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Jack A. Rainier v. Champion Container Co.

July 21, 1961

JACK A. RAINIER, APPELLANT IN NO. 13337,
v.
CHAMPION CONTAINER COMPANY, IRWIN R. WEINER, APPELLANT IN NO. 13338, IRA EARL ROBINSON AND HARRY A. ROBINSON.



Author: Forman

Before GOODRICH, McLAUGHLIN and FORMAN, Circuit Judges.

FORMAN, Circuit Judge.

These are cross appeals from a judgment of the United States District Court for the Eastern District of Pennsylvania. Jurisdiction is based on diversity of citizenship.

The suit was brought by Jack A. Rainier against the now dissolved Champion Container Company (Champion) and three of its former shareholders, Irwin R. Weiner, Ira Earl Robinson and Harry A. Robinson.

In the first count of his complaint in the District Court Rainier alleged that defendants entered into a brokerage contract with him in which they agreed to pay him a commission of five percent of the purchase price if he found a buyer for the capital stock of Champion. Rainier further alleged that he found a buyer who was ready, willing and able to buy the capital stock of Champion for $1,000,000 and defendants agreed to sell for that price but that defendants failed to pay the agreed commission. He therefore demanded judgment of $50,000 plus interest and costs on this count.

In the second count Rainier alleged that he entered into a second contract with the defendants in which they agreed to pay him a commission of five percent of the purchase price if plaintiff found a buyer for the assets of Champion, exclusive of real estate. He further alleged that he found such a buyer who was ready, willing and able to pay $1,000,000 and that defendants agreed to sell for that price but that they refused to pay the commission. Rainier therefore demanded judgment on the second count for $50,000 or a total of $100,000 plus interest and costs on both counts.

After trial, the District Court filed an opinion in which it made findings of fact and conclusions of law.*fn1 It entered judgment for $50,000 for Rainier against Weiner on the first count of the complaint, but dismissed the action against the other defendants. It also dismissed the action alleged in the second count of the complaint.

In No. 13,337 Rainier appeals from the judgment below in so far as the District Court dismissed his action against defendants, Champion, Ira Earl Robinson and Harry A. Robinson, as stated in the first count of his complaint. He also appeals from the dismissal of the action alleged in the second count of his complaint.

In No. 13,338 Irwin R. Weiner appeals from the $50,000 judgment against him.

Rainier, a resident of New York, was a business broker with offices there. All of the individual defendants were residents of Philadelphia. The defendant Champion was incorporated in Pennsylvania. At the time in question, 1956, all the individual defendants were directors of Champion and Irwin R. Weiner was its President; Ira Earl Robinson, its Secretary-Treasurer and Harry A. Robinson each owned one-third of the stock and Ira Earl Robinson, his mother and sister together, owned the remaining one-third.

Early in 1956, Weiner telephoned Rainier, with whom he was previously acquainted and requested that the latter come to Philadelphia to "talk with him and to see a machine." Rainier went to Philadelphia, observed the operations of Champion in detail*fn2 and was told by Weiner that he would be paid a commission of five percent if he could find a buyer for the business at "somewhere around $1,000,000." On February 22, 1956, Rainier brought Floyd D. Gottwald to Philadelphia where they both observed the operations of Champion under the guidance of Weiner. Gottwald was president, director and owner of a majority of the voting stock of Albermarle Paper Manufacturing Company of Richmond, Virginia (Albermarle). Shortly thereafter Gottwald received a statement of the financial position of Champion. He also sent Albermarle's vice president in charge of sales to Philadelphia to make a favorable report to Gottwald in so far as the sales aspect of Champion was concerned.

Subsequently, in late February or early March, 1956, Weiner, Gottwald and Rainier met in the latter's office in New York. At that meeting a general discussion concerning the proposed sale of Champion took place. However, before a definitive agreement could be reached Gottwald found it necessary to depart, but he testified that before leaving he authorized Rainier to conduct further negotiations and to reach an agreement on the basis of his previous understanding with Rainier. Rainier's testimony as to what transpired after Gottwald departed was as follows:

"A. It took us about ten minutes and I said to Weiner, 'I understand you want about $1,000,000.'

"Oh, I said, 'What do you want?'

"He said, '$1,000,000.'

"I said, All right.'

"The stock of Albermarle Paper Company had been selling at seventeen when we started this about a month or two previously and it was then selling at thirty, and I said, 'We will give you $1,000,000 in ...


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