Lead Opinion
Opinion by
This is аn appeal from a final order dismissing a petition to open judgment which had been entered in 1961 by confession on a warrant of attorney contained in a non-negotiable judgment note. Appellant, Angelina Maraldo, averred, and it was found as a fact by the lower court, that her signature on the note as maker or
In 1961, Woodland Marble & Tile Co., Inc. (Woodland), whose principals were James F. Woodland and Louis Maraldo, sought a business loan from appellеe. After investigation appellee forwarded loan documents to Woodland’s accountant in which the Woodland corporation was named the borrower and the principals and their wives, sureties. Among the documents was a non-nеgotiable installment judgment note for $20,000. Appellant, Angelina Maraldo, the wife of Louis Maraldo, testified that she knew nothing of this loan. Bernard Granor, an officer of appellee, testified that he visited the Maraldo residence in order to determine its value as security for the loan; and the lower court stated that appellant was present on that occasion and knew about the loan.
Subsequently, Woodland defaulted on the loan and filed a bankruptcy petition. Apрellee had recorded the note on January 20, 1961, immediately after its execution on January 19, 1961, so that judgment was confessed against all parties prior to any default.
When appellant confronted her husband about this matter, he retained an аttorney. Another attorney, asked by her husband to represent her, advised appellant that if the judgment was not paid, despite her forged signature on the note, her home would be sold and her husband would be imprisoned for forgery. While this attorney did prеpare a petition to open judgment based on the forgery, it was never filed because of appellant’s fear that she would lose her home and that her husband would go to jail. In addition appellant was fearful of family disgrace from her husband’s threatened criminal conviction. She also felt that she had to clear him because of the economic circumstance, if he were imprisoned, that she could not work due to her impaired eyesight and hearing, and becаuse she was 48 years of age. Counsel for appellee was aware of the forgery claim of appellant at this time. Under the influence and pressure of the family disasters envisioned by appellant she was induced to join in another agreement prepared by appellee, dated January 28, 1963, which contained the following paragraph: “8. Maraldo hereby releases and discharges Corporation [Appellee] of and from any and all claims, suits, causes of action and judgments which they now or in the future may have arising out of this or any other transaction. Maraldo hereby waives any defect or error which may appear on the face of the instrument upon which the judgment hereinabove rеferred to was entered, and further waives any right to petition to open or strike said judgment for any rea
The gist of the 1963 agreement, aside from the above, was that appellee would forego execution on the Maraldo property until after the conclusion of the bankruptcy proceedings. It further provided that the Maraldos would mortgage their property and pay over to appellee close to $10,000 and that execution might be made upon the property to obtain any funds still owing to appellee at the close of the bankruptcy proceedings. The Maraldo attorney did inform Mrs. Maraldo that she would no longer be able to claim that the signature on the judgment note was a forgery and she understood this. It was her understanding, howеver, that she and her husband had now paid half of the debt owing to appellee and that they would no longer be liable to appellee in any amount, and that, in any event, her house was now safe.
In November, 1968, at the close of the bankruрtcy proceedings, the Maraldos were informed that there was still a deficiency on the judgment in the amount of approximately $10,000, which sum was computed by adding counsel fees and interest to the alleged unpaid debt. In February of 1969, the instant petition to open the judgment was filed which, as we have noted, was denied on the basis of ratification and waiver.
Generally, an appellate court will limit review of proceedings to open a judgment entered by confession or upоn a warrant of attorney to ascertain whether the discretion of the court below was properly exercised, and will reverse only if an abuse of discretion or manifest error is shown. 9 Standard Pa. Practice 421 (1962). However, when dealing with a сlaimed forged signature upon a judgment note, a different rule is applied whereby the burden is put upon the holder of
It has long been an established principle in this Commonwealth that a fоrgery may not be ratified since it is a crime the adjustment of which is forbidden by public policy. Austen v. Marzolf,
Neither of the cases relied upon as modifying this rule are apposite in the present case. Carlson deals with the burden of proof upon the judgment debtor: that he offer by clear, direct, precise and convinсing evidence in the first instance that the signature is a forgery. Here, appellant has met that burden. In fact, the forgery testimony remains uncontradicted. Albright is not really concerned with ratification of a forged instrument, and also it deals with a negotiable instrument and the concept of estoppel within the terms of the
Appellee, however, raises another ground for affirming the lower court’s action. Appellee contends that appellant waived her right to petition to open the judgment after executing the 1963 agreement on the grounds of estoppel and laches. While there is no time limit on the exercise of the power of the court to open a judgment by confession, nonetheless the doctrine of laches may be applied to the opening of a judgment when the delay is unreasonably long and unexplained. Windber Trust Co. v. Evans,
Appellee next contends that appellant is estopped from attacking the validity of the judgment note because by signing the ratification agreement, execution on appellant’s real and personal property was delayed for five and one-half (5%) years to her benefit and to apрellee’s detriment. Appellee’s delay, it asserts, was based on its reliance upon a misrepresentation by appellant, i.e., that she would not attack the validity of her signature on the judgment note in accordance with the 1963 ratificаtion agreement. This argument is without merit, however, as appellee has failed to show detriment to itself as a result of the delay, thus failing to meet its burden of establishing an estoppel. Albert v. Lehigh Coal & Nav. Co.,
The order of the lower court is reversed.
Notes
Section 3-112(1) (d) (12A PS) provides that negotiability is not affected by a term in the instrument that permits confession of judgment if it is not paid when due. This has been held to mean that a note which authorizes confession of judgment at any time before or after maturity, as is the case here, is a nonnegotiable instrument. See, Smith v. Lenchner,
Article 3 is entitled “Commercial Paper”, and Section 3-102 (1) (e) (12 A P.S.) provides: “(e) ‘Instrument’ means a negotiable instrument”.
Haverford Twp. Sch. Dist. v. Hertzog,
Although it may be argued that a confession of judgment on a warrant of attorney may be unconstitutional, Swarb v. Lennox,
Dissenting Opinion
Dissenting Opinion by
I regret that I must dissent from this decision. I believe that a forgery can be legally ratified by a wife if done, as here, without coercion and with a full understanding of the facts and of the consequences thereof. No matter how heart-appealing appellant’s claim may be, or how laudatory this Court’s objective, neither can or should serve as a legal basis for a Court’s decision.