Court Opinion

ID: 6248975
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:08:36.738954+00
Date Added: 2024-06-11T08:59:05.809897
License: Public Domain

Opinion by
Mr. Justice Potter,
The record in this case shows that no final decree had been entered when the appeal was taken. Nor is the entry of any decree assigned for error. Under the authority of Watkins v. Hughes, 206 Pa. 526 and other cases there cited, this appeal should be quashed. Not one of the five assignments of error filed is in accordance with the rules'. The first three assign certain conclusions of law by the court below, but they do not give the language in which those conclusions were stated. They merely give counsel’s ideas as to the effect of that language. Moreover, the court’s legal conclusions are not assignable for error, in the absence of a decree: Fitzpatrick v. Engard, 175 Pa. 393. The fourth assignment is bad, in that it refers to more than one exception and also because the exceptions referred to are not set out: Fitzpatrick v. Engard, 175 Pa. 393. The fifth assignment is bad because it alleges that the court committed error in not making certain findings, when appellant presented no requests for such findings and filed no exceptions to the findings of the trial judge: Beatty v. Harris, 205 Pa. 377; Swope v. Snyder, 209 Pa. 352. But if we disregard these irregularities, and look at the merits, it is apparent that the principal question in the case was decided adversely to appellant in Kenworthy v. Levi, 214 Pa. 235. That case involved the construction of the same deed of trust which is here in question. It was there held that the words, “ provided, however, that the principal of the estate shall not become impaired or incumbered,” took the case out of the rule of Lancaster v. Dolan, 1 Rawle, 231, and the decisions which follow it. Justice Brown said (p. 238): “ It is true there was power to sell the properties for the purpose of the trust, but there was an express prohibition against borrowing on them, for he could borrow on them only by incumbering them. As this is what he did, in the face of an express direction that he should not do it, the rule announced in Lancaster v. Dolan had no bearing upon the question before the court below.”
In Kenworthy v. Levi, the trustee had assigned a mortgage for a loan. There was no doubt but that the trustee would *290have had the power to sell and assign the mortgage absolutely. But it was held that under the restriction in the deed, he could not borrow upon it and, therefore, the collateral assignment was invalid.
If the trustee had no power to borrow upon the security of the mortgage, it necessarily follows that after the mortgage was foreclosed and the mortgage property conveyed to him by the sheriff, he could not borrow upon that security any more than upon the mortgage itself. So even if appellant is correct, and the property is to be regarded as personalty in the hands of the trustee, he would have no power to incumber it by a mortgage. If it is to be regarded as real estate, the same result follows. Certainly this is so if the mortgagee had notice of the trust. Appellant admittedly had notice that Johnson was a trustee for Mary Bell Bowen. ITe obtained and rested content upon a release from her. But inquiry or examination of the record of the trust deed would have shown that Mrs. Bowen had only a partial interest for life, and that the remainder was vested in her children. ITe would also have found that the trustee was expressly prohibited from impairing or incumbering the principal of the estate. It is always the duty of one purchasing from a trustee to look at the nature and extent of the trust. “ ITe may have the legal title, and yet have no authority to sell. His sale may be entirely unauthorized by the instrument that created the trust; it may have been forbidden: Bayard v. Farmers’ & Mechanics’ Bank, 52 Pa. 232 (237).
“ One who buys property from a trustee may or may not know that it belongs to an estate or is otherwise affected with a trust. In the latter case, where the circumstances are such as to put a prudent man on inquiry as to the character of the property conveyed, a court of equity regards such circumstances as constituting constructive notice and imputes to the purchaser a knowledge of all facts that such inquiry would have revealed. And where he knows or is chargeable with knowledge of the nature of the estate, it is his duty to go further and ascertain the nature and extent of the trustee’s power, in order that he may know whether or not he is violating his trust and misapplying the property in any way. . . . Ordinarily, the words ‘trustee’ or ‘in trust’ or ‘guardian,’ *291contained in a deed, mortgage, assignment or indorsement, are deemed sufficient to put a transferee on inquiry: ” 28 Am. & Eng. Ency. of Law (2d ed.), 1128-29.
There is no question in this case that Moses T. Johnson continued to hold the property purchased by him at sheriff’s sale as trustee for the same purpose and with the same powers and limitations as were defined in the original trust deed. As was said by Chief Justice Mitchell in Church v. Winton, 196 Pa. 107: “ If a trustee buys the trust property even at a public sale, which is brought about or in any way controlled by himself, he will be presumed to buy and hold for the benefit of the trust.”
Having had notice of the existence of the trust before he made the loan to Johnson, it was the duty of the appellant to inform himself of the nature and extent of the trust, and the limits of the power of the trustee.
The appeal is quashed.