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STA-RITE INDUSTRIES v. CENTURY WATER TREATING (ET AL. (09/23/74)

decided: September 23, 1974.

STA-RITE INDUSTRIES, INC.,
v.
CENTURY WATER TREATING (ET AL., APPELLANT)



Appeal from order of Court of Common Pleas of Lancaster County, Dec. T., 1971, No. 116, in case of Sta-Rite Industries, Inc., Water King Division v. Century Water Treating and Grace M. Lehman.

COUNSEL

Marshall M. Cohen, for appellant.

Henry C. Haefner, with him Sam Ferguson Musser, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Price, J. Dissenting Opinion by Jacobs, J.

Author: Price

[ 230 Pa. Super. Page 286]

This appeal comes before the Court on a denial of a petition to open a default judgment entered by the lower court en banc. The appeal is brought by appellant Grace M. Lehman only and is not joined by co-defendant Century Water Treating. Appellant contends that the denial constituted an abuse of discretion in the lower court. We agree and therefore will reverse.

The facts briefly stated are: Appellant had taken over the presidency of Century Water Treating (Century) after the death of her husband, the founder and former president, in 1964. Century had become indebted to appellee for approximately $2500.00 owed for past supplies and equipment. On October 20, 1967, appellee and appellant discussed this debt and appellant signed a note payable to appellee in the amount of $2516.54. Appellant contends this note was signed by her in her capacity as president of Century to reflect the past debt owed by the company, and was not in any way intended to reflect a personal indebtedness. Appellee, on the other hand, maintains that the note was given to secure a personal loan made to appellant.

Appellee also contends that appellant is personally liable for the alleged balance of $746.71 still owing for supplies sent to Century. Appellant maintains that the supplies were not ordered in her personal capacity but were instead ordered by and sent to Century, and as such Century, not appellant, is liable for their cost. Century ceased operations in June of 1969.

[ 230 Pa. Super. Page 287]

Appellant was personally served with a complaint on March 10, 1972. The complaint demanded appellant pay appellee the amount due plus interest and costs. The complaint was properly endorsed with a notice to plead within 20 days or a default judgment would be entered. Appellant failed to respond until April 24, 1972. A default judgment was entered against appellant on April 20, 1972.

It is well settled that a petition to open a judgment may only be granted when three factors are present: (1) the petition to open is promptly filed, (2) the default is reasonably explained or excused, and (3) a defense to the cause of action is shown to exist upon the merits. Matyas v. Albert Einstein Medical Center, 225 Pa. Superior Ct. 230, 310 A.2d 301 (1973); Seltzer v. Ashton Hall Nursing and Convalescent Home, 221 Pa. Superior Ct. 127, 289 A.2d 207 (1972); Balk v. Ford Motor Co., 446 Pa. 137, 285 A.2d 128 (1971). In the present case, the petition to open was filed on May 5, 1972, 14 days after the default judgment had been entered. Appellee concedes that the element of prompt filing is present. Appellant satisfies the third requirement by alleging the defense of fraud. This defense, if believed by the trier of fact, will constitute a valid defense to the complaint. This also is conceded by appellee in its brief.

The crux of the lower court's refusal to open centers on the appellant's reasons for failure to file an answer or appearance within the required time. The general rule is that a petition to open a judgment is a matter within the discretion of the court and the decision will not be overturned in the absence of a clear, manifest abuse of that discretion. Balk v. Ford Motor Co., supra; D'Amore v. Erthal, 421 Pa. 417, 219 A.2d 674 (1966).

At the time appellant was served with the complaint, she was employed as a traveling sales representative for Cash Savings ...


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