Appeal from judgment of Court of Common Pleas of Allegheny County, Jan. T., 1965, No. 3477, in case of Chester L. Reed v. Universal C.I.T. Credit Corporation.
Vincent J. Grogan, with him Duff, Grogan & Doyle, for appellant.
Thomas H. Cauley, with him Richard D. Klaber and Charles E. Evans, for appellee.
Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Pomeroy took no part in the consideration or decision of this case.
In October, 1956, appellee Chester L. Reed loaned John W. Skeels $20,000 in three separate installments; the loan was evidenced by a judgment note signed by Skeels and his wife. No payments on account of principal or interest were ever made by Skeels or his wife up to the time of the trial. On November 29, 1960 Reed entered judgment on the Skeels' note in the Common Pleas Court of Allegheny County. On the same date Reed caused a writ of execution to be issued, directing the sheriff to seize all of Skeels' goods at his place of business, a Chrysler, Imperial, Plymouth and Valiant dealership in Ingram, Pennsylvania.
Appellant UCIT filed goods claims in the execution asserting ownership of and a prior perfected security
interest in the Skeels' goods which had been levied upon by appellee Reed. The matter was interpleaded, but, prior to any decision, an additional levy was made on the same writ with the sheriff seizing another 38 automobiles. Meanwhile, discussions had commenced on November 29, 1960 between appellant and appellee. The legal effect of these conversations is one of the issues to be resolved on this appeal; what happened thereafter however is not in dispute. On December 23, 1960 appellee Reed stayed the writ of execution and released the cars to UCIT. At the same time Reed issued an attachment execution on his judgment against Skeels, and Doyle, the attorney for appellant, accepted service on behalf of UCIT.
The cars were sold by UCIT shortly thereafter, and when no funds were forthcoming from the sale for Reed, this action was brought on two different theories. The first count alleged that UCIT had promised in return for appellee's release of the cars to give Reed notice of the proposed sale of the Skeels' automobiles; that the UCIT attorneys had the authority to make such a promise; that no such notice was ever given; that Reed relied on this promise of notice to his detriment; and that UCIT is liable to Reed for damages because he was unable to protect his own interests at the sale.
The second count asserted that the conversations between Reed and the UCIT lawyers plus the documents which were completed during the period between November 29, 1960 and December 23, 1960 represent a security agreement under the Uniform Commercial Code; that the UCIT attorneys had the authority to enter into such an agreement; that as a secured party under the UCC, Reed was entitled to notice; that UCIT was under an obligation to dispose of the collateral in a commercially reasonable manner; and that
failure of UCIT to either send Reed the required notice and/or sell the cars in a commercially reasonable ...