Court Opinion

ID: 6260060
Source: CourtListenerOpinion
Date Created: 2022-02-17 22:00:08.788669+00
Date Added: 2024-06-11T08:59:39.481621
License: Public Domain

Concurring Opinion by
Mr. Justice Pomeroy :
I join in the opinion of the Court, but deem it desirable to add this further statement of the reasons I think that reversal of the decision of the Court of Common Pleas is proper. While it is apparently true, surprisingly, that there is no authority directly in point on the facts, candor compels acknowledgment that the indications of the prior case law of our Court and the Superior Court point to the priority of the Peoples’ lien and the correctness of the lower court’s position in upholding it. Without here engaging in a thorough survey, we note that over fifty years ago this Court stated that “it is now established in Pennsylvania that, when a contract for advances or the assumption of future obligations accompanies a mortgage, it is not essential to its validity that the engagement governing the advance be placed upon record, or even expressly referred to in the mortgage. . . .”, and that “the lien of payments made under such an agreement relates back *309to the date of the mortgage. . . .” Land Title & Trust Company v. Shoemaker, 257 Pa. 213, 219, 101 Atl. 335 (1917). To the same effect see Batten v. Jurist, 306 Pa. 64, 158 Atl. 557 (1932), and Moats v. Thompson, 283 Pa. 313, 129 Atl. 105 (1925). And it has been held, moreover, that the undertaking for future advances does not have to be in writing, and so may be proved by parol evidence: Wardman v. Iseman, 99 Pa. Superior Ct. 551 (1930). In Housing Mortgage Corp. v. Allied Construction, Inc., 374 Pa. 312, 97 A. 2d 802 (1953), Chief Justice Stern summarized the law regarding the liens of future advances as follows: “The law is definitely established that an advance made pursuant to a mortgage to secui'e future advances which the mortgagee was not obligated to make, is subordinate in lien to an encumbrance intervening between the giving of the mortgage and the making of the advance, if the advance was made with actual notice or knowledge of the intervening encumbrance; the lien of an advance under such circumstances dates only from the time it was made and not from the time of the creation of the mortgage. In other words, after notice of the existence of a junior lien, the senior mortgagee will not be protected in making further advances under his mortgage unless he is under a binding obligation to make such advances: [citations omitted]. It is only when the advance-money mortgagee is contractually obligated to make the advances that their lien relates aback to the date of the mortgage: [citations omitted].” (374 Pa. at 320-2) The limitation emphasized in the Allied Construction case, however, is not enough to give priority to the WPNB judgment lien, since it was obtained after the grant of additional credit by Peoples. Thus, in order to prevail, the Peoples’ lien would not need to relate back to the date of tbe mortgage, but only to the date of the new advance. The lower court so held, and this was the legal basis of its decision.
*310In further support of its decision, the court below observed, “It seems to be common practice in the banking world today to advance money on an original mortgage without undergoing the necessity for preparation of new documents and instruments.” No data is given in support of this rather broad statement and there was no evidence to this effect. We would be inclined to think it likely that such a practice would be limited to situations where there was an obligation to make future advances, contracted at the time of taking the mortgage. Whatever may be the informal practice, however, “[g]ood conveyancing practice requires that the contract governing the advances be in writing and at least recited in the mortgage. . .”, notwithstanding the decisions above referred to. Ladner, Conveyancing in Pennsylvania, §9.34 (3d Ed., 1961). If the original mortgage contains no such reference, and the parties desire, as here, to have it cover new advances, prudence then dictates an amendment to the mortgage or the filing of a supplemental mortgage giving indication of the additional advances contemplated.
The present holding of the court is, I believe, essential to give effect to the purpose of the recording statutes, which have been an integral part of the real estate law in Pennsylvania since colonial times. Act of May 28, 1715, 1 Sm. L. 94, Sec. 8, 21 P.S. 621.1 A mortgage, in Pennsylvania legal theory, is a defeasible deed. Upon payment of the obligation evidenced or secured thereby, there is an automatic reversion of title to the mortgagor. Randal v. Jersey Mortgage Investment Co., 306 Pa. 1, 158 Atl. 865 (1932); Bulger v. Wilderman and Pleet, 101 Pa. Superior Ct. 168 (1931). Thus in the Peoples mortgage in the case at bar, which *311is a typical form of straight mortgage, the following proviso is set forth: “Provided however, that if the said mortgagors pay and perform, according to the condition of said bond, everything to be paid and performed as aforesaid, then the estate hereby conveyed and granted shall become and be void.” When, therefore, on February 8, 1967, the Orlandos paid to Peoples the balance due on the original mortgage debt, which was the only obligation referred to in the mortgage, the purpose and provisions of the recording statutes would require a finding that, whatever may be the case as between the mortgagor and mortgagee, as to the rest of the world the mortgage was void. By the same token, the judgment on the mortgage bond entered by Peoples on December 20, 1968 was, in my view, void as against anyone except the Orlandos. It follows that the lien of the WPNB judgment, obtained October 4, 1967, took precedence over the Peoples judgment, and the proposed execution on the latter judgment should be enjoined.
The view here expressed is not new. As long ago as Irwin v. Tabb, 17 S. & R. 419, 423 (1828), Chief Justice Gibson said, by way of dictum, “It must, perhaps, be conceded that a mortgage to secure future advances, which does not contain notice of the agreement is void against creditors generally, because the land is apparently covered for more than it actually owes, . . .” In Batten v. Jurist, supra, Chief Justice Maxey observed (306 Pa. at p. 74) : “There is much logic in the argument that the judicial recognition accorded mortgages for unlimited future advances offends the spirit of our modern Recording Acts.” Justice Maxey felt that the matter was one for legislative rather than judicial action. It is not, however, too late or too onerous to require that in order to create an effective lien for future advances there must be some ap*312propriate reference on the public records to the obligation to make such advances. That, as I understand it, is the effect of the court’s decision in this case.
Mr. Justice Jones joins in this concurring opinion.

 See, also, Act of April 27, 1927, P. L. 440, §1, 21 P.S. 622, as amended; Act of June 2, 1959, P. L. 452, 21 P.S. 629, as amended; Act of June 28, 1951, P. L. 927, 68 P.S. 601, as amended.