Keystone Building Corp. v. Lincoln Savings & Loan Ass'n

335 A.2d 817, 233 Pa. Super. 47, 1975 Pa. Super. LEXIS 1427
Superior Court of Pennsylvania·Decided March 31, 1975·No. Appeal, No. 376·Published·Cited by 2 cases

Opinion

Opinion by

Jacobs, J.,

This appeal from an interlocutory order was permitted by Order of this Court dated May 8, 1974, at No. 837 Miscellaneous Docket, pursuant to our authority under Section 211.501(b) of the Appellate Court Jurisdiction Act of 1970.1

The facts of this case reveal that “[t]he Keystone Building Corporation, the Lincoln Savings and Loan Association, and the Manufacturers Life Insurance Company of Canada entered into a construction loan agreement on October 7, 1968. Under the terms of the agreement Lincoln agreed to lend Keystone the funds necessary to finance Keystone’s construction of an apartment [49] complex and Manufacturers agreed to be the permanent mortgagee for the project.

“In May of 1969, approximately two months after construction had begun, a dispute arose between Lincoln and Keystone over the terms and conditions under which Lincoln was obligated to advance the necessary funds. Essentially, the dispute revolved around the nature and sufficiency of the proofs of expenditure which Keystone was required to present to Lincoln as precondition for payment. After protracted negotiations, Keystone commenced a suit in equity on July 3, 1969, asking that Lincoln be compelled to advance the requisitioned loan proceeds and that money damages be assessed against Lincoln for its asserted breach of contract.

“A hearing was held and, on July 18, 1969, the court decreed that Keystone had to support its present and future requisitions for loan proceeds in a specified manner and that Lincoln had to promptly pay the amounts thus requisitioned. Unfortunately, Lincoln and Keystone could not agree on the meaning of the decree, and the dispute continued unabated. On August 5, Keystone petitioned for and was granted a rule to show cause why Lincoln should not be held in contempt for allegedly not complying with the July 18 decree. A lengthy hearing was held and, on October 6, the court decreed that although Lincoln had not been in contempt, it was obligated to pay Keystone the aggregate of its claim since the dispute arose, $116,286.27, and to advance all sums properly requisitioned thereafter.

“The controversy continued, however, and on October 10, Keystone again petitioned for and was granted a rule to [show] cause why Lincoln should not be held in contempt. Lincoln filed a motion to dismiss this second rule on the grounds of prematurity, but the motion was dismissed. Thereafter, on October 16, Lincoln appealed the decrees of July 18, October 6 and October 15 to [the Pennsylvania Supreme Court].

[50] “On December 8,1969, Keystone contacted Lincoln and informed them that the permanent mortgagee, Manufacturers, was prepared to exercise its option to purchase from Lincoln, for a sum equal to the amounts already disbursed by Lincoln and the accrued interest thereon, the Keystone mortgage note and mortgage. Lincoln promptly complied with this request and transferred to Manufacturers, for the agreed consideration, the mortgage note and mortgage given it by Keystone to secure the construction loan.”2 Lincoln then filed a “Suggestion of Mootness” with the Supreme Court and asked the Court to dismiss the appeal and the case.

The Court, through Justice Roberts, dismissed the appeal but refused to dismiss the underlying action.

“While it is apparent that one of the central issues in this case, the propriety of ordering Lincoln to disburse certain sums in accordance with the construction loan agreement, is now moot, it does not follow that the case ought to be dismissed altogether.
“. . . The action was properly in equity when first brought, and since there is still the possibility that that court could grant Keystone some sort of relief, the question whether further relief should be granted is initially for the trial court to decide. Accordingly we dismiss this appeal and remand the case for further consistent proceedings.” Keystone Bldg. Corp. v. Lincoln Sav. and Loan Ass’n, 439 Pa. 444, 447-448, 266 A.2d 648, 649-650 (1970).

On remand the lower court, per Judge Silvestri, transferred the action to the law side of the court and ordered Keystone to file a Complaint. In that complaint Keystone averred that the prior orders of the court and Lincoln’s appeal had conclusively determined the question of liability and that that determination was res judicata [51] as to the instant complaint. Following answer, the court, per Judge Louik, agreed and on April 22, 1974, ordered the case to “proceed solely on the question of damages, if any, sustained by [Keystone].” It is this order from which Lincoln appeals.

The issue before us is whether the three orders of the lower court, which collectively determined that Lincoln was obligated to pay a specific sum to Keystone and which ordered Lincoln to make that and future payments, act as a bar to Lincoln’s attempt in the present posture of the case to litigate the question of the basic liability on which Keystone grounds its claim for damages. We hold that they do. ¡

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Keystone Building Corp. v. Lincoln Savings & Loan Ass'n, 335 A.2d 817, 233 Pa. Super. 47, 1975 Pa. Super. LEXIS 1427 (Pa. Ct. App. 1975).

335 A.2d 817 (Keystone Building Corp. v. Lincoln Savings & Loan Ass'n) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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