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PENNSYLVANIA COMPANY FOR BANKING & TRUSTS v. PHILADELPHIA TITLE INSURANCE COMPANY (01/05/53)

January 5, 1953

THE PENNSYLVANIA COMPANY FOR BANKING & TRUSTS
v.
PHILADELPHIA TITLE INSURANCE COMPANY, APPELLANT



Appeal, No. 192, Jan. T., 1952, from decree of Court of Common Pleas No. 4 of Philadelphia County, June T., 1950, No. 8486, in case of The Pennsylvania Company for Banking and Trusts v. Philadelphia Title Insurance Company. Decree, as modified, affirmed.

COUNSEL

Herman H. Greenberg, with him Mortimer N. Eastburn, for appellant.

Reuben Miller, with him I. Edward Master, for appellee.

Before Stern, C.j., Stearne, Jones and Chidsey, JJ.

Author: Chidsey

[ 372 Pa. Page 260]

OPINION BY MR. JUSTICE CHIDSEY

This is a bill in equity in which plaintiff, the guardian of Nellie Vaster, a weak-minded person, seeks to have a mortgage which was executed by its ward declared null and void. In 1941 plaintiff had been appointed by the Court of Common Pleas No. 6 of Philadelphia County as guardian of the Estate of Nellie Vaster, the assets of which estate included real estate, a parcel of which was the premises at 4600 Chester Avenue, Philadelphia. In the answer defendant prays, inter alia, that if the mortgage is invalid, defendant should be given an equitable lien for the amount of the mortgage.

On May 19, 1950 the ward executed a mortgage on the Chester Avenue property in the amount of $6,500 to the Second Federal Savings and Loan Association. The title was insured by defendant. At settlement delinquent taxes and water rents totaling $895.37 were paid, and after an adjustment for other settlement costs, plaintiff's ward received $5,349.38. The check in this amount was deposited by the ward in the Real Estate Trust Company of Philadelphia.

The ward informed plaintiff of the settlement on June 23, 1950, but did not state what property was involved or whether there had been a sale or a mortgage. Plaintiff then checked the records in the office of the recorder of deeds and discovered the $6,500 mortgage on the premises at 4600 Chester Avenue. On June 26, 1950 plaintiff notified the mortgagee and defendant that these premises were part of the estate for

[ 372 Pa. Page 261]

    which it had been appointed guardian. Defendant then, because of the cloud on the title, paid the mortgagee and took an assignment of the mortgage.

On July 6, 1950 plaintiff learned that its ward was operating a grocery store. A meeting was then held and attended by counsel for the ward, counsel for the plaintiff, trust officers of the plaintiff, and counsel for the defendant. The possibility of having the ward declared competent was discussed and all parties agreed that nothing should be done until that matter had been determined. After receiving notice from the ward's counsel early in August that he no longer represented her, plaintiff on petition to the appointing court, was granted leave to take possession of the assets of the grocery store without such action being considered a ratification of the mortgage. When the plaintiff attempted to take possession of these assets, it found that the store had been vacated.

On October 20, 1950 plaintiff received from the Real Estate Trust Company the sum of $1,039.34 which represented the amount of the ward's bank account after the Trust Company had deducted the balance due on a $420 loan it had made to the ward prior to the execution of the mortgage. An additional $30 (a ...


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