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LILLIAN D. CHADWIN v. MORTON L. KROUSE (04/28/78)

decided: April 28, 1978.

LILLIAN D. CHADWIN, APPELLEE,
v.
MORTON L. KROUSE, APPELLANT



COUNSEL

Jay H. Rosenfeld, Philadelphia, and Rosenfeld & Weinrott, Philadelphia, for appellant.

Sheridan P. Hunt, Jr., Philadelphia, for appellee.

Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Watkins, former President Judge, did not participate in the consideration or decision of this case. Spaeth, J., concurs in the result.

Author: Jacobs

[ 254 Pa. Super. Page 448]

This appeal is taken from the lower court's order of October 7, 1975 directing appellant to deliver to the Sheriff of Philadelphia County all stock certificates evidencing his ownership of Krouse-Forman Oldsmobile, Inc. of Cherry Hill, New Jersey. The lower court judge predicated this

[ 254 Pa. Super. Page 449]

    order upon Pa.R.C.P. 3118, which provides for supplementary relief in aid of execution. Because we agree that the lower court abused its discretion in ordering appellant to deliver to the Sheriff the stock certificates representing appellant's original 50% ownership, which had a New Jersey situs prior to the institution of the instant proceedings, we reverse in part and affirm in part.

Appellee Chadwin filed a Complaint in Confession of Judgment on November 1, 1972 to recover the sum of $25,134. This included the $15,000 principal amount of a note executed by appellant in July, 1961 plus interest at 6% per annum. A judgment was entered in her favor and more than two years later, on December 5, 1974, appellee filed a Petition for Supplementary Relief in Aid of Execution as authorized by Pa.R.C.P. 3118.*fn1

On January 20, 1975, the lower court, upon stipulation of the parties, entered an order enjoining appellant from, inter alia, "selling, transferring, assigning or otherwise negotiating any of the issued and outstanding shares of capital stock of Krouse-Forman Oldsmobiles, Inc. . . ." Record at 28a. Also on January 20th, appellant filed a petition to

[ 254 Pa. Super. Page 450]

    strike appellee's Rule 3118 petition; the lower court denied the petition to strike on February 3, 1975. Thereafter, on May 19, 1975, Appellant Krouse filed a petition to open, strike or satisfy appellee's underlying confessed judgment, which petition was denied on August 14, 1975.

The only order from which Krouse has appealed is that entered on October 7, 1975 requiring him to transfer to the Sheriff of Philadelphia County all stock certificates representing his ownership of Krouse-Forman Oldsmobile. Appellant Krouse's stock in the Oldsmobile dealership must be divided into two categories for purposes of analysis -- that acquired prior to the institution of the instant Rule 3118 proceedings and that purchased by appellant subsequent to the entry of the order on January 20, 1975 granting appellee's petition for supplementary relief in aid of execution. Prior to that date Krouse owned only 50% of the stock of the corporation; there is no evidence in the record to contradict appellant's assertion that the certificates representing his original 50% ownership were at all relevant times located in New Jersey. In the fall of 1975, however, he purchased the remaining 50% of the corporation's stock from his partner and received delivery of the certificates in Philadelphia. A short time later, the certificates representing the recently acquired stock were transferred to New Jersey. The lower court held that there was sufficient justification for finding that "the [newly acquired] stock certificates had been removed from the jurisdiction or concealed for the purpose of avoiding execution. . . ." Record at 116a.

We agree with the judge below that an order could properly be entered pursuant to Pa.R.C.P. 3118(a)(5) directing that the latter stock certificates be returned to Pennsylvania and be made available for execution; they were purchased and removed from the Commonwealth well after the January 20, 1975 injunction was issued. This action was clearly in violation of the January 20th order which sought to preserve the assets of Krouse-Forman Oldsmobile, as well ...


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