Appeal from judgment of County Court of Philadelphia, Sept. T., 1966, No. 2732-B, in case of Beth-June, Inc. v. Wil-Avon Merchandise Mart, Inc.
Malcolm M. Blumberg, with him Jay H. Eiseman, and Barba and Eiseman, for appellant.
Harry Lore, with him Dorfman, Pechner, Sacks & Dorfman, for appellee.
Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. Opinion by Montgomery, J.
This case is before us on a petition for a declaratory judgment and an answer thereto. There being no issue of fact the trial judge granted the plaintiff's motion for judgment on the pleadings and denied the defendant's motion. From this judgment the defendant appealed to this Court.
The undisputed facts in this case are as follows. On September 15, 1959 the defendant, Wil-Avon Merchandise Mart, Inc., conveyed to the plaintiff, Beth-June, Inc., certain land in Grove Township, Chester, Pennsylvania. Simultaneously with this conveyance plaintiff executed a mortgage in favor of the defendant in the sum of $142,500 together with bond and warrant, "payable within ten years from the date thereof, together with interest thereon from the date thereof at the rate of 6% per annum, said principal and interest to be payable in monthly installments as following: (a) in monthly installments of $1306.03 each commencing October 15, 1959 and on the 15th day of each month thereafter up to and including September 15, 1964. (b) Thereafter the principal balance then remaining unpaid shall be amortized in equal monthly installments commencing October 15, 1964 and on the 15th day of each month thereafter, and the balance of principal remaining unpaid together with accrued interest thereon, if not sooner paid, to be paid on September 15, 1969."
This mortgage contained a prepayment provision which expressly gave the plaintiff the right to make prepayment of the balance of the debt on the anniversary of any yearly period and further provided for various discounts if prepayment of the entire balance was made within the first five years of the mortgage.*fn1
The plaintiff defaulted in its monthly payments and judgment was entered on the bond and warrant on August 9, 1960. On May 17, 1961 the parties entered into a written agreement settling their dispute and reestablishing the mortgage and debt of September 15, 1959. At this time the plaintiff paid the defendant $14,366.33, representing the eleven monthly installments due on the mortgage commencing with June 15, 1960 up to and including the payment due on April 15, 1961. In addition the plaintiff agreed to fully perform and make all payments under the 1959 mortgage. Both parties at this time recognized the terms, conditions and provisions of the 1959 mortgage as being in full force and effect, without any change, waivers or modification except that the plaintiff "waives and relinquishes all of its rights and privileges under or arising out of the" aforementioned prepayment and discount "Proviso".
The plaintiff subsequently sold the land upon which the 1959 mortgage had been placed and on July 14, 1966 tendered the sum of $22,164.66 as the principal balance due on this mortgage. The defendant accepted this amount but demanded an additional sum of $4,211.25
representing interest on the principal sum from July 31, 1966 until September, 1969, the date of final payment under the terms of the bond and mortgage. It was agreed between the parties at this time that the disputed amount would be placed in escrow pending the legal determination of the right of the plaintiff to prepay, without further payment of interest from the date of prepayment to the maturity date of the bond and mortgage. The lower court found that the right to prepay the principal together with accrued interest was clearly established in the payment provisions of the mortgage by the language providing for the amortization of principal remaining unpaid after the first five years, and that it was the intent of the parties in their May 17, 1961 agreement by striking out the above quoted ...