author: PER CURIAM: BROSKY, Judge,

text:
    487 A.2d 947
    ROBERT CLIFTON ASSOCIATES, INC., A Corporation, Appellant, v. Thomas F. O’CONNOR, An Individual, and O’Connor, O’Connor & Lordi, Ltd., A Corporation.
    Superior Court of Pennsylvania.
    Argued Aug. 8, 1984.
    Filed Jan. 25, 1985.
    Reargument Denied April 8, 1985.

      Edward G. O’Connor, Pittsburgh, for appellant.
    Paul G. Walker, Jr., Pittsburgh, for appellees.
    Before BROSKY, WATKINS and HESTER, JJ.
   PER CURIAM:

In February, 1973, appellee, Thomas F. O’Connor, was hired as an employee of appellant, Robert Clifton Associates, Inc., an employment agency located in Greentree, Pennsylvania. Appellant is a closely held corporation with Robert Gerbi and Gabriel Rocco as its sole shareholders. On April 17, 1973, appellee O’Connor and appellant entered into a “non-compete” agreement, which provides in pertinent part, as follows:

Restrictive Covenant. For a period of 12 months after the date of termination of this Agreement, the Employee will not, within a radius of 75 miles of any city in which Robert Clifton Associates, Inc., owns, maintains or operates a personnel consulting service, directly or indirectly own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of any business similar to the type of business conducted by the Company at the time of the termination of this Agreement. However, if the Employee is discharged by reason of lack of work by the Company, then the above-mentioned restrictions shall not apply.

During this same period, appellant’s employees were requested to execute similar agreements. Moreover, prior to the execution of this document, at least one of appellant’s employees had been requested to sign a covenant which restricted employees after termination from competing with appellant for a period of six months and within a fifty mile radius of appellant’s business.

Appellee O’Connor, at the beginning of his employment with appellant, was paid a guaranteed salary of $500.00. After signing the aforementioned agreement, O’Connor was placed on a draw with a 33V3% commission on placements. This draw was subject to sales. O’Connor continued in the employ of appellant wherein he became one of appellant’s top employees until his resignation on January 13, 1984. He immediately started his own employment agency, O’Con-nor, O’Connor & Lordi, L.T.D. in Carnegie, Pennsylvania, approximately 6 miles southwest of Greentree. In operating his own business, two former clients O’Connor had serviced when he was with appellant transferred their search contracts to him. O’Connor had contacted other Clifton clients following his departure.

The lower court, upon appellant’s petition for a temporary injunction based upon the terms of the restrictive covenant, granted appellant’s request for a temporary injunction but only to the extent of a four-month period and confined to Allegheny County. The lower court gave the following reasons for modifying the covenant:

“The plaintiff [appellant] is not alleging trade secrets or customer lists but is basing the allegations of irreparable harm on a few incidents wherein former customers of Clifton have elected to contact O’Connor. Contrariwise, the defendant [appellee, O’Connor] is a young man, aged 33, with prior experience in the personnel field. If an injunction issues for any sizable period of time, the defendant will suffer serious loss of income. The Court, also, must consider the actions of the individual officers of plaintiff in approaching the defendant to start a new business. Such activity indicates the lack of reliance on the part of the plaintiff to the alleged non-compete agreement. There is an inconsistency between the offers or interest of the individual officers of plaintiff in setting up a competing business and the instant lawsuit to enjoin the defendant from operating his own agency.
It is our further conclusion that, based upon the character of the placement agency business, plaintiff’s prayer for relief is excessive and punitive in nature. Corporate management receives referrals from a variety of sources and little is required in the way of special education or training to enter the business. In this case, O’Connor had already acquired experience before affiliation with Clifton.
Therefore, we find that a non-compete agreement was signed by the defendant, ignored in part by plaintiff, and seeks excessive relief. Plaintiff was grated (sic) a four-month period to notify its clients that O’Connor was no longer a member of the firm and to seek to retain their business.”

Appellant has thus filed the present appeal seeking to have the full restrictive covenant embodied in the temporary injunction. In asserting this position, appellant has raised the following two issues: 1) whether the lower court erred in allegedly considering facts not in the record; and 2) whether the lower court erred in concluding that the duration, geographic scope and activities governed by the restrictive covenant were unreasonable.

Regarding appellant’s first issue, appellant specifically contends that there were insufficient facts of record to: 1) establish that appellee O’Connor would suffer a serious loss of income if enjoined for any lengthy period of time; 2) find that the officers of appellant breached the restrictive covenant themselves by offering to go into business with appel-lee O’Connor; and 3) that appellee was the only active member of O’Connor, O’Connor & Lordi, L.T.D.

Regarding whether the lower court could have found that appellee O’Connor would suffer substantial financial losses if the terms of the restrictive covenant were enforced, appellee O’Connor testified that he had obtained a forty thousand dollar ($40,000.00) line of credit for his business and thus it was only reasonable for the lower court to conclude that appellee O’Connor would sustain a serious loss of income if he were enjoined from operating his competing business for a period of one year.

Appellant next contends that the lower court erred in concluding that appellant’s sole shareholders themselves had breached the restrictive covenant by negotiating with appellee O’Connor to form a personnel consulting service with O’Connor. This testimony is as follows:

“Q. Mr. Gerbi, did you, in conjunction with Robert Clifton, ever approach Tom O’Connor with the idea of starting a separate firm with Robert Clifton as a partner?
A. Yes.
Q. When was that, sir?
A. I assume 198 — I don’t remember if it’s ’81 — ’82 or ’81. Several times.
Q. Now, was that firm to be in competition with Robert Clifton?
A. I don’t remember if it was going to be in direct competition or not.
Q. This was in ’81, ’82 or ’83 you said?
A. To the best that I can remember now, we talked to — talked to Tom about several business ventures in his employment, either, I don’t know if it would be in direct competition.”

Appellant contends that the lower court should not have considered the deposition testimony but should have only considered the evidence elicited at the Preliminary Hearing. Pa.R.C.P. 1531(a) provides as follows:

Rule 1531. Special Relief. Injunctions
“(a) A court shall issue a preliminary or special injunction only after written notice and hearing unless it appears to the satisfaction of the court that immediate and irreparable injury will be sustained before notice can be given or a hearing held, in which case the court may issue a preliminary or special injunction without a hearing or without notice. In determining whether a preliminary or special injunction should be granted and whether notice or hearing should be required, the court may act on the basis of the averments of the pleadings or petition and may consider affidavits of parties or third persons or any other proof which the court may require.”

In interpreting Rule 1531(a), our Supreme Court has stated that “Rule 1531(a) of the Rules of Civil Procedure, 12 P.S. Appendix permits a court to rely upon allegations in the complaint, affidavits attached thereto, preliminary objections, (and arguments of counsel) in determining whether or not a preliminary injunction should issue.” Minit-Man C.W. Cork v. B. & C.T. Council, 411 Pa. 585, 589, 192 A.2d 378, 380 (1963).

Therefore, it was not improper for the lower court to consider Robert Gerbi’s deposition testimony.

Appellant’s third contention is that there was no evidence to conclude that “the only active member of appellee’s new corporation was O’Connor.” However, this contention is without substance for O’Connor testified in his deposition that there were no other full-time employees except himself and his staff included only two part-time women and his partner who worked approximately one day a week.

The final argument raised by appellant is much more difficult. Appellant claims that the duration, geographic scope and activities governed by the restrictive covenant were reasonable. In a case factually analogous to the present one, our Supreme Court reviewed the standards to be applied to restrictive covenants and stated as follows:

“Appellants argue that the record fails to establish irreparable harm. They note that appellees were only able to demonstrate actual damages in the amount of $427.00 in loss of commission and argue that this meager amount cannot possibly constitute irreparable harm. This reasoning however, ignores the nature of the violation herein involved. It is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer’s business that constitutes the justification for equitable intervention.
This misconception is also reflected in appellants’ further contention that their continued sales to accounts on the prohibited list would not cause irreparable harm because of their agreement to maintain a record of earnings generated by such sales. It is asserted that since any loss would be ascertainable, it would be compensable in damages.
The covenant seeks to prevent more than just the sales that might result by the prohibited contact but also the covenant is designed to prevent a disturbance in the relationship that has been established between appellees and their accounts through prior dealings. It is the possible consequences of this unwarranted interference with customer relationships that is unascertainable and not capable of being fully compensated by money damages. It is for this reason we noted in Bettinger v. Carl Berke Assocates, Inc., 455 Pa. 100, 103, 314 A.2d 296, 298 (1974), that where a covenant of this type meets the test of reasonableness, it is prima facie enforceable in equity. See also Jacobson & Company v. International Environment Corp., 427 Pa. 439, 452, 235 A.2d 612, 620 (1967). In Sidco, supra, we again recognize the employer’s right to protect, by a covenant not to compete, interests in customer relationships that have been acquired through the efforts of the employee. There, quoting from Professor Blake, we described the nature of the interest as follows:
‘In almost all commercial enterprises ... contact with customers or clientele is a particularly sensitive aspect of the business ... In most businesses ... as the size of the operation increases, selling and servicing activities must be at least in part decentralized and entrusted to employees whose financial interest in the business is limited to their compensation. The employer’s sole or major contact with buyers is through these agents and the success or failure of the firm depends in part on their effectiveness____[t]he possibility is present that the customer will regard, or come to regard, the attributes of the employee as more important in his business dealings than any special qualities of the product or service of the employer, especially if the product is not greatly differentiated from others which are available. Thus, some customers may be persuaded, or even be very willing, to abandon the employer should the employee move to a competing organization or leave to set up a business of his own____
The employer’s point of view is that the company’s clientele is an asset of value which has been acquired by virtue of effort and expenditures over a period of time, and which should be protected as a form of property. Certainly, the argument goes, the employee should have no equity in the custom which the business had developed before he was employed. Similarly, under traditional agency concepts, any new business or improvement in customer relations attributable to him during his employment is for the sole benefit of the principal. This is what he is being paid to do. When he leaves the company he should no more be permitted to try to divert to his own benefit the product of his employment than to abscond with the company’s cash-box.’ Blake, Employee Agreements Not to Compete, 73 Harv.L.Rev. 625, 653-54 (1960).
It is clear that the interest sought to be protected by the issuance of the preliminary injunction was that relationship which had been established on behalf of appellees’ companies through the efforts of the former employee, Crochiere. This is clearly an interest which is incapable of adequate protection by monetary damages and the use of equitable relief is needed to avoid the threatened harm.”

John G. Bryant Co. v. Sling Testing & Repair, Inc., 471 Pa. 1, 7-9, 369 A.2d 1164, 67-68 (1977).

In the present case, the evidence reveals that O’Con-nor had over his eleven years with appellant serviced a clientele that numbered in the hundreds. Further, while appellant had only lost two of its clientele, these being Mobay Chemical Corporation and Leybold-Heraeus Corporation, O’Connor had admitted that he had been in contact with a number of appellant’s clients since his resignation. Thus, as was the case in Bryant, supra, appellant faces possible incalculable damages if appellees are permitted to violate the terms of the restrictive covenant. However, our Supreme Court has stated an additional criteria in assessing whether the restrictive covenant in the present case is reasonable:

“[w]hen the restraint is for the purpose of protecting customer relationships, [as it is here], its duration is reasonable only if it is no longer than necessary for the employer to put a new man on the job and for the new employee to have a reasonable opportunity to demonstrate his effectiveness to the customers.” Boldt Machinery & Tools, Inc. v. Wallace, 469 Pa. 504, 513, 366 A.2d 902, 907 (1976) quoting from Blake, Employee Covenants Not to Compete, 73 Harv.L.Rev. 625, note 1 at 677-78.

Due to the hundreds of clients that O’Connor was servicing for appellant, it cannot be said that it was reasonable for appellant to put a new man into O’Connor’s position and for that new employee to have a reasonable opportunity to demonstrate his effectiveness to appellant’s clients within the four month period provided for in the lower court’s order. Therefore, we find based upon all the criteria expounded by our Supreme Court, the terms of the restrictive covenant were reasonable.

Reversed. Terms of the restrictive covenant limiting appellees, directly or indirectly not to own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation or control of any business similar to the type of business conducted by appellant within a radius of 75 miles of Greentree, Pennsylvania, are to apply for a period of one year from April 25, 1984.

BROSKY, J., files a concurring and dissenting opinion.

BROSKY, Judge,

concurring and dissenting:

Although the restrictive covenant in this case was entered into after the initial date of employment and might therefore be found unenforceable, (See e.g. George W. Kistler, Inc. v. O’Brien, 464 Pa. 475, 347 A.2d 311 (1975)), I agree with the conclusion implicit in the majority opinion that this covenant was supported by sufficient consideration since it was entered into at the time Mr. O’Connor began to earn a commission. See Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279 (1974); Jacobson & Co. v. International Environment Corp., 427 Pa. 439, 235 A.2d 612 (1967).

However, it is well established that restrictive covenants are enforceable only if they are reasonably limited as to duration of time and geographical extent. See Jacobson & Co., supra; John G. Bryant Co. v. Sling Testing & Repair, Inc., 471 Pa. 1, 369 A.2d 1164 (1977).

I believe that the one year period imposed by the restrictive covenant in this case is excessive given the relevant facts and keeping in mind that as a society our public policy favors free enterprise. Within a six month period appellants could contact the clients whom Mr. O’Connor had served and try to convince them to continue to do business with the firm. To prevent Mr. O’Connor from starting a competing business for a year provides appellants more protection than necessary.

As we explained in Harry Blackwood, Inc. v. Caputo, 290 Pa.Super. 140, 434 A.2d 169, 171 (1981):

[w]hen the restraint is for the purpose of protecting customer relations, [as it is here,] its duration is reasonable only if it is no longer than necessary for the employer to put a new man on the job and for the new employee to have a reasonable opportunity to demonstrate his effectiveness to the customers.

I, therefore, dissent from that position of the majority opinion that upholds a one year restriction and would instead impose a six month restriction.

      . The lower court opined that the law only required that the company who is attempting to enforce its restrictive covenant have reasonable time to contact the clients of its former employee and communicate to them that it desires to retain their business. We believe the term "to demonstrate his effectiveness to the clients” to mean much more than the lower court’s interpretation.

      . Compare John G. Bryant Co., supra in which customer contact was infrequent. The nature of the employment industry would seem to mandate more frequent client contact.


source: Caselaw Access Project

author: SPAETH, President Judge:

license: Public Domain

text:
    487 A.2d 953
    BIG KNOB VOLUNTEER FIRE COMPANY, Appellant, v. LOWE & MOYER GARAGE, INC., and Hamerly Custom Productions, Inc.
    Superior Court of Pennsylvania.
    Argued March 21, 1984.
    Filed Jan. 23, 1985.

      Robert W. Lewis, Jr., Ambridge, for appellant.
    Thomas R. Elliott, Jr., Easton, for appellee.
    Before SPAETH, President Judge, and BECK and TAMI-LIA, JJ.
   SPAETH, President Judge:

This is an action in replevin for possession of a fire truck. Appellant, plaintiff below, claims the better right to possess the truck under Section 2403(b) of the Uniform Commercial Code, 13 Pa.C.S. § 2403(b), which provides that a merchant entrusted with possession of goods has “power to transfer all rights of the entruster to a buyer in ordinary course of business.” The trial court held that appellant was not a buyer in ordinary course of business because “no actual sale to [appellant] occurred.” Slip op. of trial ct. at 5. We hold that for one to become a buyer in ordinary course of business, it is not necessary that a sale occur, and that on the facts of this case, appellant became a buyer in ordinary course of business when its name was placed on the fire truck, thereby identifying the truck to the contract for its sale. This conclusion, however, is not dispositive. Section 2716(c) of the Uniform Commercial Code, 13 Pa.C.S. § 2716(c), provides that “[t]he buyer has a right of replevin for goods identified to the contract if ... the circumstances reasonably indicate” that an effort to cover the goods would have been unavailing. The trial court made no finding on whether the circumstances here did so indicate. We therefore reverse and remand for further proceedings.

On March 26, 1979, appellant, the Big Knob Volunteer Fire Department, agreed to purchase a fire truck from Hamerly Custom Productions, Inc., which was in the business of assembling various component parts into fire trucks. Two days later, the Volunteer Fire Department paid Hamerly $10,000 toward the purchase price of the fire truck. After a modification in the specifications, which increased the purchase price to $51,836, the Volunteer Fire Department paid Hamerly $38,000 more toward the purchase price.

The contract for the fire truck provided that Hamerly would order the chassis for the truck, and would complete and deliver the truck within 20 to 70 days after receiving the chassis. The contract also provided:

The title [to the fire truck] does not pass to Buyer until the purchase price is paid in full. The Buyer grants Seller a security interest in the fire apparatus [truck] until paid in full. Seller retains all rights and remedies afforded under the uniform commercial code and its pertinent sections.
Complaint, Exhibit A.

On April 5, 1979, Hamerly ordered the chassis from appel-lee, Lowe & Moyer Garage, Inc., which in turn ordered it from the International Harvester Company. In September 1979 International Harvester delivered the chassis to Lowe & Moyer, reserving a security interest in the chassis, and obtaining a note in its favor for the purchase price. This note was assigned to International Harvester Credit Corporation, as Lowe & Moyer’s “floorplanner,” and reassigned to the First National Bank of Allentown. On October 17, 1979, Lowe & Moyer delivered the chassis to Hamerly.

Hamerly began work on transforming the chassis into a fire truck, and at some point, painted the Volunteer Fire Department’s name on the cab. However, Hamerly neither paid Lowe & Moyer for the chassis, nor did it complete and deliver the truck to the Volunteer Fire Department, with the result that both Lowe & Moyer and the Volunteer Fire Department sued Hamerly. In April 1980 Hamerly surrendered the truck to Lowe & Moyer, whereupon Lowe & Moyer discontinued its action against Hamerly. On its action against Hamerly, for specific performance, the Volunteer Fire Department obtained a default judgment. It then brought the present action for replevin of the fire truck against Lowe & Moyer and Hamerly. The trial court found in favor of Lowe & Moyer, for the chassis or its value, and the Volunteer Fire Department took this appeal.

The Uniform Commercial Code preserves a buyer’s right of replevin:

The buyer has a right of replevin for goods identified to the contract if after. reasonable effort he is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing, ____
§ 2716(c).

It is clear that the Volunteer Fire Department was a “buyer” of the fire truck, for the Code defines a “buyer” as “[a] person who buys or contracts to buy goods.” § 2103(a) (emphasis added). It is also clear that the truck was “identified to the contract.” Identification occurred when Hamerly painted the Volunteer Fire Department’s name on the cab. § 2501(a)(2). Two issues remain, however. The first issue is whether the Volunteer Fire Department, as plaintiff in replevin, sustained its burden to prove that it has a better right to possess the fire truck than Lowe & Moyer. Robinson v. Tool-O-Matic, Inc., 216 Pa.Super. 258, 263 A.2d 914 (1970). The second issue is, if the Volunteer Fire Department did prove its better right to possession, did it also prove, either that after reasonable effort it was unable to effect cover for the fire truck, or that the circumstances reasonably indicated that such effort would be unavailing.

-1-

The Volunteer Fire Department argues that it proved its better right to possess the fire truck under § 2403(b) of the Code, which provides that a merchant entrusted with possession of goods has “power to transfer all rights of the entruster to a buyer in ordinary course of business.” In the Volunteer Fire Department’s view, Lowe & Moyer entrusted possession of the chassis for the fire truck to Hamerly, which thereby gained the power to transfer all of Lowe & Moyer’s rights in the chassis to the Volunteer Fire Department as “a buyer in ordinary course of business.”

The Code defines a buyer in ordinary course as

[a] person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind____
§ 1201.

The trial court held that the Volunteer Fire Department was not a buyer in ordinary course because there was no sale to it. Relying on the definition of “sale” as “the passing of title from the seller to the buyer for a price,” § 2106(a), the trial court held that “[njeither title to the truck passed, nor was delivery made to plaintiff.” Slip op. of trial ct. at 3.

The point at which a person becomes a buyer in ordinary course is subject to considerable controversy because the Code does not specify the moment at which the status is conferred. The controversy arises in the context of both § 9307(a) and § 2403(b) of the Code.

The commentators are divided. Jackson and Peters, Quest for Uncertainty: A Proposal for Flexible Resolution of Inherent Conflicts between Article 2 and Article 9 of the Uniform Commercial Code, 87 Yale L.J. 907, 952 and n. 163 (1978) (passing of title is not necessary to be a buyer in ordinary course for purposes of § 2403); Smith, Title and Right to Possession Under the Uniform Commercial Code, 10 B.C. Indus. & Com.L.Rev. 39, 61 (1968) (possession by buyer is required to prevail under § 2403); The Buyer-Secured Party Conflict and Section 9-307(1) of the UCC: Identifying when a Buyer Qualifies for Protection as a Buyer in Ordinary Course, 50 Fordham L.Rev. 657, 686 n. 246 (1982) (identification of goods to the contract should be point at which a person becomes a buyer in ordinary course under § 2403).

The cases are also divided. Cases denying recovery to a party on the ground that the party was not a buyer in ordinary course reason that a sale is required, § 1201; a sale requires transfer of title, § 2106(a); and a transfer of title occurs either when agreed upon by the parties or upon physical delivery, § 2401(2). Absent satisfaction of these criteria, the buyer will not prevail even though some or all of the purchase price has been paid. See, e.g., Chrysler Corp. v. Adamatic, Inc., 59 Wis.2d 219, 208 N.W.2d 97 (1973). This was the reasoning of the trial court, which cited Chrysler. Slip op. of trial ct. at 4. This reasoning places the buyer who has paid in advance for goods not yet delivered in an extremely vulnerable position.

Emphasis upon a title-passing test means that until title passes, either according to the contract or through seller’s delivery of the goods, the “executory buyer’s” status is in jeopardy. He is subject to the superior rights of an inventory secured party and runs the risk of being advised that the sale to him is in violation of the security agreement, so that he may never become a buyer in ordinary course of business.
Skilton, Buyer in Ordinary Course of Business Under Article 9 of the Uniform Commercial Code (and related matters), 1974 Wisc.L.Rev. 1, 18-19 (emphasis in original) (footnote omitted).

See also Gordon, The Prepaying Buyer: Second Class Citizenship Under the Uniform Commercial Code Article 2, 63 Nw.U.L.Rev. 565 (1968); Speidel, Advance Payments in Contracts for Sale of Manufactured Goods: A Look at the Uniform Commercial Code, 52 Cal.L.Rev. 281 (1964). The modern trend in contests between a buyer without possession and a secured creditor, typically the inventory financer, is to ignore or deemphasize the concept of “sale.” Buyer-Secured Party Conflict, supra, at 680. Instead of focusing on passage of title (delivery), courts and commentators increasingly favor identification as the critical moment that determines when a buyer becomes a buyer in ordinary course. See, e.g., In re Pennsylvania Conveyor Co., 31 B.R. 680 (Bankr.W.D.Pa.1982); Holstein v. Greenwich Yacht Sales, Inc., 122 R.I. 211, 404 A.2d 842 (1979); Dolan, The Uniform Commercial Code and the Concept of Possession in the Marketing and Financing of Goods, 56 Tex.L. Rev. 1147 (1978); Buyer-Secured Party Conflict, supra. But see Wilson v. M & W Gear, 110 Ill.App.3d 538, 66 Ill.Dec. 244, 442 N.E.2d 670 (1982) (a person is a buyer in ordinary course when a person contracts to buy goods and those goods are in the dealer's inventory or being prepared for delivery). The Code’s official comment that identification should have “limited effect,” § 2501 comment 2, is set to one side by proponents of this view, who point to several factors to reach their obviously pro-buyer conclusion.

One factor is that the Code specifically provides that it should be “liberally construed and applied to promote its underlying purposes and policies.” § 1102(a). One of the fundamental purposes of the Code, evident in such a provision as § 9307, is to protect the innocent buyer. Cf J. White and R. Summers, Handbook of the Law Under the Uniform Commercial Code 1070 (2d ed. 1980) (conceding that the policy of § 9307 would seem to cover an innocent purchaser even when the security interest has not been created by the buyer’s seller). Giving priority to the buyer over a secured party upon identification of goods to the contract furthers this purpose. Buyer-Secured Party Conflict, supra, at 883.

A second factor is that the Code expressly diminishes the importance of title in ascertaining rights in property, § 2505 comment 1, and analyses, such as that in Chrysler Corp. v. Adamatic, Inc., supra, are inconsistent with this approach. Skilton, supra, at 17-18.

A third factor is that the replevin section of the Code, § 2716(c), expressly requires identification but not delivery. “If a buyer has no replevin rights until title passes, as Chrysler, [supra], held, there is no need for the replevin section to mention identification, since identification must occur before title passes.” Dolan, supra, at 1155 (emphasis in original).

A fourth factor is the comparison of § 9307(a) with one of its predecessors, The Uniform Trust Receipts Act § 9(2) (1933), which protected “a buyer in the ordinary course of trade,” defined as a person “to whom goods are sold and delivered____” Id. § 1 (emphasis added). The omission of “delivered” or “delivery” from the definition of a buyer in ordinary course of business in § 1201 has been interpreted as intentional. Buyer-Secured Party Conflict, supra, at 674. In this regard, it may be noted that the same omission is apparent in § 2403(b) when compared with its predecessor, § 25 of the Uniform Sales Act (1906), which required “delivery.” The omission of the requirement of delivery in both §§ 2403(b) and 9307(a), which are different in origin, strongly supports the view that the drafters intended to protect certain buyers even in the absence of delivery.

Finally, some courts have concluded that the secured party is better able to absorb the loss than the buyer. See, e.g., Rex Financial Corp. v. Mobile America Corp., 119 Ariz. 176, 580 P.2d 8 (Ariz.Ct.App.1978); Herman v. First Farmers State Bank of Minier, 73 Ill.App.3d 475, 29 Ill.Dec. 787, 392 N.E.2d 344 (1979); Chrysler Credit Corp. v. Sharp, 56 Misc.2d 261, 288 N.Y.S.2d 525 (Sup.Ct.1968); Holstein v. Greenwich Yacht Sales, Inc., supra. In contests between a buyer and an owner who has entrusted the property to the buyer’s seller, the argument is made that the buyer should be protected because the owner, by placing the goods in commerce, is responsible for involving the buyer’s seller. See, e.g., Coffman Truck Sales v. Sackley Cartage Co., 58 Ill.App.3d 68, 15 Ill.Dec. 554, 373 N.E.2d 1026 (1978); Atwood Chevrolet-Olds, Inc. v. Aberdeen Municipal School District, 431 So.2d 926 (Miss.1983).

As a result of considering these several factors, courts have with increasing frequency held that passing of title (when agreed to or occurring upon delivery, § 2401(2)) is not essential to a person becoming a buyer in ordinary course of business. See, e.g., Herman v. First Farmers State Bank of Minier, supra; Tanbro Fabrics Corp. v. Deering Milliken, Inc., 39 N.Y.2d 632, 350 N.E.2d 590, 385 N.Y.S.2d 260 (1976); Holstein v. Greenwich Yacht Sales, Inc., supra. See also Rex Financial Corp. v. Mobile America Corp., supra; International Harvester Credit Corp. v. Associates Financial Services Co., 133 Ga.App. 488, 211 S.E.2d 430 (1974); Chrysler Credit Corp. v. Sharp, supra. We agree with these courts, and hold that identification rather than delivery is the point at which a person becomes a buyer in ordinary course of business. Since here the fire truck was identified to the contract, the Volunteer Fire Company did become a buyer in ordinary course of business. Upon entrusting the goods to Hamerly, which dealt in goods of that kind, Lowe & Moyer gave Hamerly the power to transfer its rights to a buyer in ordinary course of business, and Hamerly exercised that power when it painted the Volunteer Fire Department’s name on the cab of the fire truck, identifying the goods to the contract and making the Volunteer Fire Department a buyer in ordinary course of business. Cf. Buyer-Secured Party Conflict, supra, at 686 n. 246 (in rare cases where identification occurs prior to buyer taking possession, allowing buyer to prevail in entrusting situation justified by policy of § 2403(b) giving strong protection to innocent buyer who relies on seller’s apparent authority). Thus, as to Lowe & Moyer, the Volunteer Fire Department has shown under § 2403(b) a better right to possess the fire truck.

-2-

It remains to consider whether the Volunteer Fire Department also proved, either that after reasonable effort it was unable to effect cover for the fire truck, or that the circumstances reasonably indicated that such effort would be unavailing. As we have discussed, such proof is required if a buyer is to have a right of replevin under § 2716(c) of the Code.

In his opinion, the trial judge made no finding regarding cover, resting his decision in favor of Lowe & Moyer on his conclusion that the Volunteer Fire Department was not a buyer in ordinary course of business — a conclusion with which we have just expressed our disagreement. Nevertheless, we should reach the same decision as the trial judge, albeit on different reasoning, if the Volunteer Fire Department failed to meet its burden of proof regarding cover. In its opinion sitting en banc — the opinion being written by the trial judge — the trial court not only concluded that the Volunteer Fire Department was not a buyer in ordinary course, but also stated that the Department “failed to show cover was, in fact, unavailable.” Slip op. of trial ct., en banc, at 4. However, we are uncertain how to interpret this statement, which the trial court did not elaborate on. Section 2716(c) of the Code is in the disjunctive: the buyer must prove, either that “after reasonable effort he is unable to effect cover,” or that “the circumstances reasonably indicate that such effort will be unavailing.” The trial court’s statement is not clearly addressed to either of these alternatives.

We are satisfied from our own examination of the record that the Volunteer Fire Department did not satisfy the first alternative, for it offered no proof that it had made any effort, much less a reasonable effort, to effect cover. See § 2712(a). However, with respect to the second alternative, we are unwilling to reach a conclusion, for to do so would require us to appraise the evidence, which we believe should initially be done by the trial court. We shall therefore remand for further proceedings; while the trial court may of course hear argument and receive briefs, it should not receive further evidence, for that would give the parties a second chance to do what should have been done at trial. Incident to our remand, we offer the following observations in the hope that they may give some guidance to the parties in their arguments and the trial court in its decision on whether the circumstances did or did not reasonably indicate that an effort by the Volunteer Fire Department to cover the fire truck would have been unavailing.

To “cover” means to “mak[e] in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.” § 2712(a). In the context of § 2716(c), on the right of replevin, there is a dearth of case law on how to decide whether the circumstances reasonably indicated that a reasonable effort to obtain cover would have been unavailing. However, we may learn from cases that discuss the necessity to mitigate damages by covering as a prerequisite to obtaining consequential damages upon breach of a contract for sale of goods. § 2715(b)(1) (consequential damages available only when foreseeable losses “could not reasonably be prevented by cover or otherwise; ____”). And see, Gerwin v. Southeastern Association of Seventh Day Adventists, 14 Cal.App.3d 209, 92 Cal.Rptr. 111 (1971), where the court referred to the replevin provision in its discussion of the necessity to cover for purposes of obtaining consequential damages.

In some cases it will appear that the buyer could have reduced his consequential damages because equivalent goods could be easily found on the open market. In other cases, however, it will appear that cover was impossible because the goods were specially ordered or had qualities that could not be duplicated, at least not within the requisite period of time. See Whitaker v. Farmhand, Inc., 173 Mont. 345, 567 P.2d 916 (1977). See also Lake Village Implement Co. v. Cox, 252 Ark. 224, 478 S.W.2d 36 (1972) (special order machinery needed to harvest crops unavailable in time to prevent loss). Cf. Bos v. Dolajak, 167 Mont. 1, 534 P.2d 1258 (1975).

It may also be pertinent in determining the necessity to cover to consider the expense of replacement and the financial capabilities of the buyer.

[0]ne is required only to take such steps as may be taken at small expense or with reasonable exertion, and where the expense is so large as to make the requirement [to cover] impracticable, the doctrine [of avoidable consequences] does not apply.
Lake Village Implement Co. v. Cox, 252 Ark. at 231, 478 S.W.2d at 42 (citations omitted).

See also Gerwin v. Southeastern California Association of Seventh Day Adventists, supra (“duty to mitigate does not require an injured party to take measures which are unreasonable or impractical or which require expenditures disproportionate to the loss sought to be avoided or which are beyond his financial means”); Schatz Distributing Co. v. Olivetti Corp. of America, 7 Kan.App.2d 676, 647 P.2d 820 (1982) (requirement to mitigate does not require subsequent sale and replacement at any price; loss would have been $10,000); Whitaker v. Farmhand, Inc., supra (plaintiffs did not have to cover where they did not have the financial capability to acquire other satisfactory devices). If the buyer has prepaid, these interrelated factors assume greater importance.

Here, it appears to us that, accepting as true all of the Volunteer Fire Department’s uncontradicted evidence, one could find that the circumstances reasonably indicated that an effort to cover the fire truck would have been unavailing. Cf. § 2716, comment 3 (goods identified to contract subject to replevin when cover “reasonably unavailable”).

The Volunteer Fire Department is a non-profit organization, the revenues of which are derived mainly from functions to raise money and direct solicitation of donations. N.T. 6, 42-43. After choosing the lowest bidder to supply the fire truck, the Department paid $48,000, in advance, on the total purchase price of some $51,000. N.T. 7, 9. This prepayment resulted under the contract in a 5 percent discount on the price. N.T. 10. This evidence may indicate limited resources and an attempt to make the best use of those resources by reducing the total outlay for the fire truck.

The fire truck was a special-order vehicle, as appears from the contract, which lists the particular component parts required by the Volunteer Fire Department. Lowe & Moyer states that one of the Volunteer Fire Department’s witnesses, a Chief Mohrbacher, “demonstrated personal knowledge that there were other available sources for a truck meeting his specifications.” Brief for Appellee at 15. In the testimony cited, the Chief stated that four bids to supply the truck were submitted. No evidence was presented as to the time or cost in obtaining a replacement truck from these other original bidders. Given the special features of the desired truck, it may be reasonable to infer that an equivalent vehicle was not carried in stock by the other bidders, or elsewhere.

Between the date the contract was signed and the delivery of the chassis to Hamerly, Hamerly periodically reassured the Volunteer Fire Department that the chassis would be in production soon. N.T. 14. After the chassis was delivered to Hamerly, the Department called Hamerly weekly to ascertain when the fire truck would be delivered. N.T. 17. Eventually the Department learned that no part of its payment had been forwarded to Lowe & Moyer, as supplier of the chassis, N.T. 15-16, 55-56, and that prepayment was unusual and Lowe & Moyer had not been aware that Hamerly had already been paid, N.T. 15-16. A year after the contract had been signed and about six months after delivery of the chassis to Hamerly, the Department learned that the truck was still incomplete on Hamerly’s premises. N.T. 17. A week before obtaining a default judgment in its suit against Hamerly for specific performance, the Department was informed by Lowe & Moyer that it had acquired possession of the truck. N.T. 26-28. The Department then filed this action in replevin, and, after paying a premium of $1,036.72, to post a bond for twice the value of the truck, N.T. 34-36, obtained the still-unfinished truck from Lowe & Moyer in June 1980, less than two months after learning that Hamerly no longer had possession. In conjunction with the other evidence, these circumstances may have reasonably indicated that an effort to cover the fire truck would have been unavailing, at least without extraordinary expense, delay, the risk of loss of the money already paid Hamerly, and the risk that Hamerly would not be able to satisfy damages incurred in obtaining cover. Cf. Tatum v. Richter, 280 Md. 332, 373 A.2d 923 (1977) (buyer entitled to replevin where he paid $15,000 of $17,500 toward a specially-ordered car identified to the contract because buyer “unable to effect cover and there was no other way to protect himself against loss of his deposit”).

As the tone of the foregoing discussion has no doubt indicated, if we knew that the trial court had accepted the Volunteer Fire Department’s evidence as credible, we should consider ourselves able to conclude that the Department had satisfied the cover requirement, and, as a buyer in ordinary course of business, was entitled to possession of the fire truck. However, we do not know how the trial court regarded the evidence, and, moreover, we have its statement that “[pjlaintiff has also failed to show cover was, in fact, unavailable.” It may be that this statement reflects a view of the law regarding cover, rather than a view of the quality of the evidence, but we are not so sure of this as to consider ourselves entitled to act on that assumption.

Remanded for further proceedings consistent with this opinion. Jurisdiction is relinquished.

      . Appellant’s brief does not conform to Pa.R.A.P. 2111 et seq., which prescribe the form, and content of briefs. While this failure is inexcusable, we have concluded that it is not so egregious that we should suppress the brief or quash the appeal. Pa.R.A.P. 2101. But see Commonwealth v. Stoppie, 337 Pa.Super. 235, 486 A.2d 994 (1984).
      The Act of Nov. 1, 1979, P.L. 255, No. 86, 13 Pa.C.S. § 1101 et seq., transferred the former provisions of the Act of Apr. 6, 1953, P.L. 3, No. 1, known as the “Uniform Commercial Code,” as reenacted, amended, and revised by the Act of Oct. 2, 1959, P.L. 1023, No. 426, 12A P.S. § 1-101 et seq., to Title 13 of the Pennsylvania Consolidated Statutes. Because the transfer did not effect a substantive change in the law, Act of Nov. 1, 1979, P.L. 255, No. 86, § 7, we shall cite to the Code by section only and in the form used in the 1979 Act (e.g., § 2716(c)).

      . This action was commenced by complaint and a motion for writ of seizure. On appellant’s filing a replevin bond in twice the amount of the value of the fire truck, a writ of seizure issued, and we understand that appellant has since had possession of the truck under the bond.

      . The trial court granted the bank, as assignee, leave to intervene and file a counterclaim, but made no determination on the bank’s claim. Since no exceptions were taken on the bank's behalf, its claim is not before us.

      . Hamerly did not respond to service of process and entered no appearance in the action, and the judgment entered is in favor of only Lowe & Moyer. Thus, while the paper books designate both Hamerly and Lowe & Moyer as appellees, in fact only Lowe & Moyer is an appellee.

      . The Volunteer Fire Department also argues that it is entitled to the fire truck under § 9307(a) in that Hamerly, as a buyer in ordinary course, cut off the floorplanner’s security interest and the Department as Hamerly’s buyer took free of that interest. This argument is beside the point because the contest here is between the Volunteer Fire Department and Lowe & Moyer, not the floorplanner. The Volunteer Fire Department has only to establish that it had superior title to Lowe & Moyer, not to the whole world.
      Lowe & Moyer counterclaimed and argues that it had a security interest by retaining the bill of origin on the chassis. Thus, the claim is that the reservation of the security interest gave Lowe & Moyer the right to retake possession, under § 9503, and upon repossession its security interest became perfected, § 9305. Brief for Appellee at 24. Lowe & Moyer argues that the Volunteer Fire Department is not a buyer in ordinary course who can take free of the security interest. However, we find that counsel for Lowe & Moyer conceded during trial that Lowe & Moyer had no security interest. N.T. 92. Thus, the contest here is between a buyer in ordinary course and an unsecured party in possession of the property. The exclusivity of § 9307(a) in situations in which §§ 2403 and 9307(a) may be arguably considered is consequently not at issue. Counsel’s concession also negates any argument that § 9306 may apply.
      Although § 2402(a) gives priority to a buyer over an unsecured party, the Volunteer Fire Department failed to raise this theory of recovery when before the trial court and therefore has waived it.

      . The contract, which was appended to the complaint and admitted into evidence, N.T. 9, is over 40 pages long and specifies in detail the features of the fire truck to be delivered by Hamerly.


author: WIEAND, Judge:

text:
    487 A.2d 962
    COMMONWEALTH of Pennsylvania, Appellant, v. Leroy PHILLIPS.
    Superior Court of Pennsylvania.
    Submitted April 30, 1984.
    Filed Jan. 23, 1985.
    Petition for Allowance of Appeal Denied July 30, 1985.

      Ronald T. Williamson, Assistant District Attorney, Nor-ristown, for Commonwealth, appellant.
    John V. Ryan, Merion Station, for appellee.
    Before SPAETH, President Judge, and WIEAND and CIRILLO, JJ.
   WIEAND, Judge:

Can a township policeman in Montgomery County, having probable cause to believe that a robbery has been committed and that the robbers are seated in a vehicle parked on the Philadelphia side of Cheltenham Avenue, cross the street into Philadelphia and make a legal arrest? The pre-trial hearing court in Montgomery held that the arrest was illegal and suppressed incriminating evidence found in the vehicle and also an incriminatory statement made by appellee. We reverse.

At or about 1:45 p.m. on September 22, 1982, James Linkletter was assaulted and robbed by three black males in Cheltenham Township, Montgomery County. An eyewitness saw the robbers flee in a black over yellow Camaro which had extensive damage to the driver’s side. One of the men was wearing black trousers and a brown jacket. This information was communicated to Officer Daniel Rick-ard, a township policeman, who had arrived at the scene of the robbery pursuant to police radio. Rickard thereafter returned to patrol, where, shortly before three o’clock, he observed a black over yellow Camaro parked on Cheltenham Avenue in such a way as to straddle the sidewalk. The driver’s side had substantial body damage, and standing beside the vehicle was a black male wearing black trousers and a brown jacket. Two additional black males were seated in the car. At the point where the car was parked, the center line of Cheltenham Avenue forms the boundary between Cheltenham Township, Montgomery County, and the City of Philadelphia. The Camaro was parked on the Philadelphia side of the street.

Rickard pulled his vehicle behind the Camaro and approached the vehicle on foot. One of the occupants emerged and walked away with the male who was dressed in the black trousers and brown jacket. LeRoy Phillips, the appellee, remained in the back seat of the car. Rickard told the two who were leaving that he wanted to talk to them; whereupon, they started to run. Rickard gave chase but the two men took different routes, and Rickard was not able to overtake either one. He then observed that Phillips, who had been in the back seat of the car, was also running away. Rickard was able to overtake him on Limekiln Pike and place him under arrest. This was in Philadelphia. When Rickard and Phillips returned to the Camaro, the robbery victim’s wallet and umbrella were found on the back seat of the vehicle. Phillips then gave an incriminating statement to the police.

The Commonwealth’s right of appeal is clear. Its prosecution will be so severely hampered by an inability to use the evidence suppressed by the trial court that it will not be able to proceed. Counsel for appellee concedes that prosecution cannot proceed without the incriminating evidence suppressed by the court. Therefore, we may proceed to a review of the trial court’s suppression order. See: Commonwealth v. Miller, 334 Pa.Super. 374, 483 A.2d 498 (1984); Commonwealth v. York, 319 Pa.Super. 13, 15-16, 465 A.2d 1028, 1029-1030 (1983).

The authority of a municipal police officer to act beyond the territorial limits of his primary jurisdiction is determined by the provisions of 42 Pa.C.S. § 8953, which became effective August 14, 1982. The trial court properly concluded that subsection (a)(2), which authorizes fresh pursuit, was not applicable to permit Phillips’ arrest by Rickard in Philadelphia. Following the robbery, Rickard had returned to and had resumed routine patrol in the area assigned to him. It was almost an hour later when, by happenstance, he came upon a vehicle matching the description of the vehicle used by the robbers. These facts distinguish the arrest in the instant case from the arrests found legal in United States v. Getz, 381 F.Supp. 43 (E.D.Pa.1974), aff'd, 510 F.2d 971 (3d Cir.1975), cert. denied, 421 U.S. 950, 95 S.Ct. 1684, 44 L.Ed.2d 105; Commonwealth v. Stasiak, 305 Pa.Super. 257, 451 A.2d 520 (1982); and Com monwealth v. Brown, 298 Pa.Super. 11, 444 A.2d 149 (1982).

The Philadelphia arrest in this case, however, was authorized by 42 Pa.C.S. § 8953(a)(6). This subsection authorizes extraterritorial arrest by a municipal police officer

(6) Where the officer ... has probable cause to believe that an offense which is a felony has been committed, and makes a reasonable effort to identify himself as a police officer.

Cheltenham Avenue, according to the evidence, was generally patrolled on both sides by Cheltenham Township Police. It was neither illegal nor improper for Rickard, who was in full uniform, to approach a vehicle parked on the Philadelphia side of the street to speak to occupants of the vehicle. See: Commonwealth v. Hall, 475 Pa. 482, 488, 380 A.2d 1238, 1241 (1977) (nothing in the Constitution prevents the police from addressing questions to anyone on the streets). Accord: Commonwealth v. Jones, 474 Pa. 364, 370, 378 A.2d 835, 838 (1977), cert. denied, 435 U.S. 947, 98 S.Ct. 1533, 55 L.Ed.2d 546 (1978). Rickard knew that a robbery had occurred in his township because he had interviewed the victim. The vehicle parked on Cheltenham Avenue matched in every way the description of the vehicle in which the three robbers had escaped. He also knew that the man standing beside the car, while two were inside the car, was wearing clothing which matched that worn by one of the robbers. These facts, particularly when combined with the flight of two of the three men when Rickard approached in uniform and told them to stop and appellee’s subsequent running from the car, provided Rickard with the probable cause necessary to seize appellee and place him under arrest. See: Commonwealth v. Gease, 304 Pa.Super. 433, 436, 450 A.2d 989, 990 (1982); Commonwealth v. Legg, 258 Pa.Super. 294, 298-299, 392 A.2d 801, 803 (1978); Commonwealth v. Dessus, 214 Pa.Super. 347, 360, 257 A.2d 867, 873 (1969).

The legislature, recognizing the absurdity of territorial limitations which require an officer such as Rickard to stand by helplessly as suspected robbers flee, enacted 42 Pa.C.S. § 8953(a)(6) to grant police the power and authority to perform the functions of their office by making arrests for felonies in neighboring municipalities. Rickard acted consistently with this authorization. The arrest which he made, therefore, was not illegal merely because it was extraterritorial. It follows that the court’s order suppressing evidence discovered subsequent to the arrest was erroneous.

Reversed and remanded for further proceedings. Jurisdiction is not retained.

      . This subsection provides that a municipal officer shall have power and authority to act as if in the territorial limits of his primary jurisdiction ...
      (2) Where the officer is in hot pursuit of any person for any offense which was committed, or which he has probable cause to believe was committed, within his primary jurisdiction and for which offense the officer continues in fresh pursuit of the person after the commission of the offense.
      42 Pa.C.S. § 8953(a)(2).

      . Because we have concluded that Rickard could lawfully effect an arrest in Philadelphia, it is unnecessary to determine whether a municipal police officer can properly make a citizen’s arrest outside the confines of the municipality in which he has primary jurisdiction. The Pennsylvania Supreme Court has never had the opportunity to decide this issue; and a decision by this Court in Commonwealth v. Troutman, 223 Pa.Super. 509, 302 A.2d 430 (1973), which denied a policeman the right to make a citizen’s arrest outside the jurisdiction in which he was employed, has been severely criticized. See: People v. Marino, 80 Ill.App.3d 657, 663-665, 36 Ill.Dec. 71, 76-77, 400 N.E.2d 491, 496-497 (1980). See also: Commonwealth v. Harris, 11 Mass. App. 165, 415 N.E.2d 216, 221-222 n. 7 (1981). An impressive line of cases decided by the federal courts and the courts of sister states holds that an extraterritorial arrest made by a police officer lacking official authority to arrest will be sustained if it was a valid “citizen’s arrest” under the circumstances. See: United States v. Swarovski, 557 F.2d 40, 46-47 (2d Cir.1977), cert. denied, 434 U.S. 1045, 98 S.Ct. 889, 54 L.Ed.2d 796 (1978); Ward v. United States, 316 F.2d 113, 116-118 (9th Cir.), cert. denied, 375 U.S. 862, 84 S.Ct. 132, 11 L.Ed.2d 89 (1963); State v. McCullar, 110 Ariz. 427, 428, 520 P.2d 299 (1974); People v. Monson, 28 Cal.App.3d 935, 939-940, 105 Cal.Rptr. 92 (1972); State v. Shipman, 370 So.2d 1195, 1196 (Fla.Dist.Ct.App.1979); State v. O’Kelly, 211 N.W.2d 589, 595 (Iowa 1973), cert. denied, 417 U.S. 936, 94 S.Ct. 2652, 41 L.Ed.2d 240 (1974); State v. Shienle, 218 Kan. 637, 640, 545 P.2d 1129 (1976); State v. Jones, 263 La. 164, 174-175, 267 So.2d 559 (1972); Stevenson v. State, 287 Md. 504, 510, 413 A.2d 1340 (1980); People v. Bashans, 80 Mich.App. 702, 713, 265 N.W.2d 170 (1978); State v. Fritz, 490 S.W.2d 30, 32 (Mo.), cert. denied, 411 U.S. 985, 93 S.Ct. 2282, 36 L.Ed.2d 962 (1973); State v. McCarthy, 123 N.J.Super. 513, 517, 303 A.2d 626 (1973); State v. MacDonald, 260 N.W.2d 626, 627 (S.D.1977); State v. Harp, 13 Wash.App. 239, 242, 534 P.2d 842 (1975).


author: CIRILLO, Judge: OLSZEWSKI, Judge,

text:
    487 A.2d 965
    Wendell W. YOUNG, III and Marilyn L. Young, H/W v. Anthony CERONE and Marie Cerone, H/W, Appellants.
    Superior Court of Pennsylvania.
    Argued Sept. 4, 1984.
    Filed Jan. 23, 1985.

      Bruce A. Franzel, Philadelphia, for appellants.
    George W. Berkelbach, III, Philadelphia, for appellees.
    Before CIRILLO, OLSZEWSKI and MONTGOMERY, JJ.
   CIRILLO, Judge:

Appellants, Anthony Cerone and Marie Cerone, appeal a judgment of the Court of Common Pleas of Philadelphia County directing them to remove a fence from their property and enjoining them from constructing any fence less than fifteen feet from the side and rear boundaries of their property and less than twenty-five feet from the front boundary facing the street. We vacate that judgment.

Appellants and appellees, the Youngs, are next-door neighbors in the Crestmont Farms residential development in northeast Philadelphia. This development was originally farmland, conveyed in 1926 to the Crestmont Farms Improvement Company, Inc. Since then, the Company has ceased to exist, and the land has been subdivided into approximately seventy lots for construction of detached residences.

In 1980, appellants began construction of a chain link-and-wood slat fence on the boundary between their lot and appellees’. Appellees protested, claiming that any such construction would violate deed restrictions imposed by the original grantor. However, they later requested appellants to delay building the fence, so that the City of Philadelphia could survey the lots. After the survey, appellants resumed construction.

Appellees then filed a complaint in equity, seeking an injunction forcing appellants to dismantle the fence and prohibiting them from any further construction. Appellees alleged that the fence was in violation of Subdivision 6 of the deed restrictions, which states, in pertinent part:

No building, fence, wall or other structure shall be commenced, erected or maintained; nor shall any addition to or change or alteration thereon be made until the plans and specifications showing the nature, kind, shape, height, materials, floor plans, color scheme, location and approximate cost of such structure and the grading plan of the plot to be built upon shall have been submitted to and approved in writing by the Grantee and a copy thereof as finally approved, lodged permanently with the Grantee____ The Grantee shall have the right to refuse to approve any such plans or specifications or grading plan which is not suitable or desirable in its opinion for aesthetic or other reasons and in passing upon such plans, specifications and grading plan[, i]t shall have the right to take into consideration the suitability of the proposed building or other structure and of the materials of which it is to be built to the site upon which it is proposed to erect the same[,] the harmony thereof with the surroundings[,] and the effect of the building or other structure or the roadway as planned on the outlook from the adjacent or neighboring property.

The trial court, sitting without a jury, held that Subdivision 6 was not applicable. The court reasoned that the “Grantee” referred to in that restriction was the defunct Improvement Company, and that there was no successor grantee. However, the court held that the fence violated Subdivisions 4 and 5 of the deed restrictions. Subdivision 4 states:

No building or part thereof shall be erected or maintained on any part of the said tract closer to any street than 25 feet and at least 15 feet from any side or rear lot line except as hereinafter set forth and except as to eight lots of 50 feet each fronting on Orchard Lane. Covered porches____ may encroach ... not more than 12 feet. Steps, uncovered porches and terraces ... may be built and maintained on any part of such restricted areas. Single story bar, low and criel windows ... may encroach on such restricted areas by projection not more than 3 feet____

Subdivision 5 provides:

Free or open spaces shall be left on every plot built upon on both sides or every building erected thereon which free spaces shall extend the full length of the plot and shall be in addition to and independent of any free spaces, pertaining to or required for any other building or any other plot. No part of any building ... shall encroach on these free spaces. The aggregate width of any such free spaces required on both sides of any building shall not be less than 15 feet on either side except 8 lots of 50 feet front, each on Orchard Lane. Steps, uncovered porches and terraces ... may be built and maintained on any part of such restricted areas[;] one story extensions of the building, no part of any wall of which is more than 15 feet above the level of the first floor of the building[,] may encroach upon such free spaces by projecting thereon not more than 7 feet, but not nearer than 8 feet to either exterior limit of such free spaces. Covered porches ... may encroach upon such free spaces by projecting thereon not more than 7 feet, but not nearer than 8 feet to either exterior limit of such free [space]____

The court concluded that these two subdivisions demonstrated the grantor’s intent that “free or open spaces” remain between any homes built in the development, and that appellants’ fence frustrated this intent. Appellants filed exceptions, which were dismissed.

Appellants raise four allegations of error: 1) that the chancellor erred in applying Subdivisions 4 and 5 to their fence; 2) that the chancellor erroneously based her decision on matters raised sua sponte, specifically, the set-back restrictions of Subdivision 4; 3) that appellees should have been estopped from obtaining equitable relief because they requested appellants to delay construction of the fence, pending the City survey; and 4) that appellees should have been estopped from obtaining equitable relief because they have violated deed restrictions.

We need not reach appellants’ second contention, because we find that the chancellor erred in applying Subdivisions 4 and 5, whether they were raised by the parties or the court.

Deed restrictions are not favored, because they interfere with a landowner’s fundamental, Constitutional right to use his property as he pleases. See Parker v. Hough, 420 Pa. 7, 215 A.2d 667 (1966); Cleaver v. Board of Adjustment, 414 Pa. 367, 200 A.2d 408 (1964); Burns v. Baumgardner, 303 Pa.Super. 85, 449 A.2d 590 (1982); Tate v. Moran, 264 Pa.Super. 540, 400 A.2d 217 (1979). They are therefore strictly construed against the grantor, and any ambiguities are resolved in favor of the landowner. Schulman v. Serrill, 432 Pa. 206, 246 A.2d 643 (1968); Mishkin v. Temple Beth El of Lancaster, 429 Pa. 73, 239 A.2d 800 (1968); Jones v. Park Lane for Convalescents, Inc., 384 Pa. 268, 120 A.2d 535 (1956). In addition, restrictive covenants will not be extended or enlarged by implication. Ratkovich v. Randell Homes, Inc., 403 Pa. 63, 68, 169 A.2d 65, 68 (1961); Jones, supra, 384 Pa. at 272, 120 A.2d at 537; DiCarlo v. Cooney, 282 Pa.Super. 477, 423 A.2d 3 (1980); Tate, supra.

Here, Subdivisions 4 and 5 concern the construction and location of buildings or “parts thereof” on Crestmont Farms lots. Appellants’ fence is outside the clear, unambiguous terms of these restrictions. We will not extend or enlarge the meaning of those terms in order to hold otherwise and include the fence within them. DiCarlo and Tate, supra.

Appellants’ last two arguments may be treated together, as both raise estoppel claims and involve the consent requirement of Subdivision 6.

The chancellor found that Subdivision 6 was unenforceable because there was no successor to the original grantee. To the contrary, an original grantee’s successors are the owners of lots in the conveyed and subdivided property. Each of these owners has a dominant estate over the estate of his neighbor, so that he may enforce valid deed restrictions intended to protect his enjoyment of his property. Kajowski v. Null, 405 Pa. 589, 599-600, 177 A.2d 101, 106 (1962); Bennett v. Lane Homes, 369 Pa. 509, 87 A.2d 273 (1952); Benner v. Tacony Athletic Association, 328 Pa. 577, 196 A. 390 (1938). This right to enforce is limited, however, to those owners whose properties adjoin or are adjacent to an offending lot, since only their rights to enjoy their properties will be affected by violations of such restrictions. The language of Subdivision 6 supports such a limitation, by referring to the effect of proposed construction “on the outlook from the adjacent or neighboring property” (emphasis supplied). These owners are therefore the persons whose consent must be obtained under restrictions requiring the “grantee’s” consent. Their consent may not be withheld arbitrarily, capriciously or unreasonably, as this would violate the rights of the servient estate’s owner. Parker, Cleaver, Burns and Tate, supra.

Thus, appellees, as appellants’ next-door neighbors, had standing to seek enforcement of Subdivision 6. However, in Blofsen v. Cutaiar, 460 Pa. 411, 333 A.2d 841 (1975), our Supreme Court stated:

Equitable estoppel applies to prevent a party from assuming a position or asserting a right to another’s disadvantage inconsistent with a position previously taken____ [T]he person inducing the belief in the existence of a certain state of facts is estopped to deny that the state of facts does in truth exist, over a different or contrary state of facts as existing at the same time, or deny or repudiate his acts, conduct or statements.

Id., 460 Pa. at 417, 333 A.2d at 844. See also Novelty Knitting Mills, Inc. v. Siskind, 500 Pa. 432, 457 A.2d 502 (1983).

The chancellor found that, pursuant to appellees’ request, appellants delayed construction until the City of Philadelphia surveyed the parties’ lots. This request indicated appellees’ consent to the fence’s construction, provided it was built wholly on appellants’ property. Having made this representation, appellees cannot now claim that they consistently protested the fence’s construction, where appellants, relying on the representation, postponed construction and then incurred expense in completing it. The chancellor therefore erred in finding that appellees’ representations about the survey did not estop them from seeking the instant injunction.

Finally, appellants claim that appellees may not assert Subdivision 6 now, because they themselves have violated it by constructing a dog kennel in their yard. This conduct, appellants allege, places appellees before us with “unclean hands,” so that they should be barred from obtaining equitable relief.

We agree. The equitable doctrine of “unclean hands,” to be raised as a defense, requires that the plaintiff’s allegedly improper conduct affect the equitable relations between the parties and be directly connected with the matter in controversy. Stauffer v. Stauffer, 465 Pa. 558, 351 A.2d 236 (1976); Spring City Foundry Co. v. Carey, 434 Pa. 193, 252 A.2d 666 (1969); Harbor Marine Co. v. Nolan, 244 Pa.Super. 102, 366 A.2d 936 (1976) (allocatur refused). Here, appellees’ dog kennel, like appellants’ fence, relates to the restrictions of Subdivision 6, which is “the matter in controversy” among the parties.

In addition, appellees’ kennel evidences a change in the Crestmont Farms neighborhood such that Subdivision 6 is no longer valid. A deed restriction will not be enforced “where there has been a change of surroundings in the neighborhood or in the character of the improvements and in the purposes to which the restrictions are applied.” Pastore v. Lake Shore Maintenance Association, 197 Pa.Super. 419, 423, 178 A.2d 776, 778 (1962); see also Scott v. Owings, 223 Pa.Super. 481, 302 A.2d 423 (1973) (allocatur refused). A restriction is invalid under this rule if its purpose and intent have been altered and it no longer provides substantial benefit to the dominant estate. Rieck v. Virginia Manor Co., 251 Pa.Super. 59, 380 A.2d 375 (1977) (allocatur refused). For example, in Rome v. Rehfuss, 391 Pa. 82, 137 A.2d 233 (1958), the original grantor imposed a restriction meant to exclude industry and to maintain the neighborhood’s upper-class residential character. The Court found change in the neighborhood where industry had been excluded, but current conditions made impossible construction of only the mansion-type homes intended by the grantor. Id., 391 Pa. at 85-86, 137 A.2d at 235.

In the instant case, the original grantor may have intended Subdivision 6, like Subdivision 5, to preserve the open, pastoral nature of the land in spite of the housing construction, and to ensure that any fence built would not disturb the land’s aesthetic value. The chancellor found that despite this intent, eighteen fences have been built on the seventy lots comprising Crestmont Farms, to enclose swimming pools and dog kennels, including appellees’; significantly, no one formally objected to any of the fences built before appellants’. The chancellor also found that appellants and appellees have children, that appellants have a cat and that many dogs live in the neighborhood.

The residential character of Crestmont Farms, with its proliferation of children and pets and the presence of fences built without objection, demonstrates that Subdivision 6 is no longer viable. For the owners of lots in the development, fences now are of value, in securing children and pets and in preventing trespassing, particularly into dangers like backyard swimming pools and kennels. This is most likely why the great majority of Crestmont Farms residents have not objected to fence construction: without it, they bear a higher risk of suits arising out of trespassers’ injuries in accessible pools or from unsecured dogs, and of injuries and property damage to themselves from trespassers and roaming dogs. The facts show that Crestmont Farms has changed so that Subdivision 6, to the extent that it controls fence construction, is obsolete. The chancellor erred in concluding that appellants had not carried their burden of proving this change.

The judgment of the Court of Common Pleas of Philadelphia County, directing appellants to remove their present fence and restricting future fence construction, is vacated.

Judgment vacated.

OLSZEWSKI, J., files a concurring opinion.

OLSZEWSKI, Judge,

concurring:

I concur in the majority’s holding that the lower court’s judgment should be vacated. However, reservations concerning aspects of the majority’s opinion preclude my joining the opinion.

In its opinion, the majority concludes, inter alia, that the lower court erred in holding that subdivision 6 was unenforceable because no successor to the original grantee existed. The majority, to the contrary, views the successors as the present owners of lots within the subdivision. In addition, the majority holds that each property owner has a dominant estate over that of his neighbor, and therefore, may enforce valid deed restrictions against his neighbor. Finally, the majority limits this right of enforcement to only those owners whose property adjoins or is adjacent to an alleged offending lot. I do not agree with this portion of the majority opinion.

After carefully studying subdivision 4, 5 and 6, the deed restrictions at issue in this case, two observations may be made: (1) the deed restrictions manifest an intent to retain the open and pastoral nature of the land; and (2) certain responsibilities and duties regarding the maintenance of these restrictive covenants were lodged in the “grantee”. It is apparent from the language used, that the grantor planned to have the original grantee, Crestmont Farms Improvement Co., and its successors act as a kind of governing body whose duties would include both monitoring and assisting in adherence to the deed restrictions. The majority, however, ignores the plan and instead places the grantee’s powers in individual land owners. Clearly, this contravenes the grantor’s intent. The following scenarios illustrate the point.

Surely, the majority does not expect a property owner, who wishes to build on his property, to first “submit” plans to be “approved in writing” by his neighbors. Yet under subdivision 6 such approval by the grantee is required. Moreover, is it fair to have one’s neighbor have “the right to say and determine which are the front, side and rear lines of any plot,” and have this decision be “final and binding”? Again, this is the grantee’s power under subdivision 4.

Portions of the restrictive covenants at issue clearly contemplate the ongoing existence of some sort of central governing body. Evidence in the court below revealed that Crestmont Farms Improvement Co. no longer existed and, further, that no similar body had been set up in its stead. In the absence of such a governing body, those portions of the deed restrictions dealing with the powers reserved to the grantee are no longer enforceable. Therefore, the approval power contained in subdivision 6 is no longer enforceable. The courts of this Commonwealth have made it clear that they will not write into restrictions, through implication, something not clearly expressed therein. Rat-kovich v. Randell Homes, Inc., 403 Pa. 63, 169 A.2d 65 (1961).

This disposition leaves intact most of the content of many of the deed restrictions. Only those provisions which specifically and exclusively grant powers to the grantee (or its successors) are rendered unenforceable.

One final point. Subdivision 11 of the deed restrictions reads in pertinent part:

The provisions herein contained shall run, bind the land and shall endure to the benefit of and be enforceable by the Grantee or the owner of any land included in said tract____

Therefore, contrary to the majority’s view, valid deed restrictions are enforceable by any and all property owners, not just those whose property adjoins or is adjacent to an alleged offending lot.

      . Crestmont Farms was at one time a large farm which was conveyed on March 5, 1926 by Thomas C. Coale to Crestmont Farms Improvement Co. The property exists now as a subdivision containing seventy residential plots.

      . The majority opinion holds at 969 that the character of Crestmont Farms has changed so that subdivision 6, to the extent that it controls fence construction, is obsolete. However, the grantee’s power of approval in subdivision 6 extends to “building(s), fence(s), wall(s) or other structure(s)”.

      . The complete text of subdivision 4 provides:
      Sub-division 4. No building or part thereof shall be erected or maintained on any part of the said tract closer to any street than 25 feet and at least 15 feet from any side or rear lot line except as hereinafter set forth and except as to eight lots of 50 feet each fronting on Orchard Lane. Covered porches, the floors of which are not higher than the level of the first floor of the building may encroach on such restricted areas by projecting not more than 12 feet. Steps, uncovered porches and terraces, no part of which is more than 3 feet above the level of the first floor of the building may be built and maintained on any part of such restricted areas. Single story bar, low and criel windows not more than 15 feet in height (exclusive of foundations or other support) may encroach on such restricted areas by projection no more than 3 feet, but the total horizontal plans area of such encroachments on one side of a detached building shall not exceed 30 square feet. The Grantee shall in all cases have the right to say and determine which are the front side and rear lines of any plot and also that amount of set back from said lines necessary to conform to the requirements hereof and the Grantees judgment and determination thereon shall be final and binding. (Emphasis added.)


author: BROSKY, Judge:

text:
    487 A.2d 971
    COMMONWEALTH of Pennsylvania v. James D. SAVILLA, Appellant.
    Superior Court of Pennsylvania.
    Argued Nov. 19, 1984.
    Filed Jan. 25, 1985.

      John H. Moore, Erie, for appellant.
    Frank J. Scutella, Assistant District Attorney, Erie, for Commonwealth, appellee.
    Before BROSKY, ROWLEY and JOHNSON, JJ.
   BROSKY, Judge:

This appeal is from the order denying appellant’s motion to challenge the validity of his plea of nolo contendere, Appellant contends that the court below erred in denying his motion without a hearing. We disagree with appellant and, accordingly, affirm the order of the lower court.

On May 5, 1982, appellant entered a plea of nolo conten-dere to the charges of homicide by vehicle and driving under the influence of alcohol. He was sentenced on July 7, 1982 to two to four years imprisonment on the former charge and a consecutive sentence of one year probation of the latter charge. Appellant then filed a timely motion to withdraw his guilty plea which was denied on August 6, 1982. This appeal timely followed.

Appellant argues that the lower court erred by denying his motion without a hearing. We disagree.

“Pa.R.Crim.P. 321 [which governs this type of motion] does not ... require that a hearing be held, but simply states that the trial court ‘may schedule a hearing on the motion...” Pa.R.Crim.P. 321(c).” Commonwealth v. Smith, 295 Pa.Super. 361, 368, 441 A.2d 1273, 1276 (1982). Clearly then, Rule 321 places the decision whether or not to hold a hearing within the discretion of the trial court. While we recognize that this discretion is not absolute, i.e., under some circumstances a trial court could abuse its discretion by not holding a hearing — where, as here the motion makes only the boiler plate statement that “it would be in the interest of justice to permit him to withdraw the plea of guilty previously entered,” we find no such abuse of discretion.

The comment to Rule 321 indicates that “[t]his rule parallels the procedure under Rule 1123, relating to post-verdict motions following trials.” Rule 1123 clearly states that “only those issues raised and the grounds relied upon in the motions may be argued or heard.” Consistent with this rule, case law is well-settled that any issue not raised in post-verdict motions is deemed waived. See Commonwealth v. Gravely, 486 Pa. 194, 404 A.2d 1296 (1979). Thus, we hold that Rule 321 requires that specific reasons in support of the proposition that the plea should be withdrawn must be set forth in the motion in order to preserve any issues for post-sentence review.

We note that appellant was advised of his post-sentencing rights by the attorney for the Commonwealth immediately prior to sentencing as follows:

Do you understand that having pled no contest you have certain rights which I’m going to explain to you now. First of all, you have the right to ask the Court to let you withdraw your plea of no contest or to reconsider any sentence that is imposed on you here today. You have to do these things by filing a motion within ten days from today’s date setting forth all reasons that you have for wanting to do that. If you did not include any reason, you would be waiving it, or giving it up forever. You have a right to have an attorney represent you on these motions, including a free attorney if you can not afford one.[]

Since, after having been so advised, appellant included no reasons in support of the statement in his motion that his plea should be withdrawn, we conclude that the motion was insufficient to present any issues to the lower court, let alone an issue necessitating a hearing. Accordingly, we find no merit to appellant’s contention that the court erred by denying his Rule 321 motion without a hearing.

Order affirmed.

      . See Pa.R.A.P. 343 and Pa.R.C.P. 321.

      . For instance, it would certainly appear that a trial court would be abusing its discretion if it refused to hold a hearing where the motion alleged factual matters not of record which, if proven, would entitle the defendant to relief. In other words, if the defendant alleges facts not of record which, if proven, would demonstrate prejudice on the order of manifest injustice, it would be an abuse of discretion for the court not to hold a hearing. See Commonwealth v. Schaffer, 498 Pa. 342, 446 A.2d 591 (1982).

      . We note that waiver will not occur if a defendant is not informed of his right to file post-verdict motions; the time within which they must be filed; and the consequences of a failure to file them. See Commonwealth v. Gates, 295 Pa.Super. 213, 441 A.2d 425 (1982); Pa.R.Crim.P. 1123(c).