No. 1859 Philadelphia, 1981, Appeal from Order of the Court of Common Pleas, Civil Division, of Bucks County, No. 77-7318-09-1
Walter D. Campbell, Levittown, for appellants.
Richard F. Stern, Jenkintown, for appellee.
Wieand, Cirillo and Popovich, JJ.
[ 306 Pa. Super. Page 500]
After a loan transaction has been completed and the borrowers' corporate nominee has thereafter made a total of twenty-one monthly repayments of principal and interest, can the borrowers defend an action in assumpsit for the defaulted, unpaid balance by contending that the lender failed at settlement to make certain disclosures in the manner required by the loan agreement? We conclude that where, as here, the borrowers have failed to show any damage as a result of the lender's technical and insignificant omissions, they cannot avoid liability by rescinding the transaction. A judgment entered in favor of the lender for the unpaid balance of the loan, therefore, will be affirmed.
In January, 1975, Jerome J. Weingarten and Milton J. Carter associated with Larry Levine in a partnership for the purpose of purchasing a business being operated in Fairless Hills, Bucks County, under the name of the "Singer Company." Initial efforts to obtain a loan to finance the purchase price were unsuccessful, but eventually a loan commitment was obtained from First Mortgage Company of Pennsylvania, the appellee. Thereafter, an agreement to purchase the business was entered, and a corporation, known as "M and J Sales and Service, Inc.", was formed to take title. At settlement the funds necessary to complete the transaction were advanced by appellee for use by M and J Sales and Service, Inc., and the borrowers agreed to repay the loan at the rate of $1,206 per month for eighty-four months. The loan was secured in part by second mortgages on residences owned by Carter, Weingarten and Levine. After twenty-one payments on account of the loan had been made, the loan went into default. On February 10, 1977, Levine paid $20,000 to appellee and, with the consent of all parties, was released from further liability. An action in assumpsit was commenced against Carter and Weingarten and their wives for the unpaid balance, together with interest and attorney fees. Their answer to the complaint included a counter-claim,
[ 306 Pa. Super. Page 501]
which contained averments that they were entitled to rescind the loan transaction without making repayment. The action was tried non-jury and resulted in a decision in favor of the appellee-lender for $88,914.57. Exceptions thereto were dismissed, and judgment was entered on the decision of the trial court.
On appeal, it is contended by appellants that the trial court erred in refusing to find that the lender had failed to comply with provisions of the federal Truth in Lending Act of 1968, 15 U.S.C. § 1601 et seq. It is contended that this Act, although inapplicable to loans made for use by a corporation,*fn1 was made applicable to the instant loan because of the following language contained in appellee's letter of commitment:
"It is understood and agreed by the parties hereto that, while the written loan transaction is exempt from the provisions of the 1968 Consumer Trade Protection Act, commonly known as 'Truth in Lending', in that it is a loan to a corporation, the aforesaid loan will be consummated in accordance with all the provisions of the aforesaid 'Truth in Lending Act'".
Appellants argue, as they did in the court below, that appellee failed to consummate the loan transaction in accordance with the Truth in Lending Act. The loan disclosure statement, they contend, did not correctly label or disclose the amount financed, did not with sufficient accuracy describe the annual interest rate, did not recite the total sum of the monthly payments, failed to print required disclosures with sufficient conspicuousness, and contained various alleged ambiguities. They also contend that not every guarantor received a copy of the loan disclosure statement. The trial court ...