Patterson's Estate

Opinion by Mr. Justice Brown, On July 20, 1898, Fannie B. Risher executed to W. W. Whitesell, at that time a reputable member of the Allegheny county bar, a mortgage for $1,800, on an undivided fourth interest in certain real estate devised to her by Robert Patterson, deceased. The mortgage was duly recorded, and, on August 20, 1898, Whitesell assigned it upon the margin of the record to the board of church extension of the United Presbyterian Church of North America. At the time of the execution of the mortgage, as well as when it was assigned to the appellant, there were pending in the court below proceedings in partition in the estate of the said Robert Patterson, which culminated in an order of sale to the Pennsylvania Title and Trust [131] Company as trustee. The property was sold and, on an adjudication of the account of the trustee, the following award was made out of Fannie B. Risher’s share of the proceeds of the sale: “ To W. W. Whitesell for use of Board of Church Extension of the United Presby. Church of N. A. mortg. recorded in M. B. Vol. 856, p¡ 8 and int., $1,821.60.” No one appeared at the audit on behalf of the appellant as assignee of the mortgage, but on May 26, 1899, the trustee paid to W. W. Whitesell the amount awarded upon it, and he placed upon the record the follow.ing receipt: “Received May 26, 1899, W. W. Whitesell, Atty.” Whitesell never paid this sum to the appellant, but from time to time paid interest to it on the mortgage debt until his death, which occurred July 8, 1905. In the following May or June, when more than a year’s interest had apparently accrued upon the mortgage and the appellant was about to take steps to collect the same, it discovered from an examination of the records that the real estate had been sold as above stated; that the lien of the mortgage had been transferred from the land to the fund in the hands of the trustee; that the same had been distributed in 1899, under a decree of the court, and that the distribution included the award for which Whitesell had receipted. The original trustee, the Pennsylvania Title and Trust Company, was consolidated with the Colonial Trust Company, which has succeeded to all of its debts and liabilities, and this appeal is from the refusal of the court below to compel the Colonial Trust Company to pay the appellant the amount awarded to it on the Risher mortgage. It claims to be entitled to this payment for the alleged reason that it had no notice of the partition proceedings, the sale of the real estate by the trustee or the distribution of the proceeds of the sale until after the death of Whitesell. John Donaldson, Esq., a member of the legal firm of Donaldson Brothers, who were attorneys for the board of church extension of the United Presbyterian Church of North America at the time it purchased the mortgage [132] from Whitesell, was called as a witness by it and testified that his firm had examined the title of Mrs. Risher when Whitesell offered to sell them the mortgage. As this was done, the records disclosed the proceedings then in progress for the partition of the real estate, on an undivided interest in which the mortgage had been executed, and the appellant was, therefore, bound to take notice that those proceedings would, in all probability, result in a sale which would divest the lien of- the mortgage and transfer it to a fund arising from the sale, to be distributed under a decree of the court, and that in such event it could look to that fund alone for payment. The appellant thus had actual notice, through its attorneys, that just what subsequently did happen would be likely to occur. The mortgagee of Fannie B. Risher was not entitled to be made a party to the proceedings in partition and was not, therefore, within the statutory requirement as to notice: Long’s App., 77 Pa. 151; Stewart v. Bank, 101 Pa. 342; but the appellant had acquired, through its attorneys, actual notice of the partition proceedings, and, in addition to that notice, it had constructive notice of the filing of the trustee’s account and of the adjudication of the same. Less than a year from the time it took the mortgage it had constructive notice that the land upon which the same had been a lien had been judicially sold and that it would have to look for payment to the fund produced by the sale. This constructive notice was acquired through due legal advertisement, which was sufficient: App v. Dreisbach, 2 Rawle, 287; Priestley’s App., 127 Pa. 420; Ferguson v. Yard, 164 Pa. 586. In view of the actual notice which the appellant must have had of the partition proceedings and of the constructive notice to it of the filing of the trustee’s account and of the distribution of the fund by the court below, it is presumed to have known in the spring of 1899 that it no longer had a mortgage which was a lien upon Mrs. Risher’s interest in the Patterson land and that thereafter no interest would accrue upon the same. But, notwithstanding this, it regularly took semi-annual interest [133] from Whitesell on the Risher mortgage indebtedness for a period of six years after the mortgage had been wiped out. The mortgage was no longer bearing interest, for out of the fund from which it was payable there had been awarded, on March 29, 1899, the full amount due upon it. Of this the appellant unquestionably had constructive notice. The interest which Whitesell continued to pay was on the fund he had received under the decree of distribution, and, in view of the actual notice which the appellant had of the proceedings in partition and of its constructive notice of the decree of distribution, the unavoidable presumption is that it must have known Whitesell had received the money and acquiesced in his retention of it during the subsequent six years of his life. Nothing was shown by the appellant to rebut this presumption. If Whitesell was without authority to receive the money and retain it, the officials of the appellant could easily have so testified, but not one of them was called to deny such authority. As he was a member of the bar and an officer of the court, there was a presumption that he acted by authority: Miller v. Preston, 154 Pa. 63. The appellant took no steps to compel the appellee to pay what it now alleges was improperly paid to Whitesell until more than ten years had expired from the time it had constructive notice that he had received the money and more than three had elapsed from the date of actual notice of the payment to him. True, in March, 1907, the appellant entered into an agreement with the appellee that nothing should be done by it for six months, during which period the appellees should be allowed to use its name in an effort to collect from Whitesell’s estate, without prejudice to the rights of either party to the agreement; but this agreement expired in September, 1907, and the appellant did nothing until November, 1909, when this petition was presented. It did nothing at all until after the statute of limitations had barred any recovery by the appellee, or its predecessor, from Whitesell or his estate of the amount alleged to have been improp [134] erly paid to Mm. The gross laches of the appellant is unexplained, and, under the undisputed facts in the case, the conclusion is not to be avoided that it is estopped from asking relief from the appellee. Appeal dismissed at appellant’s costs.