No. 396 April Term, 1979 & No. 589 April Term, 1979, Appeal from the Order of the Court of Common Pleas of Westmoreland County at No. 3106 of 1975, In Equity, Civil Action-Law.
William J. Reeping, in pro. per.
Joseph M. Loughren, Pittsburgh, for appellee.
Spaeth, Hoffman and Van der Voort, JJ. Spaeth, J., files a concurring opinion.
[ 277 Pa. Super. Page 270]
Appellant, Shirley Reeping contends that the lower court erred in awarding a portion of the fund which is the subject of the instant partition action to Dorothy Reeping because the latter is not a party to this action.*fn1 We agree and, accordingly, reverse in part the order of the court below.
On September 26, 1975, Shirley Reeping filed a complaint in equity against William Reeping, her husband, seeking, inter alia, a partition and sale of a dwelling held by the couple as tenants by the entireties. While the partition action was pending, the subject property was sold at sheriff's sale upon foreclosure of the mortgage. Subsequently, the court granted Shirley Reeping leave to amend her complaint and stayed distribution of the proceeds from the sheriff's sale. On August 30, 1978, Shirley Reeping filed an amended complaint alleging, inter alia, that the parties were divorced on March 30, 1978. On October 26, 1978, William Reeping answered the complaint, raising as new matter the allegation that his mother, Dorothy Reeping, had expended $4,000.00 to pay debts of Shirley and William Reeping and seeking reimbursement of Dorothy Reeping from the fund in question. A commissioner was appointed, and he held hearings on October 26, and November 8, 1978. William Reeping failed to appear at either hearing. The commissioner concluded that the fund should first be divided in half and that various adjustments should then be made to the
[ 277 Pa. Super. Page 271]
parties' respective shares. The commissioner ordered that $2,307.18 be deducted from each share and awarded to Dorothy Reeping. Despite exceptions to the decision by both parties, the lower court adopted the findings of the commissioner without opinion. Shirley Reeping appealed.*fn2
Shirley Reeping contends that the lower court erred in granting William Reeping's request that a portion of the fund be awarded to a person not a party to the action. Rule 1031 of the Pennsylvania Rules of Civil Procedure provides that a defendant may set forth in his counterclaim "any cause of action or setoff which he has against the plaintiff at the time of filing of the answer . . . ." (emphasis added). "In accordance with the rule that mutuality is essential to a setoff or counterclaim, it is generally held that a defendant cannot use as a setoff a demand against the plaintiff in favor of or against a third person not a party to the action." 4 Standard Pennsylvania Practice 420-21 (revised ed. 1963). See also Russ v. Sadler, 197 Pa. 51, 58, 46 A. 903, 905 (1900). This rule cannot be avoided by mislabelling a counterclaim "new matter." See Commonwealth, Department of Public Welfare v. Ludlow Clinical Laboratories, Inc., 22 Pa. Commw. 614, 350 A.2d 208 (1976) (court ignored mislabelling of counterclaim).
In the case at bar, William Reeping attempted to assert the rights of Dorothy Reeping by way of new matter in his answer. Such action was improper. Despite the mislabelling of this claim as new matter, we will treat it as a counterclaim. Dorothy Reeping is a third person who merely testified for William Reeping at the commissioner's hearing. She is not a party to this action. Under Rule 1031, William Reeping could properly set forth by way of counterclaim only his own causes of action against Shirley Reeping. The claim that Dorothy Reeping was entitled to reimbursement was not William Reeping's cause of action. Consequently,
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it was error for the lower court to adopt that portion of the commissioner's report awarding $4,614.35 to Dorothy Reeping. We therefore reverse the order of the lower court to the extent that it awards money to Dorothy ...