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LANDAU ET AL. v. WESTERN PENNSYLVANIA NATIONAL BANK. WESTERN PENNSYLVANIA NATIONAL BANK V. CARROLL ET AL. (10/12/71)

decided: October 12, 1971.

LANDAU ET AL., APPELLANTS,
v.
WESTERN PENNSYLVANIA NATIONAL BANK. WESTERN PENNSYLVANIA NATIONAL BANK V. CARROLL ET AL., APPELLANTS



Appeals from judgments of Court of Common Pleas, Civil Division, of Allegheny County, Oct. T., 1970, Nos. 1455 and 796, in case of Walter R. Landau, Thomas J. Landau, Calvin A. Landau, Sr., and Calvin A. Landau, Jr., co-tenants, t/d/b/a Whitehall Terrace Co. v. Western Pennsylvania National Bank and Kroger Company; Western Pennsylvania National Bank v. Robert J. Carroll and Dan R. Jennings.

COUNSEL

Thomas H. Welsh and Myron B. Markel, with them Metz, Cook, Hanna & Kelly, and Markel, Markel, Levenson & Schafer, for appellants.

Robert G. Sable, with him Robert N. Hackett, and Baskin, Boreman, Wilner, Sachs, Gondelman and Craig, for appellee.

Bell, C. J., Jones, Eagen, O'Brien, Roberts, Pomeroy and Barbieri, JJ. Opinion by Mr. Justice Roberts.

Author: Roberts

[ 445 Pa. Page 219]

On July 24, 1970, the Western Pennsylvania National Bank instituted mortgage foreclosure proceedings against Robert Carroll and Dan Jennings. Shortly thereafter, Western Pennsylvania and the Kroger Company, lessee of the mortgaged premises, entered into a subordination and attornment agreement whereby the former agreed to subordinate its prior mortgage to the latter's lease. On August 13, 1970, Walter Landau, Thomas Landau, Calvin Landau, Sr., and Calvin Landau, Jr., holders of a junior lien upon the mortgaged property by virtue of a recorded judgment note, filed a complaint in equity seeking to set aside the subordination and attornment agreement on the theory that it unlawfully prejudiced their rights as junior lienors.

The mortgage foreclosure suit and related equity action were consolidated for trial in the Court of Common Pleas of Allegheny County, and Western Pennsylvania moved for summary judgment in each case pursuant to Pa. R. C. P. 1035. The motion was granted by the court en banc, and this consolidated appeal followed. For reasons which follow, we affirm the summary judgments of the court en banc.

The pleadings establish the following facts:

On July 18, 1966, the Bally Castle Corporation conveyed certain property in Ross Township, Allegheny County, to appellants Carroll and Jennings, who planned to erect and maintain a building containing

[ 445 Pa. Page 220]

    a supermarket and offices. The deed was executed by Jennings in his capacity as corporate secretary of Bally Castle. On July 19, Carroll and Jennings mortgaged the same property to appellee Western Pennsylvania National Bank to secure a $540,000 loan. At the same time, one Robert Jarvis subordinated his prior mortgage upon a portion of the premises to the Western Pennsylvania mortgage. Both the Western Pennsylvania mortgage and the Jarvis subordination were duly recorded on July 20, 1966.

On August 5 and 9, 1966, Bally Castle leased the major portion of the property in question to the Kroger Company. These leases were also signed by Jennings as secretary of Bally Castle, and each contained a provision that the lessor would deliver to the lessee appropriate agreements subordinating to the lease any mortgage on the demised premises recorded prior to the leases. The Kroger leases were recorded on August 11, 1966, and August 16, 1966, respectively, and Kroger has at all times since been tenant in possession of the supermarket.

On November 22, 1967, more than one year after the execution of the Kroger leases, Jennings, Carroll, Carroll's wife, the Eyrecourt Corporation and Bally Castle executed a judgment note to the Landau Brothers Building Company in the face amount of $194,789.85. Landau Brothers Building Company subsequently assigned the note to appellants Walter Landau, Thomas Landau, Calvin Landau, Sr., and Calvin Landau, Jr., as cotenants trading and doing business as the Whitehall Terrace Company. The judgment note as so assigned was recorded on December 11, 1967.

Carroll and Jennings defaulted under the terms of the Western Pennsylvania mortgage in 1967, and the instant controversy was thus precipitated.

To summarize, the relevant documents appear of record in the following chronology:

Date

Document Recorded

Deed -- Bally Castle Corp. to Car-

     roll and Jennings July 20, 1966

Mortgage -- Carroll and Jennings to

Western Pennsylvania National

Bank July 20, 1966

Subordination -- Jarvis ...


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