The opinion of the court was delivered by: WILLSON
Plaintiff and Aluminum Seal Company entered into an agreement for the erection of a housing project in Richmond, Indiana. The contract and all rights thereunder were thereafter assigned to defendant. In connection with the transaction an escrow agreement was entered into and certain judgment notes were a part thereof. Plaintiff alleges in his complaint that the defendant wrongfully acquired possession of the judgment notes and that on March 22, 1949 the Aluminum Seal Co., Inc., through its duly authorized agents, 'wilfully, wantonly, wrongfully, maliciously and without probable cause, entered judgment on said notes, to the use of Aluminum Seal Co., Inc. in the Court of Common Pleas of Erie County, Pennsylvania, at No. 115 February Term, 1949, D.S.B., the total judgment being in the amount of Twenty six thousand two hundred fifty and 00/100 ($ 26,250.00) Dollars.'
Defendant moved to dismiss the complaint, contending that plaintiff's action is barred by the applicable Statute of Limitations of the Commonwealth of Pennsylvania. At the argument counsel for both parties agreed that the action is one of malicious prosecution. Defendant asserts that this suit is barred by the Act of July 1, 1935, P.L. 503, 12 P.S. § 51, which provides:
'Every suit to recover damages for malicious prosecution or for false arrest, because of a right of action hereafter accruing, must be brought within one year from the date of the accruing of such right of action, and not thereafter: Provided, however, That actions already accrued must be brought within one year from the passage of this act.'
Plaintiff does not indicate whether his suit is for malicious abuse of civil process or one based on malicious prosecution. Under present requirements as to pleading, the plaintiff is not at fault in this regard. On the facts alleged, however, it appears that plaintiff has a cause of action unless it is barred by the Statute. On March 27, 1949, being five days after judgment was entered, plaintiff filed a petition to open in the Court of Common Pleas of Erie County. This petition was timely. On July 14, 1950, the Common Pleas Court of Erie County, entered an order opening the judgment. Plaintiff alleges that at all times thereafter he was ready, willing and able to submit the issues raised by the petition to open to a jury in Erie County, but that defendant refused to proceed to trial. Thereafter, on January 5, 1952, defendant here filed a praecipe with the Prothonotary of the Common Pleas Court of Erie County to mark the action at 115 February Term, 1949, discontinued of record. Still thereafter, on March 2, 1953, the Court of Common Pleas of Erie County, Pennsylvania, ordered the judgment to be stricken from the record. This latter order was based on a stipulation of counsel.
This case being one of diversity of citizenship and the cause of action on which the complaint is based arising in this District, the law of the Commonwealth of Pennsylvania applies. The Supreme Court of Pennsylvania in Publix Drug Co. v. Breyer Ice Cream Company, 347 Pa. 346, 32 A.2d 413, has reviewed the essential elements in this type of case. In the cited case judgments by confession had been entered. The Court says, 347 Pa. at page 348, 32 A.2d at page 414:
'The court below was of the opinion that the action was one for malicious use of civil process and that, as there was no proof of interference with plaintiff's property or proof that the prior proceeding had terminated in plaintiff's favor, the verdict could not stand.
'Decisions in this state and in other jurisdictions have drawn a distinction between actions for abuse of legal process and those for malicious prosecution, which, when founded on civil prosecutions, are usually described as malicious use of civil process. The gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it: Mayer v. Walter, 64 Pa. 283; Annotation, 80 A.L.R. 581. 'An abuse is where the party employs it for some unlawful object, not the purpose which it is intended by the law to effect; in other words, a perversion of it. * * * On the other hand, legal process, civil or criminal, may be maliciously used so as to give rise to a cause of action where no object is contemplated * * * other than its proper effect and execution': Mayer v. Walter, supra, 64 Pa. at page 285; Johnson v. Land Title B. & T. Co., 329 Pa. 241, 242, 198 A. 23. Malicious use of civil process has to do with the wrongful initiation of such process, while abuse of civil process is concerned with a perversion of a process after it is issued. All the analogies of an action for a malicious arrest belong to an action for malicious use of civil process.'
In the same case, the Court further says, 347 Pa. at page 349, 32 A.2d at page 415:
'It was essential in this case that plaintiff should show that the judgments were entered with malice, without probable cause to believe that the defendant could succeed, and that the original actions finally ended in failure.
Plaintiff has stated a cause of action within the requirements as set forth in the cited case. He alleges that defendant wrongfully demanded and procured the notes from the escrow agent. In Paragraph 15 of the complaint he sufficiently alleges maliciousness on defendant's part. He also alleges that the judgment was an interference with real property and that he was otherwise damaged. The difficulty in the case is the decision as to when the action in the State Court finally ended in failure, or conversely, when did plaintiff's cause of action as alleged by him accrue.
Defendant has urged that the entry of the judgment gave rise to the cause of action. However, defendant, at the argument and in its brief, stresses the discontinuance as the termination of the prior litigation. Plaintiff claims that the filing of the praecipe to discontinue on January 5, 1952, amounted to a nullity as the judgment was still of record. If the discontinuance ended the prior litigation, then plaintiff is barred by the one-year Statute of Limitations because his complaint was not filed until July 30, 1953. Plaintiff claims that the prior proceedings giving rise to his present cause of action were not terminated until March 2, 1953, the date on which the judgment was stricken from the record.
The Supreme Court of Pennsylvania has held that an order making absolute a rule to open a judgment leaves the whole matter open for further action of the Court. See Markofski v. Yanks, 297 Pa. 74, 146 A. 569. The same case holds that a judgment does not lose its status as such by being opened. It is still a lien and the levy previously made on an execution outstanding thereon also retains its lien. Also, see Adams v. James L. Leeds Co., 189 Pa. 544, 42 A. 195.
When the rule to open had been entered and an issue framed for trial it amounted to a Court ruling that defendant had made out a prime facie defense, or in other words that there was merit as to his contention. That being so, plaintiff should not be permitted to discontinue as of course, ...