Court Opinion

ID: 6299846
Source: CourtListenerOpinion
Date Created: 2022-02-18 17:37:23.848416+00
Date Added: 2024-06-11T09:00:26.538652
License: Public Domain

CERCONE, President Judge,
concurring:
The instant appeal arises from the order of distribution of proceeds following the Sheriff’s sale of properties owned by Howard 0. Stouffer, Inc. Appellants were mechanic’s lien holders who, under the schedule of distribution, would recover only part of the amount of their liens. Appellee, Dauphin Deposit Bank and Trust Company, was both the mortgagee (construction lender) and execution creditor with respect to these properties. The execution and sheriff’s sale were not a consequence of a default on the mortgage, but rather because of the bank’s execution upon certain judgment notes Stouffer had endorsed in the bank’s favor which were junior to both the mortgages would be satisfied from the sales under the terms of the distribution order, the proceeds were insufficient to reach the judgment notes which remain apparently wholly unsatisfied.
The point of contention in this matter focuses on the bank’s last minute announcement that it would waive the statutory protection of its mortgages at the sheriff’s sale, so that the proceeds of the sale would be used first to satisfy the mortgage indebtedness on the individual parcels. Appellants, as mechanic’s lien holders, would have had the proceeds of the sale applied first to their liens had it not been for this announcement; however, any successful bidder would have taken the property subject to the mortgage indebtedness. As the Judicial Code, 42Pa.C.S. § 8152 (1980) provides:
“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 judicial sale...”
Of course, bids on the parcels would have been much lower if the bidders would have taken subject to the terms *111of each mortgage; and, in light of the record developed in this case, it is problematical whether the mechanic’s lien holders were prejudiced by the change in the terms of the sale. That is, on the record before us we cannot determine whether the proceeds of sales subject to the mortgages would have generated proceeds sufficient to satisfy a greater portion of the mechanic’s liens. Indeed, it is because of the absence of any evidence of prejudice that I agree the order of distribution should be affirmed.
I part with the majority opinion inasmuch as I find requiring the lien holders to object immediately to the bank’s last minute waiver gives an unfair advantage to the bank, perhaps, in some circumstances, to the disadvantage of other creditors. See 31 C.J.S., Estoppel 70(b) (1965). The bank literally had weeks to ponder the benefits and detriments of waiving its statutory protection, whereas the remaining creditors had only seconds to consider the potential adverse consequences of the waiver to their interests. Suppose, for example, a potential bidder had come to the sale with a line of credit sufficient only to bid out the amount of the costs and mechanic’s liens and, indeed, was prepared to do so in part because the interest rate of the outstanding mortgage compared favorably with interest rates he would have to pay if a new mortgage had to be obtained. Having no opportunity to consider the new economics of the transaction, such a bidder might choose to remain silent. To my mind it is clear that, if such were the circumstances, the bank’s announcement of waiver would be inequitable under the circumstances, and I would favor reversing the order of distribution. However, the absence of such evidence persuades me to the contrary.
After exceptions were filed to the sheriff’s proposed distribution of the proceeds, the parties stipulated to all the facts they thought relevant. There was no evidence, by affidavit or otherwise, that the mechanic’s lien holders were prejudiced by the bank’s waiver. Without it being particularly articulated as such, the lien holders’ principal argument is that the bank is estopped to enforce the waiver due to the *112eleventh hour manner in which it was effected.* The difficulty arises because it is hornbook law that there are two elements of estoppel: (1) unfair or inequitable conduct on the part of the party to be estopped; and (2) a real detriment suffered by the party seeking the estoppel proximately caused by the inequitable conduct. See generally 31 C.J.S., Estoppel 74 (1964). It is the failure of the mechanic’s lien holders to allege and to prove such a detriment which persuades me that the order of distribution must be affirmed. See Roos v. Fairy Silk Mills, 334 Pa. 305, 5 A.2d 569 (1939). On this state of the record, because the amounts bid on the parcels clearly increased to reflect the discharge of the mortgages, to hold otherwise would effect a windfall to the mechanic’s lien holders at the bank’s expense despite the absence of proof that they were injured by the change in the terms of the sale.

 I am in full agreement with the majority that the bank had the power to waive its statutory protection against its lien being discharged by the sale.