In re Account of Commonwealth Trust Co.

Citations

• 247 Pa. 508
• 93 A. 766
• 1915 Pa. LEXIS 876

Syllabus

<p>Trusts and trustees — Distribution of trust — Beneficiaries—Subrogation — V olunteer.</p> <p>1. One wbo accepts with his eyes open a second mortgage as security for a loan must be presumed to anticipate the possibility of being required to look out for the lien of the first mortgage upon the property.</p> <p>2. The doctrine of subrogation is founded upon principles of equity and may be decreed where no contract exists between the parties, but not in favor of a mere volunteer.</p> <p>3. On December 1; 1906, the owner of certain real estate executed a trust deed of the same by which the trustee was given control over the property with power of sale during the lifetime of the grantor’s wife and for three years after her death, net income to be paid to the wife during her lifetime and after her death to her testamentary appointees, the proceeds of a sale to be used in paying off encumbrances then existing against certain property of the wife in New York, upon the proviso that this property at the time of the sale of the trust res was owned by the wife. The liens against the property were held by a college and an individual. On June 19, 1911, the wife executed a mortgage on the New York property to secure the payment of $13,500, subject to the prior mortgage claim in favor of Columbia College, out of the proceeds of which the individual mortgage was paid with accrued interest to the amount of $5,325.41, whereupon the mortgage was satisfied of record. The $13,500 mortgage was assigned five months later to Annie E. Copeland, who had no knowledge of the trust, and did not depend upon it in any way as security for the loan. On December 2,1912, Mrs. Copeland in order to prevent threatened foreclosure, paid the sum of $1,361.25, interest on the college mortgage.. On October 1, 1912, the wife aliened the New York property. In November, 1912, the trust res was sold and the purchase price passed to the trustee for distribution. In March, 1913, the college instituted foreclosur