No. 17 M.D. Appeal Dkt. 1982, Appeal from the Order of the Superior Court, No. 115, March Term, 1979 and No. 125 March Term, 1979 Reversing the Order of the Court of Common Pleas of Dauphin County, at Nos. 6 and 36, January Term, 1976
Robert C. Spitzer, Harrisburg, for appellant.
Patrick T. Ryan, Philadelphia, Guy William Schlesinger, Shamokin, for appellee Central Pa. Sav. Assn.
Roberts, C.j., and Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Nix, J., did not participate in the consideration or decision of this case.
Appellant, Commonwealth National Bank, (hereafter Bank) and Appellee, Central Pennsylvania Savings Association, (hereafter Savings and Loan) both made loans to Carpenters of Pennsylvania (hereafter Carpenters) for the construction of dwelling units in the Borough of Steelton, Dauphin County. Savings and Loan agreed on November
, 1973, to lend $1,289,500 for a fifty unit project. The loan was reduced to $1,221,500 at closing. It was secured by a construction mortgage against the land, which was recorded on December 3, 1973. The Savings and Loan advanced $1,211,103.87 on the mortgage. The Bank's loan was for the construction of a twenty-eight unit project on an adjacent tract.
Carpenters defaulted on both loans. Both the Bank and the Savings and Loan entered judgments. The Bank entered judgment in the amount of $778,411.13 on November 6, 1974. The Savings and Loan entered judgment in the amount of $817,010.19 on January 6, 1976, approximately 14 months after the entry of the junior lien judgment of the Bank. The Savings and Loan issued a writ of execution directing a sheriff's sale of the land covered by its mortgage. The Savings and Loan bid $812,000 at the sale. The Bank had previously brought a deficiency judgment proceeding in which the court credited it with $178,656.10. The sheriff's schedule of distribution indicated that the Savings and Loan would receive all of the proceeds of the sale. The Bank filed exceptions to the schedule of distribution, claiming that its judgment lien took priority over that part of Savings and Loan's mortgage lien that related to advances made after the November 6, 1974, the date of the entry of the Bank's judgment. The Bank argued that as of November 6, 1974, Carpenters had been in default on its payments to the Savings and Loan, that as a result of the default, the Savings and Loan's advances to Carpenters were voluntary, and that therefore, the Bank's judgment lien took priority over the lien created by the Savings and Loan's subsequent advances. The Court of Common Pleas of Dauphin County sustained the exceptions and ordered the Savings and Loan to pay the Bank $149,220.32 with interest from the proceeds of the sheriff's sale.
The Savings and Loan appealed to the Superior Court. The Superior Court reversed the Court of Common Pleas and held that the Savings and Loan was contractually obligated to make the advances in question, that the advances
related back to the date of the original mortgage, and further that the Savings and Loan's lien took priority over the Bank's judgment lien, 298 Pa. Super. 250, 444 A.2d 755 (1982). The court rejected the contention raised by the Bank in a cross-appeal that the Court of Common Pleas improperly reduced its judgment lien by $11,993.01. We granted a Petition for Allowance of Appeal to determine the question of the ...