City Deposit Bank & Trust Co. v. Zoppa

• Decision Date: 27 November 1939
• Docket Number: 158
• Citation: 9 A.2d 361,336 Pa. 379
• Parties: City Deposit Bank and Trust Company, Appellant, v. Zoppa
• Court: Pennsylvania Supreme Court

9 A.2d 361

336 Pa. 379

City Deposit Bank and Trust Company, Appellant, v. Zoppa

No. 158

Supreme Court of Pennsylvania

November 27, 1939

Argued September 27, 1939

Appeal, No. 158, March T., 1939, from order of C.P. Allegheny Co., D.S.B., Oct. T., 1934, No. 249, in case of City Deposit Bank and Trust Company v. Antonio Zoppa. Order affirmed.

Petition and rule to show cause why the satisfaction of a judgment should not be stricken from the record.

The opinion of the Supreme Court states the facts.

Rule discharged, opinion by MARSHALL, J. Plaintiff appealed.

Error assigned was the order discharging the rule.

Order affirmed at appellant's costs.

Charles Denby, with him Reed, Smith, Shaw & McClay, for appellant.

Emerson G. Hess, with him Miller & Nesbitt, for appellee.

Before KEPHART, C.J., SCHAFFER, MAXEY, LINN, STERN and BARNES, JJ.

OPINION

MR. LINN, JUSTICE

After a loan of $8,000, secured by a mortgage made in 1926, had been reduced by payments to $5,500, judgment was entered on the bond and, in execution, in February, 1935, the mortgaged premises were sold to the plaintiff-mortgagee for $1,956.28. On April 14, 1936, counsel for the plaintiff accepted service of notice from defendant that on April 20, 1936, a petition for the satisfaction of the judgment would be presented. Plaintiff did not appear in opposition to the motion whereupon the court directed the prothonotary "to enter full satisfaction upon the Judgment Docket of the said judgment . . ." The satisfaction of the judgment was prima facie evidence that it had been paid by plaintiff's taking the mortgaged premises at the foreclosure sale. It will be noticed that the petition to satisfy was not filed until six months had passed after the foreclosure sale and that in the interim the plaintiff had taken no steps pursuant to the Act of July 1, 1935, P.L. 503, to establish the amount of a deficiency judgment. So the matter stood until May 18 1938, more than two years after the proceedings to satisfy when the plaintiff filed the petition which began the present proceedings. This petition set forth various steps culminating in the order of satisfaction, with an averment that plaintiff had no notice of the application to satisfy. As the defendant's answer denies this averment, and sets forth a copy of plaintiff's attorney's acceptance of service -- two facts not now challenged by plaintiff -- we accept them and regard the order as one made after notice.

Petitioner avers that the deficiency judgments Act approved July 1, 1935, P.L. 503, "upon the authority of which the above judgment was marked satisfied has been held unconstitutional . . ." and that petitioner's judgment against defendant remains a lien and that the court was without power to authorize the prothonotary to satisfy the judgment. Various grounds of unconstitutionality were asserted and the following relief was asked: "To grant a rule against the above named Antonio Zappa [defendant] to show cause why the judgment entered as of October Term, 1934, D.S.B. No. 249, in the Court of Common Pleas of Allegheny County, Commonwealth of Pennsylvania, should not be opened and your petitioner let into a defense as to the entry of said satisfaction, and to show cause why the said satisfaction should not be stricken from the record." The rule was granted, and, after hearing, was discharged. This appeal followed. The question now is, Was there abuse of discretion?

The court had jurisdiction of the subject-matter and of the parties to the suit and in ordering the satisfaction, acted on what it considered a valid statute; the plaintiff took no appeal ^[1] from the decision. The statute, such as it was, was a fact in the case. Why, then, is the plaintiff not bound by its own conduct?

The deficiency judgments Acts of January 17, 1934 (Special Session), P.L. 243, and of July 1, 1935, P.L. 503, were held to be unconstitutional: Beaver Co. B. & L. Ass'n v. Winowich, 323 Pa. 483, 187 A. 481 (October, 1936); Shallcross v. B. & L. Ass'n, 123 Pa.Super. 593, 187 A. 819 (1936). ^[2] The basis of appellant's argument, as we understand it, is that as the learned court below did not realize that the statute was invalid, in directing the prothonotary to mark the judgment satisfied, the judgment of the court ordering the satisfaction was void when the order was made and should now be treated as though it had never been made.

It is of course generally true that void acts are of no effect (compare Haverford Twp. School District v. Herzog, 314 Pa. 161, 171 A. 455; Fowler v. Eddy, 110 Pa 117, 1 A. 789) but before that rule can be applied to judicial action based on an invalid statute it is necessary to consider the relation to the challenged act of the party complaining of it. Acts done pursuant to statute may be sustained though it be subsequently held unconstitutional: Phila. v. Ry. Co., 142 Pa. 484, 21 A. 982; Strauss v. Strauss & Co., 328 Pa. 72, 194 A. 905. In the first case it appeared that the city of Philadelphia for many years acted on the assumption that the legislation subsequently held invalid was valid; it was therefore held that the city was estopped on equitable grounds from subsequently repudiating its prior construction and recovering from a defendant on the theory that the law had been void from the beginning. In the Strauss case, the question arose between the bank, which was a mortgage creditor, and other creditors of the insolvent debtor whose property was in the hands of a receiver. To ascertain the credit to be allowed by the bank, it foreclosed a mortgage and purchased the property at a nominal bid and, in the receivership proceedings, sought to prove for the difference. Objection was made to the claim unless credited with the value of the security which had been taken at the foreclosure. To meet the objection, a proceeding was brought under the deficiency judgment Act of 1935, supra, to ascertain the "fair value" of the premises purchased; the bank participated in this proceeding and, after it was adjudicated, proved for the difference in the receivership proceedings. Thereafter, the deficiency judgment Act having been declared unconstitutional, the bank sought to repudiate its action and to claim for the full...