Court Opinion

ID: 9698004
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:39:16.912185+00
Date Added: 2024-06-11T18:20:37.340040
License: Public Domain

JOHNSON, Judge,
concurring and dissenting.
Following a trial without a jury, the Honorable Albert R. Subers rendered a verdict for the defendant, Fidelity Bank (the bank), on an action in assumpsit to recover upon a growth certificate of deposit (CD) issued by the bank to Joseph D. Flanagan in 1968. After consideration of post-trial memoranda and oral argument, Judge Subers entered judgment notwithstanding the verdict and awarded Flanagan the sum of $9,900, the face amount of the CD. The court also awarded five percent interest for the two-year period from June 6,1968 to June 6, 1970, and six percent interest from January 1, 1990, the date when Flanagan first made demand for payment on the CD.
The bank has not appealed that award. Flanagan appeals, limiting his appeal to his contention that Judge Subers erred in failing to award five percent interest beyond a two-year period in accordance with the terms of the CD dated June 6, 1968.
*522When Flanagan purchased the CD, he resided with his parents. Shortly thereafter, Flanagan was called for a tour of duty in Vietnam, and he left the CD with his father. Flanagan did not return from Vietnam until 1971. His parents’ address in June of 1968 appears on the face of the CD. Although the CD includes a box in the upper left corner for the insertion of the depositor’s social security or tax identification number, this box was not filled in at the time of issuance of the CD in 1968.
I cannot join in my colleague’s assertions that the bank never sent Flanagan notice regarding the CD. Judge Subers did not find this to be a fact, and the notes of testimony do not support such an assertion. It can be concluded from the uncontradicted testimony of Flanagan that his parents abandoned their residence at the address recorded on the face of the CD no later than June 1969, when they moved to Florida. Any notice regarding the bank’s intent not to renew the CD would have been mailed to the address shown on the CD, an address from which the Flanagans removed themselves fully one year before the CD would have matured in June, 1970. There was no direct testimony from Flanagan’s parents, who were not called as witnesses. The parties stipulated that the bank had no records concerning this particular CD. There was no direct evidence to support my colleague’s conclusion that the bank never sent notice to its depositor.
In terms of the narrow issue preserved for appeal, the question of notice may well be considered immaterial. We are called upon to decide only whether Flanagan is entitled to receive five percent interest from June 6, 1970, to January 1, 1990.
As a starting point, we should determine if the CD provides any guidance in deciding this question. Pursuant to the terms of the CD, it matured on June 6, 1970. If not redeemed at that time, absent any notice to the contrary from the bank, the CD would renew. The CD contained the following language:
If not surrendered at maturity, this Certificate shall be renewed at its principal amount and accrued interest for *523similar successive periods unless Bank shall have mailed to Payee notice that it will not be renewed thirty days or more prior to maturity. No interest will accrue after final maturity.
My colleagues, in considering this language, assert, without citation to any authority:
By using the term “renew”, the CD does indicate the applicable interest rate: the originally stated rate of five percent. We see no reason to consider prevailing market rates, or read in a rate of zero percent, as the trial court did.
Not only is this the plain and obvious interpretation, but it best comports with the rest of the contract....
____ To deny Flanagan the time value of his investment would thus not only be arbitrary and contrary to the plain language of the CD, it would unjustly enrich the Bank as well.
Majority opinion at 520-521.
Unlike the majority, I find this interpretation of the CD to be neither plain nor obvious. While the instrument declares in the simplest of terms that “no interest will accrue after final maturity,” the term “final maturity” is not defined in the instrument and, in my judgment, would escape rational definition if the analysis remains confined to the written agreement before us. I do not believe any conclusion is possible as to the “final maturity” date or the rate of interest to be applied.
Moreover, this appeal involves the interpretation of a form of CD utilized by a Pennsylvania bank in the late 1960’s. There is nothing in the record to suggest that the poorly-worded declaration on the front of this CD remains in use by the successor-in-interest to the bank on this appeal, or by any other financial institutions. Therefore, I cannot believe that our interpretation of the word “renewed,” as the majority declares, involves a legal issue of continuing public interest. On the contrary, I fear that our attempt to construe language on an outdated instrument might well have adverse implications for current mercantile practice.
*524Flanagan cites only to Ballentine’s Law Dictionary, Third Edition, in support of his argument that he is entitled to five percent interest throughout the period of non-presentation of the CD for payment. Brief for Appellant at 13-14. The majority cites only to Black’s Law Dictionary, Fifth Edition, on the same issue. Majority slip opinion at 920. This paucity of authority suggests, also, that disposition of this appeal without attempting to establish new law might well be in order.
Where the bank has not challenged the underlying award of the principal sum found due on the CD, I would limit myself to an analysis based upon equitable principles, much as the majority has suggested in its alternative analysis. It is unlikely that fair-minded people within the banking community could find fault with a conclusion that Flanagan should not be denied the time value of his investment, given the fact that the bank has had the use of his funds — or at a minimum is unable to establish non-use of Flanagan’s funds — over the entire period from June 1968 until January 1990. Since equity would dictate that the depositor should not be made to bear the loss against a commercial entity possessing the resources to soundly administer funds held by it in a fiduciary capacity, I concur in my colleagues’ conclusion to remand this matter for the award of five percent interest over the entire period the CD remained in the bank’s possession prior to demand. I am unable to join and must dissent from, so much of the majority opinion as finds a basis in contract law and the interpretation of the language of the CD to support the remand.