Opinion
January 9, 1935.
February 4, 1935.
Taxes — Liability — Owner not mortgagor — Collection of rents by mortgagee — Right of purchaser at sheriff's sale against owner — Appropriation of rents by mortgagee — Duty of mortgagee to account — Balance remaining after payment of expenses — Agreement between mortgagee and owner for payment of taxes — Judgment on scire facias conclusive on question of appropriation — Subrogation — Equities — Trusts — Consideration.
1. Where a mortgagee enters into possession and collects the rent, the rent so collected by him does not become his own individual property until he has appropriated it to the interest due him on the mortgage, or on account of the principal.
2. The mortgagee, as to the rent so collected by him, is regarded in equity as a trustee and is bound to account for the rent.
3. Where a mortgagee, pursuant to demand, is collecting the rents from the mortgaged premises, and does so for the entire year, and has in his possession out of such rents sufficient funds, after paying necessary repairs and expense, to pay the taxes on the property, it is his duty to do so; and especially so where he has not appropriated the funds in his hands to the interest on the mortgage.
4. An agreement between a mortgagee and the owner of the mortgaged premises who is not the mortgagor, by which the owner turns over the rents to the mortgagee, who agrees to apply so much as may be needed, after payment of necessary repairs and expenses, to payment of the taxes, is supported by consideration and binding; and, where the mortgagee after payment of necessary repairs and expenses, has sufficient funds in his possession out of the rents, to pay the taxes, he is legally obliged to do so.
5. In the absence of an agreement between the parties, the receipt of money by a mortgagee in possession, by way of rents, does not amount to a payment on the mortgage; only such amount, remaining after payment of necessary repairs and taxes, as is appropriated by the mortgagee to the mortgage debt, interest or principal, constitutes a payment on the mortgage.
6. In the absence of special agreement between the mortgagee and the owner who is not the mortgagor, there is no personal liability on the part of the owner to the mortgagee.
7. Where a mortgagee who has been collecting the rents forecloses the mortgage, any moneys remaining in the possession of the mortgagee out of the rents, after payment of necessary repairs and expenses and taxes, which have not been appropriated by him on account of the mortgage, are the property of the owner who is not the mortgagor, and the mortgagee can not, after the mortgage is foreclosed, apply such excess funds to the deficiency on the bond of the mortgagor.
8. In such case, the judgment on the scire facias sur mortgage is conclusive on the question of the appropriation by the mortgagee to interest or principal of the mortgage, of the rents collected.
9. The right of subrogation arises by operation of, and depends on, equity alone, and will not be enforced where the equities are equal, or the rights not clear, nor to the prejudice of the legal or equitable rights of others.
Practice — Judgment for want of sufficient affidavit of defense — Doubtful case.
10. Summary judgment for want of a sufficient affidavit of defense should not be entered, if a substantial doubt exists as to the propriety of its entry.
Argued January 9, 1935.
Before FRAZER, C. J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Appeal, No. 275, Jan. T., 1934, by plaintiff, from judgment of Superior Court, Oct. T., 1933, No. 340, reversing judgment of C. P. No. 1, Phila. Co., March T., 1933, No. 8388, in case of Integrity Trust Company, trustee under the will of Minnie E. Thompson, deceased v. St. Rita's Building Loan Association. Judgment of Superior Court affirmed.
Assumpsit.
The facts are stated in the opinion of the Superior Court.
Rule by plaintiff for judgment for want of a sufficient affidavit of defense made absolute, and rule by defendant for judgment for want of a reply to defendant's counterclaim discharged, opinion by KUN, J. Defendant appealed to Superior Court. Judgment of lower court reversed, counterclaim of defendant reinstated, with leave to plaintiff to file a reply sec. leg., and a procedendo awarded. Appeal by plaintiff allowed to Supreme Court.
Error assigned, inter alia, was judgment of Superior Court, quoting record.
Wayne P. Rambo, with him J. Channing Ellery and Robert Mair, for appellant.
Hugh McAnany and Andrew J. Schroder, 2d, for appellee, were not heard.
The judgment of the Superior Court is affirmed upon the learned opinion by Judge KELLER, which will be found in 112 Pa. Superior Court Reports beginning at page 343.