Opinion
April 24, 1931.
July 8, 1931.
Judgments — Opening of — Non-negotiable instruments — Assignee — Defenses of maker.
On a petition to open judgments entered by confession by the use plaintiff on non-negotiable instruments, the defendant's petition and depositions presented a good defense as against the legal plaintiff. The alleged defense existed long prior to the assignment of the notes to the use-plaintiff.
In such case it was error to discharge the petitioner's rule and the order of the court below will be reversed with directions that the judgments be opened so as to permit the defendant to present his defense.
A note which authorizes an immediate confession of judgment, instead of merely a confession of judgment if not paid at maturity, is a non-negotiable instrument. The assignee of a non-negotiable instrument takes it subject to any defenses the maker might then have against the payee and legal plaintiff.
Appeal No. 64, April T., 1931, by David Breyer from order of C.P., Allegheny County, April T., 1930, No. 477, in the case of John W. Kaszer, for use of the Ohio Valley Trust Company, a Pennsylvania Corporation v. Louis Breyer and David Breyer.
Before TREXLER, P.J., KELLER, GAWTHROP, CUNNINGHAM, BALDRIGE and DREW, JJ. Reversed.
Rule to open judgments. Before GRAY, J.
The facts are stated in the opinion of the Superior Court.
The court discharged the rule. David Breyer appealed.
Error assigned, among others, was the order of the court.
Morse J. Keller, for appellant.
W.T. Tredway, for appellee.
Argued April 24, 1931.
The court below refused to open a judgment entered by confession against the appellant and his son, Louis Breyer, on the ground that the appellee, the use plaintiff, was an innocent purchaser for value of the notes and therefore not subject to the defense which appellant had against the payee and legal plaintiff. But the notes were not negotiable. They authorized an immediate confession of judgment, instead of merely a confession of judgment if not paid at maturity: Milton Natl. Bank v. Beaver, 25 Pa. Super. 494; Continental Guaranty Corp. v. Hughes, 81 Pa. Super. 264; Hoverter v. Consedine, 82 Pa. Super. 294; and hence the notes in the hands of the use plaintiff were subject to any defenses this appellant might have against the payee and legal plaintiff which existed prior to notification to appellant of the assignment of the notes.
The court below frankly said that there was sufficient testimony to support the averments of the petition to open as to Kaszer, "and if he were the plaintiff we would make the rules to open absolute;" but by an oversight treated the notes as if they were negotiable, and disposed of the case as if the use plaintiff were the holder in due course of negotiable paper; which it was not.
The petition and depositions presented a good defense on the part of this appellant to the notes as against Kaszer, the legal plaintiff, which existed long prior to any notice to appellant of the assignment of the notes. The defense would accordingly be valid as against the use plaintiff and the judgment should have been opened that it might be presented.
Order reversed, with directions that the judgment be opened as to appellant and that he be permitted to make defense to the same.