237 Pa. 285 | Pa. | 1912
Opinion by
This is a bill for subrogation, filed by the assignee of a lessee to compel the assignee óf a mortgagee to receive the debt and assign the mortgage which secures it. .
Charles P. Ketterer being the owner of certain real estate in the borough of Hanover, York county, gave a mortgage thereon, dated March 24, 1896, to the Hanover Savings Fund Society to secure the payment of ten thousand dollars in six months after date. On April 18, 1899, Ketterer leased the real estate to the Ketterer Manufacturing Company for ten years with the option of a second term of like tenure at an annual rental of one thousand dollars, payable semi-annually, which was applicable by the tenant (a) to payment of taxes on the property, (b) to interest on the mortgage, (c) to principal of the mortgage. The company took possession under the lease and continued in possession until it was adjudged a bankrupt in March, 1907. In pursuance of an order of the United States District Court, the trustee on September 25, 1907, sold its leasehold right to one, Lebzelter, who, on December 1, 1907, sold and delivered possession of the premises to the Hopkins Manufacturing Company, the plaintiff.
The Hanover Savings Fund Society, the mortgagee, on November 25, 1908, assigned the mortgage to Percival C. Ketterer, the defendant. The assignee of the mortgage issued a sci. fi. thereon, December 19, 1908, and obtained judgment. He issued a levari facias January 21, 1910, on the judgment and the proceedings being suspended by order of court, he subsequently issued an alias levari facias and levied on the lands described in the mortgage and held by the plaintiff under the lease.
The plaintiff company erected on the leased premises the necessary buildings and appliances with railroad switches, etc., for carrying on the business of manufacturing wagons and similar vehicles, and there are no premises with suitable buildings in the borough of, Hanover or vicinity adapted for the purpose. If the plaintiff company should be evicted from the premises its loss, expenses and the depreciation in value of its property would be an irreparable injury to it.
The plaintiff paid on its rent account on December 30, 1908, $833.33, and on September 20, 1909, $500.00.
The ábove facts are summarized from the findings of the court below, and are all that are material to the disposition of the case here. This bill was filed September 16, 1909, praying the court to stay the writ of alias levari facias issued on the mortgage, and for an order directing the defendant to assign and transfer to the plaintiff company the mortgage upon payment to
We have no disposition to interfere with the findings of fact by the court below which are complained of in the .first and second assignments of error. We think the findings are supported by the evidence and that the objections are not well taken. The plaintiff company presented a case which entitles it to équitable relief. The mortgagee was entitled to his money when it became due by the terms of his contract. If it were not paid he could proceed and collect it. The mortgage is security for the indebtedness and furnishes the legal means of enforcing payment. When, however, the debt is tendered to the mortgagee he must receive it, and he is prevented from taking any proceedings on the mortgage to collect. Generally speaking, he is not required on receipt of the indebtedness to assign or transfer the mortgage; he can only be required to satisfy it. The circumstances however may be such that when the debt is paid he may be required to assign the instrument for the protection of the party making the payment. If a junior mortgagee, judgment creditor or other encumbrancer pay a prior encumbrance in order to protect his own interest in the encumbered estate he will as’ a general rule be subrogated to all the rights of the senior encumbrancer, and if necessary for his protection may compel an assignment of the security: 27 Am. & Eng. Ency. of Law (2nd Ed.) 2á3. We have ruled that the same relief should be afforded under similar circumstances to a lessee for years: Wunderle v. Ellis, 212 Pa. 618. In the case before us, therefore, the only question is whether the plaintiff company has shown such ground as would warrant a chancellor in granting the relief prayed for in the bill, and in compelling the holder of the mortgage to assign it on payment of the debt, in-’ terest and attorney’s commissions due thereon.
The plaintiff company was not required to tender payment of the mortgage immediately upon its assignment to the present defendant. It was not required to anticipate that he would attempt to collect by legal process the mortgage and thereby deprive it of the valuable manufacturing plant erected upon the premises. The company did, however, within two months after the assignment of the mortgage notify the assignee that it would pay him the indebtedness when the mortgage was assigned to him. This notice was followed by a tender of the debt, interest and costs due on the mortgage to the record attorney of the owner of the mortgage with the request for an assignment to the plaintiff. This was sufficiently prompt to rebut any inference of laches on the part of the plaintiff and gave the holder of the mortgage an opportunity to receive
It is contended by the appellant that the tender made to his counsel of record in the mortgage proceeding was not effective, and that it should have been made to him personally. As a general rule one who seeks to take advantage of a tender of payment in discharge of an obligation must see that it is unconditional and made to the individual himself, but the circumstances may be such as to justify a qualified tender made to the representative of the party. The purpose of the plaintiff company in the present case was to protect itself against a sale of the premises on the mortgage which, as the court found, would occasion it irreparable injury. The mortgage was prior to the lease, and a sale on the mortgage would have destroyed the lease and evicted the tenant. On the other hand, the tenant could not have protected his interests by payment and satisfaction of the mortgage. The subsequent judgment of the defendant, as will be observed, exceeded the value of the property more than two thousand dollars, and the satisfaction of the mortgage would, therefore, have X>robably resulted in the loss to the plaintiff company of the amount paid by it in satisfaction of the mortgage. Equity imposes no such conditions in granting its relief, and it has been so held in numerous cases: Wunderle v. Ellis, 212 Pa. 618; Lyon’s App., 61 Pa. 15, and Hamilton v. Dobbs & Robinson, 19 N. J. Eq. 227.
The averment in the bill of the readiness and ability of the plaintiff to pay and the proffered tender therein of payment of the amount due on the judgment and mortgage rendered unnecessary the bringing of the money into court. Such a prerequisite is not necessary to the granting of relief in equity. The decree which is entered will fully protect the party from whom the relief is sought. The assignment of the judgment and mortgage will not be required until the money is paid, and the decree will so provide. The holder of the mortgage is, therefore, amply protected without the money being brought into court to await its decree. This practice is recognized in numerous adjudicated cases as well as in the leading text books on equity jurisprudence.
There is no merit in the contention that the defendant should be permitted to protect his subsequent judgment by withholding the assignment of the mortgage. As appears in the statement of facts, the judgment note on which he entered judgment was not executed for more than a year and a half after the lease of the premises, of which he had record notice. His good faith in taking the note under the circumstances may well be questioned. When he took the note he knew that there was a mortgage debt against the real estate within three thousand dollars of its value, yet he accepted a judgment for more than fifteen thousand dollars. Manifestly, he could not have expected to have obtained payment from the real estate. In addition to this, however, an examination of the record of the
The decree is affirmed.