Opinion ID: 1894470
Heading Depth: 2
Heading Rank: 1

Heading: nature of judgment

Text: An action in mortgage foreclosure is strictly an in rem action and may not include an in personam action to enforce personal liability. Pa.R.C.P. 1141. The sole purpose of a judgment obtained through mortgage foreclosure is to effect a judicial sale of the mortgaged real estate, Meco Realty Company v. Burns, 414 Pa. 495, 200 A.2d 869 (1964), and the judgment obtained in a mortgage foreclosure action is only in rem. First Seneca Bank v. Greenville Distributing Company, 367 Pa.Super. 558, 533 A.2d 157 (1987). However, where a mortgagee fails to follow Pa.R.C.P. 1141 and includes in a mortgage foreclosure complaint a request not only for an in rem judgment of foreclosure on the mortgaged property but also an in personam judgment against the individuals who executed the mortgage for their personal liability on the note or bond accompanying the mortgage, the judgment in mortgage foreclosure can be both in rem and in personam provided that the mortgagor waives any objection to the inclusion of the assumpsit action for a personal judgment in the mortgage foreclosure proceeding. Kretschman v. Stoll, 238 Pa.Super. 51, 352 A.2d 439 (1975). In the present case, the Court's order dated February 17, 1987 did not specify whether the judgment granted was in rem, in personam, or both. Rather, it simply provided the plaintiff's Motion for Summary Judgment is granted. Because the trial court could not have granted more relief than was sought, we must examine the complaint in mortgage foreclosure and the summary judgment motion to determine the nature of the judgment entered. Upon comparison of the facts in the present case with those in Kretschman, where the judgment obtained in the mortgage foreclosure action was determined to be both in personam and in rem, and by comparison with the facts in Peoples National Bank of Lebanon, 338 Pa.Super. 177, 487 A.2d 912 (1985), where the judgment obtained in the mortgage foreclosure action was distinguished from Kretschman and held to be only in rem, we conclude that the summary judgment obtained in the present case is only in rem. In Kretschman, the mortgage foreclosure complaint requested both an in rem judgment against the property and an in personam judgment against the individuals who had executed the mortgage and the bond underlying it. The complaint was brought upon both the mortgage and the bond, and the prayer for relief requested judgment against Defendants in a specified amount, and for foreclosure and sale of the mortgaged property. The trial court granted both in rem and in personam relief as requested. In Peoples National Bank, the appellee argued that its judgment in mortgage foreclosure was both in rem and in personam as in Kretschman. However, the court found otherwise. The complaint in Peoples National Bank was captioned Mortgage Foreclosure, and a bond upon which judgment could have been obtained was not mentioned in the complaint. The complaint stated that the mortgages are in default, and that  in accordance with the terms and conditions of the mortgages , the entire principal was due immediately. The complaint also recited that upon failure to pay the entire amount due, action would be commenced to foreclose. Furthermore, the prayer for relief did not specifically request judgment against Defendants but only demanded judgment for the aforesaid amounts, together with collection fees, accrued late charges, costs of suit, etc., and for foreclosure and sale of the mortgaged premises. Id., 338 Pa.Superior Ct. at 181-182, 487 A.2d at 914. Additionally, in the written notice of intention to foreclose, the mortgagee stated we may also sue you personally, and the mortgagee's praecipe for judgment asked that the damages include the balance of the principal of the mortgage. Finally, the docket entry did not indicate that an in personam judgment was granted as well as an in rem judgment. A comparison of the facts in the instant case with those in Kretschman and Peoples National Bank shows that the present case is most like Peoples National Bank in which the mortgage foreclosure judgment was held to be only in rem. In the instant case, the complaint which was filed by Insilco is captioned Mortgage Foreclosure just as in Peoples National Bank. Also, as in Peoples National Bank, the complaint recites that notice of intention to accelerate the maturity and to foreclose was given (paragraph 9), and the complaint recites that pursuant to the terms of the mortgage and as a result of the aforementioned default. . . the whole amount has become due (paragraph 12). A further similarity with Peoples National Bank, is that the complaint nowhere recites any of the terms of the underlying bond, nor attaches it as an exhibit to the complaint, nor requests judgment on the bond; the complaint simply recites No judgment has been entered on the bond accompanying the mortgage. (paragraph 11). The only similarity of the present case with Kretschman and distinction from Peoples National Bank, is that the prayer for relief requests judgment against the defendants Joel T. Rayburn and Judy A. Rayburn, his wife, in the sum of . . . [,]a foreclosure of the mortgage premises and a judicial sale thereof. In addition to the similarities between the present case and Peoples National Bank, there are two other factors which must be considered in our analysis of the type of judgment which was entered in this case. First, under the Rules of Civil Procedure governing mortgage foreclosure actions, not only is there a requirement that the action be limited to an in rem action, Pa.R.C.P. 1141, but there is also a requirement that the prayer for relief demand judgment for the amount due. Pa.R.C.P. 1147(6). Thus, the effect of the demand for judgment against the Rayburns contained in the prayer for relief in the instant case must be considered in light of the other factors which we have enumerated. If there are other factors present which indicate that the mortgagee only intended to seek an in rem judgment, then the prayer for relief requesting judgment for the amount due specifically against the Rayburns may be viewed as an inartful attempt to comply with Pa.R.C.P. 1147(6) that a demand for judgment be included in the complaint. However, if the other evidence shows that the mortgagee was in fact trying to combine the in personam action with the in rem action, then the prayer for relief demanding judgment against the Rayburns specifically may be viewed as a deliberate attempt to obtain a separate in personam judgment in the mortgage foreclosure action. The second additional factor which must be considered is that Insilco asserts repeatedly throughout its appellate brief that the present mortgage foreclosure action is exclusively an in rem action and that there can be no in personam judgment obtained in it. Considering that Insilco takes the position that only an in rem judgment could be obtained in an action for mortgage foreclosure, and that under the rules of Civil Procedure a mortgage foreclosure complaint can only include a cause of action in rem, considering that the complaint recites that the only notice given was to seek a mortgage foreclosure, considering that the complaint recites only that the terms of the mortgage, and not the bond, have been breached, considering that the terms of the bond are not recited in or attached to the complaint, and considering that the prayer for relief does not request judgment on the bond but simply requests judgment against the Rayburns in an amount equal to the amount due pursuant to the terms of the mortgage, we hold that the summary judgment which was granted is only an in rem judgment, and does not constitute a personal judgment against the Rayburns on the bond. [3]