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FIDELITY AMERICA FINANCIAL CORPORATION v. BASSMAN (09/29/58)

September 29, 1958

FIDELITY AMERICA FINANCIAL CORPORATION
v.
BASSMAN, APPELLANT.



Appeal, No. 205, Jna. T., 1958, from order of Court of Common Pleas No. 7 of Philadelphia County, June T., 1957, No. 9265, in case of Fidelity America Financial Corporation v. Eli Bassman et al. Order affirmed.

COUNSEL

Stanford Shmukler, with him Harry P. Voldow, and William A. Goichman, for appellants.

Jack Goushian, with him Bertram Bennett, and Jenkins, Bennett & Jenkins, for appellee.

Before Jones C.j., Musmanno, Arnold, Jones and Cohen, JJ.

Author: Cohen

[ 393 Pa. Page 614]

OPINION BY MR. JUSTICE COHEN

This is an appeal from the order of the Court of Common Pleas No. 7 of Philadelphia County denying defendants' petition to strike a judgment entered against them by confession.

In 1957, the defendants entered into an indemnity and surety agreement in which they agreed to serve as sureties for a principal debtor, Bassman, Inc., in the event that this corporation defaulted on its obligations to the plaintiff under a separate accounts receivable financing contract. Pursuant to authority granted them in the surety instrument, attorneys for the plaintiff in an amicable action subsequently confessed judgment against the defendants in the sum of $86,250 representing $75,000 principal, and $11,250 attorneys' collection fees. Thereafter, plaintiff issued attachment execution against one of the individual defendant

[ 393 Pa. Page 615]

    sureties. The defendants filed a petition and rule to strike off the judgment which the trial judge denied without prejudice, however, to their rights to file a petition and rule to open the judgment in whole or in part.

The defendants contend that the trial judge erred in refusing their motion to strike the judgment because (1) the warrant of attorney expressly conditioned the confession of judgment upon the default of the corporate principal, whereas plaintiff averred default only on the part of the sureties and not by the principal; (2) the confession of judgment did not contain a specific statement of the nature of the alleged default; (3) the averment of default was not verified and (4) plaintiff did not aver that a demand for payment had been made and refused.

We turn first to defendants' contention that the failure to aver default of the principal debtor rendered the confession of judgment defective.

The surety agreement provided: "Principal and Sureties, jointly and severally, agree that, in the event of any default or failure on the part of principal... [the creditor may confess judgment against them]." (Emphasis supplied). The record discloses that at the time judgment was entered the only default alleged was against the "defendants," that is, the sureties. Defendants argue that since the principal debtor was not made a party defendant, it cannot be comprehended ...


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