Appeal from the Order of the Superior Court in Case No. 01252-PGH-83 dated March 1, 1985, affirming the Order of the Court of Common Pleas of Lawrence County at No. 52 of 1979 dated September 30, 1983
Dominick Motto, Chambers, Nicolls, Balph, Paul & Motto, New Castle, for appellant.
Clifford B. Levine, Thorp, Reed & Armstrong, Pittsburgh, for amicus curiae Pa. Indus. Development Authority.
John R. Seltzer, New Castle, for appellee.
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ.
Greater New Castle Development Corporation (GNCDC) appeals from an order of the Superior Court, 343 Pa. Super. 627, 494 A.2d 491, affirming an adjudication and final decree in equity of the Court of Common Pleas of Lawrence County. The final equity decree fashioned by the trial court declared that appellant GNCDC holds, as the trustee of a resulting trust for the benefit of the appellee Louis A. Mooney, certain real estate conveyed to it by the appellee. The lower court found the existence of a resulting trust and a trust relationship between GNCDC and appellee Mooney based upon a transaction between the parties pursuant to the Pennsylvania Industrial Development Authority Act, 1956, May 17, P.L. (1955) 1609 § 1 et seq., 73 P.S. § 301, et seq. The appellant was ordered to account to the appellee for all monies received as rent or otherwise from the premises that appellee conveyed to the appellant. In addition, it was ordered that at such time as all creditors are fully satisfied, appellant is to reconvey the property to the appellee. The court also ordered that in the event of a mortgage foreclosure, a complete accounting is to be provided to appellee, and all monies received by appellant in excess of appellee's obligation to appellant are to be paid over to appellee. Because we find that the lower court erred in holding that appellant GNCDC is the trustee of a resulting trust, we reverse.
The facts agreed to by the parties and submitted to the trial court upon stipulation established the following: The appellee conducted business as a sole proprietor in Lawrence County under the registered fictitious name of Bethel Steel Co. In 1970, appellee was seeking to obtain low interest loan funds for infusion into his business. He
sought the assistance of the appellant GNCDC. Appellant agreed to become involved in the project and arranged to secure financing under the provisions of the Pennsylvania Industrial Authority Act, supra. In October, 1970, the appellee along with his wife, Norma Jean Mooney, conveyed to the appellant, GNCDC, a certain tract of real estate situated in Shenango Township, Lawrence County, Pennsylvania upon which was located appellee's business. A general warranty deed reciting a consideration of $5,000.00 was delivered to appellant and recorded in the Recorder's Office of Lawrence County. The parties agreed that the purpose of the conveyance of the real estate to GNCDC "was to enable [appellee] Louis A. Mooney, doing business as Bethel Steel Co., to receive the benefits provided for under the Pennsylvania Industrial Authority Act, said conveyance being a part of the required procedure in order for financial assistance to be available under the said Act." (Stipulation of Facts No. 4). As part of the transaction, GNCDC made application to the Pennsylvania Industrial Development Authority (PIDA) for financing of appellee's project.*fn1 PIDA financing would enable appellee to obtain a favorable interest rate on loan monies he needed for the proposed project.
Shortly after the appellee conveyed the property to GNCDC, appellee and GNCDC executed a lease whereby appellant GNCDC leased the premises back to the appellee for a term of fifteen (15) years. The appellee agreed to pay a total rental of $231,283.30, payable at the rate of $1,284.91 a month, and to pay all annual taxes, insurance premiums and all other annual charges and assessments.
At the time of the conveyance and lease arrangement, appellant executed a first mortgage and mortgage note in favor of six financial institutions in the amount of $80,000.00 at an ...