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FOURTEES CO. v. STERLING EQUIPMENT CORPORATION (09/27/76)

decided: September 27, 1976.

FOURTEES CO.
v.
STERLING EQUIPMENT CORPORATION, APPELLANT



COUNSEL

Jay H. Rosenfeld, Philadelphia, for appellant.

Kent H. Albright, Norristown, for appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Price, J., concurs in the result. Van der Voort, J., dissents.

Author: Hoffman

[ 242 Pa. Super. Page 202]

Appellant contends that the lower court should have granted his motion to strike a judgment entered by confession in favor of appellee because appellee was not a party to the agreement which authorized judgment by confession.

On October 1, 1964, appellant leased a store unit in the Norris Hill Shopping Center located on Johnson Highway, Norristown, Montgomery County. One year prior to the expiration of the first five year term, appellant entered a renewal lease for five years, commencing December 1, 1968, at a monthly rental of $550. The parties to the lease were "Tornetta Realty Corp., Agent for Owners" and "Sterling Equipment Corporation, A Pennsylvania Corporation with offices at 5699 Rising Sun Avenue, Philadelphia, Penn." Paragraph 7 of the lease provided: "All rents shall be payable without prior notice or demand at the office of Lessor's Agent, TORNETTA REALTY CORP., 839 E. GERMANTOWN PIKE, NORRISTOWN, PENNSYLVANIA 19401 . . . ." The lessor reserved to its agent Tornetta Realty Corporation the right to approve any sublease entered into by the lessee. Further, paragraph 13(b) identified Tornetta Realty Corporation in the following manner: "It is hereby expressly agreed and understood that the said TORNETTA REALTY CORP. is acting as agent only and

[ 242 Pa. Super. Page 203]

    shall not in any event be held liable to the owner or to Lessee for the fulfillment or non-fulfillment of any of the terms or conditions of this lease, or for any action or proceedings that may be taken by the owner against Lessee, or by the Lessee against the owner." Paragraph 16 authorized confession of judgment by the lessor against the lessee in the event that any terms of the lease were breached; paragraph 20 reserved the right to confess judgment to any assignee of the lessor. The lease was executed by Joseph Tornetta, Agent, Tornetta Realty Corp. and the president and the secretary of Sterling Equipment Corporation. The lease was also signed by "New Hope Inc., Charles J. Tornetta". Thus, the lease contained no reference to the appellee, Fourtees Co.

On March 23, 1973, appellee confessed judgment against appellant in the amount of $20,014.54.*fn1 Pursuant to Rule 2958, Pa.R.C.P., appellee filed an affidavit of notice of service of the confession of judgment and the complaint. Appellee's complaint alleged the existence of a lease between its agent, Tornetta Realty Corporation, and the appellant. Appellee attached to the complaint a copy of the lease, a confession of judgment, and an affidavit of service. Joseph Tornetta verified the complaint as a partner of appellee, Fourtees Company.

Appellee filed for writ of execution on June 29, 1973; and, on October 10, 1973, the Sheriff of Montgomery County sold appellant's personal property on the premises to appellee for the sum of $700.

[ 242 Pa. Super. Page 204]

On December 19, 1973, appellant filed its petition to strike and to open the judgment*fn2 alleging, inter alia, that judgment had been entered in favor of appellee, who was neither a party to the lease nor the owner of the premises. Appellee's answer to the petition admitted that appellee was not a party to the lease, but denied that the appellee was never given authority to confess judgment against appellant. Appellee averred that it was ". . . the real party in interest herein, through its duly authorized agent and representative, Tornetta Realty Corporation, . . . [and] was authorized to make claim against the defendant and to Confess Judgment against said defendant." Further, appellee admitted that New Hope, Incorporated, was the record owner of the demised premises, but asserted that New Hope, Incorporated, was only a straw party for appellee and was totally subject to its control. Appellee, therefore, argues that it was the real party in interest to the lease and entitled to confess judgment thereon.

On May 28, 1975, Julian Podgur, the secretary-treasurer of appellant; Victor Romano, a Certified Public Accountant hired by Tornetta Realty Corporation; and Charles J. Tornetta, vice-president of Tornetta Realty Corporation, secretary-treasurer of New Hope, Inc., ...


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