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decided: December 20, 1979.


Appeal from the Order of the Court of Common Pleas of Philadelphia County in case of In Re: Condemnation by the Commonwealth of Pennsylvania, Department of Transportation, of Right of Way, for Legislative Route 67009, Section 11T R/W, in the City of Philadelphia, No. 4906 March Term, 1973.


Denis James Lawler, with him James Francis Lawler, Ostroff & Lawler, for appellant.

Mary E. Bretz, with her, of counsel, Morgan, Lewis & Bockius, for appellee, Trustees, Builders Investment Group.

Judges Wilkinson, Jr., DiSalle and MacPhail, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 48 Pa. Commw. Page 145]

This is an appeal from an order of the Court of Common Pleas of Philadelphia County, Civil Division, directing its Prothonotary to pay Builders Investment Group (BIG) $63,825.00 deposited with that Court on May 17, 1976, by the Pennsylvania Department of Transportation (Department) as estimated just compensation

[ 48 Pa. Commw. Page 146]

    for the condemnation on March 30, 1973, of a 5900 square foot parcel of a 48 acre tract which was owned by Metrocen, Inc., at the time of the condemnation.

On the date of condemnation, John McShain Charities, Inc. (Charities), held a first purchase money mortgage lien of $19,160,520.00 against the entire 48 acre tract and BIG held a second mortgage lien of $3,150,000.00 on the same tract. On June 4, 1974, Charities confessed judgment on its mortgage bond against Metrocen. On September 8, 1975, Charities purchased the tract at an execution sale. On June 23, 1976, Charities filed a petition in the lower court to intervene and withdraw the estimated just compensation deposited by the Department with the Prothonotary. BIG filed an answer with new matter alleging that Charities was not entitled to the fund and that BIG was entitled to the fund. BIG pleaded that Charities failed to proceed under the Act of July 16, 1941 (Act), P.L. 400, as amended, formerly 12 P.S. § 2621.1 et seq.*fn1 (relating to deficiency judgments). On November 10, 1978, the trial court granted leave to intervene to both Charities and BIG and, after considering the pleadings, record, argument and memoranda, ordered that the sum on deposit be distributed to BIG.

Charities admits that it did not file any proceedings under the Act. In Federal National Mortgage Assn. v. Guy Heavener, Inc. (hereinafter Heavener), 16 Pa. Commonwealth Ct. 386, 328 A.2d 590 (1974), our Court held that a mortgagee which had foreclosed on a mortgage and purchased the mortgaged property at an execution sale but had failed to obtain a deficiency judgment under the Act could not participate in funds deposited as estimated just compensation in an

[ 48 Pa. Commw. Page 147]

    eminent domain proceeding where the declaration of taking of an easement over a portion of the mortgaged premises preceded the mortgagee's judgment. Confronted with our decision in Heavener, which certainly would seem to control the case now before us, Charities argues that there is a factual distinction between Heavener and the instant case. Charities contends that whereas the owners of the mortgaged premises in the instant case had never made any payments on that mortgage to Charities, the mortgagee in Heavener was eventually made whole because it received payments from the owners periodically and resold the property which it had bought in at the execution sale for more than the principal and interest balance on the mortgage owned by the owners. Our review of the record in the Heavener case indicates that the mortgagee's representative testified that the mortgagee had filed a claim with the Federal Housing Administration which had insured (guaranteed) the original mortgage obligation for a sum which exceeded the original amount borrowed. However, at the time of the disposition of the case by the trial court, the mortgagee had not been reimbursed nor had anything been paid on the claim by the Federal Housing Administration. For that reason, Judge Rogers, speaking for our Court, quite accurately defined the issue to be decided as though the mortgagee had not been made whole, which, of course, was in accord with the facts ...

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