Maurer's Appeal , 1878 Pa. LEXIS 80 ( 1878 )

Mr. Justice Sharswood

delivered the opinion of the court,

It is too late to shake the authority of Lancaster v. Dolan, 1 Rawle 232. Whether the decision in that case was right or wrong it .has been so often recognised and affirmed since 1829, that it is now one of the most firmly established rules of property in this state. Under the deed of trust of April 24th 1863, executed by J. Warren Tryon, with the assent of Daniel Kerper and Eliza E. Kerper, to George W. Goodrich for the sole and separate use of Mrs. Kerper during her natural life, with remainder to her children, she, being a feme covert, had no power over the separate estate except what' was expressly reserved in the deed. There was an express power reserved to the trustee to execute a mortgage of §2000 for the sole and separate use of Mrs. Kerper absolutely. This mortgage was executed, and, as the master rightly held, that power was exhausted. Subsequently, under a mistaken idea that the deed of trust was revocable, a deed was executed on the 25th day of May 1867 by Kerper and wife to Zacharias N. Maurer in fee, the object of which was to vest in Mrs. Kerper the title to said premises in fee simple for her own exclusive use. It is not now pretended that this deed was operative for the purpose fir which it was designed. The trust for Mrs. Kerper for her sole and separate use for life continued unaffected by it. On the 31st May 1867 Mr. and Mrs. Kerper executed a mortgage to secure the payment of two bonds in favor of Henry H. Maurer and Benjamin Keim of §1500 each. The money was loaned in good faith on the security of the mortgage, in the belief that the deed of trust was revoked and that the mortgagors had a perfect right to make the mortgage. Of the money thus loaned it is reported by the master that about §1100 was used to pay the balance due on the mortgage for §2000 given under the express power in the trust deed, and satisfaction was then entered on that mortgage. In the original trust deed there was a power to Goodrich the trustee to sell “to any person or persons and for any such sum or sums of money as the said Eliza E. Kerper, by wilting under her hand and seal, at any time during her natural life may appoint and direct, and to discharge the purchasers from all obligation to see to the application of the purchase-money ; and the purchase-money of the premises so sold or any part shall in all respects be substituted for the real estate sold as regards the enjoyment and ownership thereof.” It is now contended that the mortgage to the complainants of May 31st 1867, is a valid instrument under the power. Without doubt a power of sale includes a.power to mortgage; nor is it necessary that the deed should on its face refer to the power if it can take effect in no other way. It has also been held by this court that where there is a power in a trustee to convey to such persons as the cestui que trust shall appoint, a deed executed by the latter is a good appointment and the trustee will be decreed to convey: McFadden v. Drake, 29 P. F. Smith 473. In that case hoivever the cestui que trust had the absolute equitable estate, an estate-tail, indeed, but which when converted into money became absolute. In equity then she would be considered as the owner of the money produced, and the payment to her discharged the purchaser. Here however the cestui que trust had but a limited interest for her life, and it was expressly declared, as we have seen, that the purchase-money should in all respects, be substituted for the real estate sold as regards the enjoyment and ownership thereof. If the mortgage had been made by the trustee, or if it had appeared that the mortgage-money had been paid to him, as his was the hand appointed to receive it, undoubtedly under the clause inserted in the deed for that purpose, the mortgagees would not have been bound to see to the application of the mortgage-money. Those interested in remainder must look to-the trustee. But here the mortgagees did not pay the money into the hand appointed to receive it. They had express notice of the trust on the face of the deed. They paid the money to Mrs. Kerper, and so far and so far only, as she had a right to the money received, can the appointment by way of mortgage under the trust deed be supported. But had she not a perfectly good and absolute title to so much of the mortgage-money as was actually applied to the payment of the balance upon the mortgage expressly authorized by the trust deed for her absolute use ? It is not easy to see upon what principle of equity she can controvert the claim of these mortgagees to the security of their mortgage under the power, for so much as was applied by her to relieve her estate from a valid subsisting encumbrance, placed upon it for her sole benefit. It was to that extent a. rightful application of the proceeds of the mortgage under the trust deed.

The bonds which the mortgage was given to secure were void as personal obligations of Mrs. Kerper. They were neither at law or in equity any charge upon her estate. We are of opinion that so much of the decree as sequestered the rents and profits of Mrs. Kerper’s estate to be paid to the complainants was erroneous, as was the order of sale of the mortgaged premises, the proceeds to be invested and the interest paid to the plaintiffs towards satisfaction of their mortgage; but we are of opinion that the complainants are entitled to the security of their mortgage to enforce the pay-, ment of $1148.48, or whatever was the exact amount of the balance paid on the $2000 mortgage, with interest. To this extent the mortagees have a full remedy at law upon their mortgage, and it will be the duty of the court below to permit them to proceed thereon for the purpose of realizing that amount.

Decree reversed and bill dismissed, each party to pay their own costs in the court below and on this appeal.