*1 179 PER CURIAM. December, 1983, NOW, petition day this 29th
AND granted and the Order appeal is for allowance 12, Philadelphia, 1983 No. 712 August at Superior Court Pleas of of the Court of Common affirming 1981 the Order Term, 1975, No. Philadelphia County Civil June to the Court of Common The matter is remanded reversed. complaint. petitioner’s Pleas with directions to reinstate J., NIX, a dissent to this order. notes McDERMOTT, J., allocatur, grant vote to but would Per of this case. disposition dissents from the Curiam A.2d BANK, N.A., Appellant, FIRST PENNSYLVANIA v. TAX LANCASTER COUNTY CLAIM BUREAU Becker, Appellees. Della Supreme Pennsylvania.
Argued April 1982.
Reargued 1983. Oct.
Decided Dec. *2 Shusterman, Bowman, Richard M. Lawrence T. Philadel- phia, appellant. Green,
Maurice Philadelphia, M. for Della Becker. Greer, Lancaster, David for Lancaster County. ROBERTS, C.J., NIX, LARSEN, Before and FLAHER- jj. TY, McDermott, zappala, hutchinson and OPINION THE ANNOUNCING JUDGMENT
OF THE COURT HUTCHINSON, Justice. May
On 1982 our filed an order dismissing appeal improvidently granted. allowance Appellant — then appealed Court, to the United States Supreme U.S. —, (1983), 103 S.Ct. 77 1381 which vacated L.Ed.2d order, our 498 Pa. 445 A.2d and remanded the of its subse- light consideration to us for further record Adams, Missions v. Board decision Mennonite quent (1983). 2706, 77 L.Ed.2d 791, 103 S.Ct. 462 U.S. from an order appeal us on case was and before The 301, 404 Court, 44 Ct. Pa. Commonwealth Commonwealth of the Court affirmed a final decree A.2d which An Common Lancaster en banc County. Common Pleas of en- decree nisi adjudication Pleas Court affirmed an and sitting equity. tered a Common Pleas judge appellant- complaint Chancellor had dismissed which made mortgagee sought pursuant to set aside a tax sale Law, the Tax Real Tax to cancel Claim Estate Sale sale, at the tax appellee, purchaser Bureau deed to dis- mortgage reinstate confirm a first charged by the tax sale. presented
The first on remand is whether question *3 in Real Estate provision Pennsylvania’s contained Law, 7, 1947, P.L. No. July Tax Sale Act of § amended, require 5860.101 which does not seq., P.S. et mail to record mort- by either service or notice a sale, the due gagee impending process of an tax violates Pennsylva- under the rights mortgagee conferred on such a nia and The notice United States Constitutions. statute is unconstitutional under Pennsylvania plainly by Supreme
the standard set forth States United question, by in Mennonite The second first raised Board. quash on her to appellee application this Court appeal, interpretation Deficiency Judg- an of our involves mortgag- ment Act. a Specifically we must decide whether parcels in mortgages separate ee who holds on several triggers loan security single different counties as for a parcels Act of one of the provisions by purchase of that its foreclo- following at the execution sale his first successful Judgment Act Deficiency sure action. hold that the We Therefore, of this case.1 we apply does not to the facts necessary to the final determina- 1. Our consideration of this issue is appellant set a tax sale and of this in which seeks to aside tion case starting mortgage foreclo- end of a thus reinstate its to ultimate reverse Commonwealth Court and remand the record to Pleas. Common purchased
In of unim- parcel 1972 Bernard DiSabatino Borough, land in Lancaster In proved County. Millersville en- appellant Company Construction DiSabatino agreed into an Bank to agreement appellant tered repay existing obligations $850,000.00 Company lend addition, provid- In working capital. agreement and for discretion, in its could an appellant, ed that advance time, $250,000.00 At the same borrower. additional appellant executed and delivered to the Bernard DiSabatino $1,100,000.00 in the secured note amount promissory mortgages. mortgages properties five were on owned located in four coun- Pennsylvania Bernard DiSabatino County ties and included the Lancaster real estate. The mortgage amount of each The mort- $1,100,000.00. was mortgage, on the Lancaster a first gage County property, given by was John DiSabatino and Bernard DiSabatino April mortgage was recorded on 1973. That been April default since mortgage,
At the time recorded its Bernard the property, DiSabatino owed 1972 real estate taxes on county. which had become a lien their return to the lien on the Accordingly, appellant’s mortgage property . tax lien tax junior dischargeable and therefore sale. See 72 P.S. 5860.609.2 Thus, question. that the Act had sure on the here in the fact *4 moment, triggered because not been when this action started is no appellant begin the foreclosure seeks to if it is successful here must obviously purchase come more than six months after its execution sale on its first foreclosure. provides: 2. Section 5860.609 claim, discharge obligation, Every every such sale shall the lien of may property have or shall become lien or estate with which said liable, charged, may except or for which it become no such sale discharge any ground mortgage shall the lien of rent or which shall liens, is or have been recorded before such taxes became and which liens, prior except mortgages grounds shall be to all other other rents. County. in Lancaster properties owned two DiSabatino Inc. Apartments, Lynnebrook shareholder of He was sole property to the contiguous land a tract of which owned Frank appellant. held mortgage to the subject and St. O’Donnell, DiSabatino Esquire, represented both mort- closing of the Paul Title Insurance at the Company connection loan to DiSa- gage appellant’s executed with settlement, per- mortgage batino. Before the DiSabatino on sonally gave for real estate taxes owed O’Donnell bills paid these Lynnebrook Apartments tract. O’Donnell paying that he was back bills under the mistaken belief subject is the adjoining property taxes on the payments these tax receipts instant lawsuit. The for Inc., Apartments, map Lynnebrook showed the number for inquired never as not for the O’Donnell contiguous parcel. More- receipts. referred to on the designation title over, County with the Lancaster correspondence all his Bureau, stated that the en- merely Tax Claim O’Donnell made on of Bernard DiSa- payments closed tax were behalf description and property by identifying batino without map number. continuing delinquency respect tax
As a result of the mortgage, held a the Tax on which property sale of the for October property Claim Bureau scheduled a impending appeared notice of the sale 1974. Published once a week for three consec- newspapers, two Lancaster addition, appeared In notice of the sale utive weeks. one week the scheduled sale. Lancaster Law Review before Becker, Heywood scheduled and The sale held as mother, appellee, purchased for his Esquire, agent $854.88, upset price. for found that the fair market value the land Common Pleas $185,000.00. Appellant did not at the time of the sale was notice of the sale learned of or mailed receive and, after the apparently, redemp- occurred it after the sale in the Real Estate Tax Law Sale period provided tion (Supp.1983-84). 5860.501 had run. 72 P.S. *5 Throughout these that proceedings argued the notice contained the Real Estate Tax Sale § 5860.602, Law, is unconstitutional it does P.S. because require personal mortgagee. not or mailed notice to a record out that the Appellant correctly points provides statute and generally by publication posting requires for notice by only notice certified mail to owners of the affected Appellant mortgagees further notes that are not property.3 5860.602, Specifically, by September Section as amended the Act of 27, 1973, question at the time the P.L. No. events occurred, pertinent part read in as follows: Notice of sale thereof, give any the Prior to scheduled sale bureau shall notice (3) (2) newspapers once a week for three consecutive weeks in two general county, many published circulation in the if are so therein, legal journal, any, designated by the once in if the legal publication court for the notices. Such shall set (a) sale, sale, (c) (b) purposes forth the time of such such sale, (d) including approxi- place of such the terms of the sale (e) upset price, descriptions properties mate of the to be sold as entered, commencing description stated in the claims each with
Name of Owner description period unknown and has been unknown for a Where the owner is years, the name of the owner need not be of not less than ten description. included in such may given intelligible description The be abbreviations. prop- published notice shall be addressed to the "owners of Such liens, persons having all erties described in this notice and to tax tax against properties.” judgments municipal such or claims publications, similar notice of the shall In addition to such sale bureau, (10) days given by ten date of also at least before the be mail, sale, only, States certified addressee United postage prepaid, receipt requested, to each owner as defined return property. by posting on the this act and notice, posted published the mail notice and the notice shall may, option any property sale of each state that the bureau, any stayed or lien creditor of if the owner thereof be agreement of sale enters into an the date owner on or before instalments, provided pay in the manner the bureau to the taxes act, agreement entered into. and the title to sold shall be defeated and no No sale shall be required proof mail notice as herein invalidated because owner, given provided such notice was not received prescribed by this section. definition. 72 P.S. statutory under the “owners” *6 § 5860.102 which states:
“Owner,” property in name the is last person whose law, and all other registered, registered according if to and notorious person open, peaceable cases means any or of owner owners possession property, apparent thereof, thereof, in the reputed or the owner or owners property having as to neighborhood property; such by any county, turned “owner” been over bureau county. shall mean the Board, Supreme
In States Mennonite United here, i.e., question was confronted the identical raised with whether a mort- by publication posting provides notice gagee proceeding of real estate notice of a to adequate mortgaged sell the of taxes. property non-payment There, require- that court that in to satisfy held order ments of the Due Process of the Fourteenth Amend- Clause Constitution, ment to the United mort- States “[w]hen recorded, gagee in mortgage publicly is identified that is supplemented notice must by publication constructive be notice mortgagee’s mailed to the last known available ad- dress, —, or at 2711. service.” Id. at S.Ct. holding Supremacy We are bound to follow that VI, Constitution, Clause of the United States Article Section quoted provision Pennsylvania’s statute appears foregoing constitutionality to fail the test of be- cause it includes only mortgagees owners and not within however, persons given Appellee, class notice. di- rects this Court’s attention differences between our and the law Indiana statute considered the United States Supreme Court. notes that Specifically, appellee the lien divestiture provisions discharged of the Indiana statute all mortgages, recorded, the Pennsylvania whenever but Real Estate Tax discharges only Sale Law those mortgages Therefore, recorded after the tax lien has attached.4 she argues that lien creditors have constructive notice of the 4. See 72 P.S. § 5860.609. statute, from the
lien under our record of taxes returned as liens, interest in protect their the affected that such notice is sufficient. constitutionally constructive
Indeed, the record shows that had record and lien, appropriate actual notice of the tax but failed to take measures to its interest in the protect ques- understanding tion because of its mistaken that Mr. O’Don- nell had taxes on the That paid property. appel- owed lant was not tax sale apprised subsequent may be attributed to Mr. O’Donnell’s actions and not to the inade- quacies provision. the Act’s notice However, from the Court’s discussion Mennonite Board, it is that the notice in our apparent statute *7 is not by Specifically, saved this distinction. the Court stated that: mortgagee’s knowledge delinquency in the
[a] payment equivalent of taxes is not to notice that a tax sale is pending. The latter the information “was which [County] obliged give the to constitutionally person- ally obligation mailing of a —an single discharged.” letter would have —, at 2712 (quoting Id. 103 S.Ct. at Schroeder v. City of 283, York, 208, 214, 279, New 371 U.S. 83 S.Ct. 9 L.Ed.2d [1962]). 255 in majority states Mennonite Board that a “[s]ince interest,
mortgagee
legally protected property
has a
clearly
calculated to
him
reasonably
apprise
he is entitled to notice
—,
tax sale.” Id.
187 1874, 1880, 9,n. Lindsey, 444, 455, 9, S.Ct. n. 102 456 U.S. (1982). 249 72 L.Ed.2d in the United reasons, we, like the dissenters these
For the statements Court, are troubled Supreme States “a steps to ability take party’s majority that court’s of its does not relieve the State interests safeguard its “forego not may and that a state obligation” constitutional modest administrative burden relatively provid- even resource- ing parties particularly notice mail to who are Board, ful.” Mennonite —, 103 at 2712 S.Ct. U.S. added). (emphasis Board the decision Mennonite unques-
Nevertheless, Men- Accordingly, instant under controls the case. tionably Board, Real nonite Pennsylvania’s the notice process rights Tax Law violates the due Estate Sale mortgagees. record ap-
However, for the first time on appellee argues uncon- provisions if are statutory that even peal, stitutional, County Lancaster interest appellant’s Act, Deficiency Judgment has been divested seq., 1261.1 et § 16, 1941, 400, P.L. P.S. July Act Code, July Act of re-enacted the Judicial substantially § (effective 27, 1978), 42 June P.L. No. seq5 8103 et Pa.C.S. Act Judgment Legislature passed Deficiency
Our unsettling injus- during Depression remedy deeply *8 existed; creditor then an execution specifically, tice which nominal sum at a forced purchased who real estate judgment to retain the full amount of his sale was entitled Son, Philip Kimwyd, Green & Inc. v. against the debtor. Inc., 410 Pa. (1963). 202, 204, 231, 232-33 The Act 189 A.2d by reducing judgment the creditor’s injustice removed this instead of its by the fair market value § See Thus, 8103(c). 42 under minimal sale Pa.C.S. price. Act, may proceed against execution creditor an before petition he must the court property, other the debtor’s re-enactment, convenience, considering citations and such 5. For quotes from the Judicial Code. are hereafter 188 value of
establish the fair market the real estate six within months of the forced sale which purchased he the proper- § 8103(a) ty. (d). Pa.C.S. If no petition is filed within the prescribed period, six-month specified certain persons including judgment debtor and any person interested in real estate which would be bound deficiency judgment, may petition the court to have the judgment marked satisfied and discharged. 42 Pa.C.S. § 8103(d).
Appellee asserts that appellant foreclosed on three of the mortgages given by $1,100,000.00 DiSabatino to secure the loan and subsequently purchased these properties at sher iffs’ By sales. appellee’s own admission purchases these place took after the trial this case. Appellee’s Supple mental Reproduced Record at 2. Appellant admits these facts. See Memorandum in Opposition to Petition and Quash Motion to Appeal Appellee at 9. further maintains that, respect to each of the three mortgaged proper ties, appellant failed to file a petition to fix the fair market value of the property within six months of the sheriff’s sale required Deficiency Judgment Appellee, Act. therefore, concludes that DiSabatino’s appellant debt to been deemed by operation now satisfied of law and that the mortgages on all the properties, including that on the tract, Lancaster County discharged.6 See, are e.g., Union 145, 149, Tutino, Trust v. 353 Pa. (1945). A.2d (“[p]ayment of the debt secured the mortgage discharg es the mortgagor’s liability on both the bond and mort addition, In gage”). appellee claims that “person she is a interested in ... which would ... be bound procedural way by petition satisfy 6. The direct to raise this issue is 8103(d) pursuant county to 42 Pa.C.S. in the in which first Indeed, purchased mortgaged parcel appellee at execution sale. did County petition this in Delaware and after its was dismissed failed to appeal. appellant argues appellee only improperly On that basis not 8103(d) by-passes by raising quash the issue on its motion to this appeal, collaterally estopped. argument but is indeed While this appealing reply it is first raised in a footnote to a brief to which there Therefore, response. prefer has been no we to decide the case on the Judgment ground Deficiency apply alternate that the Act does not bring longstanding litigation to an end. *9 and, such, as entitled to the substantive judgment” the 8103(d) Act. of the afforded Section protection Judgment Deficiency contends that the appellant In reply, Appellant case. to the facts this applicable is not Act Judg Deficiency of the objective that *10 election volved a creditor’s to execute a personal judgment against parcels one of the same county two controls here. lender, A necessarily who issues on successive executions debt, mortgaged to collect his and who is required petition to the for a deficiency judgment court in connection action, with that every perceive individual foreclosure will the value of its collateral has reduced. significantly been Lending financing institutions’ reluctance to extend under these significantly circumstances would be to reduce likely the to enterprises credit available several with counties. appellee’s theory, mortgagee
Under a would have proceed against every mortgage securing the obli- debtor’s gation in single a execution in order to avoid application Judgment the Deficiency Act. believe a who We creditor should, a bargained specific lien on several parcels instead, issue against be able to successive executions those specific parcels he collects his until debt from various parcels However, real appellee the debtor’s estate. proceeds, contends that if creditor so and the first parcel an than is sold to him the sheriff for amount less owed, the debt he cannot institute foreclosure proceedings against parcel deficiency a second unless he obtains a respect to judgment with the first.
Appellant practical observes effect of appellee’s of the Act is to force a mortgagees construction to obtain with deficiency judgment simultaneously every mortgage result, claims, foreclosure. This the Bank is fundamentally i.e., policy objective Act, inconsistent with from protect liability by limiting liability debtor to the fair market value of real estate collateral. Brief Appellant’s agree at 17. We on Reply this point argu- and therefore need not deal with its other ments on deficiency judgment issue. single only county where land in than execution more one of to consists tract, single require fact that our rules not and the do counties all hold at the same time. sheriff’s sales Court vacat-
Therefore, order of the Commonwealth consistent with proceedings remanded for record ed and the opinion. NIX, in which J., concurring opinion ZAPPALA, files a McDERMOTT,JJ., join. LARSEN and in the result. ROBERTS, C.J., concurs ZAPPALA, Justice, concurring. that the majority
I agree with unconstitutional held to be act must be *11 tax sale Adams, 462 v. Board Missions light of Mennonite I (1983). would 2706, 77 L.Ed.2d 791, 103 S.Ct. U.S. it case and makes of the holding disposes find that such applicability issue of the to reach the unnecessary part I do not join act. deficiency judgment act issue. deficiency judgment that discusses the majority dictum. regarded as should be Such discussion JJ., in this concur- McDERMOTT, join NIX, LARSEN ring opinion.
Decided notes correctly liability personal a of further relieve debtor ment Act is to sold been the debtor’s his creditor wherever Cheltenham debt. judgment for less than in execution Inc., Enterprises, Sky v. Pocono Loan Assoc. Fed. Sav. & (1982). 451 A.2d Ct. Pa.Superior only when play Act comes into argues that Appellant obliga his on personally his debtor pursues lien creditor only elects mortgagor where the application has no tion and it argues which rem proceedings foreclosure to institute in to do here. ultimately seeks is all it properties it foreclosed on three Appellant asserts them at purchased and then loan securing DiSabatino’s a settlement terms of in accordance with sales sheriff’s under and the DiSabatinos appellant between agreement in the only to look agreed which bank mortgagors personally. pursue not to counties and four Thus, n. Appellant Brief for Reply sought has not or obtained appellee it that since concludes in Lancaster the DiSabatinos against judgment is not included county, appellee any in other County or standing to invoke Section who have among persons n Id. at 8. These Act. 8103(d) Judgment Deficiency are not contradicted. facts extend loans frequently lenders society, In our modern located on take, security, mortgages properties as where, true particularly This is several counties. and commercial developer is a of residential case, the debtor securing one mortgaged properties Where properties. it is jurisdictions, in different separate parcels loan are properties proceed against all virtually impossible do not think Tutino in- Thus, we one execution.7 dealing between Pa.R.C.P. 1142 of the interaction 7. This is because actions, allowing mortgage Pa.R.C.P. 3163 foreclosure with venue