author: HOFFMAN, Judge:

text:
    510 A.2d 722
    Eugene McNALLY & Kathleen McNally, Appellants, v. James DAGNEY & Lucille Cavallero (Two Cases).
    Superior Court of Pennsylvania.
    Submitted Dec. 18, 1985.
    Filed April 14, 1986.
    Reargument Denied June 19, 1986.

      Allen L. Feingold, Philadelphia, for appellants.
    Edward J. Carney, Jr., Media, for appellees.
    Before CAVANAUGH, WICKERSHAM and HOFFMAN, JJ.
   HOFFMAN, Judge:

This is an appeal from the lower court’s January 15, 1985 order, docketed on January 28, granting appellees’ motion to dismiss appellants’ action. Appellants contend that (1) the trial court erred in effectively overruling the order of a judge of “coordinate jurisdiction,” (2) the trial court improperly took judicial notice of the record of a proceeding not before it, and (8) they are entitled to recover in this third-party liability action because their damages are in excess of those recovered in a previous uninsured motorist arbitration proceeding. For the following reasons, we reverse the lower court’s order and remand for further proceedings consistent with this opinion.

On March 1, 1981, appellant Eugene McNally was a passenger in an automobile driven by appellee James Dagney and owned by Dagney’s wife, appellee Lucille Cavallero. They were involved in an auto accident with an unknown car and driver. Appellant suffered various injuries and required periods of hospitalization in three different hospitals. Both appellant and appellee Cavallero have insurance policies with Nationwide Insurance Company. Appellee Dagney is listed on Cavallero’s policy as a named insured and was driving the car with her permission on the day of the accident.

Appellant Eugene McNally brought an action under the uninsured motorist provision of his policy, and the matter was heard by common law arbitration on April 23, 1984. The arbitrators determined that stacking of both appellant’s and appellee Cavallero’s policies was appropriate; each had a $15,000 policy. The panel of three arbitrators, with one arbitrator dissenting, awarded appellant $27,500 out of a possible recovery of $30,000. Appellant filed exceptions that were denied by Judge White on August 21, 1984, and this Court affirmed. McNally v. Nationwide Insurance Co., 348 Pa.Superior 637, 501 A.2d 295 (1985) (per curiam).

On January 26, 1983, while the uninsured motorist claim was pending, appellants brought this separate trespass action against appellees. Appellees filed a motion for summary judgment that Judge Jerome denied on July 2, 1984, and the case was listed for trial. Appellees thereupon filed a motion for continuance, a supplemental motion for continuance, and a motion to dismiss that was, in effect, another motion for summary judgment. The lower court granted the motion to dismiss, and this appeal followed.

Appellants, citing Reifinger v. Holiday Inns, Inc., 315 Pa.Superior 147, 461 A.2d 839 (1983), first contend that the lower court improperly overruled Judge Jerome’s order denying appellees’ motion for summary judgment. They argue that appellees, at the hearing on their motion to dismiss, sought to bar appellants’ recovery on the same ground as appellees relied upon in their motion for summary judgment, namely, this Court’s decision in Rossi v. State Farm Automobile Insurance Co., 318 Pa.Superior 386, 465 A.2d 8 (1983), allocatur denied. We find no error in the trial court’s ruling on appellees’ motion to dismiss.

In Reifinger, we noted the general rule that, “[a]bsent some new evidence, it is improper for a trial judge to overrule an interlocutory order of another judge of the same court in the same case.” Reifinger v. Holiday Inns, Inc., supra 315 Pa.Super. at 151, 461 A.2d at 842 (citing Commonwealth v. Griffin, 257 Pa.Superior 153, 157, 390 A.2d 758, 760 (1978)). Here, however, the record before the trial court was materially different from that before Judge Jerome. In their answer to appellees’ motion for summary judgment, appellants argued that appellees’ motion must fail for three reasons, one of which was that appellant Eugene McNally’s exceptions to the arbitrators’ award in the uninsured motorist arbitration proceeding were still pending. Accordingly, Judge Jerome may have denied appellees’ motion for summary judgment simply because the arbitration award, the scope of which forms the basis of the parties’ contentions in this case, was not yet final.

Appellants next contend that the trial court erred in relying on the record of the uninsured motorist arbitration proceeding in ruling on appellees’ motion to dismiss. This claim is meritless. At the hearing on appellees’ motion, the following exchange occurred:

THE COURT: All right. May I consider then, that [the record of the arbitration proceeding] is part of the record if by no other way, by way of [appellees’ motion to dismiss], and it may be considered by the Court? • [Appellants’ counsel]: If it is necessary to consider it in your decision, Your Honor, we have no objection.

N.T. December 13, 1984 at 9. Indeed, we find it difficult to understand how appellants could have objected; they are not entitled to recover duplicate damages, and thus it was necessary for the lower court to review the record of the arbitration proceeding to determine if such recovery was being sought in the instant case.

Appellants last contend that they are entitled to recover damages in this action because their damages “are far in excess” of their recovery in the uninsured motorist arbitration proceeding. Appellees, on the other hand, argue that appellants are barred from recovery here either under the principle of collateral estoppel or this Court’s decision in Rossi, supra.

In Rossi, we held that a recipient of insurance benefits, who is fully compensated for the injuries suffered, cannot seek to recover the loss a second time under a different provision of the same policy. Rossi v. State Farm Automobile Insurance Co., supra 318 Pa.Super. at 390, 465 A.2d at 10. The lower court, finding “no suggestion in [the] arbitration award ... that it ... was anything short of a total award fully compensating [appellants] for those damages found after the arbitration hearing,” Lower Court Opinion at 4, held that appellants’ instant trespass action was barred under Rossi. Appellants argue, however, that there is “no identity of damages” in the two actions because they limited their damage claims in the arbitration proceeding “to a specific period of time and [to] only part of the damages claimed by [appellant], Eugene McNally.” Brief for Appellant at 17.

On the record before us, we cannot determine whether appellants are seeking to recover identical damages here. Cf. Rossi v. State Farm Automobile Insurance Co., supra 318 Pa.Super. at 390-91, 465 A.2d at 10 (upon review of the record, this Court convinced that the plaintiff sought the same special and general damages in an uninsured motorist arbitration proceeding as she received in a settlement for which she released her claims under the liability provision of the insured’s policy). To the extent that appellants are submitting the same claims, appellees may be correct in their assertion that appellants are collaterally estopped from relitigating the amount of damages awarded on those claims. See id., 318 Pa.Superior Ct. at 391, 465 A.2d at 10 (the only difference between the arbitrators’ award and the settlement was a difference of opinion as to the value of the plaintiff’s general damages). We believe, nonetheless, that appellants should be given the opportunity to submit proof of damages on claims not presented to the arbitrators. Appellees may, of course, argue that appellants presented those same claims to the arbitration panel. Again, we emphasize that we cannot make that determination on the present record. Accordingly, we reverse the lower court’s order granting appellees’ motion to dismiss and remand for further proceedings consistent with this opinion.

Lower court’s January 28, 1985 order in No. 308 PHL 85 is reversed and case is remanded for further proceedings consistent- with this opinion. Jurisdiction is relinquished.

Appeal at No. 707 PHL 85 is quashed.

      . Appellants also appealed from the judgment entered in favor of appellees and against them on the basis of the order. Because we treat appellees’ motion to dismiss as a motion for summary judgment, and orders granting a motion for summary judgment are appealable, Whirley Industries, Inc. v. Segel, 316 Pa.Superior 75, 78-79, 462 A.2d 800, 802 (1983), the appeal from the judgment was improper. Cf. Pa.R.A.P. 301(c). Accordingly, we will quash the appeal in No. 707 PHL 85.

      . We have renumbered appellants’ statement of the questions involved to comport with our disposition of this case.

      . Appellant Kathleen McNally was not a party to the uninsured motorist arbitration proceeding.

      . Appellees filed the motions for continuance because, believing that it would control the result in this case, they wished to await the outcome of the appeal of the uninsured motorist action to this Court.

      . The record of the arbitration proceeding includes the award (and attached dissent), Judge White’s order denying appellant Eugene McNally’s exceptions, and the notes of testimony of the arbitration hearing.

      . Appellants also argue that Rossi was overturned by the memorandum opinion supporting this Court’s per curiam order in Tyler v. Ohio Casualty Group, 333 Pa.Superior Ct. 636, 482 A.2d 672 (1984). See Brief for Appellant at 76-77. We note, however, that memorandum opinions are unpublished and "may not be cited as precedent in any brief, argument or subsequent opinion.” Business of the Superior Court of Pennsylvania, Internal Operating Procedures V.8. at 9 (1983). Accordingly, even assuming, arguendo, that appellants are correct in their reading of Tyler, we do not, and cannot, consider it here.

      . The complaint in the uninsured motorist action is not a part of the instant record. We would have found a comparison between it and the instant complaint helpful in determining whether appellants seek the same damages here. Nor are appellants’ complaint and joint tortfeasor release relating to a second automobile accident in which appellant Eugene McNally was involved, see Brief for Appellees at SR 104-111, a part of the instant record. That action may be relevant to the extent that appellants’ injuries resulting from the two accidents overlap. Further complicating our review is the arbitrators’ award itself: a one-sentence order stating the dollar amount of the damages with no breakdown thereof. But see N.T. April 23, 1984 at 83 (arbitration hearing) (appellants’ counsel, in response to an arbitrator’s question, stating that all that was needed was an award “find[ing] X amount for [appellant Eugene McNally], signed by the arbitrators”).

      . At the hearing before the trial court, appellants stated that they “limited [their] damages from the time of the accident to the day before accident two, one year, and about seven months later” and had "different injuries, continuing injuries[, and] lost wages that were not compensated by the first award." N.T. December 13, 1984 at 14-15.

      . The parties stipulated that appellants should recover ?25,000, the value of appellee Lucille Cavallero’s Nationwide insurance policy, if the case were tried by a jury. See id. at 4-5. Appellees appear to have agreed to pay that sum if it were found that appellants were entitled to a duplicate recovery. See id. at 6. The issue before us, however, is not whether appellants can twice recover for the same injuries, but whether appellants have additional damage claims that were not presented in the initial arbitration proceeding. Therefore, we cannot simply award appellants, as they request in the alternative, the stipulated amount here. For similar reasons, we disagree with appellees that their motion to dismiss "was in effect a motion for a directed verdict on an agreed statement of facts.” Brief for Appellees at 5.


source: Caselaw Access Project

author: BECK, Judge:

license: Public Domain

text:
    510 A.2d 726
    CONTINENTAL BANK v. Barry L. AXLER and Leslie C. Axler, His Wife, Appellants.
    Superior Court of Pennsylvania.
    Argued April 18, 1985.
    Filed April 21, 1986.
    Reargument Denied June 80, 1986.

      Charles G. Milner, Norristown, for appellants.
    George J. Meng, Norristown, for appellee.
    Before WICKERSHAM, BECK and CERCONE, JJ.

      . This is in conformity with paragraph two of the parties’ unlimited surety agreement which states:
      This Agreement shall continue until Undersigned shall pay in full all Liabilities and shall continue in force until one calendar month after written notice of termination shall be given to BANK by Undersigned by registered mail letter actually received by BANK, the only evidence of which shall be return receipt card executed by BANK, provided that termination shall not affect any Liabilities in existence as of the end of the calendar month specified in such notice and all subsequent renewals and extensions thereof.

   BECK, Judge:

Appellants Barry and Leslie Axler appeal the denial of their petition to open a judgment confessed against them under a surety agreement by which they became cosureties for a Continental Bank (Continental) loan to North Broad Distributors, Inc. (North Broad), a corporation which the Axlers and two other couples formed. Primarily, the Axlers contend on appeal that their surety obligation was discharged by a material modification in the relationship between North Broad (the principal debtor) and Continental (North Broad’s creditor), namely, the sale of North Broad to an individual who was not a cosurety of North Broad’s debt to Continental. We hold that the sale of North Broad to a non-surety did not discharge the Axlers, and we affirm the order of the court of common pleas.

In 1976, North Broad was formed by three couples — the Axlers, the Paul Lipschutzes and the Paul Freedmans. One member of each couple was given a one-third interest in North Broad. On August 19, 1976, North Broad, through its president Paul Lipschutz, executed a nondiscount note to Continental in accordance with a North Broad corporate loan resolution which authorized either North Broad’s president or North Broad’s secretary (then Leslie Axler) to borrow money for North Broad. In connection with this note, the Axlers, the Lipschutzes and the Freedmans each personally signed identical surety agreements obligating them to pay North Broad’s debt to Continental in the event North Broad defaulted.

On November 2, 1977, North Broad obtained another loan from Continental on the same terms as the first note. As of January 12, 1978, there remained a balance of $75,443.09 on the first note and $25,000 on the second note.

On January 12, 1978, the Axlers sold their interest in North Broad to Paul Freedman and to another individual who was not an originator of North Broad. By a letter dated February 1, 1978, the Axlers informed Continental that they were no longer owners of North Broad and requested that they be released as cosureties of North Broad’s debt to Continental. By a letter dated February 9, 1978, Continental advised the Axlers that they would not be released as cosureties unless North Broad’s indebtedness was fully paid or satisfactory substitute security for the indebtedness was pledged.

On March 3, 1978, North Broad executed a consolidation note with Continental in order to aggregate the outstanding balances on North Broad’s first and second notes with Continental. The consolidation note was executed in the amount of $100,075.42 representing the remaining balance of $75,075.42 on North Broad’s first note of August 19, 1976, and $25,000 on North Broad’s second note of November 2, 1977.

By September 21, 1981, the balance on the consolidation note was $46,057.24. On that date, North Broad renegotiated a five-year note with Continental for the amount of $49,868.62 which constituted the outstanding principal on the consolidation note plus accrued interest thereon. A Time and Demand Loan Memorandum of Continental indicates that the purpose of the five-year note was to pay the balance on the consolidation note from North Broad’s “cash flow of business, which in turn services buyout by Barry [Friedman] to [Lipschutz] and [Paul] Freedman.” After the five-year note was executed, Lipschutz and Paul Freedman (the remaining original North Broad shareholders) sold their interest in North Broad to Joseph Barry “Buddy” Friedman.

North Broad made regular payments on the five-year note for a period of six months and then failed to make payments for the next three months. Consequently, on July 8, 1982, Continental confessed judgment against the Axlers, the Paul Lipschutzes and the Paul Freedmans as cosureties for North Broad’s debt to Continental. At the time judgment was confessed, none of the cosureties were still involved in North Broad’s business operations inasmuch as all the cosureties had previously sold their shares in North Broad.

On September 21, 1982, the Axlers filed a petition to open the confessed judgment. After oral argument, the Axlers’ petition was denied, and the Axlers brought the present appeal.

Since the decision whether to open a confessed judgment involves an exercise of the equitable power of a court of common pleas, our scope of appellate review of such a decision is limited. Lalumera v. Nazareth Hospital, 310 Pa.Super. 401, 456 A.2d 996 (1983). The common pleas court will not be overruled unless it has committed an error of law or clearly and manifestly abused its discretion. Lazzarotti v. Juliano, 322 Pa.Super. 129, 469 A.2d 216 (1983); Lalumera.

To have a confessed judgment opened, the petitioner “must act promptly, allege a meritorious defense, and present sufficient evidence of that defense to require submission of the issues to a jury.” Lazzarotti, 322 Pa.Super. at 133, 469 A.2d at 218. “ ‘Thus, a court can no longer weigh the evidence in support of the defense, but ... the judgment should be opened where the evidence produced would be sufficient to prevent a directed verdict against [the petitioner].’ ” Corson v. Corson’s, Inc., 290 Pa.Super. 528, 533, 434 A.2d 1269, 1272 (1981) (citations omitted); Pa.R.C.P. No. 2959(e). Furthermore, the court should view the proffered evidence in the light most favorable to the petitioner because “the standard of sufficiency here is that employed on consideration of a directed verdict.” Greenwood v. Kadoich, 239 Pa.Super. 372, 376, 357 A.2d 604, 606 (1976).

In their petition to open, the Axlers alleged as a meritorious defense that the sale of North Broad to Joseph Barry “Buddy” Friedman materially altered the relationship between North Broad and Continental and thereby discharged the Axlers from their obligation as cosureties for North Broad’s debt to Continental. The common pleas court ruled that the change in ownership of North Broad did not, under the facts of this case, constitute a material alteration which would discharge the Axlers as cosureties. For the following reasons, we agree.

Customarily, a suretyship arrangement arises when a creditor refuses to extend credit to a debtor unless a third party (the surety) agrees to provide additional security for repayment of the debt by undertaking the debtor’s obligation to the creditor if the debtor fails to perform. See, e.g., Meyer v. Industrial Valley Bank and Trust Co., 428 Pa. 577, 239 A.2d 371 (1968) (dissenting opinion by Roberts, J.). In general terms, a suretyship represents a three-party association wherein a creditor is entitled to performance of a contractual duty by the principal debtor or alternatively, if the debtor defaults, by the debtor’s surety. Restatement of Security § 82 (1941); J. Murray, Murray on Contracts § 314 (1974); see Meyer (dissenting opinion by Roberts, J.); First National Bank and Trust Co. v. Stolar, 130 Pa.Super. 480, 197 A. 499 (1938); Pure Oil Co. v. Shlifer, 115 Pa.Super. 319, 175 A. 895 (1934). The existence of the suretyship is evidenced by a contract. Thommen v. Aldine Trust Co., 302 Pa. 409, 153 A. 750 (1931); Pure Oil Co.; Cohen v. Bank of Philadelphia, 102 Pa.Super. 279, 156 A. 742 (1931).

Usually, suretyship problems arise because the three-party structure of a suretyship becomes dynamic rather than remaining static. After the signing of a suretyship contract, the creditor and the principal debtor may renegotiate the terms of the debtor’s obligation to the creditor without obtaining the surety’s assent to the changed obligation. When the debtor defaults, the creditor then seeks to have the surety perform the debtor’s renegotiated obligation. Commonly, the surety asserts as a defense that he does not have a duty to perform the renegotiated obligation of the principal debtor since he did not consent to be liable for that new obligation. See, e.g., Jacob Sall Building & Loan Association v. Heller, 314 Pa. 237, 171 A. 464 (1934).

Cognizant of the problems posed by the three-party composition of suretyships, Pennsylvania courts have uniformly recognized that where the creditor and the debtor materially modify the terms of their relationship without obtaining the surety’s assent thereto, the surety’s liability may be affected. Schroyer v. Thompson, 262 Pa. 282, 105 A. 274 (1918); McClelland v. New Amsterdam Casualty Co., 322 Pa. 429, 185 A. 198 (1936). A material modification in the creditor-debtor relationship consists of a significant change in the principal debtor’s obligation to the creditor that in essence substitutes an agreement substantially different from the original agreement on which the surety accepted liability. Koch v. Moyer and Burkhart, 103 Pa. Super. 270, 158 A. 198 (1931); Restatement of Security § 128, Comment d. Where, without the surety’s consent, there has been a material modification in the creditor-debtor relationship, a gratuitous (uncompensated) surety is completely discharged. Meyer (dissenting opinion by Roberts, J.); Schroyer. A compensated surety is discharged only if, without the surety’s consent, there has been a material modification in the creditor-debtor relationship and said modification has substantially increased the surety’s risk. McClelland; see also Restatement of Security § 128(b).

The record in the case sub judice does not clearly establish whether the Axlers were gratuitous sureties or compensated sureties for North Broad. Nevertheless, the nature of the Axlers’ suretyship is not dispositive of the present appeal. As explained hereinafter, we conclude that the Axlers have not made a threshold showing of a material modification, without their consent, in the creditor-debtor (Continental-North Broad) relationship and hence cannot be discharged whether they are gratuitous sureties or compensated sureties.

Citing Pure Oil Co., the Axlers argue that they should be discharged as sureties because the sale of North Broad to a nonsurety (Joseph Barry “Buddy” Friedman) of North Broad’s debt materially modified the creditor-debtor relationship between Continental and North Broad. We find Pure Oil Co. distinguishable from the case sub judice.

As part of the suretyship contract, the surety in Pure Oil Co. agreed to be bound by any subsequent extensions of time for debt repayment which the Pure Oil Company as creditor might give the principal debtor. After the signing of the suretyship contract, the debtor together with Pure Oil Company and ten other creditors of the debtor entered into a written agreement whereby (1) the eleven creditors agreed to accord the principal debtor a six-month extension of time for debt repayment and (2) control of the debtor-company was submitted to a group of trustees empowered “to fill vacancies on the board of directors [of the debtor]; to manage, supervise and reorganize the conduct of the [debtor’s] business; to liquidate the assets of the [debtor] company; and to ... never mature the principal debt____” Id., 115 Pa.Superior Ct. at 324-27, 175 A.2d at 897-98. We held that the surety’s assent to extensions of time for debt repayment could not be construed to bind the surety to any other material modifications in the creditor-debtor relationship. Because in Pure Oil Co. material modifications had been made without the surety’s consent, the surety was discharged.

However, it is well settled that a surety’s consent to material modifications in the creditor-debtor relationship may be obtained as part of the suretyship contract. Central-Penn National Bank of Philadelphia v. Tinkler, 351 Pa. 123, 40 A.2d 389 (1945); Pure Oil Co.; Travelers Indemnity Co. v. Rexnord, Inc., 37 Pa.Commw.Ct. 20, 389 A.2d 246 (1978); Restatement of Security § 128, Comment c. Where the surety has given such prior consent, the surety is contractually bound to accept the material modifications in the creditor-debtor relationship. Central Penn National Bank of Philadelphia; Pure Oil Co.; Rexnord, Inc.; Restatement of Security § 128, Comment c. A suretyship “contract must be given effect according to its own expressed intention as gathered from all the words and clauses used, taken as a whole, due regard being had also to the surrounding circumstances.” Pure Oil Co., 115 Pa.Super. at 324, 175 A.2d at 897.

In contrast to the suretyship contract in Pure Oil Co., the Axlers have signed a suretyship contract which provides not only that Continental may “grant extensions of time and other indulgences of any kind to [North Broad]” but also, that the Axlers’ suretyship “shall continue until [the Axlers] shall pay in full all Liabilities,” that the Axlers have waived “all notices of the financial condition or of any adverse or other change in the financial condition of [North Broad],” that the Axlers have waived notice of “any other fact which might materially increase [their] risk,” that the Axlers will be obligated for the “Liabilities of any partnership, firm, corporation or other company which may be a successor to [North Broad],” and finally, that Continental “shall have the right ... without notice to or consent from [the Axlers] ..., and without affecting, impairing or discharging, in whole or in part [the Axlers’] Liabilities ..., to modify, change or supplement ... any indebtedness ... or any agreement ... between [Continental and North Broad].”

Even if we were to assume arguendo, as the Axlers assert, that the sale of North Broad to Joseph Barry “Buddy” Friedman — a nonsurety of North Broad’s debt— created a new entity which replaced North Broad, such a material modification in the creditor-debtor relationship would not discharge the Axlers as sureties. By the very terms of their suretyship contract, the Axlers consented to be obligated for the “Liabilities of any partnership, firm, corporation or other company which may be a successor to” North Broad. Thus, the suretyship contract in the present case, unlike the suretyship contract in Pure Oil Co., fully encompasses the modification that occurred in the creditor-debtor relationship, and the Axlers remain contractually liable for the debtor’s obligation.

Citing Stolar, the Axlers collaterally contend that the sale of North Broad should result in their discharge as sureties because Joseph Barry “Buddy” Friedman impaired their security for North Broad’s debt by liquidating North Broad’s inventory but not applying any liquidation proceeds to repayment of North Broad’s debt to Continental. We deem Stolar inapposite.

After the signing of the suretyship contract, the creditor and the debtor in Stolar renegotiated the terms of the debtor’s obligation so that the creditor acquired a mortgage from the debtor in satisfaction of certain lien judgments. The creditor then subordinated a prior lien judgment on which the surety was obligated, to the lien of the recently acquired mortgage and in this manner impaired the surety’s security for the original debt. We held that to the extent the creditor failed to preserve the surety’s security for the lien judgment, the surety was discharged pro tanto. See also Restatement of Security § 132. In the instant case, the Axlers have not shown any way in which the creditor (Continental) has endangered security for North Broad’s debt. Consequently, because the creditor (Continental) has not impaired security for the debt, the holding of Stolar is inapposite.

Rather than having asserted the creditor’s impairment of security for North Broad’s debt, the Axlers have complained that the sale of North Broad by the Axlers’ co-sureties (the Lipschutzes and the Paul Freedmans) to a nonsurety of North Broad’s debt (Joseph Barry “Buddy” Friedman) has increased their risk of loss and should discharge them as sureties. Specifically, the Axlers have alleged that North Broad’s new owner (“Buddy” Friedman) has failed to preserve the security for North Broad’s debt to Continental by liquidating North Broad’s assets.

Our reading of the suretyship contract signed by the Axlers persuades us that the Axlers remain contractually liable as sureties despite the actions by North Broad’s new owner (Mr. Friedman) which resulted in North Broad’s defaulting on its debt to Continental. The Axlers’ surety-ship contract fully anticipates the potential sale of North Broad to persons other than the North Broad originators who were also sureties of North Broad’s debt to Continental. The suretyship contract not only binds the Axlers for the liabilities of both North Broad and its successors but also states that the Axlers have waived notice of “any ... fact which might materially increase [their] risk” as the sale of North Broad to a nonsurety might be expected to do. Therefore, in signing the detailed suretyship contract outlined in this case, the Axlers knowingly undertook the risk that, for whatever reason, neither North Broad nor its successors would repay the debt to Continental.

In summation, we conclude that the Axlers have failed to offer sufficient evidence that the sale of North Broad to a nonsurety of North Broad’s debt discharges them as sureties either because there was a material modification, without their consent, in the creditor-debtor relationship between Continental and North Broad or because the creditor (Continental) impaired the security for North Broad’s debt. Accordingly, the Axlers are not entitled to have the confessed judgment opened on these grounds.

As an alternative ground for opening the confessed judgment, the Axlers assert the improper execution of the five-year note on which judgment was confessed against them. The note was signed on behalf of North Broad by “Paul Lipschutz, consultant.” While the Axlers do not dispute the authenticity of Mr. Lipschutz’s signature on the note, they contest the capacity in which Mr. Lipschutz executed the note.

North Broad’s corporate loan resolution required the signature of either North Broad’s president or North Broad’s secretary as binding authorization for loans to North Broad. Since the Axlers do not contend that Mr. Lipschutz was no longer North Broad’s president when he signed the five-year note, we hold that the Axlers have not presented adequate evidence of a defect which would invalidate the note and require the opening of the judgment confessed against them on the five-year note. Lebowitz v. Keystone Insurance Agency, Inc., 198 Pa.Super. 495, 182 A.2d 289 (1962) (“The title of an agent who signs an instrument on behalf of a corporation is not an essential ingredient so long as his power to bind the corporation is not denied____”); see Prestressed Structures, Inc. v. Bargain City, U.S.A., 413 Pa. 262, 196 A.2d 338 (1964).

Since the Axlers have not proffered sufficient evidence of a meritorious defense to the confessed judgment, we find that the court of common pleas did not abuse its discretion in denying the Axlers’ petition to open the confessed judgment.

Order affirmed.

      . In the interest of completeness, we note that the Axlers may have other forms of relief available to them. Where a surety has performed upon the default of the principal debtor, the surety has a right to reimbursement from the principal debtor and is subrogated to the rights of the creditor against the principal debtor. Restatement of Security §§ 104 and 141; see also J. White & R. Summers, Uniform Commercial Code § 13-16 (2d ed. 1980). Additionally, "[a] surety who in the performance of his own obligation discharges more than his proportionate share of the principal’s duty is entitled to contribution from a cosurety.” Restatement of Security § 149.


author: BROSKY, Judge:

text:
    510 A.2d 732
    Maurice M. ROSEN v. Sandra Ebersole ROSEN, Appellant.
    Superior Court of Pennsylvania.
    Argued Dec. 17, 1985.
    Filed April 28, 1986.
    Reargument Denied June 30, 1986.

      Marvin M. Mitchelson, Los Angeles, Howard K. Gold-stein, Philadelphia, for appellant.
    Jack A. Rounick, Norristown, for appellee.
    Before BROSKY, McEWEN and HESTER, JJ.
   BROSKY, Judge:

This is a consolidated appeal from two orders: one denying a petition to vacate or strike a divorce decree and the other finding appellant in contempt for failing to adhere to the equitable distribution provisions of that decree. Appellant contends that the Court of Common Pleas was without jurisdiction to issue the divorce decree, as the case was then on appeal from an order awarding counsel fees. She also argues that since the Court of Common Pleas did not have jurisdiction to enter the divorce decree it also was without the power to enforce that decree via a contempt order. We agree and, accordingly, vacate both the divorce decree and the contempt order and remand for further proceedings.

Procedural History

The instant divorce proceeding was commenced on June 25, 1980. An order was entered on December 29, 1981, awarding appellant counsel fees and costs. Appellee herein took an appeal from that order on January 4, 1982. This Court affirmed the December 29th order on June 1, 1984. Rosen v. Rosen, 328 Pa.Super. 93, 476 A.2d 470 (1984).

During the pendency of the above-mentioned appeal, the Court of Common Pleas entered a decree nisi on the issues of child custody, equitable distribution, child support, alimony, divorce and legal fees. On February 16, 1983, a final order was issued. Appellant filed a petition to open or strike the divorce decree and appurtenant orders on June 1, 1984. On January 3, 1985, the court sustained appellee’s preliminary objections and dismissed the petition. Appellant took an appeal from that order, which is one of the two consolidated appeals before us at this time.

Also while the counsel fees appeal was before this Court, on May 3, 1984, appellee filed a petition to effectuate the divorce decree and accompanying orders. Such an order was issued and disregarded by appellant. In September of 1984 appellee filed a petition for contempt and special relief. An order was issued on September 17, 1984, finding appellant in contempt and on September 25 an order was issued imposing a fine of $100 per day of noncompliance with the previously issued decree. Appellant continued to disobey and, on November 15, 1984, appellee filed yet another petition for contempt. The trial court then escalated its order, imposing an additional fine of $250 per day. Evidently exasperated, the court imposed another order finding appellant in contempt of the divorce decree and subsequent orders. Appellant was incarcerated from March 8th through 14th, 1985. Notice of appeal was timely taken and the propriety of the contempt order is the second issue before us now.

Jurisdiction

Appellant contends that the trial court erred in denying her petition to open or strike the divorce decree. That court was, she says, without jurisdiction to enter the divorce decree because an appeal in the case was before this Court. We agree.

First, as a factual matter, we note that the divorce decree was, indeed, entered while the counsel fees appeal was before this Court. Second, it is clear that, as the law stood at that time, the taking of an appeal acted to divest the trial court of jurisdiction over the case.

In Wilson v. Wilson, 297 Pa.Super. 14, 23, 442 A.2d 1189, 1193-94 (1981), this Court held that the trial court was without jurisdiction to proceed after an appeal was taken from an alimony pendente lite order.

We are, therefore, led to the inevitable conclusion that all proceedings in the lower court after February 26, 1980, when the record was lodged in the Superior Court, are null and void for lack of jurisdiction in the lower court to proceed with this matter after that date.

Prozzoly v. Prozzoly, 327 Pa.Super. 326, 332, 475 A.2d 820, 824 (1984) treated an appeal from the denial of alimony pendente lite and an award of counsel fees. This Court wrote:

“that an appeal from an order granting or denying alimony pendente lite and counsel fees operates to divest the trial court of jurisdiction to proceed further with the action in divorce....”

In Sutliff v. Sutliff, 326 Pa.Super. 496, 502, 474 A.2d 599, 601-02 (1984), this Court held that interlocutory awards are appealable in a divorce proceeding. Of interest for our purposes is the statement: “In so holding, we recognize that some delay in the principal litigation may result because the general rule is that an appeal removes jurisdiction from the lower court, see Pa.R.A.P. 1701....”

Wilson, Prozzoly and Sutliff are unanimous in holding that the pendency of an appeal divests the trial court of jurisdiction. In some instances this Court, upon petition, has granted a trial court permission to proceed in matters not related to issues under appeal. Pa.R.A.P. 1701(c). The Court of Common Pleas was, while the case was on appeal, without the power to proceed further in the case. Orders imposed in the absence of jurisdiction are, as Wilson held, null and void. Accordingly, the final divorce decree of February 16, 1983, as amended March 16, 1983, is vacated.

Contempt

Appellant contends that because the trial court was without jurisdiction to enter the divorce decree when it did, it could not hold appellant in contempt of court for failing to obey that decree. Again, we agree.

“The basis for contempt is to provide punishment for contemptuous disregard of a court’s authority.” Commonwealth ex rel. Roviello v. Roviello, 229 Pa.Super. 428, 438, 323 A.2d 766, 772 (1974). Thus, in order to justify contempt, a court must, in that situation, have authority. It must at least have had jurisdiction to issue the order which was violated and on which the contempt was based. “In those instances where a court enters an order without authority or legal right to make such an order it is powerless to attempt its enforcement.” Roviello, supra, 229 Pa.Superior Ct. at 439, 323 A.2d at 772. Lack of jurisdiction over the matter in which any order is entered is a defense in any subsequent contempt proceeding for violation of that order. Leveto v. National Fuel Gas Distributing Corp., 243 Pa.Super. 510, 366 A.2d 270 (1976). “The disregarding of an order in excess of the court’s authority does not give rise to contemptuous conduct by the parties involved.” Roviello, supra, 229 Pa.Super. at 439, 323 A.2d at 772. See Commonwealth v. Miller, 306 Pa.Super. 468, 452 A.2d 820 (1982); Dover v. Philadelphia Housing Authority, 318 Pa.Super. 460, 465 A.2d 644 (1983).

Accordingly, appellant should not have been held in contempt for failing to obey an order which was issued by a court which lacked jurisdiction to enter that order.

The contempt order, along with the divorce decree, is vacated. Any fines paid under the contempt order are to be remitted.

      . Appellant also contends that the divorce decree should have been opened or stricken because her rights under a pre-nuptial agreement had not been determined. Our disposition of her other issues makes it unnecessary for us to reach this issue. Similarly, appellant’s other arguments as to the contempt order — lack of actual notice, improper procedures, excessive fines — are also moot in light of our vacation of the contempt order.

      . This case has taken, to date, six years and has already been the subject of two appeals; moreover, it is far from finished even now. This is not a record in which anyone associated with this case should take pride.

      . The counsel fees appeal was taken January 4, 1982; the final divorce decree was issued on February 16, 1983; and the appeal was decided on June 1, 1984.

      . Since that time, two changes have been made in the law and, were the same set of facts to occur today, the Court of Common Pleas could proceed with the rest of the divorce case. The first of these changes was a 1984 amendment to Pa.R.A.P. 1701:
      (b) Authority of a trial court or agency after appeal. After an appeal is taken or review of a quasijudicial order is sought, the trial court or other government unit may:
      (6) Proceed further in any matter in which a nonappealable interlocutory order has been entered, notwithstanding the filing of a notice of appeal or a petition for review of the order.
      The second change was Fried v. Fried, 509 Pa. 89, 501 A.2d 211 (1985). Fried reversed prior caselaw and announced that orders granting interim financial relief in divorce actions are interlocutorily and not appealable. Fried put the instant counsel fees and costs order under Pa.R.A.P. 1701(b)(6). However, during the relevant time periods under review here, neither (b)(6) nor Fried were in existence; hence, the order was properly appealable, and, even if it had not been, the trial court would still have been divested of jurisdiction.