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decided: December 2, 1977.


No. 262 October Term, 1976, Appeal from the September 25, 1975 Order of the Philadelphia County Court of Common Pleas, Trial Division, January Term, 1975, No. 750.


John F. Hunt, Philadelphia, with him Stanton L. Triester, Philadelphia, in pro. per., for appellant.

Miles H. Shore, Philadelphia, with him Saul, Ewing, Remick & Saul, Philadelphia, for appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Watkins, President Judge, files a dissenting opinion in which Jacobs and Van der Voort, JJ., join.

Author: Hoffman

[ 251 Pa. Super. Page 375]

Appellant contends that the lower court erred when it granted summary judgment in an action on a promissory note by appellee, First Pennsylvania Bank. Specifically, he contends that there are genuine issues of material fact as to whether appellee accepted a second promissory note as satisfaction and payment of the note upon which the action was brought and as to whether a novation occurred. Because we believe that the record presents no genuine issues of material fact, we affirm the judgment of the court below.

The undisputed facts giving rise to the instant appeal are these. On or about February 14, 1974, appellant and one Leonard J. Mercer (not a party to this appeal) signed a promissory note for $60,000 payable in 90 days with interest computed at a rate of 3 per cent over appellee's prime

[ 251 Pa. Super. Page 376]

    lending rate as determined from time to time. Appellant and Mercer used the loan proceeds to finance a real estate venture in Hillsboro, Florida. On or about May 15, 1974, Mercer called one of appellee's loan officers seeking to secure an extension of time for payment of the February 14 note. On May 21, 1974, the loan officer sent a renewal note to Mercer dated May 15, 1974, and requested that appellant and Mercer sign and return it to him together with a copy of a purported mortgage commitment from Mellon National Mortgage Corporation in Cleveland, Ohio, which was meant to supply needed capital for completion of the Hillsboro project. Shortly thereafter, appellant and Mercer signed and returned the proffered renewal note, but the Mellon National Mortgage Corporation commitment never materialized. On its face, the May 15 note required payment of $60,000 in 60 days plus interest computed at 3 per cent over appellee's moving prime rate. Some time during the month of May, 1974, Mercer executed an agreement to indemnify and hold harmless appellant on the May 15 note. There is no evidence in the record that appellee surrendered or cancelled the February 14 note.*fn1

Thereafter, appellant sent Mercer a series of letters and memoranda requesting that he either secure a release from appellee in appellant's favor or that Mercer pay off the February 14 note. On March 15, 1974, appellant wrote Mercer informing him that he, appellant, had spoken to a loan officer at the bank and that appellee still considered him liable. He, therefore, directed Mercer to ". . . either pay off the note or make other satisfactory arrangements to sign a new note and cancel the old note." On April

[ 251 Pa. Super. Page 3771]

, appellant wrote to Mercer the following: "You have agreed to repurchase my 22 1/2 interest in the Hillsboro property. There is no cash consideration for the repurchase, but you were supposed to have arranged with First Pennsylvania Bank to have my name released from the $60,000 Note." Again on April 8, 1974, appellant wrote to Mercer: "Enclosed the interest bill from First Pennsylvania Bank on the $60,000 Note*fn2 which was to be used in conjunction with your Hillsboro project. It is urgent that I get off this loan immediately. . . ." Appellant sent similar letters and memoranda to Mercer on April 3, August 28, October 4, November 11, and November 19. Additionally, appellant sent memos on June 11, August 6, September 9, 1974, and January 15, 1975, directing Mercer to pay the loan interest. With several of these directives, appellant enclosed a loan interest bill identifying by number and date the loan extended in connection with the February 14 note.

On August 28, 1974, appellee demanded payment of the February 14 note; appellant did not respond. On October 22, 1974, appellee again demanded payment of the February 14, note. Appellant responded on October 29 by letter: "Enclosed is a copy of the Indemnity Agreement which Leonard Mercer signed in conjunction with the $60,000 loan. I wanted you to have this so that you know that I am not responsible for the loan as between Mercer and myself."*fn3 The October 29 letter identified the $60,000 loan by number, the same number as the loan extended in connection with the February 14, 1974 promissory note.

On January 8, 1975, appellee filed a complaint in assumpsit against appellant and Mercer on the note dated February 14. After appellant and Mercer answered the complaint and appellee replied to defendants' New Matter, appellee deposed appellant on April 30, 1975. Thereafter, appellee filed

[ 251 Pa. Super. Page 378]

    a motion for summary judgment to which it attached the affidavits of two bank officers; both defendants answered. The court heard oral argument on the motion, which it granted on September 25, 1975. Appellant docketed an appeal to this Court on November 3, 1975; the lower court granted supersedeas with respect to appellant only on November 7, 1975.

Rule 1035, Pa.R.C.P.; 12 P.S. Appendix; provides in relevant part:

"(a) After the pleadings are closed, but within such time as not to delay trial, any party may move for summary judgment on the pleadings, depositions, answers to interrogatories, admissions on file and supporting affidavits, if any.

"(b) The adverse party, prior to the day of hearing, may serve opposing affidavits. The judgment sought shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact ...

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