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NATOLI APPEAL. (04/16/58)

April 16, 1958

NATOLI APPEAL.


Appeal, No. 150, Oct. T., 1957, from order of court of Common Pleas of Montgomery County, June T., 1956, No. 97, in case of Norristown Federal Savings and Loan Association v. Archilbald B. Erwin et al. Order affirmed.

COUNSEL

William C. Cahall, III, with him Smith, Cahall & Aker, for appellant.

Joseph J. Zapitz, Assistant United States Attorney, with him Harold K. Wood, United States Attorney, for United States of America, lien creditor, appellee.

Milton Jacobson, for Norristown Plumbing Supply Co., judgment creditor, appellee.

Before Rhodes, P.j., Hirt, Gunther, Wright, Woodside, Ervin, and Watkins, JJ.

Author: Wright

[ 186 Pa. Super. Page 83]

OPINION BY WRIGHT, J.

We are here concerned with a dispute over the distribution of the proceeds of a sheriff's sale of real estate on a writ of levari facias after judgment in an action of mortgage foreclosure. The sheriff's schedule of distribution failed to list two judgments of Dorothy I. Natoli as liens for the reason that said judgments had not been revived. The lower court dismissed Dorothy's exceptions to the sheriff's schedule of distribution, and she has appealed.

On June 10, 1949, the Norristown Federal Savings and Loan Association recorded a first mortgage on the real estate of Archibald B. and Jean Dolores Erwin. On November 5, 1949, appellant entered two judgments against the Erwins. On July 1, 1952, the United State Government entered a lien against the Erwins for income tax. On April 11, 1952, the Norristown Plumbing Supply Company entered a number of judgments against the Erwins. On June 22, 1954, the Erwins entered into voluntary bankruptcy, and the real estate in question was listed in the schedule of assets. The Savings and Loan Association subsequently presented a petition to the referee in bankruptcy, which petition was joined in by the trustee, requesting leave to foreclose the mortgage. On July 11, 1955, the referee entered an order giving leave to foreclose. According to the agreed statement of facts, notice of this "abandonment" of real estate was not given to any other parties. The real estate was sold by the sheriff on May 5, 1956. The amount remaining after payment of the first mortgage, costs and taxes, was applied by the sheriff to the payment of the United States Government tax lien, and the balance was distributed in

[ 186 Pa. Super. Page 84]

    partial satisfaction of the judgments of the Norristown Plumbing Supply Company.

Briefly stated, the issue before us is whether the lien of a judgment on real estate is indefinitely preserved by an adjudication of the debtor's bankruptcy, notwithstanding the fact that the lien is not revived*fn1 and the real estate is thereafter sold on a mortgage foreclosure in the state court. Counsel assert that this is a question of first impression. Our conclusion is that the question must be answered in the negative.

Appellant first contends that, under Section 6 of the Act of June 16, 1836, P.L. 755, 12 P.S. 2661, the court has the power to hear and determine disputes concerning the distribution of the proceeds of a sheriff's sale "according to law and equity", and that we should therefore "give strong emphasis" to equitable principles. However, the Act in question must be applied in the light of the Act of April 10, 1862, P.L. 364, as amended, 12 P.S. 2670. This later statute provides that, when real estate is sold by virtue of a writ of execution, the sheriff shall report to the court by filing a schedule of distribution of the proceeds of the sale "according to the list of liens on the property sold, as certified to the sheriff from the record by the proper ...


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