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ROBERT MALLERY LUMBER CORPORATION v. B. & F. ASSOCIATES (01/19/82)

filed: January 19, 1982.

ROBERT MALLERY LUMBER CORPORATION,
v.
B. & F. ASSOCIATES, INC., A/K/A VALLEY WOOD PRODUCTS AND UNITED PENN BANK OF WILKES-BARRE, PENNSYLVANIA, APPEAL OF UNITED PENN BANK OF WILKES-BARRE, PENNSYLVANIA



NO. 1297 PHILADELPHIA, 1980, Appeal from the Order of the Court of Common Pleas, Civil Action-Law, of Cameron County, at No. 57 November Term, 1978.

COUNSEL

Anthony J. Lumbis, Wilkes-Barre, for appellant.

Daniel F. Glassmire, Coudersport, for appellee.

Hester, Cavanaugh and Van der Voort, JJ. Cavanaugh, Justice, dissenting.

Author: Van Der Voort

[ 294 Pa. Super. Page 506]

This is an appeal from judgment on the pleadings for $25,000 entered in favor of ROBERT MALLERY LUMBER CORPORATION, appellee (hereinafter, MALLERY LUMBER) and against the UNITED PENN BANK OF WILKES-BARRE, PENNSYLVANIA, appellant (hereinafter, THE BANK).

The Complaint consists of two Counts, the first against B. & F. ASSOCIATES, INC. (hereinafter, B. & F.), a purchaser of lumber products, for $21,714.36 and interest for lumber sold to it by Mallery Lumber, and the second Count against The Bank for $25,000 as guarantor of the purchase obligations of B. & F. to Mallery Lumber.

The Bank's Answer denies liability and asserts by way of New Matter that any obligation it may have had to Mallery Lumber has been discharged. Mallery Lumber replied to the New Matter and The Bank moved for judgment on the pleadings. Responding to the Motion, the lower Court directed that Judgment be entered for $25,000 in favor of Mallery Lumber and against The Bank.

The facts out of which this litigation arises are not in dispute. Mallery Lumber produces and supplies northern hardwood lumber in a variety of species, sizes and grades to its customers. B. & F. was a purchaser of lumber products from Mallery Lumber. On or about May 15, 1977, Mallery

[ 294 Pa. Super. Page 507]

Lumber and B. & F. entered into negotiations concerning the terms on which Mallery Lumber would continue to produce and supply lumber to B. & F. on an on-going basis. Mallery Lumber wanted satisfactory assurance that its invoices would be paid. It was agreed at that time that B. & F. would attempt to negotiate an agreement with a reliable third party, preferably The Bank, whereby payments to Mallery Lumber would be assured. B. & F. undertook such a negotiation with The Bank and succeeded in obtaining a $50,000 line of credit of which $25,000 was to be reserved for purchases from Mallery Lumber.

Under date of June 8, 1977, The Bank notified Mallery Lumber of this agreement by a letter which read as follows:

Mallery Lumber Co.

Emporium

Pennsylvania 15834

Gentlemen:

RE: B. & F. Associates, Inc.

T/A Valley Wood Products, Inc.

This is to inform you that United Penn Bank has established a $50,000.00 line of credit for the above customer, of which $25,000.00 is reserved for purchases from Mallery Lumber Company.

We trust this will be sufficient to permit you to continue to serve the needs of our mutual customer.

Very truly yours,

W. B. Simmers

Senior Vice ...


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