Citizens Building & Loan Ass'n v. Arvin

56 A. 870, 207 Pa. 293, 1904 Pa. LEXIS 465

• Court: Supreme Court of Pennsylvania
• Decided: January 4, 1904
• Docket: Appeal, No. 31
• Status: Published

Opinion

Opinion by

Mb. Justice Potter,

The appellant in this case seeks to have a mortgage given to it by L. S. Arvin, a minor, declared to be a purchase money mortgage. The fact of the minority of the defendant is not disputed. We have looked in vain through the evidence to find any basis upon which to rest the claim, that the mortgage in question was at the time of its execution, intended by any of the parties in interest, to stand as security for any part of the unpaid purchase money. The former owners of the property made the sale for cash. There was no understanding with them as to the giving of any mortgage, nor did they have any knowledge that their vendee was executing a mortgage to any one. So far as they were concerned, there was no mortgage, as they demanded and received cash upon the delivery of the deed. The vendee made an application for a loan upon the propérty, which was accepted by the plaintiff, a building and loan association, and, in so far as the evidence shows, was made in the usual way, without any thought of the mortgage being given for purchase money. In fact, no suspicion of the minority of the defendant seems to have been entertained, as the application was made in writing, and through a third party, and none of the officers of the loan association ever saw the borrower in person. The agent who procured the loan, was also the agent for the former owners, and made the sale. Both transactions were closed at the same time, and the deed was delivered to the vendee and the mortgage executed by him, as a borrower from the building and loan association at substantially the same time and place. But there is nothing in this case to show that the vendee was doing anything else than borrowing money upon his own account from the loan association, to pay for property which he had purchased from another party. If this was the fact, then the money so borrowed belonged to the borrower, to apply as he pleased; and the mortgage given to secure its repayment would not be a purchase money mortgage.

As the learned judge of the court below well said, in speaking of the essentials of a purchase money mortgage : “ It (the mortgage) may by the terms of the contract not be made payable to the vendor, but the parties to the contract must have made it the motive for the conveyance by tire vendor. The vendor and the vendee alone have the power to stamp the debt with its character of purchase money. Some third party cannot by himself, or in conjunction with only one of the parties to a contract of purchase and sale, stamp a liability as one for purchase money, which in fact was not made so by the joint action of both parties to the contract of purchase and sale.” Under the facts of this case, the claim of the plaintiff to be substituted to such rights as the vendors might have exercised, had they been in the situation which it occupied, cannot be sustained.

The assignments of error are overruled, and the judgment is affirmed.