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RABY v. COMMERCIAL BANKING CORPORATION (06/17/66)

decided: June 17, 1966.

RABY, APPELLANT,
v.
COMMERCIAL BANKING CORPORATION



Appeal from judgment of Court of Common Pleas No. 5 of Philadelphia County, Dec. T., 1962, No. 3033, in case of Maude E. Raby v. Commercial Banking Corporation.

COUNSEL

Lloyd A. Good, Jr., for appellant.

Irving J. Katz, for appellee.

Albert B. Gerber, with him Gerber, Galfand & Berger, for interested party under Rule 48.

Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. Opinion by Jacobs, J.

Author: Jacobs

[ 208 Pa. Super. Page 52]

The question in this case is whether an individual who co-signs a note with a corporation for a loan can recover alleged usurious interest paid by her to the lending institution. After trial at which a jury had

[ 208 Pa. Super. Page 53]

    been waived, the lower court found for the defendant lending institution. We affirm.

The facts, viewed in the light most favorable to the verdict-winner, establish that on May 31, 1960, a property improvement contract and note were executed in the principal amount of $52,207, providing for repayment to Commercial Banking Corporation ("Commercial") within 36 months. The property improvement contract and note each contained the typed name "Roanoke Construction Co." in the lower right-hand corner. Below this were the following four signatures, one underneath the other: "William Stuempfig, Pres.", "W. S. Spaulding, Secty.", "William Stuempfig", and "Ann F. Stuempfig". Immediately to the left of the first three on adjacent dotted lines appeared the signatures of "Walter Stuempfig, Jr.", "Rachel T. Stuempfig", and "Maude E. Raby", one underneath the other. In the lower left-hand corner immediately to the left of these three on adjacent dotted lines appeared the signature of a witness. Roanoke Construction Co. ("Roanoke") received the entire proceeds of the loan, $40,000, to complete a construction contract it had with the owners of "Chel-Wayne", on which property Roanoke was building a Sears Roebuck Store. Plaintiff owned one-half of the property, "Chel-Wayne", and William, Walter and Rachel Stuempfig each owned one-sixth of the property. William, who was plaintiff's nephew, was also President of Roanoke and negotiated the loan with defendant.

Roanoke had financed and re-financed four transactions with Commercial before the one at issue. The Vice-President of Commercial testified that the present loan was made to Roanoke Construction Co. after receiving a corporate resolution of the Board of Directors of Roanoke authorizing the loan, that the checks for the $40,000 were cashed by Roanoke Construction Co., that when a note was executed for Commercial the

[ 208 Pa. Super. Page 54]

    guarantors and endorsers were put on the same note as the principal "to simplify the procedure and simplify the paper work in closing", and that when this loan was negotiated, William Stuempfig was asked for collateral security in the form of endorsers. Plaintiff and the three other owners of Chel-Wayne signed the contract and note. Roanoke went into bankruptcy in November, 1961. Plaintiff paid the unpaid balance claimed due on the note, $11,461.69,*fn1 and brought this action pursuant to the Usury Statute, Act of May ...


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