Dauphin Deposit Bank & Trust Co. v. Howard O. Stouffer, Inc.

WATKINS, Judge:

This is an appeal from the order of the Court of Common Pleas of Lebanon County, distributing the proceeds of Sheriff’s sales or real estate in that county.

The facts in the instant case are that Dauphin Deposit Bank and Trust Company, the Execution Creditor, executed upon its judgments which were junior in lien to its construction mortgages. At the time announced for the sheriff’s sale of the real estate which was subject to the execution and to the mortgages, the attorney representing the Execution Creditor and the Mortgagee announced that the sale would divest the construction mortgages. The sheriff, in announcing the conditions of sale, repeated that announcement. Present at the sale and at the time of the announcement were all of the mechanics lien creditors together with their counsel and they voiced no objection to the divestiture of the mortgage liens. In point of fact, one of the Exceptant Mechanic Lien Creditors through his counsel purchased Tract No. 4, 608 Meadow Drive, South Lebanon Township, Lebanon County, Pa., by bidding a price over and above the bid of the bank which had bid the amount of the mortgage debt and interest together with the costs and collection fee.

All of the Mechanics Lien Creditors were present at the sale and were free to bid to protect their interest. Only with respect to Tract No. 4 did one of those creditors so act. In each instance, the Execution Creditor bid a sufficient fund to cover the mortgage debt, interest, collection fee and costs.

The sole question on this appeal is whether the waiver of its right of preservation of its lien by the first mortgagee was effective and its lien discharged by the sales.

Section 8152 of the Judicial Code, 42 Pa.C.S. § 8152, is a reenactment of the Act of April 30, 1929, P.L. 874, 21 P.S. § 651. This Act, in turn was a re-enactment of the Act of 1901, May 8, P.L. 141 with various amendments and supplements, which in turn was a re-enactment of the Act of March 23, 1867, P.L. 43.

These Acts provide, in pertinent part:

“When the lien of a mortgage is or shall be prior to all other liens upon the same property.. . the lien of such mortgage shall not be destroyed or in anywise affected by an judicial sale...”

As early as Love’s Estate, 4 Pa.Super. 556, 40 W.N.C. 345 (1897) held in effect that the Act preserving the lien of the mortgage does not prevent and was not intended to prevent those who were to be benefitted under the Act from waiving or relinquishing the benefits thereby conferred. The Court cited the earlier case of Berger v. Hiester, 6 Wharton 210. This case was followed by McFadden’s Assigned Estate, 191 Pa. 624, 43 A. 383, 1899, wherein the Supreme Court of Pennsylvania held:

“Under the Act reserving the lien of a first mortgage at a judicial sale not made on said lien, the mortgagee by agreement may waive such right on the benefit, and consent that the sale be made free and clear of the lien.”

The Court went on to say:

“There cannot be any doubt that the Act preserving the lien of the first mortgage at a judicial sale not made on said lien is for the benefit of the holder of the mortgage, and that by agreement he may waive such right on benefit and consent that the sale may be made free and clear of the lien.”

That the rights of the mortgagee may be relinquished by proper waiver cannot be argued. Rights of all parties of interest in a Sheriff’s sale depend on the record at the time of the sale. Here all parties were aware of the existence of the construction mortgages and of the fact that buyers would be profoundly influenced by the effect of the sale on said mortgages, i. e. would the sale be subject to the mortgages or divested of same.

Those primarily protected by the record are the execution creditor on a junior lien and the purchaser at the sale, so that title will not be divested by matters not a part of the record.

The waiver here was made for the record, clearly without reservation. All parties had the opportunity to protect their interest, and the purchaser bid on the basis that the mortgages would in fact be divested.

The waivers were proper and effective and timely.

Order affirmed.

CERCONE, President Judge, files a concurring opinion.