Mulcahy v. Loftus

• Decision Date: 02 July 1970
• Citation: 439 Pa. 111,267 A.2d 872
• Parties: William F. MULCAHY, Appellee, v. John E. LOFTUS, Jr., also known as John Edward Loftus, Jr., Appellant, and Jeljr, Inc.
• Court: Pennsylvania Supreme Court

Page 872

267 A.2d 872

439 Pa. 111

William F. MULCAHY, Appellee, v. John E. LOFTUS, Jr., also known as John Edward Loftus, Jr. Appellant, and Jeljr, Inc.

Supreme Court of Pennsylvania.

July 2, 1970.

[439 Pa. 112] Milton Jacobson, Norristown, for appellant.

Edward J. Ozorowski, Geoghegan & Ozorowski, Norristown, for appellee.

Before BELL, C.J., and JONES, COHEN, EAGEN, O'BRIEN, ROBERTS and POMEROY, JJ.

OPINION OF THE COURT

POMEROY, Justice.

On February 28, 1967 John E. Loftus, Jr., individually, and Jeljr, Inc., by Loftus as its president and A. Watson as secretary, jointly executed and delivered a promissory note payable 60 days after date to the order of William F. Mulcahy in the amount of $10,000, with interest at the rate of 2 1/2% Per month. The note contained a power of attorney to confess judgment as of any term. The note was 'filed' in the Office of the Prothonotary of Montgomery County on March 6, 1967. Seven weeks later, on May 23, 1967, an assessment of damages was filed in the amount of $11,640.04 computed as follows:

                Unpaid principal            $10,000.00
                Interest from Feb. 28,1967
                to May 22, 1967 at 6%           140.04
                15% collection fee            1,500.00
                                            ----------
                                            $11,640.04
                

On July 21, 1967, defendants petitioned to strike off the judgment or in the alternative to open it. Jeljr also alleged that the loan evidenced by the note was without consideration as to it. Defendants' petition was dismissed and Loftus alone has appealed. ¹

There is no doubt that the note called for a usurious rate of interest. Act of May 28, 1858, P.L. 622, § 1, as amended, 41 P.S. § 3. This defect, however, rendered the note not void, but only voidable as to the interest specified beyond the lawful rate. Gerber's Estate, 337 Pa. 108, 137, n. 7, 9 A.2d 438 (1939). The payee holder did not seek to collect interest beyond the lawful rate. From and after the liquidation of the judgment by the filing of assessment of damages, the defendants' interest obligation was not excessive. The assessment cured any prior infirmity in the judgment itself. Housing Mortgage Corp. v. Tower Development & Investment Corp., 402 Pa. 388, 167 A.2d 146 (1961), relied upon by appellant, is not controlling. In that case a judgment entered by confession was stricken off for inclusion of an improper item unauthorized by the warrant of attorney. The judgment here, however, did not exceed the warrant. As we pointed out in...