Court Opinion

ID: 6276755
Source: CourtListenerOpinion
Date Created: 2022-02-18 16:03:10.433786+00
Date Added: 2024-06-11T09:00:04.983871
License: Public Domain

Opinion by
Henderson, J.,
It is a well-recognized rule that the owner of land at the *478' time it is taken for public use is the person entitled to the damages awarded for such taking, and it is equally well settled that where the land is subject to the lien of a mortgage the court having jurisdiction of the subject will guard the rights of the lien creditor. This is on the theory that the land is converted into money to the extent to which damages are allowed. The damages become a substitute for the thing taken and the mortgage is a charge against the fund. While the award is in the /name of the owner, however, he becomes a trustee for j the mortgage creditor and until there has been an actual / payment of the damages assessed to the owner by the municipality the mortgage creditor has standing to intervene and claim the fund to the extent necessary to satisfy his lien. It would be manifestly unjust to deprive the creditor of a portion of his security and thereby perhaps take from him a part of his property without according him the reimbursement which he would have through the receipt of the damages allowed for the land. The principle is asserted in Reese v. Addams, 16 S. & R. 40; Workman v. Mifflin, 30 Pa. 362; Philadelphia v. Dyer, 41 Pa. 463; Powell v. Whitaker, 88 Pa. 445. The appellant contends that he is not subject to the operation of this rule, however, because he took an assignment of the Cohen award for a valuable consideration by reason of which he is an innocent purchaser and took the assignment free from any equity of the mortgagee of which he was ignorant. But we do not think the doctrine applicable to the case of an innocent purchaser of a judgment or mortgage applies in this case. The proceeding under which the damages were assessed was still pending in the court of common pleas of Allegheny county. The report of viewers was not finally confirmed until June 2, 1908, while the assignments from Cohen to Fulmer and from the latter to Kelso were made March 9, 1908. The money has not been paid by the city, and under all of the authorities the application of the appellee was in time. The claim set up by the Bankers’ Trust Company, receiver of the building *479and loan association, is in no sense a secret equity. Its mortgage was of record. The proceeding to improve the. highway was also a matter of record as was the report of the viewers awarding damages to the Cohen property. The appellee is presumed to have known that the mortgage creditor had a claim against the damages allowed, and he was therefore in possession of all of the facts of which the receiver had knowledge. The case is not distinguishable in principle from Powell v. Whitaker, supra. The report of that case does not show to whom the second jury of view awarded the damages. Nor do we consider it material that the award is in the name of the owner while the right to the fund exists in the mortgagee. The\ important matter is that the mortgagee claims the fund/ before it is paid and the law declares that under such\ circumstances the amount of the assessment is applicable \ to the mortgage lien to the extent necessary to satisfy ¡ it. What protection the appellant miglitTiave had if he had proceeded before the sale of the property on the mortgage we need not now consider. The only question before us is as to the rights of the holder of the mortgage and the holder of the claim for damages assigned by Cohen. On that question the rights of the mortgagee are superior and the case was well decided in the court below.
The judgment is affirmed.