Court Opinion

ID: 9443452
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:20:47.787845+00
Date Added: 2024-06-11T17:29:29.552904
License: Public Domain

KALODNÉR, Circuit Judge
(dissenting)-
It is well settled under the Pennsylvania decisions that “whether the facts and evidence relied upon to rebut the presumption of payment are true is a question of fact for the jury; but whether, if true, they are sufficient to rebut the presumption, is a question of law for the court.” Corn v. Wilson, 1950, 365 Pa. 355, 358-359, 75 A.2d 530, 532. I do not believe that the record and the evidence sustain the conclusion of law of the District Court that the defendant had successfully rebutted the presumption of payment.
Unfortunately, the District Court did not write an opinion but merely stated its findings of fact and conclusions of law. They contain no mention of what I deem to be a critical fact — that the defendant corporation dissolved on October 25, 1948,1 without having ever made any demand upon the plaintiff for payment of the $200,000 mortgage which is the subject of this litigation. Inescapably, this significant fact speaks volumes. The defendant corporation at the time of its dissolution in 1948 had held the mortgage for 26 years (since 1922). During that time it never made any demand for payment and it dissolved without making any demand for payment or taking any action towards payment. It is inconceivable that a corporation holding a $200,000 mortgage would dissolve without attempting to liquidate such an asset if a valid claim existed with respect to it.
The majority in its opinion gave no consideration at all to this vitally important factor of dissolution without any attempt at collection of the mortgage. It should have done so, particularly under the requirement of the applicable Pennsylvania decisions that the defendant must “sufficiently” account for its delay in securing payment, particularly where, as here, it had held the mortgage for 26 years.2
*446In connection with this litigation it must be kept in mind that the mortgage was created in 1914 for a two year term and payment was consequently due thereon in 1916; that no extension agreement with respect to the mortgage was ever executed so that when the defendant acquired the mortgage in 1922, it had been in default at that time for six years and at the time the defendant dissolved in 1948, it had been in default for 32 years. Further, it must be noted that the defendant not only failed to make any demand for payment during the 26-year period in which it held it (from 1922 to 1948), but never made any demand after dissolution. Indeed, had it not been for the fact that the plaintiff instituted this action on May 13, 1949, (more than six months after dissolution), seeking a decree that the mortgage be cancelled, the question as to the payment of the mortgage would not now be before us.
In my opinion, the defendant has failed to meet its burden, under the Pennsylvania decisions, to rebut the presumption of payment.
For the reasons stated I would reverse.

. The Complaint in Paragraph 1 alleges the fact of dissolution on October 25, 1948, and the defendant’s Answer to Paragraph 1 admits the allegation.

. “There is a long established presumption that a mortgage * * * unclaimed and unrecognized for 20 years, has been paid. * * * This presumption of payment after a lapse of 20 years is a strong one and is favored in law as tending to the repose of society, the protection of the debtor, and the discouragement of stale claims. * * * The presumption of payment may be rebutted only by clear, satisfactory and convincing evidence beyond that furnished by the specialty itself, that the debt has not been paid, or *446by proof of circumstances tending to negative the likelihood of payment and sufficiently accounting for the delay of the creditor.” (Emphasis supplied.) Corn v. Wilson, 1950, 365 Pa. 355, 358, 75 A.2d 530, 532.