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SOLEBURY NATIONAL BANK NEW HOPE v. BENJAMIN F. CAIRNS (12/02/77)

decided: December 2, 1977.

SOLEBURY NATIONAL BANK OF NEW HOPE
v.
BENJAMIN F. CAIRNS, III, APPELLANT, AND WILLIAM C. KRATZ



No. 1141 October Term, 1977, Appeal from the Order of the Court of Common Pleas, Civil Division, of Montgomery County, at No. 75-18846.

COUNSEL

Thomas C. Branca, Lansdale, for appellant.

Kenneth R. Williams, Doylestown, with him John A. Lord, Norristown, for appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Price, J., notes dissent.

Author: Hoffman

[ 252 Pa. Super. Page 46]

Appellant contends that the lower court erroneously refused to strike or open a confessed judgment because (1) he did not personally sign the note containing the authorizing warrant of attorney, and (2) the record reveals that he had not actually defaulted on his contractual obligations. We believe that the lower court erred in refusing to strike the confessed judgment because appellant did not sign the note containing a warrant of attorney in his individual capacity. Accordingly, we reverse the order of the lower court dismissing appellant's motion to strike the judgment, and order the judgment stricken.*fn1

On October 16, 1973, Kratz and Cairns Excavating Corporation executed a judgment note in favor of appellee, Solebury National Bank of New Hope, in the face amount of $96,277.20. The note provided that Kratz and Cairns Excavating

[ 252 Pa. Super. Page 47]

Corporation would repay the note in 60 monthly payments of $1604.62. Form provisions contained in the note provided that in the event of a default in a monthly payment, the undersigned authorized any prothonotary or clerk or attorney of any court of record to confess judgment for the unpaid amount of the note plus 18% for collection costs and the costs of suit.*fn2 Appellant, Benjamin F. Cairns, III, signed this note in his capacity as President of Kratz and Cairns Excavating Corporation; William Kratz signed the note in his capacity as Secretary-Treasurer of the Corporation. Directly underneath these signatures, in a space labelled "co-maker," the name and addresses of appellant and William Kratz appeared in type.

On October 19, 1973, appellant and William and Dolores Kratz executed a guaranty note in their individual capacities. The note provided: "FOR VALUE RECEIVED, the undersigned jointly and severally guarantee payment of the within note according to its terms and hereby agree to all the provisions thereof. Protest and notice is hereby waived in the within promissory note and I/We hereby endorse the same."

On November 24, 1975, appellee filed in the Montgomery County Court of Common Pleas a complaint in confession of judgment against Kratz and Cairns Excavating Corporation, and against Benjamin F. Cairns, III, William C. Kratz and Dolores Kratz individually. The complaint alleged that the corporate defendant had defaulted under the judgment note and that the individual defendants had also defaulted by their failure to make payments due from the corporate defendant in accordance with their guaranty agreement. On November 24, 1975, appellee confessed judgment against the corporate and individual defendants.*fn3

[ 252 Pa. Super. Page 48]

On December 23, 1975, appellant Benjamin F. Cairns, III, filed a motion to strike or, in the alternative, to open the judgment entered against him individually.*fn4 Appellant alleged that he signed the note authorizing confession of judgment solely in his capacity as President of Kratz and Cairns Excavating Corporation. While he did sign the guaranty agreement in his individual capacity, this agreement did not explicitly authorize confession of judgment against him. Moreover, appellant alleged that the corporation did not default in its payment under the judgment note. On February 4, 1976, appellee filed its answer which alleged that appellant, by signing the guaranty agreement, accepted all the terms and conditions of the judgment note, including the confession of judgment clause. The answer also stated that the corporation failed ...


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