Gagnon v. Speback

118 A.2d 744, 383 Pa. 359, 1955 Pa. LEXIS 361

• Court: Supreme Court of Pennsylvania
• Decided: November 28, 1955
• Docket: Appeal, 122
• Status: Published

Opinions

Opinion by

Ms. Justice Arnold,

Defendants appeal from the discharge of a rule to show cause why judgment should not be opened. The judgment was entered on November 2, 1953, by confession upon a note executed on October 31, 1952, by defendant Kuznesld in the name of the partnership. Kuznesld and Spevack comprised the partnership.

The note was given in payment of one-half of the purchase price for potatoes bought from plaintiff and sold and disposed of by the defendant-partnership. At the same time, plaintiff delivered to Kuzneski a bill of sale which provided in part: “. . . this sale is made with the empress understanding that there is no warranty of quality or quantity whatsoever.” (Italics supplied). Also noted on the bill of sale was an acceptance in the name of the partnership, signed by Kuzneski.

The petition to open averred, inter alia: “3. On November 2, 1953, judgment was entered D.S.B. against petitioners [defendants] upon a judgment note issued October SI, 1952 by Charles Spivak and Company, a partnership then existing, through Andrew Kuzneski, partner. 4. . . . The said pptatoes were purchased upon sample and upon the express representation given petitioners by plaintiff that . . . [they] .were merchantable, . , . and containing less than one percent unmerchantable potatoes. . . 5. . . ..petitioners, through Andrew Kuzneski,. . . did execute the said judgment note . . . petitioners would not have executed the said judgment note or delivered same to plaintiff, except for their complete reliance upon the said representations. . . 6. . . . over seventy-five percent of the said potatoes were . . . unmerchantable ... 7. Plaintiff well knew at the time of his said representations . . . that [they] . . . were . . . unmerchantable.” (Italics supplied). It also averred that the sale had been made upon an oral contract.

The petition was sworn to by both partners. Plaintiff filed an answer making proper denials and also pleading the written contract — the bill of sale heretofore mentioned.

Depositions taken on January 30,1954, were offered in evidence at hearing held on February 2, 1954, at which time additional testimony was taken. Plaintiff objected throughout to all parol evidence tending to vary the terms of the written contract, but it was received subject to further ruling thereon by the court. Subsequently, on May 3, 1954 — the date fixed for argument on the record — defendants asked leave to amend their petition and plaintiff filed answer to the rule issued thereon. Not until May 3, 1954, was Kuzneski’s authority to execute the warrant of attorney denied. On July 23, 1954, an amended petition to open, sworn to by Spevack only, was filed. This averred that Kuzneski had executed the note without authority to bind the partnership by the warrant of attorney. Plaintiff having filed answer, further hearing was had on November 17, 1954, to determine whether filing of the amended petition should be permitted, and whether, if filed, judgment should be opéned on those grounds. The court discharged the rule; hence this appeal. ■

Whether or not a judgment should be opened is within the sound discretion of the court; and its action will not be reversed on appeal unless an abuse of that discretion appears: Deviney v. Lynch, 372 Pa. 570, 574, 94 A. 2d 578.

An examination of the testimony, as well as the pleadings in this case, leaves no doubt that the saie was upon a written contract, the bill of sale, and that there was nothing to call for any alteration of its terms by oral evidence. “The parol evidence rule . . . provides that where parties to an agreement commit their undertakings to a writing with the intention that it shall formally and comprehensively evidence the terms of their agreement, the writing when executed by the parties, cannot thereafter be made subject to parol alteration, contradiction or variance by way of agreements or understandings had prior to or contemporaneously with the execution of the writing . . . But, . . . evidence of prior or contemporaneous agreements of the parties is admissible to alter, contradict or vary the terms of their writing where the omissions therefrom occurred by reason of either fraud, accident or mistake”; International Milling Company v. Hachmeister, Inc., 380 Pa. 407, 414, 110 A. 2d 186.

The evidence here established that in the course of negotiations for purchase, Kuzneski and plaintiff went to the place of storage where Kuzneski saw, and had an opportunity to examine, the potatoes. Plaintiff offered alternatively to grade and bag the potatoes (at a higher price), or to sell them “in place,” and Kuzneski chose the latter method. The bill of sale was read, and expressly accepted, by Kuzneski prior to delivery of the note or the potatoes. The partnership thereafter took possession of the potatoes, graded and sold them, and received the proceeds.

Nowhere has any of the parties proved that the representation of fitness, if made, was omitted by fraud, accident or mistake. Thé most that was established was that plaintiff thought that about 1■% were unfit. Furthermore, defendants could have examined and determined for themselves the merchantability of the potatoes. Nothing was hidden from them by plaintiff. Moreover, it is not conceivable that, if such representation had been made, the defendants would have accepted the bill of sale as written, the provision against warranty being so strongly stated.

Defendants also contend that the execution of. the note with warrant of attorney to confess judgment against the partnership was without authority and not binding upon it. They proved that their partnership agreement provided that neither party “shall, without the written consent of the other, in behalf of the firm: ... (b) Make, execute and deliver . . . confession of judgment. . .”

It has been heretofore noted that such lack of authority was not averred in the original petition to open, which was sworn to by not only Kuzneski but also Spevack. And in the original petition the averment was affirmatively that the “judgment note [was] issued . . . by. Charles Spivak and Company, a partnership . .- . through Andrew Kuzneski,. partner.” The evidence firmly establishes that Spevack knew everything that had been done, including the delivery of the judgment note. He had knowledge of it certainly no later than March 10, 1953,¹ and his testimony shows that he knew about it prior thereto.² At no time did he disavow its legality or binding effect. His only excuse for non-payment was that the potatoes were unfit. On several occasions prior to March 10, 1953, he had talked with plaintiff relative to payment of the note, and did not then deny authority. He was advised in writing by plaintiff’s attorney on March 10, 1953, that he had his “judgment note . . . for collection [which] provides for an attorney collection fee . . . [and unless I] hear from you on or before March 20, 1953, concerning the settlement of this note, ... I will be compelled to have judgment confessed and execution issued thereon.” Not until May 3,1954 — some 18 months after execution of the note; six months after confession of judgment; and after several hearings on the petition to open — did he try to deny authority in Kuzneski to bind the partnership under the warrant of attorney. The circumstances established at the very least a ratification of Kuzneski’s acts. Cf. Montgomery v. Van Ronk, 328 Pa. 508, 195 A. 910; National Bank of Fayette County v. Valentich, 343 Pa. 132, 22 A. 2d 724; Sterle v. Galiardi Coal & Coke Co., 168 Pa. Superior Ct. 254, 77 A. 2d 669.

In the Sterle case, appellant complained that the judgment was improperly confessed for lack of an averment that the partner had authority to execute the warrant of attorney and confess judgment against the partnership. The Court held, at page 259: “ ‘It is true that the action of a single partner in executing a warrant of attorney to confess judgment is not binding on the partnership unless authorized by the other partners or subsequently ratified by them, but a judgment entered by virtue of such a warrant is merely voidable, and not void. . .’ ” Spevack’s conduct manifested his consent to be a party to the transaction and to bind the partnership thereby. From all of the circumstances, we can find no abuse of discretion in the court’s refusal to open judgment.

Order affirmed.

1 On March 10, 1953, the plaintiff’s attorney wrote the following letter to the partnership: “Xour judgment note dated October 31, 1952 and payable in fifteen (15) days to Edward P. Gagnon, in the sum of $15,000.00 has been handed to me for collection. This note further provides for an attorney collection fee . . . Please let me hear from you on or before March 20, 1953, concerning the settlement of this note, or I will be compelled to have judgment confessed and execution issued thereon.”

2 Spevack testifiéd, in part:' “Q. After the potatoes were removed from the storehouse, whatever you removed from it in Potter County did you ever contact Mr. Gagnon about this note? A. .No, sir. Q. Did you ever talk to him about it over the telephone? A. Oh yes; you mean after the potatoes, went out? . . . Q. And your conversation was it not with reference to the paying of this note? A. That is right. Q. Did you talk to him about it before I wrote you? A. Several times. Q. And on each one of those conversations you complained to him that the potatoes were not in good condition, and you lost'money on them? A; That is right. Q. Then finally I wrote you [letter quoted above] in the spring of 1953,- or early summer, about this note; did you call me on the telephone? A. Yes,I called you on the telephone. Q. During that conversation you' told me that the potatoes had a lot of bad ones in them and you didn’t make out? A. We lost a lot of money oh them.”