to determine if they overcame the statute of frauds and whether leave to amend the complaint should be granted. A petition for reconsideration of an order asks the court to reconsider its order in light of the record it previously considered. Neither the writings nor a petition to amend the complaint were of record and the court's order, in effect, allowed Conaway to add the writings to the record. By allowing him to add to the record and stating it would thereby be permitted to determine "whether such material overcomes the bar of the statute of frauds and whether (Conaway) should be granted leave to amend the complaint," neither of which issues the court had yet to consider, the court specifically indicated that the litigation was not at an end; that its order was not intended to dispose of the entire case; and, that Conaway was not out of court. Hence, whatever finality the court expressed on the one hand, it destroyed on the other, and the practical ramification of the order of September 29, 1975 was not to put Conaway out of court. Accordingly, the order of September 29, 1975 was not final.

Since the appeal was timely filed from the denial of the petition for reconsideration, which effectively sustained preliminary objections after consideration of the writings ⁴ and, hence, constituted the first final order, the Superior Court was correct in accepting jurisdiction.

With regard to the statute of frauds issue, Century asserts the Superior Court majority erred in holding the writings submitted with Conaway's petition for reconsideration satisfied the statute of frauds. Century argues that the writings relied on merely indicate the parties were involved in "negotiations looking forward to a possible contract" and that the writings were not sufficient to satisfy the requirement of the applicable statute of frauds, namely, that the writing be "sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price ...." ⁵ After careful review of the record, we agree with Century; accordingly, we reverse.

In chronological order, the first writing relied upon by Conaway is a letter, dated May 12, 1967, addressed...