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BROAD AND LOCUST ASSOCIATES v. LOCUST-BROAD REALTY COMPANY (08/19/83)

filed: August 19, 1983.

BROAD AND LOCUST ASSOCIATES, A PENNSYLVANIA LIMITED PARTNERSHIP
v.
LOCUST-BROAD REALTY COMPANY, A PENNSYLVANIA GENERAL PARTNERSHIP, APPELLANT



Nos. 2287 & 2528 Philadelphia 1982, Appeal from the Orders of the Court of Common Pleas, Civil Division, Philadelphia County at No. 3098 June Term 1982.

COUNSEL

Gilbert E. Toll, Philadelphia, for appellant.

Leonard Dubin, Philadelphia, for appellee.

Wickersham, Rowley and Watkins, JJ.

Author: Wickersham

[ 318 Pa. Super. Page 40]

This is a consolidated appeal from two lower court orders enjoining appellant Locust-Broad Realty Company from foreclosing on the instantly considered commercial mortgage and disallowing a claim for counsel fees. The pertinent facts are as follows.

On June 11, 1980 appellee Broad and Locust Associates (hereinafter "Associates") entered into an agreement of sale with appellant Locust-Broad Realty Company (hereinafter "Realty") whereby Realty agreed to sell, and Associates agreed to buy, real estate in Philadelphia consisting of a twenty story office building and adjacent areas, such areas to be developed into a parking garage. The parking garage was to be built beside the Bellevue-Stratford Hotel.

The agreement of sale called for a selling price of $4,000,000, subject to many adjustments. Approximately $2,500,000

[ 318 Pa. Super. Page 41]

    of the price was to be paid in cash at the time of settlement and Realty was to take a $1,500,000 purchase money mortgage in the office building at 8% annual interest. Under paragraph 18(a) of the mortgage agreement Associates was prohibited from causing or allowing any lien or security interest to arise against the office building except for "any indebtedness incurred in order to finance mortgagor's construction activities on the adjoining property[.]" Reproduced Record at 33a.

Settlement was concluded on July 2, 1981. Thereafter, Associates obtained a loan commitment of $21,699,000 from Chemical Bank of which $12,622,000 was for the construction of the garage and $9,077,000 was for the renovation of the office building. The Chemical Bank loan was to be secured by a first mortgage on the parking garage and a second mortgage on the office building. Realty objected to this method of securing the loan, however, and refused to issue an estoppel certificate indicating that there were no outstanding defaults under the purchase money mortgage. Associates then filed an action in equity and moved for a preliminary injunction barring Realty from instituting any action under or related to the mortgage between Associates and Realty. A hearing was held before the Honorable Joseph P. Braig of the Court of Common Pleas of Philadelphia County on June 29 and 30, 1982. On July 1, 1982, Judge Braig granted the preliminary injunction and fixed bond at $5,000. Thereafter Realty requested that Associates pay the legal fees Realty had incurred in the action in accordance with the terms of their mortgage. Associates refused to do so; subsequently Judge Braig amended his order so as to enjoin an action for attorney's fees brought under the mortgage. Appeals from both orders followed.

Appellant Realty phrases the first eight questions involved as follows:

1. Whether Appellee's legal right to a Preliminary Injunction is clear, certain, unquestionable, and not subject to doubt?

[ 318 Pa. Super. Page 422]

. Whether the Preliminary Injunction awarded Appellee which allowed it to alter the status quo and gain an advantage over ...


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