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CENTRAL PENNSYLVANIA SAVINGS ASSOCIATION v. CARPENTERS PENNSYLVANIA (04/16/82)

filed: April 16, 1982.

CENTRAL PENNSYLVANIA SAVINGS ASSOCIATION, APPELLANT,
v.
CARPENTERS OF PENNSYLVANIA, INC. CENTRAL PENNSYLVANIA SAVINGS ASSOCIATION V. CARPENTERS OF PENNSYLVANIA, INC. APPEAL OF COMMONWEALTH NATIONAL BANK



No. 115 March Term, 1979, No. 125 March Term, 1979, Appeal from Order of the Court of Common Pleas, Civil Division, of Dauphin County at Nos. 6 and 36 January Term, 1976.

COUNSEL

Patrick T. Ryan and Kathleen Lynch, Philadelphia, for Central Pennsylvania, appellant (at No. 115) and appellee (at No. 125).

Robert C. Spitzer, Harrisburg, for Commonwealth Nat. Bank, appellant (at No. 125) and for participating party (at No. 115).

Cercone, P. J., and Watkins and Montgomery, JJ.

Author: Watkins

[ 298 Pa. Super. Page 252]

This case comes to us on appeal from the Court of Common Pleas of Dauphin County, and involves a dispute between two banking institutions as to the priority of their respective liens against real estate and the distribution of the proceeds of a sheriff's sale.

On November 30, 1973, Central Pennsylvania Savings Association (CPSA) agreed to lend the sum of $1,289,500.00 to Carpenters of Pennsylvania, Inc. (Carpenters) in order to enable it to construct fifty (50) low-income residential units on a tract of land in the Borough of Steelton, Dauphin County. At closing the loan amount was reduced to $1,221,500.00 and it was secured by a construction mortgage recorded against the tract of land on December 3, 1973. CPSA subsequently advanced a total of $1,211,103.87 to Carpenters pursuant to the construction mortgage.

The Commonwealth National Bank (CNB) also made a loan to Carpenters for the purpose of constructing twenty-eight (28) residential dwellings on a separate, but neighboring, tract of land. When Carpenters defaulted on the loan, CNB entered judgment against it in the amount of $778,411.13 on November 6, 1974.

On January 6, 1976 CPSA confessed judgment against Carpenters in the amount of $817,010.19 pursuant to the mortgage and note dated November 30, 1973. CPSA then issued a writ of execution and directed the Sheriff of Dauphin County to sell the real estate on which the fifty (50) residential units were to be constructed at Sheriff's Sale. At the Sheriff's Sale, CPSA bid $812,000. However, CNB initiated a deficiency judgment proceeding prior to the sale and the court ruled that the CNB judgment should be credited in the amount of $178,656.10. After the Sheriff's Sale the Sheriff's Schedule of Distribution was prepared which indicated that the proceeds of the sale would be distributed entirely to CPSA based upon its mortgage which

[ 298 Pa. Super. Page 253]

    was recorded on December 3, 1973 and which, therefore, predated the CNB judgment which was dated November 6, 1974. CNB filed exceptions to the Sheriff's distribution schedule asserting that its judgment of $178,656.10 had priority over the CPSA lien to the extent of the sum of $161,312.33 because CPSA's lien had been in default and its advances after November 6, 1974 under the construction mortgage were voluntary. CNB's exceptions were then subject to lengthy hearings before the court below. On January 25, 1979 the court below ruled in favor of CNB and sustained its exceptions to the Sheriff's Schedule of Distribution. The court then ordered the Sheriff to pay CNB the sum of $149,220.23 with interest out of the proceeds of the Sheriff's Sale. CPSA then appealed the court's ruling. CNB then filed a cross appeal arguing that the court below erred in crediting CPSA with $11,000 of interest advances thereby reducing the amount ultimately due it from the Sheriff's Sale by that amount. CNB also argues that CPSA's appeal should be quashed as untimely because, instead of taking an appeal to this court within thirty (30) days of the January 25, 1979 ruling, CPSA filed "exceptions" to said ruling which were dismissed on May 29, 1979. CPSA then appealed from the "Final Order" of the court below dated May 29, 1979.

With respect to CNB's assertion to the effect that CPSA's appeal was untimely and should, therefore, be dismissed the court below stated as follows:

"The Commonwealth National Bank did challenge the procedure which was followed in the instant situation. Commonwealth National Bank contended the verdict rendered January 25, 1979 constituted a "Final Order" as to which Central Pennsylvania Savings Association can seek relief only by an appeal. It bases its position on Pennsylvania Rule of Civil Procedure 3136 which governs the disposition of a sheriff's schedule of distribution. The Rule provides in subsection (g) that the ...


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