M. H. Davis Estate Oil Co., Inc. v. Sure Way Oil Co., Inc.
| Decision Date | 04 May 1979 |
| Parties | M. H. DAVIS ESTATE OIL CO., INC., Appellant, v. SURE WAY OIL CO., INC. M. H. DAVIS ESTATE OIL CO., INC., Appellant, v. Barry L. HADLEY, Evelyn S. Hadley and Luther Smith. |
| Court | Pennsylvania Superior Court |
Argued Dec. 5, 1978.
William J. Litvin, West Chester, for appellant.
Lawrence A. Goldberg, West Chester, submitted a brief on behalf of all appellees.
Before VAN der VOORT, WIEAND and LIPEZ, JJ.
VAN der VOORT, Judge:
These are appeals by a creditor from orders of the lower court, on petitions filed in two companion cases, opening judgments confessed against defendants and permitting defendants to defend.
The plaintiff in each case is a supplier to the corporate defendant, Sure Way Oil Co Inc. at No. 816. The individual defendants at No. 817 are the President of Sure Way, his wife, and the secretary of Sure Way. Davis and Sure Way had done business with each other since October, 1972.
On May 4 1976 Sure Way was indebted to Davis in the approximate sum of $33,000.00 on an open account. Barry L. Hadley, as President and Luther Smith, as Secretary signed a corporate judgment note dated May 4, 1976 for $33,000.00 payable to M. H. Davis Estate Oil Co.
Barry L Hadley, his wife Evelyn S. Hadley and Luther Smith signed individually a second judgment note dated May 4, 1976 for $33,000.00 payable to M. H. Davis Estate Oil Co.
On May 7, 1976 plaintiff filed a complaint on each of the notes and took confessed judgments, the first against defendant corporation and the second against the three individual defendants.
On July 7, 1976 defendants filed "Petition(s) for Relief from Judgment by Confession" (considered by the lower court as petitions to open judgment).
The petitions for relief recite that plaintiff represented that if the notes were signed, plaintiff would take them to its bank "and would obtain money for the Petitioners from said bank."; and that defendants executed the notes "based upon the aforesaid representations."
The petitions also recite that when the notes were executed the "demand date was excluded", meaning that the date of payment at the beginning of the note form was not filled in.
Petitioners then claimed (P 6) that their signatures were "obtained through fraud and deceit by the creditor."
Plaintiff filed answers to the petitions, denying the representations; denying that the demand date was not filled in; and denying any fraud.
Defendants and plaintiff then took depositions in support of their respective positions; and on December 21, 1977 Judge Sugerman entered orders opening the judgments. From these orders plaintiff has filed these two appeals to this Court.
Thus, the test in evaluating the petitioners' evidence is not whether the evidence will probably win a verdict from a jury, but only whether there is sufficient evidence to allow the disputed issue to go to the jury: Wolgin v. Mickman, 233 Pa.Super. 218, 335 A.2d 824 (1975).
In this present case, as in Greenwood, supra the essential issue is whether there was fraud on the part of plaintiffs inducing the execution of the judgment notes.
Greenwood, and many other cases, defines fraud as the misrepresentation of a material fact upon which the other party relies to his detriment or injury.
Whether a fraud has been committed is almost always a question of fact for the jury, provided, however, that the evidence meets the so-called higher "equitable standard" of proof, that is to say it is
"clear, direct, precise and convincing" Kadilak's Est., 405 Pa. 238, 174 A.2d 870 (1961);
"precise, clear and indubitable" Laughlin v. McConnel, 201 Pa.Super. 180, 191 A.2d 921 (1963).
The defendants' offer of proof of fraud in this case derives almost entirely from the deposition of Barry Hadley. He says that on May 3, 1976, Boyd C. Davis, Jr., Vice-President of the corporate plaintiff, told Hadley by phone that:
(Record, 42a).
"At anytime that these papers were given to you, did Mr. Davis explain to you that it was his intention to have these notes entered into the Court House in Chester County?"
"No" (50a)
(Davis said:) "These would be taken to the bank and they would give him $33,000.00" (50a)
"Did you, as far as you know, get anything as consideration for signing these notes?" (51a)
"No" (52a)
Cross Examination:
"Did you read the note?"
(60a)
" . . . She (his wife) just looked at it and she didn't read it in detail."
"You did explain to her, nevertheless, what the note was for?"
(61a).
Boyd C. Davis, Jr. deposed that his company did business with Sure Way Oil Co., beginning in 1972; that its indebtedness to Davis grew to $46,000.00 or $47,000.00 in the winter of 1975; and was $33,000.00 in the Spring of 1976; that "we were concerned about the size of it" (record 112a); that he had tried unsuccessfully in 1975 to help defendant corporation get credit from a local bank; that he knew defendant approached three banks without success; that he prepared two notes for execution respectively by this corporate defendant and the individuals:
Cross Examination:
" . . . in May of 1976 you had an open book account with no security which you then attempted in May of 1976 to make secure?"
"That is correct." (125a)
"I don't believe so, no."
"I told Barry that he could take the note, as such, and it would secure the line of credit that we had given him and we could use it to secure the line of credit that we needed to keep on buying the products on credit and selling it to him." (126a).
"I did not tell him I was going to turn it in to my bank." (127a).
The above summary and quotes seem to us to include all of the testimony of Hadley and Davis pertaining directly to the representations or misrepresentations made by Davis to secure the execution of the notes. Judge Sugerman says, (page 9 of his opinion, page 47 of appellants' brief) that:
"If Hadley's oral testimony were the only evidence of fraud, we would not grant the defendants relief as such testimony was diametrically opposed by the testimony of Davis . . . Hadley's uncorroborated testimony is not of sufficient weight as a matter of law to meet the standard for submission of the question of fraud of a jury . . . "
We agree up to this point.
Judge Sugerman, however, found in the record "corroboration of Hadley's testimony".
This "corroboration" comes from some bizarre circumstances to which we estimate that 70 to 80 percent of the depositions are directed, specifically whether the due date had been filled in on the two judgment notes before they were signed by Mr. and Mrs. Hadley, and Mr. Smith, and whether the signatures of an attesting witness were added to the notes after delivery of the notes by Hadley to Davis.
The two judgment notes on which judgments were entered by confession are each witnessed by "L. Melva Thomas" on signature lines at the lower right. Each note also has typed in at the top center the words "On Demand" above a dotted line, and before the printed words "after date", etc.
The defendants produced at the depositions photostatic copies of each of these notes [2] which contained no attesting signatures, and no typed words saying "On Demand".
Hadley and Smith both testified that the due date was blank when they signed the notes, and that they were not witnessed.
Boyd Davis Jr. testified "definitely" that the words "on demand" were filled in on the notes when given to Hadley (Record 116a and 130a) [3] and denied that the words...
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