Reed v. Universal C. I. T. Credit Corp.

• Decision Date: 23 April 1969
• Citation: 253 A.2d 101,434 Pa. 212
• Parties: Chester L. REED v. UNIVERSAL C.I.T. CREDIT CORPORATION, a Corporation, Appellant.
• Court: Pennsylvania Supreme Court

Page 101

253 A.2d 101

434 Pa. 212

Chester L. REED v. UNIVERSAL C.I.T. CREDIT CORPORATION, a Corporation, Appellant.

Supreme Court of Pennsylvania.

April 23, 1969.

Rehearing Denied May 26, 1969.

Vincent J. Grogan, Duff, Grogan & Doyle, Pittsburgh, for appellant

Thomas H. Cauley, Cauley, Birsic & Clarke, Richard D. Klaber, Charles Evans, Dickie, McCamey & Chilcote, Pittsburgh, for appellee.

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

OPINION OF THE COURT

ROBERTS, Justice.

In October, 1956, appellee Chester L. Reed loaned John W. Skeels $20,000 in three separate installments; the loan was evidenced by a judgment note signed by Skeels and his wife. No payments on account of principal or interest were ever made by Skeels or his wife up to the time of the trial. On November 29, 1960 Reed entered judgment of the Skeels' note in the Common Pleas Court of Allegheny County. On the same date Reed caused a writ of execution to be issued, directing the sheriff to seize all of Skeels' goods at his place of business, a Chrysler, Imperial, Plymouth and Valiant dealership in Ingram, Pennsylvania.

Appellant UCIT filed goods claims in the execution asserting ownership of and a prior perfected security interest in the Skeels' goods which had been levied upon by appellee Reed. The matter was interpleaded, but, prior to any decision, an additional levy was made on the same writ with the sheriff seizing another 38 automobiles. Meanwhile, discussions had commenced on November 29, 1960 between appellant and appellee. The legal effect of these conversations is one of the issues to be resolved on this appeal; what happened thereafter however is not in dispute. On December 23, 1960 appellee Reed stayed the writ of execution and released the cars to UCIT. At the same time Reed issued an attachment execution on his judgment against Skeels, and Doyle, the attorney for appellant, accepted service on behalf of UCIT.

The cars were sold by UCIT shortly thereafter, and when no funds were forthcoming from the sale for Reed, this action was brought on two different theories. The first count alleged that UCIT had promised in return for appellee's release of the cars to give Reed notice of the proposed sale of the Skeels' automobiles; that the UCIT attorneys had the authority to make such a promise; that no such notice was ever given; that Reed relied on this promise of notice to his detriment; and that UCIT is liable to Reed for damages because he was unable to protect his own interests at the sale.

The second count asserted that the conversations between Reed and the UCIT lawyers plus the documents which were completed during the period between November 29, 1960 and December 23, 1960 represent a security agreement under the Uniform Commercial Code; that the UCIT attorneys had the authority to enter into such an agreement; that as a secured party under the UCC, Reed was entitled to notice; that UCIT was under an obligation to dispose of the collateral in a commercially reasonable manner; and that failure of UCIT to either send Reed the required notice and/or sell the cars in a commercially reasonable manner resulted in damages to Reed.

The jury returned a verdict in favor of Reed in the amount of $28,400, which included both principal and interest. Since it is our view that this verdict is entirely supported by the theory outlined in appellee's first count and the evidence presented below, we need only consider appellant's contentions as to that theory of recovery; in so doing, we in no way decide any of the issues which were argued as to appellee's theory of recovery under the Uniform Commercial Code.

The initial contention appellant asserts to defeat recovery under appellee's first count is that local counsel lacked the authority, either apparent or real, to bind UCIT to such a promise. However, it is not necessary under the facts of this case for this Court to reach the issue of the authority of local counsel. The court below concluded that there was ample evidence to support a finding that 'agreement was reached and arrangements were made in the presence of, and with the tacit approval of Andrew Newall, Esq. of defendant's home office.' We must agree with the trial judge that even assuming that local counsel only had the 'authority to make agreements on behalf of his client with respect to procedural matters,' see City of Philadelphia v. Schofield, 375 Pa. 554, 101 A.2d 625 (1954), home office staff counsel must occupy a relationship which is different from that of local counsel and which comprehends an authority which is broad enough to permit this type of agreement. Further, it seems patently unfair for appellant to contend that its attorney did not have the requisite authority to make promises on behalf of UCIT when these same individuals obviously had sufficient authority to accept the benefits arising from appellee's part of the bargain. Local counsel enthusiastically gained possession of the automobiles and initiated the disposition process and in so doing ratified the agreement for UCIT.

Next appellant contends that the promises made by UCIT's agents could not constitute an enforceable legal agreement. However, we need not decide whether there was in fact an enforceable agreement between the parties that UCIT would make appellee whole...