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SINGER v. RITTER (07/20/50)

July 20, 1950



Edward Watson, Philadelphia, for appellant.

Mortimer N. Esatburn and Herman H. Greeberg, Philadelphia, for appellee.

Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross and Arnold, JJ.

Author: Dithrich

[ 167 Pa. Super. Page 155]


Early in October 1939, defendant appellant and Charles Singer, who was at the time plaintiff appellee's husband, were desirous of forming a partnership for the purpose of operating a dental laboratory. Each was to contribute $1,500 to the partnership, and since neither had sufficient capital appellee agreed to obtain a mortgage on premises owned by her and to turn the proceeds over to her husband and appellant to enable them to set up their laboratory. She obtained a mortgage for $2,000, and it was agreed that the partnership would assume the obligation of the mortgage and would pay the taxes, the interest, and installments on account of the principal

[ 167 Pa. Super. Page 156]

    of said mortgage to the mortgagee from the proceeds of the business until the full amount of the mortgage debt was paid. On October 14, 1939, at the instance of appellee's then attorney, appellant executed a note in her favor in the amount of $980. Appellee and the attorney testified that the note was given as additional security, and the court below so found; it represented the sum required by appellant to complete his capital contribution of $1,500. As of October 14, 1944, the sum of $1,248.75 had been paid in semi-annual installments on account of principal and interest. The payments were made by partnership checks and charged to the personal account of appellant.

In March of 1944 the property covered by the mortgage was sold and appellee was obliged to pay the sum of $1,279.55 in order to satisfy the mortgage of record. In December of 1947 the partnership was dissolved and appellant assumed all the partnership debts. In March of 1948 appellee and her husband separated, and in a financial settlement entered into between them at that time she released her husband from all obligations to her. In November of that year she entered judgment on the note and assessed damages for $1,422.60. Appellant obtained a rule to show cause why the judgment should not be opened and he be permitted to enter a defense. He admits execution of the note and expiration of the time for payment but contends that the payments aforesaid made to the mortgagee and charged to his personal account were sufficient in amount to more than pay the note; and that even if the note had not been paid, he was discharged from any further obligation to appellee by reason of her release of his partner and co-obligor.

Depositions and counter-depositions were taken, and after argument the petition to open was dismissed and the rule to show cause was discharged. As stated by the learned president judge of the court below: 'An analysis

[ 167 Pa. Super. Page 157]

    of the testimony convinces the Court that plaintiff * * * agreed with her husband * * * and the defendant * * * that she would mortgage her own separate property to the extent of $2,000.00 and would loan such money to the partnership * * * and would look to the * * * partners for payment of the full amount of * * * $2,000.00. The partners were to repay the $2,000.00 by paying off the mortgage plus interest and any costs. It appears that plaintiff was willing to accept the promise of * * * her husband, without additional security, but insofar as Arthur Ritter was concerned, who was a stranger to her, the plaintiff, through her attorney, required added collateral to secure the debt. Plaintiff's attorney, therefore, had the defendant * * * execute a judgment note in the amount of $980.00 as additional security for the payment of the loan to plaintiff. Plaintiff's testimony is clear that she believed that the debt had been paid off by the amount being applied to the mortgage, but upon her property being sold she found that there was a deficiency of some $1,279.55 which she was forced to pay. There is no testimony whatsoever that plaintiff ever agreed that partial payment by the partnership, either to the full extent of the note or otherwise, would extinguish the obligation on the note itself. There is still remaining a balance owed on the original $2,000.00 advanced by the plaintiff a, sum in excess of the judgment note * * *'

In Stoner v. Sley System Garages, 353 Pa. 532, pages 534, 535, 46 A.2d 172, 173, the latest decision of the Supreme Court affirming an order refusing a petition to open a judgment, the Court, ...

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