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SMITH v. LENCHNER (12/16/64)

decided: December 16, 1964.

SMITH, APPELLANT,
v.
LENCHNER



Appeal from order of Court of Common Pleas of Allegheny County, July T., 1965, No. DSB505, and July T., 1963, Fi. Fa. No. 142, in case of Martin B. Smith v. Joseph S. Lenchner.

COUNSEL

Edward C. Leckey, with him Leonard M. Mendelson, for appellant.

I. Martin Wekselman, for appellee.

Ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ. (Rhodes, P. J., absent). Opinion by Wright, J.

Author: Wright

[ 204 Pa. Super. Page 502]

We are here concerned with an appeal by Martin B. Smith from an order of the Court of Common Pleas of Allegheny County making absolute a rule to open a judgment entered by confession on a note.

The note in question is dated July 6, 1962, in amount of $1,200.00 payable on demand, and is under seal. The petition for the rule alleges that the maker of the note is not indebted to the payee, and requests that the judgment be opened because (a) the note was given "under duress of a threat made by the plaintiff to maliciously and falsely interfere with and disrupt a business transaction which petitioner was then negotiating"; and (b) no consideration was received for the execution and delivery of the note. Appellant's answer denies that the note was given under duress of a threat, and avers to the contrary that the note was voluntarily negotiated as "the result of a good-faith, arms-length business transaction". The answer further denies want of consideration, and alleges to the contrary (1) that the presence of the seal imports consideration and (2) that the transaction which gave rise to the note "was a sale of stock by plaintiff to defendant". Depositions were taken of both parties, and also of the attorney for the maker of the note. A brief summary of this testimony is as follows:

Joseph S. Lenchner, the appellee, testified that he was a college graduate, admittedly experienced in business transactions. In the month of June, 1962, negotiations were pending for the sale of the Lenchner-Corvato Company, a security business in which he was financially interested. Martin B. Smith, an employe and owner of one share of stock, demanded the sum of $1,200.00, "and if I didn't give it to him he was going to try to do everything and anything he could to

[ 204 Pa. Super. Page 503]

    kill our deal . . . I suggested a note which he agreed to take". Although he had ample time to do so, Lenchner did not consult his attorney before the note was executed and delivered.

Martin B. Smith, the appellant, testified that he was manager of the underwriting department of Lenchner-Corvato Company, and had paid $1,200.00 for the one share of stock which he owned. He had doubts as to the financial status of the proposed purchaser of the business, and objected to the sale "because I didn't think we'd ever get paid". He proposed that Lenchner buy his share of stock for the cost price. Lenchner did not have the cash available, and said "that he would give me a note". The stock certificate was endorsed, but was retained as collateral. Smith flatly denied making any threats, and testified that the transaction was purely a business deal.

Edward M. Citron, Esquire, testified that he represented the Lenchner-Corvato Company, and also represented Lenchner as an individual. He was not aware of any transfer of Smith's share of stock, and Smith signed the agreement for the sale of the business as a stockholder. He testified further that Lenchner informed him of the threat several days after the note was executed, and "I advised him that I did not believe that the note . . . was enforceable".

We are not aware of the basis upon which the order making the rule absolute was predicated since the court below did not file an opinion as required by our Rule 46. While the determination of the lower court in a proceeding of this nature will be reversed only for clear and manifest abuse of discretion, Balobeck v. Penthouse Club, 204 Pa. Superior Ct. 496, 205 A.2d 675, our study of ...


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