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CHELTENHAM NATIONAL BANK v. SNELLING (09/23/74)

decided: September 23, 1974.

CHELTENHAM NATIONAL BANK
v.
SNELLING, APPELLANT



Appeal from order of Court of Common Pleas of Montgomery County, No. 73-4213, in case of Cheltenham National Bank v. Louis R. Snelling, III.

COUNSEL

J. Raymond Munholland, with him Bluestein & Prusky, for appellant.

John W. Lauffer, with him Harry C. Barbin, and Barbin, Lauffer & O'Connell, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Hoffman, J. Jacobs, J., concurs in the result.

Author: Hoffman

[ 230 Pa. Super. Page 499]

This appeal is from an order of the Court of Common Pleas of Montgomery County dismissing appellant's

[ 230 Pa. Super. Page 500]

    petition to open and set aside a confessed judgment. We must determine whether a clause allowing judgment to be confessed "at any time" renders the instrument nonnegotiable; if so, we must determine whether principles of equitable estoppel preclude the appellant from asserting defenses against the appellee, the present holder of the instrument.

The complex facts of this case may be summarized as follows: On August 14, 1969, Goodway Copy Centers, Inc. ("Goodway") and appellant entered into a franchise arrangement whereby Goodway promised to locate, establish, equip and manage 100 copy centers within a period of seven years. In return, appellant agreed to purchase the centers as completed. Shortly thereafter, appellant transferred all his right in this venture to International Development Corp. ("IDC"), of which appellant was the sole shareholder. Goodway was represented in these negotiations by Mr. Donald Wolk.

In December, 1969, Mr. Wolk applied to Cheltenham National Bank ("Cheltenham") for a loan. Appellant did not participate in any negotiations. Appellant testified that Mr. Wolk told him that Cheltenham would require a promissory note as a prerequisite to granting the loan. On February 27, 1970, appellant executed a demand note to the order of Goodway in the amount of $150,000.*fn1

Cheltenham was aware that the purpose of the loan was to enable Goodway to purchase five copy centers. Cheltenham never saw the master agreement between appellant and Goodway but did possess a copy of Goodway's prospectus and appellant's financial statement.

[ 230 Pa. Super. Page 501]

On March 24, 1970, Goodway assigned appellant's note to Cheltenham and the bank approved the loan application. $132,000 was deposited into a Goodway account and ...


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