Universal Builders Supply, Inc. v. Shaler Highlands Corp.

• Decision Date: 14 November 1961
• Citation: 175 A.2d 58,405 Pa. 259
• Parties: UNIVERSAL BUILDERS SUPPLY, INC., Appellant, v. SHALER HIGHLANDS CORPORATION, Defendant, and North Hills Homes & Development, Inc., Intervening Defendant. UNIVERSAL BUILDERS SUPPLY, INC., Appellant, v. SHALER HIGHLANDS CORPORATION.
• Court: Pennsylvania Supreme Court

175 A.2d 58

405 Pa. 259

UNIVERSAL BUILDERS SUPPLY, INC., Appellant, v. SHALER HIGHLANDS CORPORATION, Defendant, and North Hills

Homes & Development, Inc., Intervening Defendant.

UNIVERSAL BUILDERS SUPPLY, INC., Appellant, v. SHALER HIGHLANDS CORPORATION.

Supreme Court of Pennsylvania.

November 14, 1961.

John A. Metz, Jr., Guy L. Warman, Metz, Cook, Hanna & Kelly, Pittsburgh, for appellant.

William L. Jacob, William L. Jacob, Jr., Pittsburgh, John F Gloeckner, Pittsburgh, for appellees in No. 185.

John F. Gloeckner, Frank J. Zappala, Jr., Pittsburgh, for appellee in No. 227.

Before BELL C. J., and MUSMANNO, JONES, COHEN, EAGEN and ALPERN, JJ.

JONES Justice.

The instant appeals, involving three Pennsylvania corporations, question the propriety of an order of the Court of Common Pleas of Allegheny County which made absolute a rule to stay an execution on a judgment and, by the same order, disposed of a petition and rule to open judgment without affording an opportunity for answer or hearing.

On July 16 1957, Shaler Highlands Corporation[Shaler], owning 37 acres of land in Shaler Township, Allegheny County, and desirous of developing the same, entered into an agreement with Universal, Builders Supply, Inc.[Universal] whereby Universal was to advance to Shaler not more than $50,000 in exchange for a $90,000 mortgage.^[1] Pursuant to this agreement Universal advanced to Shaler only $18,978.95.Differences thereafter arose between the parties and Universal decided to foreclose, at which time, August 14, 1959, Shaler instituted an equity action to restrain the contemplated foreclosure and seeking other relief.Following the taking of testimony and negotiations, a consent decree was entered which provided, inter alia:

'* * * It is ordered and decreed that Shaler Highlands Corporation, plaintiff, shall pay to Universal Builders Supply, Inc., defendant, the sum of Twenty-nine thousand ($29,000.00) Dollars within sixty days from the date of this order and in addition interest at the rate of six per cent per annum, Shaler to have the privilege of anticipating the entire amount or any part thereof.In the event payment is not made as herein provided, Universal Builders Supply, Inc., shall have the right to proceed on its mortgage covering properties of plaintiff without further delay.'(Emphasis supplied.)

Shaler failed to pay the agreed sum, or any part thereof, within the sixty day time limit which expired on December 20, 1960 and on December 23, 1960, Universal entered judgment by confession and issued execution thereon against Shaler on the mortgage bond for $58,978.95 plus interest at 4% from July 13, 1957($8,633.40) and attorneys' commission of $3,380.62 or a total of $70,993.05.^[2]

On January 6, 1961, Shaler executed an agreement of sale covering the mortgaged property to North Hills Homes & Development, Inc.[North Hills] for the sum of $40,000.On January 9, 1961, North Hills tendered the sum of $29,000 to Universal in satisfaction of the judgment but Universal refused the tender.Thereafter, on February 3, 1961, North Hills, not then a party to the proceedings, petitioned for a stay of execution and prayed for a rule on Universal to show cause why it, Universal, should not be required to accept the sum of $29,000 plus interest and costs in satisfaction of the judgment.Universal responded to the petition denying that North Hills had any standing to assail the execution and further alleging that, under the consent decree, Universal was free to proceed on its mortgage and was not required to accept the $29,000 in satisfaction thereof.

On February 16, 1961, the court permitted North Hills to intervene nunc pro tunc as a partydefendant in the execution proceedings.On April 19, 1961the court heard argument on the petition, answer and depositions.

Shaler on May 15, 1961 petitioned the court for a rule to show cause why the judgment should not be opened which rule was granted by the court.Universal never received nor was it given notice that the rule was granted, although the record discloses that it was given notice that the petition for the rule was to be presented.No answer was filed nor was there ever a hearing or argument on this rule.

On May 17, 1961, the court below filed an opinion and order making absolute the rule granted on petition of North Hills to stay the execution and ordering Universal to accept the sum of $29,000 plus interest at 6% from October 20, 1960 and to satisfy the judgment.This action of the court was premised on its conclusion that, under Cochrane v. Szpakowski,355 Pa. 357, 49 A.2d 692, it had the power to extend the time for performance provided in the consent decree and that under the authority of Sinking Fund Commissioners of City of Philadelphia v. City of Philadelphia,324 Pa. 129, 188 A. 314, 113 A.L.R. 202, it had the power to modify the consent decree.Believing it possessed such power and concluding further that it would be unconscionable to permit Universal to receive a $40,000 bonus where it had advanced but $18,978.95, the court modified the consent decree and required Universal to accept the compromise sum of $29,000 even though the time specified for payment in the decree had expired or passed.This order is the subject of AppealNo. 185.

On the same date the court endorsed upon its order granting the rule on Universal to show cause why the judgment should not be opened, a notation to see the opinion and order filed in the matter of North Hills' petition to stay the execution.The reason for this action of the court is explained in the court's opinion:

'The same facts are made the basis for relief in the latter petition, and the same reasons for granting or refusing the relief requested are applicable in the two matters.Since Shaler has now directly attacked the judgment entered, the question as to whether or not North Hills is a proper party in interest is moot.The opinion disposing of the petition filed by North Hills will likewise determine the issues raised by Shaler.'

From this somewhat informal order disposing of Shaler's petition and rule, Universal has taken AppealNo. 227.

Universal presently contends: (1) that North Hills lacked standing to attack the judgment by a petition for a stay of execution and that the court below erred in permitting it to so attack the execution; (2) that the court below was without power or authority to modify the consent decree and require Universal to accept the sum stated in such decree after the specified time for payment had expired; and (3) that the procedure followed in disposing of Shaler's petition and rule to open judgment was a denial of due process in that it wiped out Universal's judgment without permitting Universal to have its day in court.

It has been stated that before one, not a party of record, can be heard to challenge the execution process issued on a judgment, he must obtain leave to become a party by application based on sufficient grounds.Lietka v. Hambersky,167 Pa.Super. 304, 307, 74 A.2d 698.It is obvious that this procedure was not followed in the instant case.However, the record does reveal that North Hills was permitted to intervene nune pro tunc, and while we do not approve of such practice, the facts reveal that North Hills did have an interest in the subject matter and also that the judgment has been attacked directly by Shaler.

Under these facts and circumstances we find no reversible...