*1
v. CO., WELLS FARGO LAND AND INC. and MORTGAGE Co., Individually Inc., Northeastern National Land Center, Shopping Appellants. d/b/a 25th Street Supreme Pennsylvania. Court of
Argued April 1982. July
Decided 1982.
Reargument Denied Oct. 1982. Easton, for appellants. James C. Hogan, Busch, Bala Reibman, Easton, M. H. Donald Joseph appellee. Cynwyd, *2 LARSEN, ROBERTS, NIX, O’BRIEN, J.,
Before C. HUTCHINSON, JJ. FLAHERTY, McDERMOTT and OPINION THE COURT OF ROBERTS, Justice.
This is an an appeal Superior order a decree of the Pleas of Nor- affirming Court of Common Fargo which directed Wells thampton County appellants Land and Land Co. Mortgage Co. and Northeastern National to a (Wells Fargo) pursuant construct a theatre building Theatres, Inc. Be- agreement lease Easton appellee decree, we dismiss cause Wells has with the Fargo complied as moot.1 The to seek financ- parties’ agreement permitted appellee a mortgage for the construction ing project, provided security.” be obtained “with the leased as the premises only obtained an offer of a loan from the Continental Appellee Bank, your companies “evidenced the bond or note of rejected secured a first Wells mortgage.” Fargo the re- offer first to determine whether seeking without to impose of a bond or note had been intended quirement advantages to afford personal liability merely procedural to the in lender the event default.2 Wells proceedings upon instituted the
Appellee present Octo- financing. refusal to On accept proposed 17,1978, Fargo ber the court of common directed Wells pleas building thirty to commence construction of a theatre $200,000. bond in the amount post supersedeas days Court, but did Wells then Fargo appealed Superior reassigned to this on June 1982. 1. This case was writer 12.01, (4th Ladner, Conveyancing Pennsylvania 12.14 ed. §§ 2. See 1979). not file a bond or an seek alternate See Pa.R.A.P. stay. 1732. was pending, appellee sought While have for its noncompliance held contempt with the decree. On December the court com- mon denied “that it is pleas appellee’s request, concluding not in the best of either for construction to interest side supersedeas commence ... pending appeal [and] Nonetheless, is the least burdensome remedy.” file continued refuse to a bond construction. begin 7,1979, On after Court had affirmed the May Superior common specific decree of performance, the court of found Court denied contempt. Superior and at Fargo’s petition stay contempt, some time thereafter construction was commenced. The theatre building open has been since December business 21, 1979. *3 decree, its
Despite compliance Fargo Wells seeks a reversal of the decree that it acted properly theory in summarily the Continental offer. rejecting Fargo Wells also seeks a remand of the for the fashioning record of additional relief.” “appropriate the latter re- Presumably quest for relief reflects Wells belief has been Fargo’s that it harmed its construct having prices, to the theatre at 1979 instead of in in prices 1973, effect when the was building have been built.3
We are not persuaded that
request
either
for relief can
survive in the face of Wells
with the
Fargo’s compliance
court’s decree.
to,
a
“Ordinarily,
who consents
or
party
has,
Fargo
course,
3. Wells
of
overlooked the fact that the Increase in
price
greater
the construction
correspondingly
has resulted in a
return on Wells
building
investment. To the extent
that the
more,
in
Fargo
propor-
constructed
1979 is worth
receives
tionately greater
advantage
depreciating
building
tax
over its
Bolubasz,
561,
useful life. See
v.
Kaczkowski
491 Pa.
acquiesces judgment pp. 9 Practice Ch. Pennsylvania from.” Standard § Commonwealth, Health, 495 Dep’t 134-35. Brown v. of See Pa. Adamson, Pa. Reese v. (1981); 434 A.2d 253, 119 Here, Fargo every was (1923). given A. 920 to maintain the pleas the court of common opportunity Nevertheless, its was quo appeal pending. status while of the orders the court ignore chose Fargo inaction, it until, common as a result of its own willful face had to of the theatre building construction begin In these circum enforcement of the citation. contempt stances, that Wells be held manifestly equity requires its that its consequences for the conduct and responsible as moot. dismissed own Appeal dismissed. Each costs. party pay FLAHERTY, in which J., dissenting opinion, files a McDermott, j., joins;-
FLAHERTY, Justice, dissenting.
I dissent.
I.
an order
took this
Superi-
Pleas
the Court Common
affirming
District,
sitting
of the Third Judicial
equity,
that Wells
construction-lease
perform
specifically
contract
lease Easton a theatre. The Superi-
to build and
controversy
perceive
addressing the merits of the
4. We
no basis for
*4
prevent
theory
estoppel
on a
collateral
would
asserted to
that
initiating any
against
Fargo
civil action
Easton
Wells
from
future
only
Superior
of the
Court from which
Theatres. The
determination
relating
Fargo
appeal
decree of
Wells
has chosen to
is that
Superior
specific performance.
Fargo
challenged
has not
Fargo’s
agreement
breach of the lease
Court’s
that Wells
conclusion
Thus,
supra
may
profits.
recover
See
note 2.
entitle Easton to
lost
any
estoppel arising
possibility
from a
of this
of collateral
dismissal
making,
may
possibility
own
and
of Wells
whether
to address the issue of
influence
decision on
this Court’s
long
specific performance
has
after
the theatre
been built. See
Co.,
Lehigh Valley
Dilliplaine
Pa.R.A.P.
v.
Trust
2116. See
(1974).
Pa.
If the Landlord unable, within (60) days get a sixty in the mortgage amount Two Hundred Fifteen Thou- sand Dollars ($215,000.00) (20) on terms of a twenty year with the 9V2% payback interest not to exceed leased as the premises no only security, provided extreme conditions as to Tenant pre-payment Landlord, shall to obtain attempt for mortgage these terms Land- lord, provided Landlord have shall first obtained subor- agreement dination from the holder of mortgage upon over land which the premises demised shall built. Tenant shall have a from the period sixty (60) days receipt of written notice Landlord and subordina- tion agreement within which to acquire Landlord. If the does Tenant not obtain the mortgage within period, either at party its cancel may, option, between lease the parties. added). (Emphasis was not able to obtain financing sixty and Easton did
days not submit final plans for the construc- theatre, tion of the it did although submit preliminary schematics June of Nevertheless, 1972. the parties Easton agreed attempt would financing, secure fall of Easton obtained a commitment from an affiliated rejected this company. commitment because it contravened terms of the lease. *5 of 1973 Easton obtain- continued, and in Negotiations April from the Continental commitment ed a permanent Fargo rejected Wells Again, Bank in Philadelphia. terms contravened the its grounds commitment on the accept- required the lease Claiming terms of the lease. commitment, filed a Easton Bank’s ance of Continental of the lease performance in complaint equity seeking specific and monetary damages. a decree in issued equity 1977 the chancellor
On June Bank’s to honor Continental nisi, ordering available, compa- or another commitment, if still which building a theatre commitment, rable and to construct $215,000.00, or to in 1972 could have been constructed $200,000.00. This in the amount of post supersedeas that while Wells finding on the chancellor’s order was based the first mort- rejecting breach the lease Fargo did not Easton, did commitment obtained gage offered by the commitment rejecting breach the lease ordered that Further, the chancellor Continental Bank. in excess of construction cost of share parties equally dam- monetary claim for $215,000.00, denied Easton’s but The en banc Court Pleas of the Third Common ages. the chan- as its own adopted affirmed and Judicial District to the Superior on cross-appeals cellor’s adjudication, court as to the affirmed the lower Court, the Superior reversed, remand- but performance, specific Easton’s claim for mone- chancellor, denial of ing for a redistribution remanding tary damages, for the $215,000.00 responsibility based costs in excess of the order of to this Court delay. Fargo appealed specific performance. after Court’s Superior the majority,
As noted by the court of performance, of specific affirmance of the order because it had contempt common held Wells bond, Superior and the nor posted neither built the theatre order. There- contempt stay Court denied a petition theatre, which construction after Fargo began complete. now II. all has controversy raged stages proceedings at *6 as to which if breaches, actions of the constitute parties, any, material lease otherwise, agreement, of the and what remedies appropriate breaches, are for those that assuming such exist. On this that the Fargo argues chancellor to authority exceeded his it a ordering accept mortgage commitment different terms and great- er than the security provided agreement.1 for in lease letter from Continental Bank Wells a Fargo offering as mortgage commitment follows: begins This will evidence the this institution to agreement lend Wells Land Mortgage Inc... Company, the sum of Two fifteen ($215,000) hundred Thousand Dollars, evidenced note of by your companies secured first by mortgage ground containing 13,000 feet and approximately building theatre square be thereon 25th constructed in the Street Cen- Shopping ter, Palmer ... Township, Pennsylvania, (Emphasis added). This a bond note requirement secured first at odds with by squarely portion of the lease above: “If the Landlord is quoted unable, (60) sixty get mortgage days amount Two ($215,- Hundred Fifteen Thousand Dollars 000.00) ... only with leased as the premises security, ... the Tenant shall obtain a these attempt terms for Landlord....” (Emphasis added).
It is well settled in that a be Pennsylvania mortgage may executed personal without liability: significant by 1. There are other issues raised which merit, opinions notwithstanding, could well have courts’ lower (1) requirement assigned security viz. be for the lease as mortgage; (2) Continental’s entitlement to demand direct rental payments Fargo; (3) to cure default failure of lease; supply plans required (4) Easton to as fact that permanent provided financing only Continental’s commitment required financing and not construction lease. as These grounds accepting additional asserted for not Continental Bank’s addressed, however, financing agreement need not since Conti- was, security itself, requirement nental justify Bank’s sufficient to Fargo’s rejection of the offer. with an created as well without mortgage may “A to pay mortgagor obligation personal accompanying secured, thereby. to be secured, attempted the debt with charged alone is the property the one case which to out of mortgagee solely by lien—is looked security lien; other, he has the additional make his A debt the mortgagor. obligation of the personal effect, is, in property certain only against chargeable or en- of satisfaction limited means debt with simply forcement; charged of the property the value afforded.” of the security is the measure indebtedness 908, 910 570, 574, (1942) 28 A.2d Estate, 345 Pa. Hartje’s well It is likewise added). omitted) (Emphasis (Citations is not specifically note or bond which that a established *7 express Absent an general liability. acts to create restricted not however, does general liabiity mortgage, in the covenant bond or note: itself, but only mortgage arise on the which a itself an instrument by is not of mortgage “[A] which an raised, and on for the liability money personal maintained the or covenant can be debt action of remedy but ... his mortgagor, the against mortgagee is put the itself which is confined to land mortgage, such accompanying or any prior if there yet, in pledge; creates a action, liability, which of itself personal of cause loan, bond, a note such as a mortgage, from the distinct claim, is not to be considered mortgage the or other a collateral demand, but is merely such claim merging accompa- in this state are usually Mortgages, security. etc. Sometimes attorney, a bond and warrant nied by instruments, notes, or other to secure given are they and some- indemnity, to secure warrants sometimes mere naked, mortgage, form of a simple times of a securing the debt perhaps for the purpose given of these are given any and when person, they third action of debt has never been that an supposed, modes it will lie the money upon for the or covenant the itself, party upon but remedy land, and the land only.” against Baum Tonkin, (1885) v. Pa. 1 A. (Citations omitted) (Emphasis added).
The effect of a bond or note secured executing mortgage, limited, unless on the bond is specifically recourse tois real subject property all of the and personal obligor to Ladner execution in event of default. writes:
The bond and distinct mortgage, although separate instruments, same are securities for one and the debt.... The bond and warrant of themselves create no lien until one (or both) of them is entered as a when it judgment, becomes a lien all real estate owned against obligor and situated date of its county, entry.... instances, In when mortgaged some prop- erty has depreciated mortgagor value has other property, on the bond advantages proceeding obvious, warrant are since the personal bond is a obliga- tion of the and a on it obligor judgment permits execution against of his real or For personal property. this reason, and warrant is usually demanded and given along with the mortgage. 9:01
Conveyancing
Pennsylvania,
(3d Edition, 1961)
§
(Emphasis
Kretzschmar,
v.
added), See
Neville
271 Pa.
222,
It clear from the record and the lease that the parties intended the in recourse the event default mortgagee’s be limited to the such premises. leased Whether a bargain is our function ordinary inquiry. wise is not Our and the function chancellor proper enforce terms of the agreement as be determined they may insofar with certainty. Wells committed no breach of the terms Fargo lease agree provide additional declining security, wit, note, bond or a required by a Continental Bank as for in the in excess of that lease. security provided
III. is that Wells made majority observation An initial without first offer of Continental Bank rejected Fargo requirement whether Continental’s to determine seeking personal liability intended to impose or note was a bond to the lender advantages procedural to afford merely a bond executed Although At 1372-1373. default. event of involve does not always in connection (see supra) discussion mortgagor liability personal rule and its absence the on the bond is the liability personal in Ladner, Pennsylvania, Conveyancing exception. See Edition, reasonable, It there- 1961). was 9.01, (3d 9.22 § § was liability to assume that fore, Fargo personal for Wells If that reason. to have refused the offer for intended and person- intend that Fargo Bank did not Continental bond, it could have communicated liable ally clearly. intention not have that Wells implies may
The majority theatre at 1979 to construct the by having harmed been consent. terms to which it did not under prices It sufficient to that Wells respond n.3. At tax greater advantages depreciating realization of suffered, of loss it not to to the amount building goes damages. existence mis- majority dismissing appeal,
Additionally, principle “Ordinarily, party its reliance on the places or order to, in, acquiesces judgment who consents therefrom,” At 1373. To no extent can cannot Fargo challenging validity taken Wells timely consent manifesting court’s order be regarded of the trial majori- in the order in As the acquiescence question. to and observes, did not construction begin itself ty the decree of specific Court affirmed Superior until after the court of common held Wells performance be called acquiescence This can contempt. hardly order. judgment or consent to *9 By moot, the instant to holding the majority a new limitation on places not heretofore in appeal rights existence. While Wells Fargo refrained its pursuing under Pa.R.A.P. 1732 of option seeking and the stay, alternative bond, of it posting supersedeas acted its in so rights doing. The record the case does present not establish the reason for to build the decision theatre rather than It post supersedeas may bond. that the cost bond, of the with that coupled the conviction lower case, courts were in error on the of the merits and the business decision it that would be build a less costly theatre under adverse contractual conditions than tie up the land no use at all for an additional extended period time, of pending appeal Court, led Wells Fargo to build the theatre rather than post bond. case, out, as the majority points correctly
Fargo was of given by choice order the court of common $200,000 of building the theatre or posting supersede- as bond. The is purpose the interests protect creditor, of the judgment and so as long that interest is protected, the choice how specif- of it shall be protected by— ic performance of a posting bond—is that judgment debtor. are not cut Appeal rights off merely because judgment debtor one of options exercises court, unless, course, offered the trial the case becomes moot a result of an action party. therefore,
Central to majority’s position, ques- tion whether the case moot. Mere of an completion act does foreclose relief on appellate grounds of mootness if there are circumstances in case which require equitable relief in complete litigation: is an
[Tjhere general to the rule a case exception must exist at all controversy stages appellate review. If one will parties controversy continue to suffer some decision, detriment from the lower court’s will be heard. usually *10 v. Carros, 291, 311,
Janet D. 362 A.2d Pa.Super.Ct. 240 (1976). will, 1070 of the Carros language case, continue to lower suffer detriment from the court’s decision, and the not be as moot for case should dismissed has this reason alone. the Additionally, certainly where, to review matter action before an power a an relief, court there equity request general has been for fashioned, be and it is equities require possible that relief v. Manufac- Sigal that relief can be fashioned.2 In fact Co., (1973), turers and 450 Pa. 299 A.2d Light Heat the chancellor preliminary injunction forbidding dissolved a grant perma- the construction of a and refused to pipeline completed nent was injunction. pipeline Construction Court, appeal, before an to this and on appeal was taken should be quashed builder pipeline argued moot. refused to because the was This Court controversy quash appeal, stating: relief, not but only injunctive
The complaint requested otherwise, and for also also and prayed damages, punitive jurisdiction had requested general Equity proper relief. for general in this matter under the may, prayer and relief, agreeable relief validly any proper frame pleaded case and proven.
¤ [*] [*] [*] [*] [*] cases to sustain its The relied various appellee has if the act to be controversy contention that a moot is correct appellee has The enjoined completed.... been act to had been enjoined that in the it cites] [cases In all relief. these give did completed equity any cases, however, act, declined not because act equity been but because to be had sought enjoined completed, relief, would have been relief, other than any injunctive express opinion Fargo should receive 2. I no as to whether Wells clear, damages. however, is for the chancellor. What Such determination remanded for the is that is not moot and should be the case damages required are chancellor to make as whether the decision in the case. inappropriate. In cases was there a none cited which re- continuing trespass or other circumstances quired in order to equitable complete litigation. relief Pa. 231-33, added). at 299 A.2d at (Emphasis 647-48 See Faden v. 424 Pa. Philadelphia Housing Authority, 273, 227 was A.2d 619 there (1967). present case relief,3 it is prayer general appropriate possible can fashioned, relief on its consideration of case merits is necessary complete litigation. not,
should therefore, be dismissed moot.4 reasons, For these Bank
accept mortgage commitment from Continental *11 build the theatre was in deprived error and of the benefit of its accept it to bargain by requiring terms in the mortgage significantly commitment which were different from the terms it had bargained for.
the Superior Court as to specific performance should reversed and the case remanded for chancellor further proceedings, purpose which would be to restore Wells to the it would had it been position have been in ordered to build the theatre.
McDERMOTT, J., joins this dissenting opinion. prayer general 3. The fact that the relief was contained in Easton’s original complaint, prevent deciding does not us, properly issues before even if our decision is adverse equity jurisdiction, jurisdic- interests of Easton. “Once obtains tion continues all until issues raised have been determined.” McGo- 269, 272-73, Spear, (1975). vern v. 463 Pa. 344 A.2d 828 by Easton, Keystone Company Building 4. The mootness cases cited Savings Association, v. Lincoln and Loan 439 Pa. A.2d (1970) City Authority, and Fox v. Central Delaware 475 Pa. (1977) Key distinguishable A.2d 448 are from the case. instant appeal appellant stone the was declared moot because could made proceedings below; pending whole which were in Fox the originally was moot because the issues raised no were longer issue, issues, at and new never addressed court lower were introduced.