Searight's Estate

163 Pa. 222 | Pa. | 1894

Opinion bv

Mb. Justice Mitchell,

That the executor, in good faith and with reasonable grounds to believe that the estate was solvent, paid the interest and the judgments, gives him, as the auditor found and the court be-' low held, an equitable right of subrogation,, to which he maybe entitled even at the present time provided it can be allowed-without injury tq others. So far therefore as the fund was: the proceeds of personal property, the distribution may be sus-, tained upon the opinion of the learned judge below.

•But with regard to the proceeds of the real estate the case is entirely different. There were lien creditors with rights of priority between themselves, and as to other creditors. They stood in line, and when one of them stepped out, by expiration of his lien or payment or any other cause, all those in the rear advanced a step towards the front. Their rank and standing were fixed absolutely as a matter of law, by the sale. After that no new rights of lien, or claim on the proceeds, could be acquired by subrogation or otherwise. This was firmly settled in Douglass’s Appeal, 48 Pa. 223, and Gring’s Appeal, 89 Pa. 339, where even sureties, who had an unquestioned right of subrogation, were held to have lost it as against junior' incumbrancers by failing to assert it until after a judicial sale.

The learned judge below apparently treated this rule as de-' pendent on the particular facts of each case, showing actual injury to'the junior lien holders, and as there was no evidence in the present case that, the appellants would have bid any. more at the sale if they had known that Mr. Stuart was enti-. tied to subrogation to the interest and judgments he had paid, hp held that they were .not injured, but only disappointed by the subrogation. The rule, however is a presumption of law, not rebuttable, and the fact is to be decided by the state of the record at the date of the-sale. In Harner’s Appeal, 94 Pa. 489, it was held that a judgment creditor had a right to rely on the apparent priority of his judgment shown by the satisfaction of record of an earlier one; and in Indiana County Bank’s Appeal, 95 Pa. 500, it was said by the present Chief Justice: “The rights of those claiming to participate in the proceeds of a sheriff’s sale are to be determined by their status as shown by the record at the time of the sale.” In none of the cases is any reference made to the evidence, or the fact of injury to the junior incumbrancers, the inference of injury is drawn as a presumption juris et de jure, and the rule is a rule of policy in the interest of certainty in judicial sales.

It is unfortunate for tbe executor that his very carefulness to have the payments noted on the record, should work to his disadvantage now,, but the payments of interest must stand on the same basis as the payments of principal. Both being on the record as reductions or satisfaction of the judgments, at the time of the sale, must be conclusively presumed to be so as against junior judgment creditors claiming the fund.

Decree reversed, and distribution directed to be made in accordance with this opinion.