No. 635 Pittsburgh, 1981, Appeal from the Orders of the Court of Common Pleas, Civil Division - Law, Mercer County, at No. 436, D.S.B. 1980.
P. Bartholomew, Sharon, for appellant.
William C. Kuhn, Sharon, for Stupka, et al., appellees.
Rowley, Beck and Montemuro, JJ.
[ 310 Pa. Super. Page 144]
This is an appeal from Orders of April 27 and June 22, 1981 entered by the Honorable John Q. Stranahan, President Judge, in the Court of Common Pleas, Mercer County. The orders pertain to the dismissal of the appellant's petition for deficiency judgment.
The pertinent facts of this case are as follows: In October, 1977, petitioner, McDowell National Bank of Sharon, Pennsylvania (hereinafter, "appellant") agreed to loan to
[ 310 Pa. Super. Page 145]
the respondents, Milan and Frances M. Stupka, Anthony and Mary S. Frank, and the Brimar Construction Company (hereinafter, "appellees") the sum of $330,000.00. This loan was to be used to consolidate the debts of the appellee, construction company, and to provide the company with working capital. The appellees executed a note in favor of the appellant in the sum of $330,000.00 in addition to giving the appellant a mortgage in the amount of $330,000.00 covering five parcels of land owned by the appellees. In November, 1977, the appellee, construction company gave the appellant a security interest in its construction equipment as added collateral for the $330,000.00 loan and a security agreement was filed shortly thereafter.
On November 25, 1977, the appellees executed a demand note in favor of the appellant in the amount of $330,000.00. This note was part of the overall transaction between appellees and appellant. The collateral of the demand note consisted of the mortgage and the security agreement against the construction equipment. On January 16, 1978, the appellant had judgment confessed against the appellees on the note.
In June of 1979, appellant filed a Complaint in Mortgage Foreclosure against the appellees and a default judgment was entered against appellees in March, 1980. The mortgaged property was sold to the appellant at a foreclosure sale.
In October, 1980, the appellant filed a petition for a deficiency judgment based on the default judgment entered against the appellees on the mortgage foreclosure. This petition was dismissed by the lower court on the basis that a deficiency can be recovered only by an in personam judgment, the mortgage foreclosure being an in rem judgment. The court supported its decision with the Supreme Court's holding in Meco Realty Company v. Burns, 414 Pa. 495, 200 A.2d 869 (1964). The appellant's motion for reconsideration of the dismissal was denied. ...