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decided: March 29, 1976.


Appeal from order of Court of Common Pleas, Civil Division, of Allegheny County, Oct. T., 1973, No. 1036, and Jan. T., 1974, No. 952, in case of Safeguard Investment Company, a Pennsylvania Corporation, v. Robert H. Davis and Catherine T. Davis, his wife.


John G. Arch, for appellants.

M. David Turets, for appellee.

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

Author: Van Der Voort

[ 239 Pa. Super. Page 302]

This is an appeal from the denial of two Petitions to Strike or Open Judgments. The appellants, a husband and wife, allege that the lower court abused its discretion in denying their Petitions, and further, misconstrued the Debt Pooling Act (Act of December 6, 1972, P.L. 1482, No. 334, § 1, effective June 6, 1973, 18 Pa.C.S. § 7312).

In the consideration of any appeal from the lower court's denial of a Petition to Open Judgment, it is well established that we must not reverse the lower court's action unless a clear abuse of discretion is apparent or an error of law was committed. Alliance Discount Corp. v. Shaw, 195 Pa. Superior Ct. 601, 171 A.2d 548 (1961). A party that moves to open a confessed judgment, such as those involved in the instant appeal, must act promptly and aver a meritorious defense. Wenger v. Ziegler, 424 Pa. 268, 226 A.2d 653 (1967). No issue is raised in our Court, nor was any voiced by the appellee or the lower court regarding the timeliness of appellants' Petitions to Open Judgment. Thus, we must only determine whether the lower court clearly abused its discretion or committed an error of law in the evaluation of whether appellants raised a meritorious defense.

Appellants filed petitions to open (or strike) judgment relating to two judgments confessed against them by appellees. Rules to Show Cause why the judgments should not be opened or stricken were sought. After Answers were filed the lower court directed appellants to proceed in accordance with Pennsylvania Rules of Civil Procedure 209 or 2959, and utilize discovery procedure, or be bound by the averments contained in the Answers. See Harr v. Bernheimer, 322 Pa. 412, 185 A. 857 (1936). Appellants took no further action so the record before the lower court and our court must necessarily rest upon the factual averments of the Answer, together with the undenied averments found in the appellants' petitions.

The record therefore indicates that on December 12, 1968, appellants executed bonds and mortgages on real

[ 239 Pa. Super. Page 303]

    estate evidencing indebtedness in the penal sums of six thousand ($6,000.00) dollars and fourteen thousand ($14,000.00) dollars, based upon loans in the actual amounts of three thousand ($3,000.00) dollars and seven thousand ($7,000.00) dollars. These loans were secured to consolidate and pay off debts of the appellants which totaled five thousand, seven hundred and six and four one-hundredths ($5,706.04) dollars. At the time the loan transaction was completed, appellants were provided with "settlement sheets" indicating the terms and conditions of the loans and various expenditures involved with the loans. These sheets indicate that the appellants agreed to make monthly payments of a stated amount to satisfy the two separate loans. Each loan bore interest at the rate of six (6%) percent per annum, with a "one (1%) percent premium payment." The mortgages provided for fire insurance premiums and taxes to be paid from the monthly payments. Other normally included items such as recording costs and attorneys' fees are evident.

In addition to the above-described costs and fees, the "settlement sheet" and mortgage show that appellants were required as a condition of the loan, to pay the Commonwealth Acceptance Corporation a sum of one thousand, six hundred ninety-four and six one-hundredths ($1,694.06) dollars as a so-called "financial consultant fee," on the first mortgage of seven thousand ($7,000.00) dollars. Moreover, appellants were required to pay to the appellee, Safeguard Investment Company, a fee of nine hundred ($900.00) dollars on the same loan and an additional fee of eight hundred three and forty one-hundredths ($803.40) dollars on the second mortgage of three thousand ($3,000.00) dollars. No reasons are specified on the loan documents for these payments of one thousand, seven hundred and three and forty one-hundredths ($1,703.40) dollars to Safeguard.

Thus, to summarize, the record shows that the appellants, in an attempt to consolidate debts of five thousand, seven hundred ...

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