Bulger v. Wilderman

• Decision Date: 27 February 1931
• Docket Number: 371-1930
• Citation: 101 Pa.Super. 168
• Parties: Bulger v. Wilderman and Pleet, Appellants
• Court: Pennsylvania Superior Court

101 Pa.Super. 168

Bulger v. Wilderman and Pleet, Appellants

No. 371-1930

Superior Court of Pennsylvania

February 27, 1931

Argued November 14, 1930

Appeal by defendants from judgment of C. P., No. 5, Philadelphia County, No. 11605-1929, in the case of Roy S. Bulger v. Isaac Wilderman, Constable, and William Pleet, Agent.

Replevin to recover goods taken in distraint for rent. Before Martin P. J.

The facts are stated in the opinion of the Superior Court.

The court entered judgment for plaintiff. Defendants appealed.

Error assigned, among others, was the entry for judgment.

Affirmed.

Parris and Lischin, for appellants. -- A tenant is estopped to deny his landlord's title and to set up a paramount title in a third party: Cooper v. Smith, 8 Watts 536; Elliott v. Smith, 23 Pa. 131; City of Cincinnati v. Paint Creek Collieries Co., 252 Pa. 619.

The mere sending of a letter by a mortgagee, not the holder of the premises, to the tenant on the premises, does not in and of itself constitute the taking of legal possession Tryon v. Munson, 77 Pa. 250; Myers v White, 1 Rawle 353; Shields v. City of Pittsburgh, 252 Pa. 74.

Charles Myers of Barnes, Biddle and Myers, for appellee. -- After default in a mortgage and notice by the mortgagee to the tenant occupying the mortgaged premises of such default and demand by the mortgagee upon the tenant that the rents thereafter accruing be paid to the mortgagee, the mortgagee is entitled to the rents: Wells v. Van Dyke, 109 Pa. 330; Mellon v. Lemmon, 111 Pa. 56; Bausman's Appeal, 90 Pa. 178; Wolf's Appeal, 106 Pa. 545; Eagle-Picher Lead Co. v. Fullerton, 28 F.2d 472.

Before Trexler, P. J., Keller, Linn, Gawthrop, Cunningham, Baldrige and Whitmore, JJ.

OPINION

KELLER, J.

This is an action of replevin growing out of a distress for rent.

On July 1, 1924 John Donlan was the owner of a lot of ground situate on the northwest corner of 8th Street and 66th Avenue, Philadelphia, on which is erected an apartment house, known as Launton Apartments. On the same day Donlan executed and delivered a mortgage covering the said premises, duly recorded, to secure the sum of $ 40,000 payable in two years with interest at 6% per annum. The mortgage contained a clause conveying the rents, issues and profits of the buildings thereon erected. It was duly assigned to John Hancock Mutual Life Insurance Company, the holder at the time this controversy arose.

Max Moscovitz and Israel J. Allen duly succeeded to Donlan's rights as owner of the premises and on July 30, 1926 entered into an agreement with the John Hancock Mutual Life Insurance Co. -- hereinafter called " insurance company," -- by which it was provided that the principal of the mortgage was reduced to $ 36,000, and the date of payment extended to September 1, 1929, with interest as aforesaid.

On July 26, 1929, the owners of said apartment house, through their duly authorized agent, leased an apartment on the second floor of said premises to this plaintiff, for one year from October 1, 1929 at the annual rental of $ 1,080, payable in advance in monthly installments of $ 90, on the first day of each month.

On September 18, 1929 said lease was duly assigned by the authorized agents of the owners to William Pleet, one of the defendants, and on October 7, 1929 the plaintiff paid to him the rent provided in said lease for the month of October, 1929.

On September 1, 1929 there was a default in the payment of the principal and interest due on said mortgage, and no payment was made thereon after that date.

On October 29, 1929 the insurance company notified the plaintiff, as well as all other tenants of said mortgaged premises, that it had taken possession of the premises on account of default in payment of the principal and interest due on said mortgage on September 1, 1929 and that no rent thereafter due and payable by him as tenant of the premises should be paid except to its duly authorized agent, and demanded payment to it of the rent thereafter due and payable.

Pursuant to said notice plaintiff paid insurance company the rent due and payable November 1, 1929 for the month of November, 1929.

Pleet and his constable, the other defendant, levied a distress warrant against the plaintiff's goods for the rent for the month of November, 1929. The plaintiff thereupon sued out this writ of replevin.

On November 13, 1929 judgment, with waiver of inquisition, condemnation, etc., was entered on the bond accompanying the mortgage, in favor of insurance company as assignee aforesaid, and a writ of fieri facias was issued on November 15, 1929 by virtue of which the said premises were sold by the sheriff on January 6, 1930 to insurance company for $ 50.

The court below entered judgment in favor of the plaintiff for want of a sufficient affidavit of defense.

The question raised by this appeal is whether payment of the rent by the tenant to the mortgagee, on demand after default on the mortgage, was a good defense to Pleet's claim and distraint for the rent. It depends on the rights granted the mortgagee by the indenture of mortgage.

There is some confusion in the decisions in this State on the subject, (See Professor Wm. H. Lloyd's article " The Mortgage Theory of Pennsylvania," 73 University of Pennsylvania Law Review 43), but much of it can be cleared up if the opinions are read in the light of the facts in issue and the question involved in the particular case. Generally stated, the rule in Pennsylvania is that although in form a conveyance of title, a mortgage is in reality only a security for the payment of money, or performance of other collateral contract: Wilson v. Shoenberger's Exrs., 31 Pa. 295; McIntyre v. Velte, 153 Pa. 350, 25 A. 739. So in Rickert v. Madeira, 1 Rawle 325, it was held that the interest of the mortgagee was not such an estate in the land as could be levied upon and sold by the sheriff under an execution; and in Myers v. White, 1 Rawle 353, that a sale under a levari facias on the mortgage would not pass title to the growing grain. In McIntyre v. Velte, supra, it was held that a material alteration of the mortgage by the mortgagee rendered it void; while the question at issue in Wilson v. Shoenberger's Exrs., supra, was whether the conveyance was absolute or defeasible; and, if the latter, it was held to be in effect a mortgage.

But the conveyance, though only as security, is not without significance and effect. In Lennig's Est., 52 Pa. 135, cited and relied on by the appellant, it was held that " when encumbered by the mortgagor for his own debt, the land is but a pledge or security for its payment and the primary liability rests . . . . upon the personal estate to redeem it; " but it is, nevertheless, a pledge of the land as security, and the effect of the conveyance as security cannot be brushed aside or overlooked: McLaughlin v. Ihmsen, 85 Pa. 364. The mortgagor remains the owner of the land mortgaged, but the mortgagee, is entitled to its possession to be held as security until his debt is paid. In case of default the mortgagee may proceed on the bond, or he may issue a scire facias on the mortgage, but he is not limited to those remedies. He may also bring ejectment against the mortgagor, and those claiming under him, to recover the possession. His right of possession is not founded on his right to bring ejectment; his right to bring ejectment is based rather on his right to possession under the mortgage; and if he can enter on the premises, without any breach of the peace, he has the right to do so and take the profits until his debt is paid: Erny v. Sauer, 234 Pa. 330, 334, 83 A. 205. His possession is never absolute, but only as a security or pledge for the debt due him. He must account to the mortgagor for the rents and profits received; and when his debt is paid, the mortgagor is entitled to have back his possession, and may recover it in ejectment: Wells v. Van Dyke, 109 Pa. 330; Mellon v. Lemmon, 111 Pa. 56, 2 A. 56. This right of possession, and to bring ejectment against the mortgagor and those claiming under him, is unquestioned. Mr. Justice Rogers, who wrote the opinions in Rickert v. Madeira, supra, and Myers v. White, supra, said in Fluck v. Replogle, 13 Pa. 405, 406: " That the mortgagee has a right to recover possession, immediately on the execution of the mortgage, results from the nature of the instrument itself . . . . Unless there be an agreement to the contrary, the mortgagee has a right to immediate possession." In Smith v. Shuler, 12 Serge. & Rawle 240, it was held that ejectment might be supported on a mortgage, payable by installments, before all the installments became due. In Martin v. Jackson, 27 Pa. 504, that the remedy by scire facias on a mortgage does not exclude the remedy by ejectment; and in Youngman v. Elmira & Williamsport R. Co., 65 Pa. 278, that unless there be a stipulation in the mortgage to the contrary, a mortgagee may maintain ejectment for the mortgaged property before condition broken. The correct principle was stated by Chief Justice Gibson in Presbyterian Corporation v. Wallace, 3 Rawle 109, as follows: " In form, a mortgage is certainly a conveyance; but it is unquestionably treated at law here, in the way it is treated in equity elsewhere, as a bare incumbrance, and the accessory of a debt. As between the parties it is a conveyance, so far as is necessary to enforce it as a security: As regards third persons, the mortgagor is the owner, even of the legal estate. This distinction, which, if attended to, will be found to reconcile the apparently jarring dicta of the judges, is as firmly established by the practice and decisions of the courts in Pennsylvania, as any other in the law." This constitutes the gist of Mr. Lloyd's conclusion in his article...