Smith's Estate

Sinkler, J.,

— Decedent, Agnes Smith, died March 1, 1939. At the audit of the account filed hy her executor, a claim was presented by Fidelity-Philadelphia Trust Company, continuing substituted trustee under the will of Thomas Simpson, deceased, upon a bond executed by her, and secured by mortgage of real estate formerly owned by her. The auditing judge disallowed the claim, and exceptions have been taken to his finding.

The mortgage bond in question was executed by decedent on August 19, 1918, the principal sum to become due three years thereafter. On July 1, 1919, decedent conveyed the mortgaged premises, under and subject to the mortgage, to one Dobson. He, on April 7, 1920, conveyed the premises, under and subject to the mortgage, to Mary D. Brooks, who at all times thereafter has been the real owner thereof. On July 5, 1929, Mary D. Brooks, hereafter called the grantee, and Fidelity-Philadelphia Trust Company, hereafter called the mortgagee, entered into an agreement whereby the mortgage (then in default as to the payment of principal) was extended for three *344years, and the grantee “guarantees and covenants to make prompt payment of the interest and the principal of the bond.”

After the conveyance of the property by decedent, payments of interest were made by the grantees and real owners of the premises. No default exists in the payment of interest or in the payment of taxes. The principal sum of the mortgage debt is now overdue.

Objection to the allowance of the mortgagee’s claim was made at the audit upon the ground that lapse of time raised a presumption of payment. The adjudication recites that, while 20 years had elapsed since the last payment of interest by decedent, in February 1919, less than 20 years have elapsed since the principal of the mortgage bond became due, on August 19,1921. The auditing judge disallowed the mortgagee’s claim.

The mortgagee has filed exceptions to the adjudication, and contends that the auditing judge erred in finding that there was a fair presumption that decedent had been discharged ; in holding that under special circumstances the lapse of less than 20 years may be sufficient to raise a presumption of payment; in finding that the fact that the mortgagee looked to the grantee for payment of interest was a circumstance sufficient to discharge decedent; and, finally, in disallowing the mortgagee’s claim.

The basis for the ruling of the auditing judge, according to the adjudication, is as follows:

“During all of this period of 20 years, however, there was no suggestion of a claim against decedent, and while of course it cannot be said that there is a presumption of the payment of the debt itself, it is a fair presumption that the personal liability of the debtor has been discharged.”

The disallowance of the mortgagee’s claim is based upon a conclusion of fact that the mortgagor was released of liability. The auditing judge later states:

“The fact that the creditor during all the period mentioned looked to the new owner for the payment of the *345interest is in my opinion a circumstance sufficient to discharge the former owner, the mortgagor.”

This would suggest that the mortgagor was discharged by operation of law when the mortgagee accepted payments of interest from the new owner.

Whether viewed as a conclusion of law or as a conclusion of fact, we cannot concur in the disallowance of exceptant’s claim. In our view, the facts presented in this case, as above set forth, do not, as a matter of law, amount to a release of the mortgagor or a discharge of her obligation. The fact that the mortgagee collected the interest payments from the grantees of the land and did not make any demand on the mortgagor does not work a release by operation of law, or result in a novation substituting the grantees as obligors. Even the execution by the present grantee of the mortgage extension agreement did not have such effect: Willock’s Estate, 58 Pa. Superior Ct. 159 (1914) ; Joyce, to use, et al. v. Hawtof, 135 Pa. Superior Ct. 30 (1939) ; York Trust Co., Trustee, v. Haugh, 20 D. & C. 338 (1933). See also Kiedaisch et ux. v. Elkins Park National Bank et al., 325 Pa. 241 (1937).

Is the finding of fact justified, that the mortgagor had been released? The liability of the mortgagor is based upon her mortgage bond. Such a sealed instrument is accorded a greater dignity in the law than an ordinary unsealed obligation. After the lapse of six years all remedies to enforce the ordinary obligation, not under seal, are barred unless the obligor in some manner waives this defense. The remedies to enforce a sealed obligation are never barred by the mere lapse of time: Gill’s Estate, 268 Pa. 500 (1920) ; Parsons Trading Co. v. Dohan et al., 312 Pa. 464 (1933). After the lapse of 20 years a presumption arises that the sealed obligation has been discharged: Gregory’s Execs, v. Commonwealth, 121 Pa. 611 (1888); Wilson v. Eckman, 55 Pa. Superior Ct. 403 (1913); but, unlike the bar imposed by a statute of limitations, this presumption may be rebutted: Grenet’s Estate, 332 Pa. 111 (1938). The operation of the presumption is *346purely procedural. Its only effect is that after 20 years the obligee has the burden of proving nonpayment, whereas until then the obligor had the burden of proving payment.

In the instant case the mortgage bond on which the claim is made did not mature until August 19, 1921. As 20 years had not elapsed from that date at the time the matter was heard at the audit, the question to be determined by the auditing judge was whether the representatives of the deceased mortgagor’s estate had sustained its burden of proving a discharge of the liability of the mortgagor on the bond. The question to be determined by the court in banc is whether he could have reasonably found that such burden had been carried.

The essential facts relating to the mortgagee’s claim are that the mortgagor executed a bond and mortgage; the mortgagor conveyed the property; the grantees have thereafter made all payments of interest due; the present owner executed a mortgage extension agreement with the mortgagee; and the mortgagee presents a claim for payment of the principal debt within 20 years after its maturity.

From the transfer of the mortgaged premises by the mortgagor and the acceptance by the mortgagee of interest payments from the grantees, we cannot conclude that the mortgagee was “looking to the new owner” alone for payment, and that he was abandoning his claim against decedent. Clear proof is necessary to overthrow the reasonable inference that the mortgagee accepted interest from the grantees because the mortgagee’s only concern was that he be paid by someone, and that he did not intend thereby to relinquish his right to proceed against decedent for any sums not paid him by the grantees. The mortgagee’s failure to make any demand on the mortgagor may readily be explained by the fact that the grantees made payment of the interest due. The execution of the mortgage extension agreement in which the grantee assumed personal liability is not evidence of a *347release or discharge of the mortgagor’s liability, but is merely a step taken by the mortgagee to provide additional security for the mortgage debt.

The circumstances of this case are not inconsistent with the continued existence of the mortgagor’s liability on her bond, nor do they raise any question as to the bona fide character of the claim. This distinguishes the instant ease from the many decisions in which liability upon specialties was found barred as a question of fact, although less than 20' years had elapsed. Thus in Woodward v. Carson, 208 Pa. 144 (1904), it was questionable whether the obligation alleged to be barred by the lapse of less than 20 years was enforcible because it was only collateral for a note, while liability on the principal debt was denied. In Diamond v. Tobias, 12 Pa. 312 (1849), an issue as to the validity of the obligation itself was present. In Morrison v. Collins et al., 127 Pa. 28 (1889), the obligor had apparently failed to use as a set-off in a settlement of an open account the obligation which he later asserted. In Piper’s Estate, 208 Pa. 636 (1904), not only had more than 30 years elapsed, in which case the rebuttable presumption of payment arises, but the obligee had failed to present his claim at the audit of the account of the executors of the will of the deceased obligor, and only asserted it at a later date upon an application for another accounting and to have the amount of the legacies applied on account of a deficiency remaining after the sale of the mortgaged premises.

We cannot concur in the conclusion delivered in the adjudication. This conclusion is not sustained by the facts, to wit, that the mortgagor has been released from liability.

The first, third, and fourth exceptions to the adjudication are, therefore, sustained. A decision upon the second exception becomes unnecessary, and that exception is dismissed pro forma. The claim of $3,300 is allowed, upon condition that said mortgage and bond be duly assigned to this estate by way of subrogation.

*348So amended, the adjudication is confirmed absolutely, and it is ordered that a schedule of distribution be filed, in duplicate.