Appeal, No. 12, March T., 1954, from decree of Court of Common Pleas of Westmoreland County, in Equity, No. 2115, in case of Harvey S. Fishel et ux. v. C. Edgar McDonald et ux. Decree affirmed.
Daniel J. Snyder, Jr., with him Carroll Caruthers, for appellants.
Marquis M. Smith, with him John M. Noel, for appellees.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.
OPINION BY MR JUSTICE ARNOLD
An appeal in this case to the Superior Court (Fishel v. McDonald, 163 Pa. Superior Ct. 251, 60 A.2d 820) resulted in a reversal so that the plaintiff might amend. The facts are succinctly stated by Judge RENO in the opinion in that case, at page 252 as follows: "In 1928 David A. Hammond conveyed property to plaintiffs [the Fishels], husband and wife, subject to a mortgage given by Hammond to the Keystone-Westmoreland Building and Loan Association, and plaintiffs gave their mortgage to Hammond for part of the purchase price. Later in 1928 plaintiffs conveyed to defendants [the McDonalds], husband and wife, subject to the two mortgages which the grantees assumed and agreed to pay [the mortgage by Hammond to Keystone-Westmoreland
Building and Loan Association and the mortgage by the Fishels to Hammond]. In 1923 an execution was issued by the building association... and at the sheriff's sale the property was purchased by, and conveyed to, the execution-plaintiff [Keystone-Westmoreland Building and Loan Association]. The sale divested the lien of the second, the Hammond mortgage. In 1933 the building association conveyed the property to one of the defendants, C. Edgar McDonald. Meanwhile the Hammond mortgage had been acquired by the Secretary of Banking, as receiver of the Bloomfield Trust Company of Pittsburgh, who in 1944 entered judgment against plaintiffs upon the accompanying bond."
The averments of the bill in equity were that the defendants defaulted in the payments due under the mortgage to the building association, and fraudulently acquiesced in said sheriff's sale for the purpose of devesting said property of the lien of the second mortgage, and reacquired title to the same, free of the second mortgage, to avoid the liability which they had assumed by said deed. Other averments in the bill were that the plaintiffs were without knowledge either of the sheriff's sale or of the reconveyance of said property to C. Edgar McDonald, until about two weeks prior to the filing of the bill, to wit January 6, 1946.
The appellants here contend that the facts show that this sheriff's sale was a "wash" sale, and was made merely for the purpose of divesting the lien of the second mortgage to David S. Hammond which the defendants-appellees had assumed and agreed to pay. This is predicated principally on the contentions: (1) that the McDonalds were in default under the mortgage for only three months; (2) that the building association permitted the defendants to remain in possession of the property under a leasing arrangement; and (3) approximately
two years after the sheriff's sale a conveyance was made to the defendant, C. Edgar McDonald, with a mortgage given ...