Smith v. Bunting , 86 Pa. 116 ( 1878 )

Mr. Justice Gordon

delivered the opinion of the court,

The defendant alleges in his affidavit of defence, that, as security for the note in suit, he assigned to the plaintiff certain mortgages with their bonds, representing some $42,508.33; that .he, the plaintiff, caused these mortgages to be recorded, and then brought suit thereon in his own name as absolute owner; that, having obtained judgments, he caused the mortgaged premises to be sold, in due course, by the sheriff, without notice to the affiant, and that he bought in said premises for himself, at the same time receipting to the said sheriff for the sum of $17,708.20 as purchase-money ; that the consideration agreed to be paid for these premises, at the time when the mortgages were executed, was $30,508.33; and, finally, that the affiant believes that by careful management of these collaterals the plaintiff might have realized much more than he did, the property still being worth more than $17,708.20.

This affidavit necessarily results in one of two conclusions: First. The plaintiff properly realized on his collaterals the aforesaid sum of $17,708.20, and for this amount the defendant may have credit. Second. If the defendant’s theory be correct, that the plaintiff, by bidding in the property and causing the sheriff’s deed to be made to himself, -without notice to, or having the assent of, the defendant, thereby constituted himself a trustee for the defendant, and so now holds the land only as he held the mortgages, as collateral security for the payment of the $30,000 note, then, and in that case, the defendant may compel a re-conveyance to himself on tender to the plaintiff of the whole amount of his claim. In either case, however, the plaintiff is entitled to judgment ; in the first, to the balance due upon his note after deducting $17,708.20; in the second, to the whole amount of that note, since, according to the defendant’s theory, the collaterals have not yet been realized, but have only been changed from 'mortgages to the premises formerly bound thereby, which premises are still held for his use.

It is now ordered that the records in this case be remitted to the court below, and the said court is hereby directed to enter judgment against the defendant, as may be just and right, unless other legal or equitable cause be shown to the court why such judgment should not be so entered.