Opinion
January 6, 1939.
January 26, 1939.
Insolvency — Distribution of assets of estate — Proof of claims — Secured creditors — Collateral of third person — Extension agreement — Building and loan association.
Where it appeared that defendant, a building and loan association, the owner of premises subject to a mortgage held by plaintiff, entered into an agreement with plaintiff by which the latter agreed not to demand payment before a specified date and defendant agreed to assume payment of the mortgage; that after default, and after defendant had conveyed the property, plaintiff foreclosed and purchased the property for a nominal sum and brought suit on the extension agreement; and that the association defended that it was insolvent; it was held that at the time of suit the plaintiff was not a secured creditor and that defendant who had not owned the property at the time of foreclosure, was not entitled to require plaintiff to credit the value of the premises purchased at the foreclosure sale.
Argued January 6, 1939.
Before KEPHART, C. J., SCHAFFER, DREW, LINN, STERN and BARNES, JJ.
Appeal, No. 289, Jan. T., 1938, from judgment of C. P. No. 5, Phila. Co., March T., 1936, No. 469, in case of New York Life Insurance Company v. Brith Achim Building and Loan Association. Judgment affirmed.
Assumpsit on written contract. Before BOK, P. J.
The opinion of the Supreme Court states the facts.
Verdict directed for plaintiff and judgment entered thereon. Defendant appealed.
Error assigned, among others, was refusal of judgment n. o. v.
Frank A. Simons, with him Louis Halprin, for appellant.
Ralph S. Croskey, for appellee.
This was an action of assumpsit against a building association on a so-called extension of mortgage agreement. The verdict was for plaintiff for the amount of the mortgage debt with interest, less the nominal amount received at the foreclosure sale. The assignments of error are to the refusal of motions for judgment n. o. v., or for a new trial.
April 7, 1924, Leaness and wife delivered their bond and $4,000 mortgage on premises 6728 Lebanon Avenue, to a mortgagee who assigned them to plaintiff. The defendant held a second mortgage on which it foreclosed and purchased the premises mortgaged. On October 25, 1930, by agreement with defendant, then owning the property, plaintiff agreed not to demand payment before April 7, 1933, and defendant agreed to pay principal, interest, taxes, etc., as specified in the agreement. In 1932 defendant conveyed the property to Jack Klein. In August, 1934, both mortgagor and defendant being in default, plaintiff foreclosed and, October 1, 1934, purchased the property for $75. This suit followed. In defense, the association sought to establish that it was insolvent and in process of voluntary liquidation pursuant to the Building and Loan Association Code of 1933 and amendments. It was agreed that the value of the premises purchased by the plaintiff was $3,800. The court directed a verdict for the plaintiff for the amount claimed less the bid at the sheriff's sale.
It is not necessary, in affirming, to deal with the defense of insolvency alleged, because, at the time of suit the plaintiff was not a secured creditor for the reasons given in the opinions filed in the appeals which were argued with this one: see Emlen's Estate, 333 Pa. 238; All Wyoming Building and Loan Association Case, 333 Pa. 250; First Friday Building and Loan Association Case, 333 Pa. 254.
Defendant was therefore not entitled to require plaintiff to credit the value of the premises purchased at the foreclosure.
Judgment affirmed.