Opinion ID: 1969320
Heading Depth: 1
Heading Rank: 1

Heading: Appeal of Carroll and Jennings

Text: In assessing the contentions of the mortgagor-appellants, it is to be noted initially that the subordination and attornment agreement was in itself an entirely legal act. As stated in Harp Building & Loan Association v. Davis, 56 Pa. Superior Ct. 282 (1914): The authority to release part of mortgaged premises from the lien of the mortgage is recognized by statute, and the release of premises or part of premises from the lien of a judgment is a common practice. No conceivable principle of public policy forbids the extension of this right to a leasehold term in the property. As Chief Justice GIBSON said, in Berger v. Hiester, 6 Wharton, 210: `It is a maxim that anyone may renounce the benefit of a privilege provided for himself.' Id. at 285. There are of course certain well defined duties owing from a mortgagee to his mortgagor. A mortgagee in possession must account for rents and profits, Winthrop v. Arthur W. Binns, Inc., 160 Pa. Superior Ct. 214, 50 A. 2d 718 (1947), must maintain the mortgaged premises in good condition to prevent its deterioration, Sansotta v. City of Pittsburgh, 330 Pa. 199, 199 Atl. 164 (1938), and is liable for waste, Elliott v. Moffett, 365 Pa. 247, 74 A. 2d 164 (1950). However, none of these duties or any analogous duty was breached by Western Pennsylvania's subordination of its mortgage to the Kroger lease. As set out above, the lease agreement with Kroger was executed by the Bally Castle Corporation as lessor, and the record does not reveal whether or not Bally Castle and Carroll and Jennings are legally synonymous. It is certain, however, that Jennings personally signed the lease as secretary of Bally Castle, and Kroger has been at all relevant times tenant in possession. Furthermore, in their answer to Western Pennsylvania's mortgage foreclosure complaint, Carroll and Jennings virtually admitted their status as Kroger's landlord, alleging: 10. Western Pennsylvania National Bank has sequestered the rents payable from tenants occupying the building on the property subject to mortgage foreclosure since May 1, 1970, and Defendants demand an accounting of all payments and the application of said payments that have occurred since that time and demand that any rental payments should constitute a reduction of the mortgage balance or interest thereon. These facts taken together clearly demonstrate that Carroll and Jennings (a) are Kroger's actual landlord or (b) have at least ratified the lease by knowingly recognizing Kroger's tenancy on the mortgaged premises. That being the case, we agree with the court en banc that Carroll and Jennings certainly cannot be heard to complain about Western Pennsylvania's voluntary subordination to a lease which they themselves either negotiated or ratified and to which they themselves were legally bound. While a mortgagee in possession might in certain circumstances be under a duty not to let a readily marketable leasehold lie dormant and financially unproductive, cf. Artisans Order v. Superb Realty Co., 353 Pa. 256, 258-59, 44 A. 2d 584, 585 (1945), we perceive no reason why a mortgagee should not be altogether free to fulfill, albeit voluntarily, his mortgagor's legal duty to an existing lessee. We likewise agree with the court en banc that Carroll and Jennings have not sufficiently pleaded an unlawful conspiracy between Western Pennsylvania and Kroger. A civil conspiracy is a combination of two or more persons to do an unlawful or criminal act or to do a lawful act by unlawful means or for an unlawful purpose. Fife v. Great Atlantic and Pacific Tea Co., 356 Pa. 265, 52 A. 2d 24 (1947); Bausbach v. Reiff, 244 Pa. 559, 91 Atl. 224 (1914). As noted above, Western Pennsylvania's subordination and attornment agreement was in itself a completely lawful act. Hence, conspiracy in the present case could be predicated only upon an unlawful means or purpose. However, the only allegation of conspiracy appears in the very last paragraph of Carroll's and Jennings' answer to the mortgage foreclosure complaint and reads as follows: 18. Plaintiff has conspired with the Kroger Co. to limit the value of the subject property at foreclosure and by doing so has adversely affected Defendant's rights. Pa. R.C.P. 1019(a) directs that [t]he material facts on which a cause of action or defense is based shall be stated in a concise and summary form. The purpose of the rule is to require the pleader to disclose the material facts sufficient to enable the adverse party to prepare his case. Smith v. Allegheny County, 397 Pa. 404, 155 A. 2d 615 (1959); 2A Anderson, Pennsylvania Civil Practice § 1019.1 (1969); 3 Standard Pennsylvania Practice § 31 (1952); cf. Roberts v. Peoples Cab Co., 7 Pa. D. & C. 2d 632 (1955). In the instant case, the single, vague and conclusory allegation that the mortgagee and lessee have conspired to the detriment of the mortgagors falls far short of the requisite pleadings of the material facts. Summary judgment was entered in Western Pennsylvania's favor in the mortgage foreclosure action in the amount of $567,000 plus interest from March 1, 1970. This sum represents the $540,000 face amount of the mortgage together with $27,000 for attorney's commissions at the rate of 5%. Carroll and Jennings never admitted this amount of indebtedness in their pleadings, and they presently contend that summary judgment was improper inasmuch as there existed a genuine issue as to damages. This argument is groundless. It is admitted that the mortgage is in default, that the mortgagors have failed to pay interest on the obligation since March 1, 1967, and that the recorded mortgage is in the amount of $540,000. [] In these circumstances, the amount of the summary judgment was entirely proper. Carroll and Jennings did interpose a counterclaim for $779,483.42 plus interest. This counterclaim, however, was based solely upon the alleged illegality of the Western Pennsylvania subordination agreement, and, as we have already concluded, this agreement was not actionable. Nor does Western Pennsylvania's admitted sequestration of Kroger's rent from May 1, 1970, raise any genuine issue as to the amount of damages to be awarded in the mortgage foreclosure action. The debt owed on the mortgage changed and can be expected to change from day to day, because Western Pennsylvania is mortgagee in possession, collecting rents and paying expenses in that capacity. The mortgagors are unquestionably entitled to an accounting, but that accounting is not due until the property is sold at sheriff's sale and distribution of the proceeds is made. Judgment in a mortgage foreclosure action must be entered for a sum certain or no execution could ever issue on it.