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filed: October 29, 1982.


No. 1167 Philadelphia, 1980, Appeal from the Order of the Court of Common Pleas, Civil Trial Division of Montgomery County, 1980, No. 76-1543.


Walter W. Rabin, Philadelphia, for appellant.

Harold Levy, Philadelphia, appellant, in pro. per.

Albert C. Oehrle, Norristown, for Adrienne Levy, appellee.

Price, Watkins and Montgomery, JJ.

Author: Price

[ 306 Pa. Super. Page 96]

This is an appeal from a judgment n.o.v. entered in this action of mortgage foreclosure in favor of the appellee Adrienne P. Levy. We reverse and remand for consideration of the pending motion for new trial, on which we express no opinion.

In mid-1968, International Gas Light, Inc. ("IGL") found it needed financing and sought such financing from appellant, Grant Service Company ("Grant"). (R. 101a-102a). To secure this financing, Grant sought and received the personal guaranty of Harold Levy, appellee.*fn1 (R. 149a). To secure that guaranty, Harold Levy and his wife, Adrienne Levy, executed a mortgage in favor of Grant on their personal residence.*fn2 (R. 350a-357a). Both said mortgage and said guaranty expressly secured "advances made or to be made or credit given or to be given or other financial accommodations

[ 306 Pa. Super. Page 97]

    from time to time afforded [to IGL]."*fn3 The mortgage given expressly secures "all obligations set forth in that certain Guaranty Agreement dated June 6, 1968." (R. 352a). While no copy of the 1968 Guaranty Agreement was available below, both parties agreed that it contained the following language:

This guaranty shall be a continuing, absolute and unconditional guaranty and shall remain in full force and effect until written notice of its discontinuance shall be actually received by [Grant].*fn4

In 1971, IGL secured further financing from Grant. Grant also secured a new guaranty agreement from Harold Levy at this time. (R. 377a). IGL shortly thereafter instructed Grant to use some of the 1971 funds to pay off the remaining 1968 debt and Grant did so. (R. 376a).

Appellees contended below that notice had been sent to Grant discontinuing the 1968 guaranty agreement before the 1971 financing was extended. (R. 166a-168a). The evidence was uncontroverted, however, that no such notice was ever received by Grant.

The court below found that there was a novation in 1971 (R. 412a) and implicit therein was a finding that the parties to the 1971 agreements specially intended those 1971 agreements as a complete substitute for all and any prior agreements. In so finding, we hold the court below erred.

In First Pa. Bank, N.A. v. Triester, 251 Pa. Superior Ct. 372, 380 A.2d 826 (1977), this court considered the law regarding novations at some length:

The elements of a novation are clearly stated in Wright v. Hanna, 210 Pa. 349 [59 A. 1097]: 'The displacement and extinction of the prior contracts, a sufficient consideration, and the consent of the parties thereto.' (citations omitted) (emphasis added).

[ 306 Pa. Super. Page 98]

[T]he court must accept as true all facts and proper inferences from testimony which tend to support the contentions of the party against whom the motion [for judgment n.o.v.] has been made, and further, must reject all testimony and inferences to the contrary.

Id., 265 Pa. Superior Ct. at 105, 401 A.2d at 822.

Applying this rule to the case at bar, the judgment n.o.v. cannot stand.

The order of April 16, 1980 entering judgment n.o.v. is reversed. The matter is remanded for the trial court's action on the outstanding motion for a new trial upon which we express no opinion and do not retain jurisdiction.

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