Opinion
April 17, 1935.
May 13, 1935.
Husband and wife — Bond given by — Liability of wife — Payment of purchase-money mortgage — Estate by entireties — Improvements on land.
1. A married woman is liable on a bond given by her and her husband, accompanying a mortgage secured on real estate owned by the husband and wife as tenants by entireties, to the extent that the proceeds of the mortgage are used in payment of a purchase-money mortgage on the property. [249-53]
2. Such married woman is liable likewise, where the proceeds of the mortgage are used in the erection of an improvement on the premises, and this is so although the improvement is made against her wishes and she takes no part in its direction or management, where she makes no effort to relieve herself of liability during the existence of the bond and mortgage and before default thereon. [252-3]
Argued April 17, 1935.
Before FRAZER, C. J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Appeal, No. 10, Jan. T., 1935, by Mary Jane Koller, from decision of C. P. Blair Co., March T., 1931, No. 398, in case of Pennsylvania Trust Company v. Mahlon S. Koller and Mary Jane Koller, his wife. Order affirmed.
Petition and rule to open judgments.
The facts are stated in the opinion of the lower court, PATTERSON, P. J., as follows:
Mary Jane Koller presented her petition for rule on the plaintiff to show cause why judgment entered in the Court of Common Pleas of Blair County to No. 398, March Term, 1931, should not be opened on the grounds that she is a married woman and signed the mortgage bond as surety for her husband.
On November 22, 1923, the petitioner, Mary Jane Koller, and her husband Mahlon S. Koller, were owners in fee as tenants by entireties and in possession under deeds of conveyance duly recorded in the office for the recording of deeds in and for Blair County of three contiguous lots or parcels of land fronting 92 1/2 feet on the northwestern side of Eleventh Avenue, numbered 708-708 1/2-710-712 Eleventh Avenue in the City of Altoona and extending 150 feet through to Green Avenue, fronting thereon 71 feet and numbered 711-713-715 Green Avenue, having thereon erected a three-story brick building fitted with freight elevator, facilities for loading and unloading trucks under cover, and other equipment for a modern wholesale grocery business, and known as the Koller warehouse property.
On that date the property was subject to a mortgage executed by both Mahlon S. Koller and Mary Jane Koller for an indebtedness of $23,000 with interest at six per cent per annum, dated March 14, 1923, and duly recorded in favor of the Mountain City Trust Company. The mortgage represented purchase money borrowed from the trust company. There were also several mechanics' liens of record.
There was at the same time other indebtedness representing money borrowed for the building of the warehouse and for labor and materials for said building project. The whole sum owed on that date aggregated $45,000 which was borrowed from the Pennsylvania Trust Company of Reading, Pennsylvania, upon the execution of a first mortgage in that sum, dated November 22, 1923, and payable in five years securing thirty-two obligations in the form of mortgage bonds under the hands and seals of the mortgagors, to wit, Mahlon S. Koller and Mary Jane Koller, Mary Jane Koller, the petitioner, having signed and duly executed the mortgage and each of the thirty-two mortgage bonds.
The entire proceeds of the mortgage and bonds, amounting to $45,000, were paid by the Pennsylvania Trust Company check dated November 21, 1923, to the order of Mahlon S. Koller and Mary Jane Koller, and endorsed by both. The testimony shows that of this new loan, $23,000 was paid in satisfaction of the Mountain City Trust Company mortgage, representing the original purchase money. We have, therefore, an estate by entireties mortgaged by the owners, the proceeds paid by check to both owners jointly with almost half of the amount used to pay the purchase-money mortgage, and a large part, if not all, of the remainder used in the erection of a wholesale warehouse building thereon. Later, the mortgagors defaulted in payment of interest, and on the 30th day of September, 1932, the Pennsylvania Trust Company, mortgagee, became the purchaser of the property at sheriff's sale. So far as this record shows, the Trust Company is still the owner of the title to the premises.
On April 15, 1931, the plaintiff, the Pennsylvania Trust Company, filed a præcipe for a deficiency judgment on three of the bonds, each in the sum of $1,000 and on October 19, 1932, Mary Jane Koller filed this petition with the prayer that the judgment be opened and she be permitted to enter her defense on the grounds that she was an endorser for her husband throughout the entire transaction.
To permit her to do so would be contrary to the acts of assembly which permit married women to own real estate and to execute mortgage indebtedness against the same. The petitioner voluntarily accepted title to the mortgaged property as a tenant by entireties with her husband in 1923 and at no time during the period of nine years which elapsed from the date of her ownership to the date of the filing of this petition did she raise any question of her joint ownership and joint and several liability with her husband for the payment of the debt which they together had borrowed from the plaintiff trust company. It was only when the plaintiff undertook to collect the indebtedness for which they were both liable that the petition was filed. These tenants by entireties received the full amount of the mortgage, to wit, $45,000, and had the use of it for the years they owned the property, and complained only when called upon to pay. There is not any sound reason why they should not pay their just obligations. That is what they contracted to do when they executed the mortgage and the several bonds accompanying the same. Mary Jane Koller was not an endorser for her husband in these transactions. She was a joint maker with him. The debt was hers as well as that of her husband. When in the bond she pledged all her real estate for the payment of the debt she did exactly what all other mortgagors do when the common form of mortgage and bond are used. The testimony satisfactorily discloses the fact that the petitioner was not in any manner misled or deceived in the original transaction.
If the Kollers had been successful in meeting their obligations and paying off this mortgage and the petitioner had survived her husband, there is no reason to believe that she would have then said that she was an endorser for her husband and not entitled to the sole ownership of the mortgaged property as the surviving spouse.
This case differs from the case of Commercial Corp. v. Ruppel, 295 Pa. 88. In that case it was shown that the money borrowed, for which a mortgage and bond were executed by the husband and wife against property held by entireties, was used by the husband for the purchase of an automobile, title to which he took in his own name.
A married woman cannot enjoy the advantages and security of an estate by entireties for ten years without being liable for the payment of the purchase money and the cost of improvements represented by mortgage and bonds duly executed by her and her husband as tenants by entireties.
The contractor testified that she took no part in the management of the construction work, neither did she participate in directing the mercantile establishment, and petitioner testifies that the property was built against her wishes, but these facts, even though believed by a jury, would not relieve her of liability for payment of her just indebtedness against her estate. It was her duty to make some effort to relieve herself of this liability during the years that it existed before default in the payment of interest and principal and the sheriff's sale.
The present executions represent bonds in the sum of $3,000 and there can be no doubt about the petitioner's liability on these and other bonds to the extent of $23,000 for the reason that it is admitted that that part of the loan was used to pay the purchase money for the lots, the title to which was taken in the names of the petitioner and her husband.
Now, therefore, December 28, 1933, upon due consideration of the testimony and arguments of counsel, it is hereby ordered and decreed that the rule heretofore granted to show cause why the judgment should not be opened and the petitioner allowed to put in her defense is hereby discharged.
Rule discharged. Defendant wife appealed.
Error assigned was discharge of rule.
Robert W. Smith, for appellant.
J. Lee Plummer, for appellee, submitted no brief.
All questions raised in this appeal were correctly disposed of by the learned president judge of the court below, whose opinion is herewith adopted by us in affirming his order discharging the rule to open judgment.
Order affirmed.