117 Pa. 628 | Pa. | 1888
Opinion,
This case is to be determined upon the general principles of equity which govern in the marshaling of assets or in subrogation. The doctrine of subrogation is of purely equitable origin; its application is always controlled for the promotion of justice; it will never be enforced therefore to defeat a superior or even an equal equity in another. That this is the rule which governs in all cases of subrogation, is, of course, unquestioned. What are the respective rights and equities of the parties to this appeal ?
But when the appellees subsequently recorded their mortgage upon the Decatur tract, it is contended that, as mortgagees, they acquired a lien, and that their equity was equal to that of the appellants; that the equities were in equilibrio. We do not think so. The appellants acquired against Graham, the mortgagor, the right to have his other lands, not included in the mortgage, applied first to the payment of the earlier judgments which were liens against them. This right it was
This equity, we have said, was against the debtor; and it is equally such against his subsequent mortgage creditors, with notice, who can have no greater rights than the debtor had at the time .the mortgage was given. This equity existed in favor of the appellants before the appellees acquired their lien; prior in tempore potior in jure. . The appellees must be considered to have taken their mortgage subject to the prior equity of the appellants-: McDevitt’s and Hays’s App., 70 Pa. 377; Hastings’ Case, 10 W. 305. Hoff’s App., supra, although somewhat similar in its facts, is readily distinguishable from the case at bar. In that case, Adams, a judgment creditor of Phillips, had a lien on two properties, whilst Hoff, a mortgagee, had a lien upon one property only of the same debtor. After these liens were entered, Phillips sold the property upon which the mortgage was not a lien, to Reiff. It will be observed that Reiff was a purchaser, not a mortgagee, and Phillips, under the implied covenant in his deed, was bound to make the title good to him; he was a bona fide purchaser for full consideration wholly paid, without notice in fact of the Ren of the judgment. As subrogation is not of right, but is a mere benevolence, this court, under the special facts of that case, sustained the court below in setting aside a decree of
In this case there was no covenant of title to be implied from the words of the mortgage; and in the absence of proof to the contrary, the appellees will be presumed to have known what was clearly exhibited to them by the record. We think the appellants, upon the plainest principles of justice and equity, would have been entitled to subrogation to the rights of Woods’ executor against the Decatur tract, and if so, the distribution of the proceeds should now be made as if that had been done, which, in equity, ought to have been done.
The decree of the Common Pleas is reversed, and the record is remitted, in order that distribution may be made in accordance with this opinion, the appellees to pay the costs of this appeal.