Court Opinion

ID: 6259946
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:59:41.211031+00
Date Added: 2024-06-11T08:59:40.823650
License: Public Domain

Opinion by
Mr. Justice Jones,
Although I agree with the result reached in the opinion of Mr. Justice O’Brien, I desire to express my views as to what I believe to be the nature of Brandy-wine’s interest and what further disposition should be made with respect thereto.
The record shows that when Brunswick first sold the alleys to E. Z. Lanes (in effect, Tolan), Brunswick retained a purchase money security interest pursuant to §9-107 of the Uniform Commercial Code (Act of April 6, 1953, P. L. 3, §9-107, 12A P.S. §9-107) (hereinafter cited as UCC). After Tolan defaulted in his payments, Brunswick brought an action in replevin, as authorized by UCC §9-503, and obtained a default judgment.
At this point, Dean and Schulz agreed to help Tolan, and paid Brunswick $15,000 in settlement of Brunswick’s claim. In return, Dean and Schulz each received a one-third interest in the new corporation, Brandywine Lanes, Inc. They also received an assignment of Brunswick’s security interest to their assignee, Mellon Bank.
The central issue in this litigation involves whether Brandywine Lanes, Inc. acquired ownership of the alleys when the corporation was formed. The record *502clearly shows that Tolan did not convey the alleys to Brandywine, and Brunswick could only transfer, pursuant to UCC §9-504(4), the interest it then held— which was a security interest. This transaction did not, therefore, give Brandywine ownership of the alleys, but only a security interest and the right to “maintain replevin to recover the property.” 10 Std. Pa. Practice, §15, p. 440 (1963).
Tolan, therefore, owns the alleys subject to the outstanding security interest of Dean and Schulz. Unless Tolan elects to redeem the alleys, pursuant to UCC §9-506, Brandywine should be permitted to dispose of them as provided by UCC §9-504, with any proceeds in excess of Brandywine’s security interest, costs and special damages being returned to Tolan.
The judgment is affirmed only insofar as it entitles Brandywine to take possession; the judgment for damages is vacated.
Mr. Chief Justice Bell, Mr. Justice Cohen, and Mr. Justice Pomeroy join in this opinion.