Appeal from judgment of Court of Common Pleas of Indiana County, Dec. T., 1963, No. 189, in case of Brandywine Lanes, Inc. v. Pittsburgh National Bank et al.
Vincent M. Casey, with him G. W. Musser, and Margiotti & Casey, for appellants.
Joseph N. Mack, with him Edgar J. Cooke and Wilbur F. Galbraith, for appellee.
Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Jones. Mr. Chief Justice Bell, Mr. Justice Cohen, and Mr. Justice Pomeroy join in this opinion. Concurring Opinion by Mr. Justice O'Brien. Mr. Justice Eagen and Mr. Justice Roberts join in this opinion.
Although I agree with the result reached in the opinion of Mr. Justice O'Brien, I desire to express my views as to what I believe to be the nature of Brandywine's interest and what further disposition should be made with respect thereto.
The record shows that when Brunswick first sold the alleys to E. Z. Lanes (in effect, Tolan), Brunswick retained a purchase money security interest pursuant to § 9-107 of the Uniform Commercial Code (Act of April 6, 1953, P. L. 3, § 9-107, 12A P.S. § 9-107) (hereinafter cited as UCC). After Tolan defaulted in his payments, Brunswick brought an action in replevin, as authorized by UCC § 9-503, and obtained a default judgment.
At this point, Dean and Schulz agreed to help Tolan, and paid Brunswick $15,000 in settlement of Brunswick's claim. In return, Dean and Schulz each received a one-third interest in the new corporation, Brandywine Lanes, Inc. They also received an assignment of Brunswick's security interest to their assignee, Mellon Bank.
The central issue in this litigation involves whether Brandywine Lanes, Inc. acquired ownership of the alleys when the corporation was formed. The record
clearly shows that Tolan did not convey the alleys to Brandywine, and Brunswick could only transfer, pursuant to UCC § 9-504(4), the interest it then held -- which was a security interest. This transaction did not, therefore, give Brandywine ownership of the alleys, but only a security interest and the right to "maintain replevin to recover the property." 10 Std. Pa. Practice, § 15, p. 440 (1963).
Tolan, therefore, owns the alleys subject to the outstanding security interest of Dean and Schulz. Unless Tolan elects to redeem the alleys, pursuant to UCC § 9-506, Brandywine should be permitted to dispose of them as provided by UCC § 9-504, with any proceeds in excess of Brandywine's security interest, costs and special damages being returned to Tolan.
The judgment is affirmed only insofar as it entitles Brandywine to take possession; the judgment for damages is vacated.
Judgment affirmed only insofar as it entitles Brandywine to take possession; judgment for damages vacated.
Concurring Opinion by Mr. Justice O'Brien:
On June 29, 1955, Bernard J. Tolan (the additional defendant here) and Saul Snitkin, doing business as E. Z. Lanes, purchased from the Brunswick Corporation [Brunswick] by means of a conditional sale contract certain bowling alleys plus related equipment which were thereafter installed at 224 Eighth Street, Braddock, Pennsylvania. E. Z. Lanes paid $30,000.00 down, leaving a balance of some $71,000.00. Snitkin later dropped out of ...