Court Opinion

ID: 4951591
Source: CourtListenerOpinion
Date Created: 2021-09-24 13:10:55.12691+00
Date Added: 2024-06-11T08:15:23.654529
License: Public Domain

WIEAND, Judge,
concurring and dissenting:
I agree with the majority that the summary judgment entered in favor of the plaintiff-appellees must be reversed. Instead of entering judgment for the appellant, however, I would remand for further proceedings.
The applicable principles of law were stated by the Supreme Court in Masgai v. Masgai, 460 Pa. 453, 333 A.2d 861 (1975), as follows:
One who by acceptance of a deed assumes and agrees to pay a mortgage to which the property is subject becomes liable both to his grantor and also to the mortgagee as a third party beneficiary. See Steinert v. Galasso, 363 Pa. 393, 69 A.2d 841 (1949). If the. conveyance is made under and subject to a mortgage but without an express assumption, there is no direct obligation to the mortgagee on the part of the grantee. Act of June 12, 1878, P.L. 205, § 1, 21 P.S. § 655. See Meco Realty Co. v. Burns, 414 Pa. 495, 200 A.2d 869 (1964). Rather, the obligation of the grantee is to indemnify the grantor from the mortgage obligation, including any deficiency judgment following foreclosure. See Heaney v. Riddle, 343 Pa. 453, 23 A.2d 456 (1942).
Id. at 459 n. 5, 333 A.2d at 864 n. 5. See also: Ruzyc v. Brown, 320 Pa. 213, 216-218, 181 A. 783, 784-785 (1935); Faulkner v. McHenry, 235 Pa. 298, 301, 83 A. 827, 828 (1912); In re May’s Estate, 218 Pa. 64, 69, 67 A. 120, 121 (1907), overruled on other grounds by Schuetz’s Estate, 315 Pa. 105, 172 A. 865 (1934).
In reciting this principle of indemnification, however, the Supreme Court has on occasion suggested that it is a presumption which may be rebutted by an agreement to the contrary. Thus, in Fair Oaks Bldg. & Loan Ass’n v. Kahler, 320 Pa. 245, 181 A. 779 (1936), the Court said:
Where a conveyance is made subject to a mortgage, the amount due on the mortgage is presumptively part of the consideration for the purchase: Orient Building & Loan Association v. Freud, 298 Pa. 431, 435[, 148 A. 841]. As between the parties to the conveyance this presumption may be overcome by oral or written agreement, but not to the prejudice of others not parties thereto who may be affected thereby. We have held that where a purchaser comes into possession of property with an existing mortgage thereon, he intends to indemnify the vendor against loss through such mortgage, and that there is thus created a contingent liability: Dobkin v. Landsberg, 273 Pa. 174, 180[, 116 A. 814].
Id. at 251, 181 A. at 781. See: Heaney v. Riddle, 343 Pa. 453, 456, 23 A.2d 456, 458 (1942) (“the amount of the mortgage debt was presumably part of the consideration for the purchase”). And in Naffah v. Diebold, 349 Pa. 219, 36 A.2d 782 (1944) (per curiam), the Court said:
Where land is sold and conveyed under and subject to a mortgage there arises an implied obligation on the part of the vend-ee to indemnify the vendor against the latter’s personal liability for the debt, but this is true only if such obligation constitutes part of the consideration for the conveyance, in which case, the amount of the *746mortgage lien being deducted from the purchase money, the parties naturally intend that, as between them, the vendor is to be relieved from all liability thereon.... It is clear, therefore, that no implied covenant of indemnity arises unless the obligation to pay the incumbrance constitutes part of the purchase price.
Id. at 220-221, 36 A.2d at 783.
In the instant case, when Phyllis and John E. Coleman took title to the home of their son, John T., on August 28, 1987, they expressly agreed to assume and to pay a mortgage thereon held by Landmark Savings Association. In this manner they became liable both to their son, the grantor, and to the mortgagee for payment of the mortgage.
When Phyllis Coleman, the surviving grantee, subsequently reeonveyed the real estate to her son on November 9, 1989, the conveyance was made under and subject to the mortgage of Landmark Savings Association. However, the deed did not contain language that the grantee was assuming or agreeing to pay the mortgage. The son argues that the deed of reconveyance was a gift and was made without consideration. Therefore, he concludes, the consideration did not include an implied agreement to indemnify his mother against the mortgage obligation. The mother’s deposition testimony, while conceding that a gift was intended, disclosed an intent that her son should pay the mortgage because she could no longer afford to pay it on her fixed income.
Under these circumstances, there is, in my judgment, an outstanding factual issue to be determined regarding the appellant-mother’s donative intent. Did she intend her conveyance to be free and clear of all liability for the existing mortgage or was it the intent of the parties that, consistent with the language of the deed, the grantee son was to indemnify the grantor mother for mortgage payments which she was required to pay by virtue of her prior assumption of the mortgage? So that the trial court may receive evidence on this factual issue, I would remand for further proceedings.