McDevitt & Hays's & Kitchenman's Appeal

| Pa. | Jan 29, 1872

The opinion of the court was delivered, January 29th 1872, by

Agnew, J.

Primarily the decision of this case rests on the question whether the sale of the property of Edward Devlin in Philadelphia, under the judgment of James Kitchenman, was a satisfaction of the judgment of Claghorn, Herring & Co. Benner v. Phillips, 9 W. & S. 20, is cited by the appellants as an authority that a sale of land by the sheriff “ is a payment of the amount for which it is sold; whether it ever reached the pocket of the creditor or not. He must look to the application of the purchase-money.” This is certainly true as to the debtor, and that is the sense in which the language is to be understood. When the property of the defendant in the judgment, real or personal, is sold under execution, and the proceeds paid into the hands of the sheriff, it is a discharge of the debtor’s estate to that amount; but what creditor’s debt it will extinguish is a question to be settled only by the final distribution and appropriation. It is that alone which determines what creditor shall be thrown upon the fund, or shall suffer the loss if he passes it by. Universal practice and numerous authorities prove that the sale and receipt of the money by the sheriff'are not per se a satisfaction of any particular encumbrance, though the lien of it may be extinguished. Hence it has been held over and over again that a creditor having two funds subject to his encumbrance, may pass the first by and come in upon the second for payment; a thing he could not do were the fund first brought into 'distribution a satisfaction of his debt. Whether he will be permitted to do this, or, having done it, whether a junior encumbrance will be permitted to stand in his place by subrogation, will depend upon the equities among the lien-creditors which ought to prevail. The following cases abundantly support these positions : Bank of Pennsylvania v. Winger, 1 Rawle 295" court="Pa." date_filed="1829-06-01" href="https://app.midpage.ai/document/bank-of-pennsylvania-ex-rel-echelman-v-winger-6314297?utm_source=webapp" opinion_id="6314297">1 Rawle 295; Addams v. Hefferman, 9 Watts 529" court="Pa." date_filed="1840-05-15" href="https://app.midpage.ai/document/addams-v-heffernan-6312218?utm_source=webapp" opinion_id="6312218">9 Watts 529; Hastings’s Case, 10 Id. 303; Ziegler v. Long, 2 Id. 205; Konigmaker v. Brown, 2 Harris 269; City of Philadelphia v. Cooke, 6 Casey 56; Del. & Hud. Canal Co.’s Appeal, 2 Wright 512; Cummins’s Appeal, 9 W. & S. 73.

This brings us, therefore, to the question, what the equities of the parties are, and on this secondary consideration the decision must rest. As it regards the fund for distribution, it is conceded that the judgment of Claghorn, Herring & Co. is the first lien. It is also the first lien on the funds in Philadelphia county. The case stands thus : The judgment of Claghorn, Herring & Co. was entered first in Philadelphia on the 21st of September 1868, and in Chester county by exemplification filed September 22d 1868. Carson & Co. entered their judgment in Philadelphia on the 26th of December 1868. James Kitchenman, one of the appellants, entered his judgment in Philadelphia on the 15th of December 1869, a year after the entry of the Carson & Co. judgment. He tranferred it by exemplification to Chester county on the 16th of December 1869. The mortgage of Hay & McDevitt, the other appellants, was recorded in Chester county on the 9th day of December 1869, nearly a year also after the entry of the Carson & Co. judgment in Philadelphia. It is obvious, from this state of facts, that when Carson & Co.’s judgment was entered in Philadelphia the case stood thus: Claghorn, Herring & Co. had two funds to resort to — one in Philadelphia and the other in Chester county. Had a sale then taken place, there could have been no conflict of interests whatever. Carson & Co. having but a single fund to look to, could have compelled Claghorn, Herring & Co. to take their judgment out of the Chester county fund, and thus realized their own out of the Philadelphia fund, or could have been subrogated to Claghorn, Herring & Co., which would have been the same thing in effect-. Having this right in equity, it is clear that they had a right to accomplish the same result by their own act, and therefore could take an assignment of the judgment of Claghorn, Herring & Co., and take payment of it out of the fund in Chester county, and thus lift off the Philadelphia fund the encumbrance of the Claghorn, Herring & Co. judgment, and let themselves in upon that fund: Miller v. Jacobs, 3 Watts 477" court="Pa." date_filed="1835-05-15" href="https://app.midpage.ai/document/miller-v-jacobs-6311395?utm_source=webapp" opinion_id="6311395">3 Watts 477; Bank of Pennsylvania v. Winger, supra; Hasting’s Case, supra; Del. & Hud. Canal Co.’s Appeal, supra. Now, it is not 'to be doubted, that the recording of Hay & McDevitt’s mortgage, and the entry of Kitchenman’s judgment a year later, could not alter the status of the Carson & Co. judgment so as to compel them to suffer a loss, which they were not obliged to sustain when their judgment was obtained. Some of the cases already cited support this position, and it is obviously so in equity. On what principle of law or equity, therefore, can the appellants whose later encumbrances were subject to the prior rights of Carson & Co., ask us to deny their right as assignees of Claghorn, Herring & Co., to take the fund in question out of court? Had the assignment been obtained to frustrate equity and not to advance it, perhaps a different question might arise, but the facts here disclose no such question. McGinnis’s Appeal, 4 Harris 445, is not opposed to this conclusion. McGinnis failed to have himself subrogated to the judgments of McLanahan in Cumberland county, which took the fund from him in that county. Had he been subrogated in Cumberland county it is obvious that the judgments of Mc-Lanahan, which were first also in Franklin county, could be shown there to be satisfied only by the record in Cumberland county. But by the subrogation on the same record in Cumberland they would stand upon the record still open and unpaid in equity, and would therefore be entitled to take the fund in Franklin county, for McGinnis the equitable plaintiff by the subrogation.

But when McGinnis went into Franklin county, and there asked his Cumberland county judgment to be subrogated to McLanahan’s in Franklin county, he was met by the declaration that the court would not undertake to settle claims not within their jurisdiction, and his application failed. Whether this was a good reason it is unnecessary to say, or whether the doctrine of equity is correctly stated in the opinion is unimportant, as the case differs from this in the material fact mentioned. Here Carson & Co. go into Chester county with an actual assignment of Claghorn, Herring & Co.’s judgment, and their equity, as we have seen, is superior to that of either of the appellants.

The record of the judgment of Claghorn, Herring & Co. in Philadelphia affords no evidence of satisfaction there, and the equity of Carson & Co. as prior encumbrancers entitled them to call upon Claghorn, Herring & Co. to take their payment out of the Chester county fund.

Upon the whole case, finding no error in the distribution made by the Court of Common Pleas of Chester county, the decree is affirmed with costs to be paid by the appellants, and the record is ordered to be remitted to the court below for distribution according to the decree.