Charmwood, Inc. Appeal

187 A.2d 296, 200 Pa. Super. 140, 1962 Pa. Super. LEXIS 479
CourtSuperior Court of Pennsylvania
DecidedDecember 18, 1962
DocketAppeal, No. 254
StatusPublished
Cited by4 cases

This text of 187 A.2d 296 (Charmwood, Inc. Appeal) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charmwood, Inc. Appeal, 187 A.2d 296, 200 Pa. Super. 140, 1962 Pa. Super. LEXIS 479 (Pa. Ct. App. 1962).

Opinion

Opinion by

Flood, J.,

This is an appeal from the refusal of the court below to set aside a sheriff’s sale of real estate, title to which was held by two parties described as partners trading under a firm name, upon a judgment representing a firm debt, but entered against the two partners individually without mention of the partnership name.

[142]*142On October 1, 1960, a tract of land in Franklin Township, Westmoreland County, consisting of eight lots was conveyed by deed, recorded the same day, to “Samuel DeLullo and Nick DeLullo, partners trading as DeLullo Bros. Construction Co.” To obtain capital to build upon two of the lots the DeLullo brothers on February 27, 1961, borrowed $36,000 from the plaintiff and as security executed in its favor their bond secured by a mortgage on the two lots. The bond and mortgage were executed by Samuel J. DeLullo and Nick A. DeLullo without mention of the partnership name. On November 30, 1961, judgment was entered under the warrant contained in the bond in favor of the plaintiff against Samuel J. DeLullo, also known as Samuel DeLullo, and Nick A. DeLullo, also known as Nick DeLullo. Thereafter the sheriff levied upon the two properties upon which dwellings had been erected and at a sheriff’s sale held January 2, 1962, they were purchased by the plaintiff for $1. The advertisement of the sheriff’s sale described the property to be sold as the property of Samuel J. DeLullo, also known as Samuel DeLullo, and Nick A. DeLullo, also known as Nick DeLullo.

On November 9, 1961, prior to the entry of the judgment, Charmwood, Inc., the appellant, had filed a mechanics’ lien covering the two lots and the dwellings erected thereon against Samuel DeLullo and Nick De-Lullo, trading as DeLullo Bros. Construction Co. On January 12, 1962, Charmwood, Inc. filed a petition and rule to set aside the sheriff’s sale held on January 2, 1962, upon the ground that the judgment under which the execution sale was held was not a judgment against the partnership in whose name the title stood. The court below discharged the rule because, while the property sold was partnership real estate, both partners had signed the bond and mortgage, and the mortgage described the property and recited the deed by [143]*143which they obtained the property. - .The court also held that the appellant cannot be heard to say that it did not have notice of the mortgage because it knew that the partnership was composed solely of the two individuals.

Admittedly, the DeLullo brothers were -engaged in the construction business as partners, the encumbered lots were partnership real estate - and the - bond and mortgage were given to secure a loan for the -purpose of carrying on the business, of the partnership. ■

The appellant argues that the judgment does not bind the partnership because the action was not brought against it in accordance with Pa. R. C. P. 2128(a). However, the precise question before us, as stated above, is whether partnership real estate; recorded in the names of all the partners trading under a firm, name, is subject to execution upon, a judgment representing a firm debt but entered against .all the partners individually without mention of . the partnership name. The rules do not specifically cover this question. Pa. R. C. P. 2132(a) provides what happens with regard to judgment and execution if suit is brought-against the partnership only. Pa. R. C. P. 2132(b) provides what happens with regard to judgment and execution if suit is brought against the individual park ners “trading in the firm name”. The appellant argues that, since the rules are silent as to what happens when judgment is taken against the partners only, there is no authority for subjecting partnership real estate to execution on such a judgment, especially since Pa. R. C. P. 2128(a) does not provide for suit or judgment against the partnership in -this form.

As against this, however, the Uniform Partnership Act in §10(5), 59 PS §32(5) provides: “Where the title to real property is in the names of all the partners, a conveyance executed by all the partners passes all their rights in such property.”: If partnership real [144]*144estate standing in the name of all the partners can be so conveyed by the voluntary act of all the partners, it should follow that it can be involuntarily transferred by a sheriff’s sale on a judgment for a firm debt entered against all the partners individually. “Unless the property in question is exempt from sale by virtue of some positive rule of law, a court as a general rule, has power in a proper case to sell under a judicial sale any property, real or personal, tangible or intangible, which may be sold and transferred by the owners thereof at voluntary sale.” Brennan v. Pittston Brewing Corporation, 344 Pa. 495, 497-498, 26 A. 2d 334, 335 (1942).

In support of its ruling the court below cited Overholt’s Appeal, 12 Pa. 222 (1849). In that case, the Supreme Court reversed the refusal of the court below to direct an issue to determine whether a note signed jointly by the partners was a partnership obligation and the real property sold in execution thereunder was partnership property. The court said: “The object of the application is for liberty to show that the bond was given by defendants as partners and for a partnership debt. We see nothing in the proposal contradicting the judgment; but a mere explanation. A firm may exist, as is correctly said, and often does, without being designated by any name, and in bringing suit against a firm of that kind it is sufficient to designate the names of the parties, as in this case, and it is unnecessary to allege the existence of a partnership firm. In Dana v. Abbott, 2 McLean 27, it was decided that in an action against the maker of a note signed A. & B., it is unnecessary to allege a partnership between the makers.”

The appellant calls attention to the sentence of the Overholt opinion which follows the portion just quoted: “It is only, as is ruled 1 Denio, 471, 402, when partners have a partnership name, that they will be [145]*145bound only by that name.” However, the two cases cited, Bank v. Monteath, 1 Denio 402 (N.Y. 1845) and Palmer v. Stephens, 1 Denio 471 (N.Y. 1845) do not aid the appellant. Bank v. Monteath, supra, is not authority for the proposition that when partners have a partnership name they will be bound only by that name. It is rather authority for the. proposition that when the partners carry on business in the name of one of the partners and the name partner executes a note in his own name, no proof is necessary in an action against the partnership that the note is a partnership obligation unless it is also shown that the name partner who executed the note also carried on another business under his own name. Palmer v. Stephens, supra, was concerned with a note signed by “G. Stephens per W.G.S.” A firm consisting of G. Stephens and his sons did business under the name of G. Stephens and Sons, but never used the name of G. Stephens. One of the partners of G. Stephens and Sons was W. G. Stephens, son of G. Stephens. W. G. Stephens had no authority to execute notes for G. Stephens individually but did have authority to do so for the partnership, G. Stephens and Sons. It was held that in the absence of any evidence that the partnership had ever used the name “G. Stephens”, W. G. Stephens alone was bound on the note and the partnership was not.

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Cite This Page — Counsel Stack

Bluebook (online)
187 A.2d 296, 200 Pa. Super. 140, 1962 Pa. Super. LEXIS 479, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charmwood-inc-appeal-pasuperct-1962.