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KEYSTONE BANK v. FLOORING SPECIALISTS (10/20/78)

decided: October 20, 1978.

KEYSTONE BANK, APPELLEE,
v.
THE FLOORING SPECIALISTS, INC., PHILIP E. MCCOSBY AND VIRGINIA L. MCCOSBY, HIS WIFE, AND ANTHONY A. DERUBEIS AND GERALDINE M. DERUBEIS, HIS WIFE. APPEAL OF ANTHONY A. DERUBEIS AND GERALDINE M. DERUBEIS



No. 351 April Term, 1977, Appeal from the Order Entered December 22, 1976, of the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division, at Ex. No. G.D. 76-27493, Sur No. 2317 October Term, 1972, No. 2318 October Term, 1972, No. 2319 October Term, 1972, Refusing to Grant a Rule to Show Cause Why Judgments Should Not Be Opened and Execution Stayed.

COUNSEL

Maurice A. Nernberg, Jr., Pittsburgh, with him John M. Walsh, Pittsburgh, for appellants.

Abraham Fishkin, Pittsburgh, for appellee.

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

Author: Cercone

[ 259 Pa. Super. Page 27]

The instant appeal arises from the lower court's refusal to issue a rule to show cause why judgment against appellant should not be opened and execution stayed. Since a rule to show cause never issued, no hearing was held, which complicates our task of determining whether the court abused its discretion. The sole basis for the court's decision, which it rendered entirely upon the petition for the rule and the answer thereto, was that too much time had elapsed following the entry of the judgment against appellant to permit its being opened. At least on the current state of the record and the averments set forth in appellant's petition, we disagree and will remand for a hearing on the rule.

The relevant "facts," assuming that appellants will be able to prove their averments at the hearing, are as follows. On three separate occasions from December, 1965 through January, 1967, appellants, Anthony and Geraldine DeRubeis, executed judgment notes in favor of appellee, Keystone National Bank. The notes were co-endorsed by The Flooring

[ 259 Pa. Super. Page 28]

Specialists, Inc., Philip McCosby (its President) and his wife, as well as by Mr. and Mrs. DeRubeis. Mr. DeRubeis claims that, although he was Vice-President of Flooring Specialists, he held no stock in the corporation. The notes were in consideration for loans which Keystone National Bank extended to the business which, apparently, did not fare well. Mr. DeRubeis soon thereafter left the employ of Flooring Specialists and Keystone confessed judgments on the notes against all the co-signers in September, 1967. Mr. and Mrs. DeRubeis were not notified that said judgments had been confessed.

In August, 1972 Keystone Bank released certain real property owned by Mr. and Mrs. McCosby from the lien of the judgments in return for their payment of money on account, and the McCosbys sold the property. Mr. and Mrs. DeRubeis had not been informed of this release when the judgments were revived in January, 1973, and they did not appear in court to defend against the revival although they had been served with the writs of revival by the sheriff.

Matters again laid dormant until December 9, 1976 when Mr. and Mrs. DeRubeis received notice that their property was to be sold at sheriff's sale. Shortly thereafter counsel for appellants filed the petition to show cause why the judgments should not be opened and execution stayed. Following the filing of Keystone's answer, the court below found appellant's petition inadequate on its face. In its opinion the court indicated that appellants should have petitioned to open the judgments when they received notice of their revival in 1973. We find that the record at this time is insufficient to warrant that conclusion.

A petition to open a judgment appeals to the equitable powers of the court and should be granted when three factors coalesce: (1) The petition has been promptly filed; (2) A meritorious defense is presented; and (3) The failure to respond previously can be excused. ...


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