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HAMILTON BANK v. EDWARD L. RULNICK AND BETTY F. RULNICK (04/19/84)

filed: April 19, 1984.

HAMILTON BANK, FORMERLY NATIONAL CENTRAL BANK
v.
EDWARD L. RULNICK AND BETTY F. RULNICK, APPELLANTS



No. 147 Harrisburg, 1982, Appeal from Order of the Court of Common Pleas, Civil Division, of York County, No. 80-N-4377.

COUNSEL

Ronald Perry, York, for appellants.

Eugene R. Campbell, York, for appellee.

Wickersham, Wieand and Cercone, JJ.

Author: Wieand

[ 327 Pa. Super. Page 135]

OPINION

This appeal was taken from an order refusing to open a judgment which had been confessed against Edward and Betty Rulnick, appellants, by Hamilton Bank, appellee. The judgment had been confessed pursuant to warrant of attorney contained in a written agreement by appellants to guarantee a loan made by the Bank to Edward Rulnick's wholly owned corporation. The court denied the petition to open the judgment because appellant's only defense was an alleged, oral agreement, evidence of which, in the court's opinion, was barred by the parol evidence rule. We affirm, but for a different reason. The terms of the subsequent, oral agreement, if believed, did not constitute a defense to the judgment confessed against appellant.

The facts have been recited in an opinion of the trial court as follows: "Defendant Edward L. Rulnick is engaged in the profession of a real estate broker. In 1972, Mr. Rulnick formed a corporation, Edward Rulnick Associates, Inc., of which he was the sole shareholder. Thereafter the corporation entered into an arrangement with Hamilton Bank (then National Central Bank) whereby the corporation established a line of credit with the bank for the operation of the brokerage business. On November 20, 1973, both Defendants signed a personal guaranty for the obligations of the corporation. That guaranty contained a clause permitting the confession of judgment which was subsequently exercised by Plaintiff bank. In 1976, the parties agreed to collateralize the loan by the execution of a document called 'Collateral Assignment Of Partnership Interest'. That instrument, dated October 29, 1976, purported to assign to the bank, as collateral security for the payment of the

[ 327 Pa. Super. Page 136]

'present indebtedness owing by corporation to bank', Edward L. Rulnick's one-third interest in a partnership known as KenCo. The assignment stated the present indebtedness to be the sum of Forty-Nine Thousand Eight Hundred Thirty-Eight and 24/100 ($49,838.24) Dollars.

"No part of the principal indebtedness of Edward Rulnick Associates, Inc. was made after the date of the assignment by Defendant Edward L. Rulnick. On August 29, 1980, Plaintiff filed its Complaint in confession of judgment against Defendants under the terms of the guaranty referred to above. Defendants, on September 18, 1980, filed the petition to open."

Depositions of Edward Rulnick, taken in support of the petition to open the judgment, suggested that the consideration for the collateral assignment of his partnership interest in KenCo had been an oral agreement "that they (the Bank) would not proceed for collection until I either liquidated the debt as a cash flow or sold the property (owned by the partnership) in Manchester." The trial court held that the alleged oral agreement was an inadequate defense because it was barred by the parol evidence rule.

The purpose of the parol evidence rule is "to preserve the integrity of written agreements by refusing to permit the contracting parties to attempt to alter the import of their contract through the use of contemporaneous [or prior] oral declarations." LeDonne v. Kessler, 256 Pa. Super. 280, 286, 389 A.2d 1123, 1126 (1978), quoting Rose v. Food Fair Stores, Inc., 437 Pa. 117, 120-121, 262 A.2d 851, 853 (1970). The parol evidence rule in Pennsylvania holds that "[w]here parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the ...


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