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EDELSTEIN ET AL. v. CAROLE HOUSE APARTMENTS (12/13/71)

decided: December 13, 1971.

EDELSTEIN ET AL., APPELLANTS,
v.
CAROLE HOUSE APARTMENTS, INC.



Appeal from judgment of Court of Common Pleas of Delaware County, No. 11655 of 1968, in case of Albert A. Edelstein and Jack E. Edelstein v. Carole House Apartments, Inc.

COUNSEL

Joseph R. Livesey, for appellants.

David J. Natale, with him ReDavid, Orlowsky & Natale, for appellee.

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

Author: Jacobs

[ 220 Pa. Super. Page 300]

In this action to foreclose a mortgage the appellants demanded judgment against the appellee corporation in the amount of $39,322.00. After a trial, before Judge Francis A. Catania, sitting without a jury, judgment was entered for the appellants in the amount of $9,364.34.

The mortgage in issue was given to secure performance of an agreement entered into between appellants as one party and Maurice C. Tepper, M.D., and Helen Tepper, his wife, as the other party. The agreement was in writing and dated July 3, 1967. In the agreement appellants agreed to sell Helen Tepper 100% of the capital stock of the appellee corporation for $78,114.00. Payment was to be made in installments over a period of time. All installments except the last one were paid by the Teppers. The last installment was for $35,000.00 and was due August 3, 1968, with interest at the rate of 6% per annum, making a total due then of $37,450.00. When the payment fell due the Teppers tendered $20,592.00 in full payment, claiming credit for certain payments made by them to Girard Trust Bank on notes signed by Maurice C. Tepper and Jack E. Edelstein. The appellants refused the tender and subsequently instituted the instant foreclosure proceeding.

In their answer and new matter the Teppers averred that they were induced to enter into the agreement by appellants' fraudulent representation that appellants would assume the Girard Trust obligations in full, and that the $78,114.00 purchase price included $8,114.00

[ 220 Pa. Super. Page 301]

    in legal fees owed by appellee corporation to one Lewis Kates, Esquire.

In the written agreement the Teppers relinquished any right and interest which they had in another corporation known as Goshen Arms, Inc., and the apartment house being constructed under that name. Immediately following that clause the following appears in the contract: "In consideration for said relinquishment, Jack E. Edelstein hereby agrees to save, defend and hold harmless and indemnify Maurice C. Tepper and Helen Tepper from any and all expense or any other liability arising from certain construction loans and second stand-by mortgage commitments, with regard to the said apartment project. Further, in consideration for the Teppers' relinquishment of rights, Jack E. Edelstein agrees to undertake and to assume Fifty (50%) per cent of the liability for Two (2) certain loans presently owed to Girard Trust Bank, said notes being generally known as:-a note dated December 29, 1966, in an amount of $6,192.00 on account #718287, and the other being a certain consumer credit note in the amount of $8,500.00. . . ."

Since fraud had been alleged the court below permitted oral testimony to be taken to show the fraud. From this testimony it appeared that appellants, the Teppers, their son Edward, both parties' attorneys, and one Ralph Bodek met on June 20, 1967, in an effort to resolve their differences. At that time Lewis Kates, Esquire, represented appellants and Alan Aberman, Esquire, represented the Teppers. The court below found as facts that at the meeting appellants ...


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