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GREGORY v. FASSETT ET AL. (07/21/55)

July 21, 1955

GREGORY
v.
FASSETT ET AL., APPELLANTS



Appeals, Nos. 29 and 30, Oct. T., 1955, from order of Court of Common Pleas of Bradford County, Sept. T., 1948, No. 3, in case of George Gregory v. Owen H. Fassett et ux. Order affirmed.

COUNSEL

John P. Vallilee, for appellants.

Donald Reuter, with him Duvall & Reuter, for appellee.

Before Rhodes, P.j., Hirt, Ross, Gunther, Wright, Woodside, and Ervin, JJ.

Author: Ross

[ 178 Pa. Super. Page 601]

OPINION BY ROSS, J.

These are separate appeals by husband and wife from the refusal to open a judgment entered against them by confession on a warrant of attorney contained in a judgment note given by them to the plaintiff.

In July 1946 the defendants desired to purchase a restaurant business from an Alice Nichols for the sum of $2,500. They lacked the funds however, so the plaintiff, a friend, agreed to finance the venture. The parties met at the office of plaintiff's attorney, and plaintiff gave his check for $2,500, made out to Alice Nichols, to defendants, in return for which there was delivered to the plaintiff a bill of sale. Plaintiff had that same day borrowed from his bank the sum of $2,500 at six per cent. interest to cover this check. Plaintiff and defendants then executed a bailment lease which purported to lease the equipment to defendants at a $50 a month rental. The defendants also executed and delivered the $2,500 judgment note to plaintiff, payable in five years, upon which the instant judgment was entered. The bailment lease also contained an authorization to confess judgment for $2,500 as well as a five-year graded schedule (giving credit for rents previously paid at the various dates) at which defendants could purchase the property if they so desired. Arrangements were made to have the defendants make their monthly payments directly to the bank, to be applied to the plaintiff's loan there, and regular payments were made to the bank by defendants for some time, but they began to fall in arrears when business slackened. When the arrearages totaled $250 (five months' payments), the plaintiff sent his attorney to discuss the matter with defendants, and agreement was

[ 178 Pa. Super. Page 602]

    then made to turn the equipment over to the plaintiff for liquidation. Plaintiff sold the equipment for $183, the best price available, and applied this sum to defendants' credit. Shortly before this liquidation, the plaintiff had entered judgment on the note. The judgment in the bailment lease appears never to have been entered. From 1948 when the judgment was entered until 1951 when the petition to open was filed, the defendants were ignorant of the judgment. Their attorney discovered it in making a title search, whereupon the instant proceedings were begun.

The petition to open alleges inter alia: (1) that the repossession of the goods by the plaintiff under the lease prevents plaintiff from recovering more than the arrearage of rent ( $250, which defendants admitted was due and paid into court); (2) that it was specifically agreed between defendants and plaintiff's lawyer that the repossession and liquidation would be in full settlement of their obligation.

Plaintiff answered, asserting that the transaction was a loan by him to defendants with the judgment note as evidence thereof and the bailment lease as an added security device for his protection. He further asserted that the agreement concerning the repossession and liquidation was not in final settlement and discharge, but merely to salvage as much as possible from the situation and thereby reduce the defendants' indebtedness by that amount.

Our examination of the defendants' depositions alone indicates that the transaction was a loan with the bailment lease of the equipment as additional security for the note. The husband testified on direct examination: "Q. Just exactly what was said between George Gregory and you as nearly as you can remember - about this ...


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