Lincoln Bank v. C & H Agency, Inc.
| Decision Date | 31 December 1982 |
| Citation | 456 A.2d 136,500 Pa. 294 |
| Parties | LINCOLN BANK, formerly Lincoln National Bank, Appellee, v. C & H AGENCY, INC., Appellant. and LINCOLN BANK, formerly Lincoln National Bank, Appellee, v. Clare CORKERY and John Corkery, Terre-Tenant, Appellants. |
| Court | Pennsylvania Supreme Court |
Jerome L. Markovitz, Philadelphia, for appellee.
Before O'BRIEN, C.J., and ROBERTS, NIX, LARSEN, FLAHERTY, McDERMOTT and HUTCHINSON, JJ.
In February of 1966 John Corkery obtained a loan in the amount of $22,000 (Loan A) from Lincoln National Bank (hereinafter "the bank"). On the day of the loan, the bank obtained three promissory notes executed as follows:
(1) a note in the amount of $22,000 payable in twenty-two monthly installments signed "C and H Agency, Inc., John J. Corkery Pres." and also signed "John J. Corkery." Corkery is the president of a real estate firm by the name of C and H Agency, Inc.
(2) A one-day judgment note in the amount of $22,000 signed "C and H Agency, Inc., John J. Corkery, Pres."
(3) A one-day judgment note in the amount of $22,000 signed "Clare Corkery." Clare Corkery is John Corkery's mother and the owner of real estate which was attached pursuant to a Writ of Execution on this note.
The text of these one-day judgment notes is as follows:
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE
In March of 1966 the bank issued an additional loan to John Corkery in the amount of $100,000 (Loan B). This loan was co-signed by one Roy Riker. Corkery alleges that this loan, which was made to Riker after Corkery introduced Riker to the bank as a potential customer, was a business transaction which benefited both the bank and Riker, and that he, Corkery, never received any of the proceeds, although the evidence indicates that he is the maker of the note for this loan.
A third loan (Loan C) was made to Corkery and his wife in January, 1968 in the amount of $25,000. The evidence indicates that this loan was used in part to satisfy the balance outstanding on Loan A, and on January 11, 1968 the bank marked "cancelled" the installment note in the amount of $22,000. The bank did not cancel the one day judgment notes which had been executed at the same time as the installment note, however, and retained these one day judgment notes on the theory that they could be used as collateral to secure any other loans which had been or might in the future be made by Corkery. The remainder of Loan C not used to satisfy the balance owing on Loan A was taken in cash. However, Loan C was paid off in October of 1970. After October, 1970, then, remaining unpaid, in part, was Loan B, made by Corkery and co-signed by Riker, in the face amount of $100,000. Loan A and Loan C were satisfied.
For a period of time after March of 1966, the date of Loan B, installments on the Corkery-Riker loan were paid by Riker, at least until the Riker Delaware Corporation filed for bankruptcy in 1967. At that time the bank filed with the bankruptcy court a proof of claim based on Riker's obligation on the note and his pledge of over 30,000 shares of Riker Delaware Corporation stock to secure the $100,000 loan. From March of 1966 until February 1967, Riker paid the bank $38,000 on the loan. From February 1967 until July 1978, Corkery paid in excess of $16,000 on the loan. The bank's witness at deposition summarized the state of the Corkery-Riker loan as follows: 1
Bank Exhibit I. The evidence also indicated that since 1972 Corkery paid an additional $15,739 in interest and that the balance due on the Corkery-Riker loan at the time of the petition to open judgment was $35,335.
On October 31, 1966, roughly eight months after Loan A had been made, the bank caused judgment to be entered by confession against Clare Corkery and against C and H Agency, Inc. on the two judgment notes, each in the amount of $22,000. Between 1966 and 1976, a ten year period, various writs of revival of judgment were filed and were unopposed, and the amount of judgment was reassessed at $35,335. On April 1, 1976 a Writ of Execution was issued and served, and pursuant to that writ, the sheriff attached real estate owned by Clare Corkery. Execution was stayed and Corkery made various payments to the bank on the balance of Loan B until August, 1978, when Corkery, Clare Corkery, and C and H Agency filed petitions to open judgment. The bank answered and depositions were conducted. The trial court granted the petitions to open confessed judgment, but on appeal the Superior Court in a memorandum opinion vacated the trial court's orders. Lincoln Bank v. Clare Corkery and John Corkery, 289 Pa.Super 568, 429 A.2d 66 (1980).
Two primary issues arise on this appeal. The first is whether the bank may utilize the one day judgment notes which were executed in connection with Loan A to secure advances made in connection with Loan B. The second is whether, even if the bank may not utilize these notes to secure Loan B, petitioner may oppose the bank's confession of judgment on these notes when petitioner has not acted in a timely manner, waiting approximately twelve years after the notes were confessed to petition to open judgment.
The instruments reproduced above are divided into two distinct segments, the first segment, actually the note, specifies the amount of the note (twenty-two thousand dollars plus interest), when it is due, and to whom it is to be paid; the second segment, the enforcement provision, specifies the warrant of attorney. The pertinent language of the warrant of attorney segment is:
[T]he undersigned ... authorizes ... any Attorney of any Court of Record ... to appear and confess Judgment against them ... for the above sum, as of any term past, present, or future....
The bank's contention is that the language in the notes authorizing confession of judgment "for the above sum, as of any term past, present, or future" authorizes a confession in the amount of $22,000, the face amount of the note, plus interest and collection fees, for any outstanding debt, incurred by John Corkery, whether that debt is incurred in the past, the present or the future. In the case of the one day judgment note signed by Clare Corkery, the bank argues that such a note also secures any past, present or future indebtedness incurred by John Corkery. This contention is not based on the assertion that there was an agreement to extend these notes to loans other than Loan A, but merely that the notes themselves contain language which provides for this result. There is no evidence of record that there was a separate agreement between the bank and the Corkerys to extend the coverage of the one day notes to other loans...
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