Lombardo v. Gasparini Excavating Co.

• Decision Date: 25 June 1956
• Citation: 123 A.2d 663,385 Pa. 388
• Parties: Pasquale LOMBARDO, Appellant, v. GASPARINI EXCAVATING CO., Inc.
• Court: Pennsylvania Supreme Court

Page 663

123 A.2d 663

385 Pa. 388

Pasquale LOMBARDO, Appellant, v. GASPARINI EXCAVATING CO., Inc.

Supreme Court of Pennsylvania.

June 25, 1956.

Bailey & Rupp, William S. Bailey, Harrisburg, Homanich, Dutka & Yavorek, Scranton, for appellant.

Jenkins & Ligi, James J. Ligi, Scranton, Carlon M. O'Malley, O'Malley, Morgan, Bour & Gallagher, Joseph E. Gallagher, Scranton, for appellee.

Before STERN, C. J., and JONES, BELL, CHIDSEY, MUSMANNO and ARNOLD, JJ.

CHIDSEY, Justice.

Plaintiff appellant brought this action in assumpsit to compel defendant corporation to account for the profits realized from a coal stripping operation and to pay plaintiff 50 per cent thereof. The case was tried before a jury and resulted in a disagreement. Pursuant to defendant's motion, the court below in a unanimous decision entered judgment upon the whole record in favor of the defendant, under the provisions of the Act of April 20, 1911, P.L. 70, 12 P.S. § 684. Plaintiff thereupon took this appeal. In reviewing the record we will consider the facts and the reasonable inferences therefrom in a light most favorable to the plaintiff as we are required to do. Maloney v. Madrid Motor Corporation, Pa., 122 A.2d 694; Harris v. DeFelice, 379 Pa. 469, 109 A.2d 174. Thus viewed, the following factual situation is present.

On July 10, 1945, plaintiff obtained a written license, revocable at any time by the licensors, to strip mine coal from land owned by the latter. A day or two later, plaintiff sought out Gene Gasparini, president of defendant corporation, and tried to interest him in carrying out the stripping work. By arrangement, the two met on the land with one of the licensors who expressed the opinion that there was coal approximately twenty feet below the surface. Mr. Gasparini then told plaintiff that as soon as the company had a dragline (piece of strip mining equipment) available, it would be sent to the location and mining operations commenced. No terms were agreed upon or discussed at that time, the understanding being that they were to be worked out later after the dragline was brought to the property. Defendant never sent the dragline, although requested to do so by the plaintiff, Gasparini saying the equipment was unavailable. On May 11, 1946, plaintiff's license to strip the land was cancelled because of his failure to begin the stripping project. Thereafter, on June 20, 1946, defendant obtained licenses to strip mine the side of a mountain consisting of five separate tracts, one of which was the tract for which plaintiff previously had his license. Defendant began stripping shortly thereafter. About October 15, 1947 plaintiff complained to Mr. Gasparini that he had been ill treated and threatened to sue defendant corporation and, after some discussion, agreed not to do so when Gasparini promised to give him one-half of the profits from the stripping project. ¹ Upon defendant's failure to pay plaintiff any of the profits, this suit was instituted.

The sole question to be decided is whether plaintiff's promise to refrain from suing is a sufficient consideration to support defendant's promise to share half of the profits. The legal principle involved is one which has had a long development in the law. In Williston on Contracts (Rev. Ed.), Vol. 1, § 135, it is said: 'The early English law apparently made no distinction in regard to the sufficiency of a claim which the claimant forbore to prosecute, or promised to forbear to prosecute, as the consideration of a promise, other than the broad distinction between good and bad claims. The forbearance or promise to forbear to prosecute an unfounded claim was insufficient consideration. * * * In the early part of the nineteenth century an advance was made from the position of the earlier authorities, and it was held that forbearance of prosecute a suit which had been already instituted was sufficient consideration without inquiring whether the suit would have been successful or not. [Longridge v. Dorville, 5 B. & Ald., 117] The case is ordinary cited for the proposition that forbearance of a doubtful claim is good consideration. * * * What constitutes a doubtful claim within the meaning of this rule, however, is not always easily defined. The most recent English cases have gone still further and held that if a claim is honestly asserted and is 'reasonable' or is 'not vexatious and frivolous,' the forbearance or the promise of forbearance to prosecute the claim is sufficient consideration. * * *' In Pennsylvania it was early held and often repeated that surrender or compromise of a doubtful claim and forbearance to sue thereon is sufficient consideration. ² However, it has also been held that if the claim forborne is groundless, Huntingdon County v. Spyker's Ex'x, 274 Pa. 570, 118 A. 501, or if there is no bona fide foundation for it and the claim is not asserted honestly and in good faith, Bryant v. Bryant, 295 Pa. 146, 144 A. 904, it will not serve as consideration. Although at one time commentators, in reviewing the Pennsylvania cases, expressed doubt whether a wholly unreasonable claim asserted in good faith is sufficient consideration for a promise, ³ subsequent decisions of this Court have adopted the rule as set forth in the Restatement of the Law of Contracts, § 76(b) that '* * * forbearance to assert an invalid claim * * * by one who has not an honest and reasonable belief in its possible validity' is not sufficient consideration. Warren Tank Car Co. v. Dodson, 330 Pa. 281, 199 A. 139; Falgiatore v. Falgiatore, 378 Pa. 586, 107 A.2d 864

We are of the opinion that plaintiff did not entertain 'an honest and reasonable belief' in the possible validity of the alleged claim forborne by him. A careful examination of the conversation between plaintiff and Mr. Gasparini on July 10, 1945, shows without question that it was only a preliminary inquiry regarding a possible contract to be made later. In this respect, plaintiff testified as follows: 'Q. Did they [plaintiff and Gasparini] make any agreements as to how the property was to be mined at that time? A. For the moment, no. The understanding was that we were going to have the dragline come on the grounds first and then we were going to talk about the agreement.' And on cross-examination plaintiff testified:

'Q. Now then, you told this court and jury that on that same day that there was no agreement made, that the agreement was that when the dragline was to go on, an agreement was to follow, isn't that true? * * * A. Certainly. * * *

'Q. So that on July 12th there was no agreement until the dragline went on, and there was no agreement in July, 1945? * * * A. No, sir. * * *

'Q. You told us that the agreement was to be made after the dragline got...