Fredonia National Bank v. Borden

Opinion by Mb. Justice McCollum, The appellant having purchased the timber on three hundred acres of land included in several mortgages on which suits were brought, was allowed “ to appear and defend in said suits as a terre tenant ” of the timber right and estate he acquired by his purchase. In this suit, and in No. 7, October Term, 1894, lie filed an affidavit of defence in which he averred that the timber was sold to him with the knowledge and consent of the plaintiff and that the latter received the entire proceeds of the sale of it. In No. 8, October Term, 1894, he filed an affidavit in which he stated that he was informed, and that he believed and expected to be able to prove on the trial of the case, that one of the mortgagees assented to and advised the sale of the timber to him and received the benefit of it in the application of its proceeds to the extinguishment of the mortgage debts upon the premises, and that he consented to such application. Inasmuch, however, as it appears to be conceded that the Fredonia National Bank is the real plaintiff in all the suits and was the owner of the mortgages when the timber was sold, there is but one question for our determination, and that is, whether the bank, having consented to and received the proceeds of the sale of the timber, can now appropriate it on either of the mortgages in suit. The learned court below thought it could do so, and accordingly entered a judgment in each case in favor of the plaintiff, for want of a sufficient affidavit of defence. In justice to that court it ought to be stated in this connection that the judgments were entered before the decision of this court in Pratt et al. to use etc. v. Waterhouse et al., 158 Pa. 45, was announced. The use plaintiff in that case is the use plaintiff in the cases we are considering, and the decision in the former was based on the facts relied on as a defeuce to the latter. In the case referred to we decided that [179] the bank’s consent to the sale of the timber and its acceptance of the proceeds of the sale operated as a release of the timber from the lien of the mortgages it then held, and raised an equity in the purchaser which required that in enforcing a judgment on a first mortgage which it purchased more than a year after the sale the execution should be confined, in the first place, to the land. It was conceded that Pratt and Phillips, the assignors of the mortgage, had done nothing to raise the equity, and the decision was distinctly based upon the ground of the bank’s consent to the sale of the timber and its acceptance of the proceeds of such sale. It is clear therefore that the decision in the case cited requires a reversal of the judgments in the cases before us. But aside from this decision the injustice of allowing the plaintiff to sell the timber on either of the mortgages in suit, and to retain the proceeds of a former sale to which it consented, is so obvious, that the appellant should have an opportunity to establish the facts interposed by him as a defence. The judgment in No. 6 is reversed and a procedendo is awarded. Judgments in Nos. 7 and 8, Oct. T., 1894, reversed for reasons given above.