6 A.2d 417 | Pa. | 1939
The court below, without making any findings of fact or filing an opinion, discharged defendant's rule to open the judgment herein, after depositions in support of the rule had been taken. From this ruling defendant has appealed on the ground that the action of the court was an abuse of its discretion.
The facts which appear of record, and those which are not disputed by the parties, disclose the following situation. In 1923 Wetherson and his wife obtained a loan of $5,000 from the plaintiff, the Keystone Bank of Spangler, appellee in this court. The Wethersons gave appellee their judgment note, on the back of which was a guaranty of payment signed by appellant Booth and one Paone, with a warrant to confess judgment against them. As security the bank received a mortgage on the Wethersons' homestead, payable to Booth and Paone and by them assigned to the bank; certain payments were *547 made on the loan, but apparently there was a default, which resulted in the bank having judgment entered against Booth and Paone in August, 1928, in the total sum of $4,945.50. In December, 1934, the bank caused the judgment to be revived for the full amount against both defendants, although in the intervening period certain payments had been made by the Wethersons. The amount of the revived judgment, reëntered on January 19, 1935, with interest to that date, was $6,898.97.
Meanwhile, negotiations had been proceeding for the purpose of refinancing the Wetherson mortgage through the Home Owners' Loan Corporation, hereinafter referred to as "HOLC." On January 17, 1935, the bank, as mortgagee, signed an agreement, addressed to the HOLC, whereby it consented "to accept in full settlement of the claim" against the Wethersons on its mortgage the sum of $1,895.78, and "thereupon to release all the claim of the undersigned [the bank] against said property." The balance due on the mortgage was stated to have been $4,535. Thereafter, on February 18, 1935, the Wethersons signed what was obviously intended as a renewal note in this amount, this being endorsed by Booth. A month later the HOLC bonds, in the amount of $1,887.66, were received by the bank and applied on the note, reducing the principal to $2,647.34, and the mortgage was satisfied. It is admitted by appellee that the amount due on its judgment against appellant is this sum, with interest to the present time and 5 per cent attorney's fee for collection.
After these transactions it became apparent that Booth would not discharge this obligation. In April, 1936, the bank issued execution on its judgment and caused a levy to be made on Booth's personal property. Booth filed a petition to open the judgment, the only substantial grounds alleged being that the amount of the revived judgment was in excess of what was due and that the satisfaction of the mortgage on the Wetherson's property was a fraud on Booth, releasing him *548 from all obligation on the judgment. By an amendment subsequently filed, Booth alleged as a further ground the agreement of the bank, above set forth, to accept HOLC bonds in full settlement of its claim.
Booth likewise served notice on the bank demanding that it first proceed to collect the claim against the principal obligors, Wetherson and his wife, before levying execution against him. Appellant thereupon issued execution against the Wethersons, but subsequently stayed the levy.
Appellant's first contention is that while the revival of the judgment was in progress, in January, 1935, he was fraudulently dissuaded by an officer of the appellee bank from taking steps to make certain that the judgment was reëntered only for the actual amount then due, and not for the original amount for which it was entered, with interest to the date of revival. This defense would have more weight if appellant had succeeded in showing that the bank was in fact claiming more than was due. On the contrary, the record indicates that the bank has never claimed more than the balance of principal with interest properly computed, and at all times has been willing to accept such a sum in entire satisfaction of the judgment debt. Appellant now has and hereafter will have, on application to the court below, full opportunity to secure reduction in the amount for which the judgment at present stands to the proper figure, as agreed to by appellee. The court below will have authority to open the judgment to such extent as may be necessary to do justice between the parties, and continue it as to the balance: Franklin v. Morris,
The burden of appellant's complaint is, however, that he is no longer liable to the bank at all and therefore the judgment should never have been revived. He testified that he had no knowledge of the proposal between the bank and the Wethersons to refund the mortgage through the HOLC until after application to the latter had been made; that he was not present at the closing, when HOLC bonds were taken by the bank in exchange for the mortgage; and that it was not until he filed his amended petition to open the judgment, in May of 1936, that he even knew of the bank's written consent to receive HOLC bonds, which was dated January 17, 1935. His testimony, however, when he was examined a second time, after the depositions of the bank's officials had been taken, was somewhat different. He then admitted that he had been present at the meeting of the committee of the bank in September, 1933, when the question of the HOLC settlement of the Wethersons' obligation was brought up and discussed in detail. It is obvious that appellant, who had no connection with the bank, could have attended this meeting only for the purpose of working out a solution for liquidation of the Wetherson loan, upon which he was surety. He admitted, further, that he joined with the bank officials in endeavoring to secure an appraisal of the Wetherson property in order to effect the HOLC settlement, which must have been, of course, before the HOLC closing early in 1935.
Moreover, the cashier and president of the bank testified to the entire transaction in positive and unequivocal terms, the substance of which was that in 1933 appellant broached to the bank the subject of an HOLC loan to relieve the Wethersons and himself, attended the committee meeting in September, 1933, approved the appraisal of the Wetherson property on the basis of which the loan was ultimately made, agreed to guarantee the balance of the Wethersons' debt after deduction of the proceeds of the HOLC bonds, and was at all times fully aware of the bank's intention to look to him as *550 surety for payment of the difference between these amounts.
The record before us affords ample justification for the refusal of the court below to open the judgment. As we have often said, a petition to open a judgment is addressed to the equitable powers of the court: Pierce v. Kaseman,
The further question requiring comment is appellant's charge that the bank in signing the consent to take HOLC bonds released its claim against the Wethersons as principals, thereby discharging his obligation as surety. Appellant's testimony standing alone might support a finding to this effect, but in the light of the evidence presented by appellee a different finding is called for, to wit, that throughout the negotiations for an HOLC settlement, lasting over a period of nearly a year and a half, the Wethersons and appellant recognized their obligation for the balance of the indebtedness, after application of the HOLC bonds, and in fact they gave the bank a renewal note for the amount then due. If the principals remained bound, so did the surety. Appellant's contention that his obligation as surety was discharged by the bank's failure to proceed against the Wethersons for the collection of the debt, after written notice to do so under the Act of May 14, 1874, P. L. 157 (
What we herein hold does not derogate in any degree the authority of the decision of the Superior Court in Anderson v.Horst et ux.,
The order of the court below discharging the rule to open the judgment is affirmed, without prejudice to appellant's right to apply in the court below for reduction of the amount of the judgment in the manner heretofore directed; costs to be paid by appellant. *553