Kretschman v. Stoll

352 A.2d 439, 238 Pa. Super. 51, 1975 Pa. Super. LEXIS 2565
CourtSuperior Court of Pennsylvania
DecidedDecember 22, 1975
DocketAppeals, Nos. 1311 and 1488
StatusPublished
Cited by18 cases

This text of 352 A.2d 439 (Kretschman v. Stoll) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kretschman v. Stoll, 352 A.2d 439, 238 Pa. Super. 51, 1975 Pa. Super. LEXIS 2565 (Pa. Ct. App. 1975).

Opinions

Opinion by

Price, J.,

This appeal was filed upon entry of the lower court’s order refusing to strike a deficiency judgment against appellants Stolls, dismissing the petition of appellant Martin to strike the same deficiency judgment, refusing to set aside the sheriff’s sale of property mortgaged to the Stolls, and dismissing the exceptions of all appellants to the sheriff’s schedule of distribution of the proceeds of sale.

The factual background which gave rise to the appeal has been needlessly complicated by appellants in their efforts to retain the premises involved in this litigation. Briefly stated, the relevant facts are that on August 31, 1971, appellees [hereinafter, “the Kretschmans”] sold two parcels of real estate to the Stolls. In exchange, the Stolls executed two purchase money mortgages and bonds upon the premises. The amount of the mortgage on the property at 422 North Duke Street was $45,000 at 9% interest and that on the property at 420 North Duke Street was $10,000 at 9% interest. Soon after this transaction, the Stolls defaulted in their monthly payments and the Kretschmans instituted proceedings to recover the properties.

We will first consider the sole issue related to the 422 North Duke Street property, which was sold at sheriff’s sale in July of 1972, to the Kretschmans for costs. Within six months, the Kretschmans instituted an action under the Deficiency Judgment Act, Act of July 16, 1941, P.L. 400, §1 (12 P.S. §2621.1) et seq. They obtained a deficiency judgment in April of 1973. This judgment was appealed by the Stolls, but the appeal was non prossed by this court on March 28, 1974.

In June of 1974, the Stolls renewed their attack on the deficiency judgment by filing a petition to strike. The petition was dismissed with prejudice by order of the lower court. That order is now before this court for disposition.

[54]*54In July of 1974, appellant Martin also filed a petition to strike the deficiency judgment. After argument, the lower court dismissed his petition as well, and that action is contested in this appeal.

The only issue concerning the 422 North Duke Street property, therefore, is whether the deficiency judgment assessed against the Stolls was validly entered, pursuant to the Deficiency Judgment Act. Both appellants assert that the judgment was improperly entered, arguing that a deficiency judgment cannot follow a mortgage foreclosure, an in rem proceeding.

The case law is clear that the Deficiency Judgment Act may not be utilized to impose personal liability where a personal judgment has not been obtained. In Meco Realty Company v. Burns, 414 Pa. 495, 200 A.2d 869 (1964), the Pennsylvania Supreme Court indicated that the purpose of a judgment obtained through a mortgage foreclosure is to effect a judicial sale of the mortgaged property. Once the foreclosure sale takes place, the judgment is fulfilled. Any further action to assess a deficiency is null and void.

The same result was reached by this court in National Council of the Junior Order of United American Mechanics of the United States of North America v. Zytnick, 221 Pa. Superior Ct. 391, 293 A.2d 112 (1972), and in Hoffman Lumber Company v. Mitchell, 170 Pa. Superior Ct. 326, 85 A.2d 664 (1952).

Therefore, were appellants’ assertions of the nature of the judgment obtained by the Kretschmans correct, we would be compelled to strike the judgment. However, appellants are not correct, and we will affirm the lower court’s refusal to strike the deficiency judgment.

The lower court found that the action in mortgage foreclosure asked for both an in rem judgment against the property and for an in personam judgment against the Stolls: “Plaintiffs demand judgment against Defendants in the amount of FORTY-FIVE THOUSAND ($45,-[55]*55000.00) DOLLARS together with interest and attorney’s commission and for the other interests, costs, charges collectible under the mortgage and for foreclosure and sale of the mortgaged 'property.” (emphasis added.) This complaint was brought upon the mortgage and the bond, and, therefore, is not governed by Meco, supra.

The relief requested by appellees was clearly both in rem against the mortgaged property (“foreclosure and sale of the mortgaged property”) and in personam against the Stolls on the mortgage bond (“forty-five thousand dollars with interest. . . .”), and both types of relief were granted by order of the lower court.

Appellees subsequently instituted their action to fix the fair market value of the property within six months of the sale, as required by the Deficiency Judgment Act. The lower court determined the value and assessed the deficiency promptly thereafter, and we find no reason to reverse its determination.

Appellants assert that requesting both an in rem and an in personam judgment in one complaint is in violation of the Pennsylvania Rules of Civil Procedure.1 We may not reach the merits of this argument, however, as appellants raised no objection to the form of the complaint until after judgment was entered. Had they raised the issue by preliminary objection, appellees would have been provided an opportunity to amend the complaint. Consequently, appellants have not raised this issue at all rele[56]*56vant stages of the proceedings, and have not properly preserved this issue for appeal. Dilliplaine v. Lehigh Valley Trust Company, 457 Pa. 255, 322 A.2d 114 (1974). See also Pa. R.C.P. 1032.

The lower court also held that Martin is not a proper party to contest the validity of the deficiency judgment, as it was not assessed against him. Martin contends that as the record holder of three judgments against the Stolls, on the 420 North Duke Street property, he is entitled to contest a deficiency judgment asserted against the Stolls on the 422 North Duke Street property. However, the amount of the deficiency has no bearing upon Martin’s status as a lien holder on an unrelated debt. Therefore, the lower court properly found that he has no interest in the deficiency action.

The refusal of the court below to strike the deficiency judgment' is supported by, competent evidence, and is affirmed.

The issues related to the property located at 420 North Duke Street concern a foreclosure_ sale and the sheriff’s distribution of proceeds obtained therefrom.

The 420 North Duke Street property, which was conveyed by the Kretschmans to the Stolls on August 31, 1971, was subject to both first and second mortgages held by the Kretschmans. Upon default in payments, the property was made the subject of a jury trial, which resulted in a judgment for the Stolls. However, the Stolls continued to remain in possession without making the monthly payments required by the mortgage. Thereafter, in January, 1973, the Kretschmans again began foreclosure proceedings.2

Shortly after the foreclosure action was filed, the Stolls informed Martin that they were going to lose the property. Because he held expired judgments against the [57]

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Bluebook (online)
352 A.2d 439, 238 Pa. Super. 51, 1975 Pa. Super. LEXIS 2565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kretschman-v-stoll-pasuperct-1975.