No. 670 October Term, 1977, Appeal from the Order Entered December 17, 1976 in the Court of Common Pleas of Montgomery County, Pennsylvania, Civil Action-Law Division, at No. 75-19606.
Abraham A. Hobson, III, King of Prussia, for appellant.
John D. Dunmire, Norristown, and Susan L. Anderson, Philadelphia, for appellee.
Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Jacobs, President Judge, concurs in the result. Watkins, former President Judge, and Hoffman, J., did not participate in the consideration or decision of this case.
[ 258 Pa. Super. Page 262]
This appeal is from the order of the court below denying appellant's petition to open a confessed judgment. The sole issue is whether the lower court abused its discretion in finding that appellant failed to aver a meritorious defense.
On August 23, 1974, appellee, The Fidelity Bank, loaned appellant, Act of America, Inc. the sum of $10,000 in return for appellant's promissory note and a guaranty agreement executed by one of appellant's principals and his wife. Pursuant to the authorization contained in the note, on December 8, 1975, appellee confessed judgment against appellant in the amount of $10,000 plus attorney's fees. In its petition to open the judgment, appellant alleged that in April of 1974 appellee orally agreed to make available a $25,000 line of credit for appellant. According to this oral argument appellant was to receive $10,000 in August of 1974 and the remaining $15,000 in November of 1974. Appellant acknowledges receipt of the $10,000 August 23 payment, but contends the appellee-bank breached its oral agreement by refusing to provide the remaining $15,000. In defense to the confessed judgment, appellant averred that as a result of appellee's alleged breach, an advertising and promotion campaign that it had earlier initiated was rendered ineffective due to lack of funds to continue, and that it was unable to meet a federal tax deadline and thus incurred a substantial penalty.
Although appellee's answer to the petition to open denied the existence of any oral agreement to extend a $25,000 line of credit to appellant, the deposition of appellee's former branch manager confirmed such an agreement. The former manager further testified that as of the time he terminated his employment with the bank in October of 1974, appellant had not requested the remaining $15,000. In addition, the manager noted that had appellant requested the funds, another personal guaranty would have been required.
[ 258 Pa. Super. Page 263]
On December 17, 1976, after consideration of the petition, answer, and deposition, the court below declined to open the judgment and this appeal ensued.
A petition to open a confessed judgment is an appeal to the lower court's discretion. Christie v. Open Pantry Marts, 237 Pa. Super. 243, 352 A.2d 165 (1975); Wolgin v. Mickman, 233 Pa. Super. 218, 335 A.2d 824 (1975). Moreover, it is well-settled that a party seeking to open a judgment by confession must act promptly and allege a meritorious defense. Kardos v. Morris, 470 Pa. 337, 368 A.2d 657 (1977); First Penna. Bank N.A. v. Weber, 240 Pa. Super. 593, 360 A.2d 715 (1976); Christie v. Open Pantry Marts, supra; Wolgin v. Mickman, supra. "In a proceeding to open a confessed judgment, '[i]f evidence is produced which in a jury trial would require the issues to be submitted to the jury, the court shall open the judgment.' Rule 2959(e), Pa.R.C.P., effective December 1, 1973. (Emphasis supplied.) 'Thus, a court can no longer weigh the evidence in support of the defense, but must only determine whether there is sufficient evidence to allow the issue to go to the jury.' Ritchey v. Mars, supra, 227 Pa. Super.  at 36, n. 4, 324 A.2d  at 515, n. 4." Wolgin v. Mickman, supra 233 Pa. Super. at 221-222, 335 A.2d at 825; Christie v. Open Pantry Marts, supra 237 Pa. at 245, 352 A.2d 824. See also Kardos v. Morris, supra.
Since it is conceded that appellant's petition to open was filed promptly, the sole question is whether appellant produced evidence which in a jury trial would require the issues to be submitted to a jury. Kardos v. Morris, supra; Foerst v. Rotkis, 244 Pa. Super. 447, 368 A.2d 805 (1976). Instantly, as a defense to appellee's judgment, appellant has advanced a breach of contract claim which, if proved, would entitle it to damages that could be set off against the judgment. In other words, the alleged defense does not attack the validity or amount of the instant judgment, but rather asserts a ...