*1 333 A.2d Haggerty V. Stewart HAGGERTY and Martha v. FETNER,
Philip Jay Appellant. Superior Pennsylvania. Court of
Argued 1984. March Aug. Filed 1984. Appeal
Petition for Allowance of Denied Nov. *4 Beckert, Jr., Hills, Paul R. appellant. Fairless for Lansdale, John T. for Dooley, appellees. CAVANAUGH, CIRILLO,
Before and WIEAND JJ. CAVANAUGH, Judge: case,
In
appellees,
this
the
Stewart V.
and his
Haggerty
wife
a farm
in
Haggerty,
Martha
sold
located Bucks Coun-
in
ty,
$180,000.00.
to the
1974 for
A
Pennsylvania
appellant
first mortgage
granted
was
the Federal
appellant
Land
of
and the appellees,
Bank
Baltimore
Dr. and Mrs.
took
a second
in
Haggerty,
mortgage
back
the amount of
$50,400.00.
appellant
The
executed a note and
in
mortgage
in
favor of the
Haggertys
financing
connection
this
arrangement.
Subsequently, considerable
be-
litigation
tween
parties
ensued. The appellant commenced an
action
in
against
appellees and others
equity claiming
their real
appellees,
agents,
estate
the title insur-
ance
and
company
Pennsylvania Department
of Reve-
nue
conspired
had
to defraud him by failing to disclose the
existence
an
against
encumberance
The
property.
appellees in turn
an
commenced
action
fore-
mortgage
closure against the
as he
appellant
allegedly had not made
all of the payments due under the second mortgage. This
picture
complicated
was further
mortgagee,
as the first
Federal
Baltimore,
Land Bank
commenced
proceedings against
appellant
foreclosure
on its first
The
mortgage.
defended
Federal Land
Bank’s legal
ground,
alia,
action on the
inter
that the bank
was
of fraud in
guilty
the inducement
con-
making the
tract. The court below entered
favor of Feder-
al Land Bank and we affirmed. See Federal Land Bank v.
Fetner,
Pa.Super. 455,
On October and entered into a agreement, settlement which approved by below, court designed litigation to settle the between parties. order provided The that the appellees would satis- fy the upon second mortgage payment by the appellant of $2,500.00 by January subject extension, further and payment by $25,000.00. October 1980 of agree- ment provided further the event the *5 due, not made the of Dr. and
payment
obligation
was
when
Haggerty
satisfy
mortgage:
Mrs.
to
the
Haggertys
shall
null and void and the
shall have
become
right
existing mortgage immediately
the
to enforce their
principal
together
in its full
amount
with interest as
payments
in the said
less
such
stipulated
mortgage,
only
Fetner, or others
by
as
theretofore have been made
they
mortgage.
on his
on account of such
behalf
$2,500.00
made the
when due. On
Appellant
payment
by
the
was sold at sheriffs sale
the
July
property
Appellant made no
toward the
mortgagee.
payment
first
agreement.
due under the settlement
On Febru-
4, 1981,
appellees
judgment against
confessed
ary
connection,
on the basis of the note executed
mortgage.
the second
The confessed
was
judgment
$77,995.32.1
that date written notice of
the amount of
On
given by
prothonotary
the confession of
was
to the
mail
accordance with
appellant by ordinary
15, 1981,
236.
requirements
May
Pa.R.C.P.
On
his
and/or strike the confess-
petition
open
filed
of the
were taken and on
Depositions
parties
ed judgment.
through Ludwig,
the court
J. entered
August
below
“for the
granting
appellant’s petition
an order
respects
In all other
purpose
determining damages.
sole
this order that an
petition
appeal
is denied.” It is from
court.
has been taken to this
must
directed to the
Initially,
appel
our attention
on the
Quash
appeal
lees’ Motion to
basis
damages
order since
appeal
interlocutory
is from an
were
denied
finally
February
determined. On
we
of the
Quash
prejudice
right
the Motion to
without
It
so
present
panel.
the issue
agree
the motion. We
presented
deny
and we will
matter has not
interlocutory
fully
order is
as the
been
filing
appellees proceeded
"Complaint
in the court below
a
2951(b).
Judgment” under Pa.R.C.P.
Pa.R.C.P.
sets
Confession of
judgment by
proceeding
forth the method of
to enter
confession on
note.
below. See Szwecki v. The Travel-
of in the court
disposed
*6
Company,
ers Insurance
32,
324
Pa.Super.
Rule 311. as of (a) as Except prescribed by otherwise Rule. General rule, an general appeal may right be taken as of from: (1) Affecting judgments. An order opening, vacat- ing striking or off a or judgment, refusing open, vacate or strike off a judgment.
Accordingly, Quash the Motion to will be dismissed and disposed the matter will of on the merits.
A open motion to a confessed is judgment addressed to the sound discretion of the court hearing and the exercise of the court’s discretion will not appeal be disturbed on unless the court below has committed a manifest abuse of or error of law. Lincoln Bank v. discretion Kelly, 282 261, 422 Pa.Super. A.2d 1106 in As noted the recent case of First Seneca Bank and Trust Co. v. Laurel Moun tain Development 357, Corporation, 324 471 Pa.Super. (1984): A.2d 877-78 principles
New are more in clearly established this Commonwealth than judgment that a seeking debtor open a judgment confessed must act promptly, must allege a meritorious defense present and must such evi- dence of the defense as to indicate the issues are a question for the jury. respect
With type the of evidence to present be ed in support of a defense Ulan, in we stated Weitzman v. 450„A.2d Pa.Super. 204, 209, (1982): “The petitioning party bears the burden of producing sufficient evidence to substantiate its alleged defenses ... The de fenses raised must be case, ‘valid’ones.” In the instant court found that valid defense had forth, not been set and agree.2 Appellant we taken the rather posi- has anomalous petition In his by strike the and/or entered confession the sets forth his defenses as follows: fraud in he to the note based on
tion that has a defense the settlement of October claims yet inducement and disputes of all and contro- a full settlement 1979 “was dispute basis of parties.” between versies against appellees action appellant’s equity had and others defraud- court below was of the farm. original sale ed him connection with in the mort- fraud in the inducement also raised Appellant brought him the Federal against action foreclosure gage interpret the settlement Baltimore. As we Land Bank of disputes concerning all agreement October settled, resolved and and fraud fraud were alleged as not now raised a defense may inducement and note. *7 by were settled the Although underlying disputes the obligation still had agreement, the the October action, Petitioner, above-captioned avers that Defendant the defense in that: he has meritorious by forth Order of of the matter as set the the a. Court attached hereto disputes settlement as "C” was a settlement of all Exhibit full remedy parties, by between the the sole and controversies mortgage granted herein on the was which was to the Plaintiffs was a estate, agreed it was and understood that there real be no and that Therefore, liability by personal arising the out of transaction. estate, herein, Defendant, is entitled to sale of real Petitioner the the obliga- discharge and of all liabilities and accord and satisfaction tions, any, if owed to the Plaintiffs. Alternatively, it is there was no dis- b. in the event that found matter, charge of as a of the settlement of this all liabilities result prove and the other entitled to fraudulent inducement Defendant is defenses raised in the "B”, pleadings hereto as Exhibits “A”and attached note, mortgage arising of the transaction from which the out part, subject proceedings, these was a which defens- which is the es are a complete all and full defense to actions hereto. authority the It is averred that the note and to confess c. contained therein was closure, further mortgage extinguished expressly by the fore- extinguished any mortgage obligation out which which authority part, the note was a and therefore there no inherent provision. that the under under d. Further it is averred that the Fifteen circumstances confess credits do not include shown ($15,000.00)paid on of the Dollars account mort- Thousand owed, due, adjusts gage, affects the interest which balance commission, attorney’s and the therefore is in penalty and claim Court, as a of record with the and further error matter during penalty not be claim for and should assessed interest litigation. period of over which there was time $25,000.00 pay a prerequisite as to the satis- faction of the second mortgage held appellees and the absence of such timely payment “the Haggertys shall right have enforce their existing mortgage immedi- ately its full principal amount together with interest as stipulated the said mortgage ...” The agree- settlement provided: ment also
In the event the subject property pursuant is sold to a sale, tax judicial sale, or pursuant to a mortgage sale, or judgment sale, the obligation to fulfill and satisfy the mortgage upon payment of Twenty Five Thousand Dol- lars shall null be and void.
Appellant argues that he has no personal further under liability the note and that the note did not survive the agreement. This contention lacks substantial merit. It is undisputed that the appellant $2,500.00 made the payment to the appellees did $25,000.00. but not pay The parties under the settlement agreement, including the appellant, $25,000.00 intended that the should paid when due and provided that if it were paid not the appellants still had their remedies under the note and mortgage. It would be completely unreasonable for the appellees to give up their rights under the note and if were paid. One of the purposes of the agreement settlement was to assure payment by of this financial obligation. Since the property was sold at a foreclosure *8 by sale the Federal Land Bank of Baltimore in July we can understand the appellant’s desire to avoid the obli gation pay to but he is by bound the terms of agreement. settlement We are not impressed by appellant’s argument parties intended that only and mortgage not the mortgage note was to survive the settlement agreement. If so, this were the appellees would have no real protection after a judicial sale on the first mortgage, as their second mortgage would be valueless. Appellant contends that:
It is submitted that is exactly what the parties intended and it is why that they granted the Haggertys the [sic]
right any not be bound limitation of their claim judicial the event of a sale so that there would be no limitation in the right participate but that given the of time in the other overlay action it was clear that it was everybody’s contemplation within that was a risk in the involved settlement. as
As far concerned only were risk they intended to assume was that the appellant would not $27,500.00he pay the owed under the agreement settlement they sought protect and against themselves that risk.3 the settlement Admittedly, agreement does not refer specif ically appellees’ right to enforce the note mortgage and refers to the only mortgage. Nevertheless, the mort provides that gage “Mortgagor [appellant] agrees comply provisions with all of the of the note.” The mortgage provides further that “The remedies mortgagees [appel of herein, provided note, as or in said and all warrants lees] contained, herein and said note shall be cumulative and added). concurrent ...” (Emphasis The mortgage and note clearly were related this case and the appellees’ right to confess on the note was not lost by virtue of the settlement agreement. recognize We that a mort gage mortgage and note are separate obligations. The note is evidence the debt and mortgage provides the collateral for security Estate, the debt. Evanovich 487 Pa. case, however, A.2d 1092 In this the mortgage gave the specifically mortgagees, the all appellees, remedies under mortgage note and this would include the right to confess judgment. respect mortgage
3. With to the risk of foreclosure on the first vis a vis agreement deposition: settlement testified at you Q. property But knew the was either in foreclosure or in danger being you foreclosed at the particular time entered this agreement, you did not? knew, including Judge A. We all Rufe. addition, appellant deposition In concerning testified at the settlement agreement: A. I Haggertys don’t want to be misunderstood. I pursu- owed the matter, $25,000, security obligation ant to this for which was the real estate. The survived to that extent.
343
2959(e) provides
Pa.R.C.P.
respect
with
to confess
ed
“if
judgments evidence is
produced which
a jury
trial
require
would
the issues to be submitted to the jury
judgment.”
also,
court shall
See
Industrial
Valley Bank and Trust Company v. Lawrence Voluck
Associates, Inc.,
285 Pa.Super.
(1981).
The appellant contends that the confessed judg ment must be stricken as the appellees failed to comply with the terms of the note ten by giving notice that days they going were to enter judgment confessed and because damages were assessed in a grossly excessive manner. A motion to strike a judgment will not granted unless the fatal defect claimed appears on the face of the record. First National Bank Kriebel, Fryburg v. 311 Pa.Super. 428, 457 (1983). A.2d 961 “If the alleged defect in the confessed judgment is based upon matter dehors the record, proper approach is to have the court open the judgment.” Equibank Dobkin, v. 284 Pa.Super. A.2d case, In this the matters com
plained of do appear of record and the court properly refused to strike the judgment. addition, In once the settle agreement ment was reached parties between the there appear would to be no further requirement give notice prior to the entry of confessed the event that was not paid, and in this case payment had not been made. With respect the amount of the confess ed judgment, if appears it that it is excessive this matter
344 prop- determines the court below resolved when will be Industries, H.A. Steen See judgment. amount of er 219, Communications, Inc., Pa.Super. 226 Inc. v. Richer credit proper that claims Appellant 314 A.2d mort- made on the previously payments for given was not on hearing at the resolved and this also will be gage note damages. of question also contends that the court below Appellant open and/or strike the finding petition erred in that the filed. The court promptly confessed was not judgment act in appellant promptly petitioning did not found and under the facts of this open judgment the court to entered on case, judgment The confessed was agree. we to the prothonotary 1981 and the sent notice February May or strike was filed on petition appellant. entered judgment At the time the confessed was in Washington, with offices appellant lawyer was the prac- He in other activities besides D.C.4 was involved degree from that he held a bachelor of arts 4. The testified degree Cambridge University University, law Yale a bachelor of from England jurisprudence degree of from Harvard in University. and a doctor concerning professional activities and asso- The ciations at the time the confessed testified his as follows: was entered Q. you practice engaged in the active of law at that time? Were Well, practice. I I don’t know. That’s a conclusion. Active A. was sense, doing legal work so in that I was not a full-time some engaging practice attorney of law but in the sence of full-time in handling legal I some matters. was Q. time, you bars were a member? At that of what guess Pennsylvania A. I Q. and New York. you Washington a member of the Bar of D.C.? Were A. No. Q. February your located in of 1981? Where were offices Well, guess Washington, A. Q. I D.C. and abroad. Washington? in What was the office address Street, A. 16th Northwest. Q. any you firm at that time? Were associated time, I A. It was somewhere around that was counsel firm Kirkwood, period Kaplan, that Russin & Vecchi. Somewhere in of that was terminated. have been. It Q. may July, It could have been 1980but it gone may have into ’81. secretary you have a there? Did secretary? A. A Q. Yes. A. Yes.
tice of
time
third world countries on
spent
law and
Nevertheless,
various
activities.
he maintained an
business
office in
and resided in
Washington,
secretary,
D.C. with a
during
period
that
testified that
city. Appellant
Febru-
he
he
ary,
May,
traveling
believed
I
good
Nigeria
Africa and “the odds are
that was
very
I
any
eight
but would have been
one
about
countries
I frequent
in Africa.” He was not out of touch with
his
He testified that
longer
office for
than several weeks.
if
he was not sure
he had been out of the
without
country
“if I
interruption
February May,
from
and that
came
*11
only
back at
it would have
been for a
short
any point
very
time,
period of time. At that
I
returning
was
States
for
at a time.”
he
maybe
Appellant
a week
testified that
actually
did not
see the
notice until
prothonotary’s
May,
it was
to his
or
although
delivered
office
home at an
earlier
The
petition
date.
court below found that
open
promptly
delay
was
filed and the reason for the
was unacceptable. “There is no time limit on the exercise
of the
of a
power
open
judgment.”
court to
a confessed
Stoudt,
First National Bank
Allentown v.
237 Pa.Su-
of
per.
(1975). However,
352 A.2d
petition to
must
open
promptly
filed. First Pennsylva-
Lehr,
knew,
nia
supra.
Bank v.
or should
known,
have
that the first
on his real estate was
foreclosed in July,
purchased
1980 and that the farm he
had
sold. He certainly
paid
been
knew that he had not
$25,000.00 he owed on the note as set forth in the settle-
ment agreement. He could not
insulate himself from
jn
knowledge of the confession
judgment by procedure
a
which his
did not
his mail
he
secretary
open
while was out
country
of the
on business for an extended
period
time.
Whether there is undue
is a
delay
largely
matter
within the
discretion of
petition
open
the court to which a
is sub-
Donatelli,
mitted. First
Valley
Pa.Super.
Bank v.
Appellees’ Quash Motion to denied and appeal Order of the court affirmed. below
WIEAND, J., filed statement. concurring WIEAND, Judge, concurring: on I that there was no basis agree majority I judgment. court could strike the properly which the trial allege failed to a defense suffi- agree also opening an of the Under these judgment. cient warrant circumstances, I find it to determine whether unnecessary appellant’s delay filing petition from adequately explained by country. his absence
Superior Pennsylvania. Court of
Submitted March 1984. Aug. Filed