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ASSOCIATES DISCOUNT CORP. v. GREISINGER

March 7, 1952

ASSOCIATES DISCOUNT CORP.
v.
GREISINGER et al.



The opinion of the court was delivered by: GOURLEY

This is a non-jury trial. Associates Discount Corporation brings action against George Greisinger and Kenneth G. Spiker, individually and as co-partners, trading and doing business as North Hills Auto Car and Truck Rental Company, and the Allegheny Car Rental Service, Inc., a corporation, to recover for a deficiency under a refinancing agreement.

George Greisinger and Kenneth G. Spiker entered into a partnership by an agreement dated May 22, 1948, for the purpose of purchasing, holding and renting for hire trucks and automobiles. This partnership was conducted under the assumed name of North Hills Auto Car and Truck Rental Company, which name was properly registered June 1, 1948, in the Prothonotary's Office of Allegheny County, Pennsylvania, but was not registered in the office of the Secretary of the Commonwealth as provided by law. 54 P.S.Pa. § 28.1. Greisinger and Spiker each held 50% of the stock of the corporation, and Greisinger was President, and Spiker was Secretary and Treasurer of the corporation.

 Shortly thereafter, June 12, 1948, divers bailment leases were executed by Greisinger and/or Spiker for the purchase of fifteen motor vehicles on behalf of the partnership and/or corporation. Said bailment leases set forth the purchaser lessee as Allegheny Car Rental Service, Inc., and were subsequently assigned to plaintiff. They were drawn in a slipshod fashion, irregular and becloud a forthright appraisal of the intent of the parties.

 Upon the bailment leases becoming defaulted, plaintiff elected not to pursue its rights under the original leases executed by Greisinger and/or Spiker on behalf of the partnership and/or corporation. Instead, on May 24, 1949 plaintiff entered into a refinancing agreement with Spiker in an individual capacity for the payment of the balance due under the original bailment leases.

 Antecedent to said date, Greisinger had sold his interest in both the partnership and corporation to Spiker for valuable consideration. This fact was known to plaintiff before the execution of the refinancing agreement which was prepared by plaintiff. At the time the refinancing agreement was entered into, Greisinger was no longer a member of the partnership, North Hills Auto Car & Truck Rental Company, and was no longer associated with Spiker in the Allegheny Car Rental Service, Inc., having severed his connections with both businesses and Spiker before the refinancing agreement was executed. Greisinger did not sign the refinancing agreement or participate in any way of the negotiations regarding it, nor was he requested to do so by either plaintiff or Spiker. Four payments were made thereafter by Spiker according to its terms.

 The refinancing agreement became in default and after repossessing the motor vehicles of value covered by the bailment leases, the same were sold. This action is for the unpaid balance due under the refinancing agreement after credit for the motor vehicles sold by plaintiff.

 The sole question before this court is the effect of the refinancing agreement with respect to the personal liability of Greisinger and/or Spiker, the corporate liability of the Allegheny Car Rental Service, Inc., and the partnership liability of North Hills Auto Car and Truck Rental Company.

 Since the agreement was prepared by the plaintiff, where any doubt or ambiguity exists, it is the duty of the court to interpret the written agreement against the party who has drawn it. Monessen Bank Mortgage Pool Case, 350 Pa. 125, 128, 38 A.2d 15; Ebbert et al. v. Philadelphia Electric Company, 330 Pa. 257, 267, 198 A. 323.

 Consequently, any doubt concerning the construction of the refinancing agreement must be resolved against the plaintiff.

 The refinancing agreement was made with adequate consideration in that the plaintiff made an additional financing charge well in excess of that the parties were obligated to pay under the original bailment leases.

 A novation may be established by either express terms or implied facts, circumstances and conduct attending the transaction. Parish Mfg. Corp. v. Martin-Parry Corp., 285 Pa. 131, 131 A. 710; Packel v. McCarthy, 120 Pa.Super. 545, 182 A. 769.

 Section 36 of the Uniform Partnership Act on this point provides as follows, 1915 P.L. 18, 59 P.S. § 98(3): 'Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be discharged from any liability to any creditor of the partnership who, knowing of the agreement, consents to a material alteration in the nature or time of payment of such obligations.'

 Thus, the execution of the refinancing agreement under these circumstances amounts to a novation which relieves Greisinger, Allegheny Car Rental Service, Inc., and North Hills Auto Car and Truck Rental Company from any liability they may have had under the original bailment leases. The essentials of a novation are the displacement and extinction of a former contract, the substitution of a new agreement, a sufficient consideration therefore and the consent of the parties thereto. Lamb v. Allegheny County Institution District, 363 Pa. 66, 71, 69 A.2d 117; Jones v. Commonwealth Casualty Company, 255 Pa. 566, 573, 100 A. 450. All these requisites are here present.

 Plaintiff rendered objection to the admissibility of testimony of George J. Shafer, a member of the bar of Allegheny County, who had represented Spiker during the partnership and corporate relationship with Greisinger. Spiker did not appear at trial and his whereabouts were unknown.

 Plaintiff contends said information was secured pursuant to an attorney-client relationship. That since the information was privileged, counsel was incompetent to testify thereto without a waiver of objection on the part of Spiker.

 The testimony of Shafer is admissible. Claim of privilege can be made solely by the client himself; the privilege is purely personal to himself. The party against whom the testimony is brought has no right to claim or to urge the exemption on his own behalf. Wigmore on Evidence, Third Edition, §§ 2196, 2321.

 Nevertheless, assuming that the testimony were inadmissible, plaintiff has failed to establish its claim by the preponderance and weight of the evidence.

 It is my conclusion:

 1. That judgment should be entered in behalf of the Associates Discount Corporation and against Kenneth G. Spiker, individually, in the amount of the deficiency.

 2. That judgment should be entered against the Associates Discount Corporation and in favor of George Greisinger, individually.

 3. That judgment should be entered against the Associates Discount Corporation and in favor of North Hills Auto Car and Truck Rental Company.

 4. That judgment should be entered against the Associates Discount Corporation and in favor of ...


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