General Credit Co. v. CleckGeneral Credit Co. v. Cleck
Without benefit of a trial court opinion, we are asked to assess several factual and legal findings by the trial judge regarding a mortgage executed by one joint tenant on property held with another joint tenant with right of survivorship. In response to a petition for declaratory judgment by the non-mortgagor joint tenant Clair Lauver (Lauver), the trial court ordered that the mortgage was null and void. The mortgagee, General Credit Company (General Credit), appeals. We reverse.
The trial court’s brief account of the facts appears at page 57 of the trial transcript. After reviewing the record, we glean the following facts to be undisputed. This case began with the purchase of a piece of real estate known as the McVeytown Property, situated in Mifflin County, Pennsylvania, by Frederick L. Cleck (Cleck) and Lauver in February 1989. They took by deed as joint tenants with right of
General Credit had previous dealings with both Cleck and Lauver. Furthermore, a credit report received less than one month prior to execution of the mortgage indicated that General Credit had notice of the joint tenancy held by Cleck and Lauver on the McVeytown Property. The deed into Cleck and Lauver at Deed Book 0346, page 0390, in the Office of the Recorder of Deeds of Mifflin County also served as notice that Cleck and Lauver held the McVeytown Property as joint tenants with right of survivorship. Despite this notice, General Credit agreed to accept the promissory note and mortgage executed by Cleck alone, relying on a statement in the mortgage regarding deck’s interest in the property: “Ownership: You are the sole owner of the Premises. You have the legal right to mortgage it to us.” Complaint in Law at No. 109-91, Exhibit C—Mortgage between General Credit and Frederick L. Cleck.
Two months after Cleck executed the mortgage on the McVeytown Property, he and Lauver conveyed the property to McVeytown Limited Partnership, of which Cleck and Lauver were general partners. General Credit then filed suit against Cleck, Lauver and McVeytown Limited Partnership under the Uniform Fraudulent Conveyance Act, seeking a reconveyance of the McVeytown Property to Cleck and Lauver. General Credit claimed Cleck and Lauver conveyed the property in fraud of creditors and without
As a result of Judge Searer’s order, General Credit is left with no collateral securing the $60,000.00 it extended to Cleck. On appeal, General Credit claims the mortgage is a valid lien against deck’s one-half interest in the McVeytown Property. Moreover, claims General Credit, the declaration of the mortgage as null and void acts as an unjust enrichment to Cleck and Lauver. General Credit requests a reversal and a remand for a determination of the following factual and legal issues presented for our review:
1. Whether the trial judge erred in failing to find as a fact that Lauver and Cleck acquired the McVeytown Property as joint tenants with right of survivorship and not as tenants in common?
2. Whether the trial judge erred in failing to find as a fact that Lauver knew that Cleck had pledged the McVeytown Property as collateral for the $60,000.00 loan from General Credit?
3. Whether the trial judge erred in failing to find as a matter of law that the mortgage was a valid lien against the McVeytown Property at the time the mortgage was recorded?
4. Whether the trial judge erred in failing to find as a matter of law that one tenant may pledge real property as security for a loan without the other tenant’s consent?
5. Whether the trial judge erred in failing to find as a matter of law that a joint tenant who pledges real property as security for a loan, by the Joint Tenant’s Act, severs the joint tenancy creating a tenancy in common?
6. Whether the trial judge erred in failing to find as a matter of law that Lauver is barred by the doctrine of laches from contesting the validity of the mortgage lien having first contested the validity of the mortgage nearly a year and a half after the recording of the mortgage against the McVeytown Property?
7. Whether the trial judge erred in failing to find as a fact and a matter of law that Lauver consented, by his silence, to the pledging of the McVeytown Property as collateral for the loan from General Credit?
Appellant’s brief at pp. 3-9. We will address the issues above in seriatim. Initially, we dispose of issue one as meritless because neither party questioned that Cleck and Lauver took the McVeytown Property by deed as joint tenants with right of survivorship. Because this was not a disputed fact, a finding by the trial court was not necessary.
Issue number two concerns whether Lauver, the non-mortgagor joint tenant, knew about the mortgage Cleck entered into with General Credit. We find no merit to this challenge. There exists ample evidence in the record to support the trial court’s finding that Lauver was not aware of the September 1989 mortgage Cleck alone executed with General Credit. The testimony of both Cleck and Mr. Sunday, a business partner and employee of deck’s, clearly suggests that Lauver had no knowledge of the mortgage in question. Transcript of September 24, 1991, at pp. 20, 24-25, 45-46. The trial court, as fact finder, may choose to believe part or all of the testimony presented. We find no abuse of its discretion in believing the fact pattern suggesting Lauver was without knowledge of the mortgage.
Lauver argues that deck’s mortgage to General Credit severed the joint tenancy and created a tenancy in common. Consequently, because Cleck acted without Lauver’s knowledge or consent, the mortgage lien is null and void as to Lauver’s interest. General Credit agrees that the mortgage severed the joint tenancy and created a tenancy in common. However, General Credit contends that the mortgage was, nonetheless, a valid lien against deck’s interest, which lien deck and Lauver sought to avoid by fraudulently conveying the property to McVeytown Limited Partnership.
According to the record, Cleck and Lauver were clearly joint tenants with right of survivorship before the mortgage; therefore, the law of joint tenancy governs our decision, not the law of tenancy in common or tenancy by the entireties. 1
The essence of a joint tenancy created in this Commonwealth is the four unities: interest, title, time and possession.
Allison v. Powell,
Each joint tenant holds an undivided share of the whole estate.
American Oil Co. v. Falconer,
A joint tenancy is severed when one or more of the four unities is destroyed.
Riccelli v. Forcinito,
With regard to mortgages effectuating a severance, we note that Pennsylvania subscribes to the lien theory of mortgages, i.e., a mortgage does not transfer title to the mortgagee; rather, it constitutes a lien on the mortgagor’s
This case involves a fact pattern similar to the Simpson case, a mortgage by one of two joint tenants. In light of the Simpson holding, we agree with the parties that the mortgage in this case effectuated a severance of the joint tenancy held by Cleck and Lauver.
Having found that deck’s mortgage to General Credit did sever the joint tenancy, we turn now to the validity of the mortgage in relation to the respective interests of the joint-tenants-turned-tenants-in-common. On this
Issue four is disposed of in accordance with our holding that the mortgage created a valid lien against deck’s interest in the McVeytown Property.
Issue five is disposed of in accordance with our holding that the mortgage effectuated a severance of the joint tenancy.
Issue six has been waived. While General Credit raised the issue of laches in its motion for post-trial relief, it did not raise laches in the initial pleadings or during the trial phase. “[A] matter not raised in the trial court will not be considered on appeal____ To preserve an issue for appellate review, an appellant must make a timely objection at the appropriate stage of the proceedings before the trial court and must specifically raise the issue in post-trial motions.”
Taylor v. Celotex Corp.,
Issue seven is disposed of as meritless given our conclusion that the trial court did not abuse its discretion in finding that Lauver had no knowledge of the challenged mortgage. Lauver’s silence was the product of his lack of knowledge. We are hard pressed to agree that such silence amounts to actionable consent.
Order reversed. Jurisdiction relinquished.
Notes
. Lauver relies on the cases of
Caveny v. Curtis,
. The
Simpson
court addressed two questions very similar to those presented herein: 1) Whether the mortgage by two of three joint tenants severed the joint tenancy? and 2) Would the assignees of the mortgage be entitled to collect on the debt secured by the mortgage? Counsel for the joint tenant argued that, pursuant to the lien theory, no severance occurred because no title was passed via the mortgage. The court made no reference to this argument in deciding that the mortgage by two of the three joint tenants severed the tenancy. Rather, "the court [was] of the opinion that the mortgage was a severance of the jointtenancy [sic]. The interest of Baynton and Morgan passed by it, but the interest of Wharton was not effected."
Simpson,