No. 966 Pittsburgh, 1981, Appeal from the Order of August 25, 1981 in the Court of Common Pleas of Blair County, Civil Action, Equity No. 3109 Equity.
James H. English, Altoona, for appellants.
Walter F. Wall, Altoona, for appellee.
Hester, Johnson and Popovich, JJ.
[ 310 Pa. Super. Page 540]
Appellants, Richard and Romayne DiAndrea, appeal from the order of the Honorable Thomas G. Peoples, Common Pleas Court Blair County, granting judgment on the pleadings to appellee, Reliance Savings and Loan Association.
From the allegations in the pleadings, we adduce the following facts. The appellants entered into an agreement with Lawrence W. Lassak & Associates [hereinafter Lassak] providing for the construction of a single-family dwelling for appellants at a price of $25,000.00. To provide the funds for construction, appellants then concluded a loan agreement with appellee. The loan agreement provided that appellee would pay the builder certain stipulated amounts at various stages of the construction. It also provided that appellee shall:
"4. Make periodic inspections of the progress of the construction to the end that, in protection of the mortgagee's interests, the same shall be in substantial compliance with the plans and specifications. This understanding shall not relieve Owner from making such inspections as he may think necessary for his protection." (Emphasis added.)
[ 310 Pa. Super. Page 541]
The loan was secured by a mortgage executed simultaneously with the loan agreement. The mortgage covered the premises upon which construction was contemplated, and also an additional property owned by appellants. The additional property had been previously mortgaged to appellee. The outstanding amount on this mortgage was combined with the new mortgage and the previous mortgage was designated satisfied in the office of the Recorder of Deeds of Blair County.
Pursuant to the agreement, appellee paid Lassak $2,300.00 for the commencement of the project. Later, appellee made a second payment of $7,210.00 to Lassak upon presentation of a requisition for payment approved by appellant, Richard DiAndrea. On that same date, a Building Inspector of the City of Altoona ordered construction to be halted because the foundation did not conform to the requirements of the City Building Code.
Appellants subsequently filed this action in equity seeking cancellation of the new mortgage, reinstatement of the earlier one, and credit on the reinstated mortgage for the payments made pursuant to the new mortgage. The gravamen of this action was that appellee breached the loan agreement by making payments for work not properly performed, and by failing to properly inspect the on-site construction of the premises. After receiving the complaint in equity of appellants, appellee filed preliminary objections in the nature of demurrer, which were denied. Appellants filed a petition for termination of the mortgage, to which appellee responded. Subsequently, an amendment to appellants' complaint was filed in accordance with an order of the trial judge. Then appellee answered the amended complaint specifying new matter. Appellants filed their reply. Appellee then filed a motion for judgment on the pleadings, which was granted. Whereupon, appellants filed this appeal.
Three issues are presented for our consideration by appellants. The first issue presented is whether granting a judgment on the ...