Assigned Estate of Love

Opinion by Beaver, J., The appellant in his argument embodies the various assignments of error in this case in two questions. These can be combined in one and for the sake of clearness and fullness should have two or three additional facts added which are in no way disputed but are practically admitted. This is the question : Can a mortgage creditor whose mortgage is a lien prior to all others, except another mortgage, under an agreement with the assignee and a verbal notice given by the assignee at the hour of the assignee’s sale made under an order of court founded on the act of February 17, 1876, agree that the lien of his mortgage would be divested by the sale, divest the lien [560] of Ms said mortgage, so that he may participate in the distribution of funds realized from said sale to the exclusion of a subsequent judgment creditor whose lien would be divested by said sale, and who was present at the sale, heard the notice given by the assignee, made no protest at the time, participated in the sale as a bidder, and filed no exceptions to the return of salé as made by the assignee ? The purposes of the Act of February 17, 1876, P. L. 4 are plainly apparent. They are, first, to enable an assignee for the benefit of creditors to make advantageous sales of real estate, that is, sales advantageous to the creditors for whom the assignee is trustee, and to this end to empower the courts of common pleas to direct the sales of real estate incumbered by liens freed therefrom; and, second, to preserve the rights of mortgagees the lien of whose mortgages it is not necessary to divest, in order to make such a sale advantageously. The language of the act which relates to the preservation of the lien of first mortgages is as follows: “ which sale or sales, after being confirmed by said court, shall discharge all liens against the real estate so sold, excepting that where the lien of a mortgage upon real estate is or shall be prior to all other liens upon the same property, except other mortgages, ground rents and the purchase money due the commonwealth, the lien of such mortgages shall not be destroyed nor in any way affected by any sale made by virtue or authority of any sale made under the provisions of this act.” It is very clear that the court of common pleas having jurisdiction of and control over assigned estates could not by an order of sale direct the divestiture of the lien of a mortgage which by the terms of the act above quoted is directed to be preserved, nor could the assignee make sale of real estate so ordered to be sold divesting such lien, without the express consent of the mortgagee. The provisions of the act which apply to such mortgages do not, however, tie the hands of the mortgagees. Such provisions are merely directory and not mandatory. They do not prevent and were not intended to prevent those who were to be benefited under the act from waiving or relinquishing the benefits thereby conferred. As was said by Mr. Chief Justice Gibson in Berger v. Hiester, 6 Wharton, 210, “ It is a maxim that anyone may renounce the benefit of a privilege provided for himself.” [561] In the present case a Building & Loan Association was the holder of a second mortgage upon the premises about to be sold by the assignee. The amount due under the mortgage or which would necessarily be paid by the purchaser, if the lien of the mortgage remained, was uncertain. This uncertainty would necessarily deter bidders and prejudice the rights of creditors who were to share in the fund arising from the sale. It was therefore wise on the part of the assignee to secure, if possible, an agreement on the part of the holder of this mortgage that its hen should be divested. Such an agreement was secured. Announcement thereof was made at the sale. The appellant in this case, after the announcement was made, was a bidder. He made no protest at the time. He acquiesced in the sale and in the sufficiency of the price of the land sold by allowing the bidder next higher than himself to take the property. He made no complaint, when the return of sale was made by the assignee, and is not heard in derogation of the bona ñdes of the sale or of the sufficiency of the price of the property sold, until the proceeds thereof are brought into court for distribution, and even then his complaint is not that there was bad faith, not that the price is insufficient, but that the lien of the building association mortgage was not divested notwithstanding the agreement. In Burkholder’s Appeal, 94 Pa. 522, Mr. Justice Stbrjrett delivering the opinion of the court says : “ It has been definitively settled that by the final confirmation of a sale made by an assignee for the benefit of creditors under the act of February'17, 1876, the land is converted into money as of that date, and at the same time discharged from all such then existing liens ás are intended to be divested by the sale, and that the liens so divested are to be paid out of the proceeds of sale according to their priority on the date of confirmation, with interest to that date.” He does not say the liens divested under the provisions of the act referred to, but such liens as are intended to be divested by the sale. There is we think clear recognition of what has been the almost universal practice under the act of 1876 of the divestiture of the lien of the mortgage by consent of the mortgagee where such divestiture was for the benefit of the assigned estate. Under the peculiar circumstances of this case, we are clearly of the opinion that the assignee was enabled to make a more ad [562] vantageous sale of the real estate sold by being able to announce that the lien of the mortgage held by the building association, uncertain in amount and uncertain also as to the number of payments and the duration of time within which such payments were to be made, would be divested by the sale than if the lien had been allowed to remain, as was possible under the provisions of the act of 1876, above referred tó. The appellant was in no way a sufferer. He was represented at the sale. He heard the notice. He was a bidder and, if he had been a purchaser, would have been entitled, of course, to claim the benefit of the agreement made by the assignee and the mortgagee as to the divestiture of the lien of the building association mortgage. If for any reason he were dissatisfied with the terms of the sale, it was his duty to make his protest on the spot or at the time the assignee made his return. The agreement between the assignee and the holder of the building association mortgage was undoubtedly valid and could be enforced: Loomis’s Appeal, 22 Pa. 812. It would be unfair, therefore, for the appellant charged with the knowledge of the facts to take the proceeds of .'the sale as against the holder of the building association mortgage and compel him to have recourse to the property which, in the hands of the purchaser at the assignee’s sale was divested of the lien of the mortgage by the agreement of the mortgagee himself. We are not called upon to consider what the effect of this sale upon the rights of judgment creditors, whose liens were divested thereby and who were not present and had no knowledge of the verbal notice given thereat, might be. As to the present appellant, we are satisfied that the distribution made by the auditor and confirmed by the court below should stand. The decree is, therefore, affirmed and -the appeal dismissed at the costs of the appellant.