No. 1803 October Term, 1978, Appeal from the Order dated May 25, 1978, by the Court of Common Pleas of Montgomery County, Pennsylvania, C.A. No. 76-10511. Civil Action, Law.
Henry W. Sawyer, III, Philadelphia, for appellants.
Jeffrey A. Less, Philadelphia, for appellee, John W. Merriam.
Alfred H. Wilcox, Philadelphia, for appellee, The Fidelity Bank.
Jacobs, President Judge, and Cercone and Lipez, JJ.
[ 266 Pa. Super. Page 255]
This appeal arises from the order of the court below dismissing the petition of Institutional Investors Trust (IIT) for a stay of execution against two tracts of land. Appellant contends that execution against the two land parcels is expressly prohibited by the terms of a written participation agreement between IIT and plaintiff's assignor. The lower court held that the agreement expired by its own terms on February 15, 1977, and consequently dismissed the petition. For the reasons that follow, we affirm the order entered below.
[ 266 Pa. Super. Page 256]
This case was before us on a prior occasion after IIT's repeated attempts to intervene in the execution proceedings were unsuccessful. Taub v. Merriam, 251 Pa. Super. 572, 380 A.2d 1245 (1977). A detailed factual background of this litigation is set forth in that opinion, and will not be restated here. Following our prior decision directing that IIT be permitted to intervene, the lower court held a hearing on the petition for a stay of execution. By stipulation of counsel, Fidelity Bank (Fidelity) was permitted to intervene for the purpose of opposing IIT's petition. After the hearing was completed, the court below dismissed the petition. This appeal followed.
Two specific provisions of the participation agreement are at the heart of this controversy: paragraph 19, limiting execution to two of the four tracts of land securing the loans, and paragraph 13, limiting the time within which the agreement remains in force. Essential to the interpretation of these terms, however, is an understanding of the genesis of the participation agreement.
In December, 1973, IIT loaned $16,800,000 to Cedarbrook Joint Venture,*fn1 Cedarbrook Realty, Inc., and Witchwood, Inc. (the Cedarbrook Companies). Due to a limitation on the amount of a single loan by the trust, the aggregate amount was separated into four notes and mortgages, with each mortgage encumbering the four land tracts owned by the Cedarbrook Companies. As additional security, Fidelity provided a $5,000,000 letter of credit for Merriam until he could substitute a second mortgage on the Curtis Building in Philadelphia as additional collateral.
In May or June, 1974, however, IIT pledged the entire Cedarbrook loan package to Chemical Realty Corporation (CRC) as collateral for loan advances from CRC to IIT. CRC objected to lending money on the security of two unimproved tracts, and was dissatisfied with the ...