Campbell & Pharo's Appeal , 36 Pa. 247 ( 1860 )

The opinion of the court was delivered by

Lewis, C. J.

The mechanics and material-men furnished their work and materials, in this case, entirely on the credit of the equitable estate then in Robert Q. Gibbon. They had neither an equitable nor legal right to anything beyond that estate, and they were as much bound to stand aside in favour of the vendor’s claim for the purchase-money, supported as it was by the legal estate, as Gibbon himself was. .

But it is supposed by their counsel, that there was a door left open by means of which they might enter upon the legal estate, after it was conveyed to Mary M. Gibbon, and before she executed the mortgage for the purchase-money. But, unfortunately for their enterprise, there was no interval of time between the delivery of the deed and the mortgage. They were executed at the same time, and are to be taken as a single transaction. It is true, that the deed came from Eldridge to Mary M. Gibbon, and the mortgage was from Mary M. Gibbon to Weldon & Tomlinson. But the mortgage was given to provide for the purchase-money, under an arrangement made by the mortgagor, the vendor and the mortgagees. The material circumstance in the case is, that the money was advanced by Weldon & Tomlinson, on the faith of this arrangement, and under a representation that the mortgage was for the purchase-money. The whole transaction shows that there was no intention whatever to permit Mary M. Gibbon to acquire the legal estate for an instant discharge of the purchase-money, and the acts of the parties show that they carried out their intention.

It is true that the mortgage is not valid against the mechanics’ liens, for anything more than the purchase-money; but the proceeds in court will not satisfy even that amount.

Where mechanics’ liens are entered against an equitable estate, their value depends upon that estate, and they survive or perish with it. When that estate is founded upon a contract of purchase, every partial payment increases the security of the liens. Even if the money be borrowed for the purpose, the lender gains no priority over the prior liens on the equitable estate, unless he advanced his money upon a contract with the holder of the legal estate, and on the security of that estate. Lynch v. Dearth, 2 Penn. R. 101, was the case of money loaned without any contract with the holder.of the legal estate. In that case, the prior liens were preferred to a mortgage given for the money borrowed to pay the vendor. Lyon v. McGuffey, 4 Barr 126, was a case where there was an interval of seventeen days between the conveyance of the legal estate and the entry of judgment for the purchase-money. After such a long interval, it was impossible to say, that the delivery of the deed and the entry of the judgment were one transaction, and it followed, that the liens on the equitable estate gained a priority over the judgment for the purchase-money.

The ease now before us differs from both the cases cited. It differs from .the last, in the material circumstance, that the delivery of the deed and the execution of the mortgage took place at the same time, and were one transaction. It differs from the first, in the still more important particular, that the money was not advanced on the credit of the equitable estate at all, but distinctly upon the security of a mortgage upon the legal estate, for the purchase-money, under a contract with the vendor himself. The deed was made for the purpose of enabling the vendee to execute this mortgage, and not for the purpose of uniting the legal and equitable estate so as to give a priority to the liens on the latter. Such a union, whether it be called merger or extinguishment, never takes place against the intention of the parties, where that intention is manifested, and where equity requires that the distinction should be presented. The mortgagees are, therefore,' entitled to the fund in court.

Decree affirmed.