Barkley's Assigned Estate

Citations

• 268 Pa. 370
• 112 A. 113
• 1920 Pa. LEXIS 694

Syllabus

<p>Mortgage — ■Judgment notes — ■Priorities — Proceeds of sale of mortgaged premises — Assignment of notes — Preexisting debt — Volunteer — G onsideraiion — Estoppel.</p> <p>1. Where a mortgage was given to secure purchase money, and at the same time fifteen judgment notes were given as collateral security for payment of deferred installments provided for in the mortgage, and the mortgage was recorded and the notes entered up on the same day, and, thereafter, the mortgagee assigned three of the judgments to his sister-in-law with whom he stood in a relation of confidence, and to whom he owed a note to the amount of the three judgments, which note was then destroyed, with the full understanding by the sister that she was secured and would be paid, and thereafter the other twelve notes were assigned to a trust company, the sister is entitled to a preference in the distribution of a fund raised by a sale of the mortgaged premises, insufficient to pay all the fifteen notes, where it appears that the notes assigned to the trust company were to secure a preexisting debt, without any additional consideration, or extension of credit, from the trust company to the assignor.</p> <p>2. Tbe mortgagee’s representation to his sister-in-law that the judgments assigned to her would bo paid, inducing her to permit the note to bo destroyed, would estop him from denying her the right of a preference, and the trust company, being a mere volunteer, has no higher rights.</p>