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LYON v. TY-WOOD CORPORATION (03/20/68)

decided: March 20, 1968.

LYON, APPELLANT,
v.
TY-WOOD CORPORATION



Appeal from judgment of County Court of Allegheny County, No. 1964 of 1964, in case of Maurice Lyon, trading as Monarch Oil Company, v. Ty-Wood Corporation et al.

COUNSEL

David F. Alpern, with him Alpern & Alpern, for appellant.

John B. Nicklas, Jr., with him Alfred C. Maiello, and McCrady & Nicklas, for appellee.

Ervin, P. J., Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. (Wright, J., absent). Opinion by Spaulding, J. Montgomery, J., concurs in the result.

Author: Spaulding

[ 212 Pa. Super. Page 70]

This is an appeal from a judgment of the County Court of Allegheny County entered in favor of Greensburg Plaza (Greensburg), appellee, in a garnishment proceeding brought by Maurice Lyon, trading as Monarch Oil Company (Monarch), appellant-plaintiff.

Under a contract dated July 8, 1962, Ty-Wood Corporation performed certain excavation work for Greensburg. On March 7, 1963 Ross Scott, president of Ty-Wood, assigned to Thomas and Dorothy Scott $25,000 of funds due Ty-Wood from Greensburg. The basis for this assignment was advances to Ty-Wood from Thomas Scott over a period of years beginning in 1960. On January 13, 1964 a second assignment was executed

[ 212 Pa. Super. Page 71]

    covering all the remaining funds due Ty-Wood from Greensburg.

In a separate action, Monarch obtained a default judgment against Ty-Wood on July 16, 1964 and on August 18, 1964 issued execution naming Greensburg as garnishee. Subsequent interrogatories and answers disclosed the assignments to Thomas and Dorothy Scott, while answers to additional interrogatories disclosed there were no amounts owing from Greensburg to Ty-Wood, that claim having been settled in a federal court action of March 1966 by Greensburg's payment of $31,000 to Thomas and Dorothy Scott as assignees of Ty-Wood's claim.

Monarch, whose judgment with interest against Ty-Wood amounted to $5,039.22, alleges that the prior assignments constituted unperfected security interests under Article 9 of the Uniform Commercial Code*fn* and are subordinate to the claim of Monarch, which was without notice of the assignment.

The court below, sitting without a jury, initially found in favor of Monarch, but reversed its position upon consideration of exceptions filed by Greensburg and held "the parties to the assignments intended that they effect an assignment, absolute and unqualified, of the assignor's right to receive certain moneys . . . in payment of the assignor's debt to the assignee."

This finding, then, frames the sole issue on appeal: did the transactions between defendant Ty-Wood and the Scotts constitute security interests which were, under the Code, unperfected and therefore subordinate to appellant's attachment, or were they absolute assignments in payment of a ...


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