Case ID: monaghan_1/html/0049-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sowers’s Appeal. [Lewis v. Stiver. Sowers v. Stiver.]
    Where the vendee of land, encumbered by two judgments recovered against his vendor, and upon which executions have been issued and the land seized, deposits money in court to pay the senior judgment, with the intention of protecting himself, the court will decree subrogation- to the rights of such judgment creditor to the extent of the payment made by the terre-tenant, as against the junior judgment creditor, notwithstanding the amount deposited was, by mistake, not sufficient to pay the senior judgment in full.
    Oct. 18, 1888.
    Appeal, No. 158, Oct. T. 1888, from C. 3?. Indiana Co., to review a decree sustaining exceptions to report of auditor, distributing proceeds of sheriff’s sale of real estate, and decreeing subrogation, at Sept. T. 1886, Fi. Fa. No. 38. Green, J., .absent.
    The facts were found substantially as follows, by John T. Bell, Esq., auditor:
    Stiver, being the owner of two tracts of land, one containing 125,' the other 31 acres, against which were various judgments' (among them one held by Lewis, for $319.10, with interest from March 18, 1885, and costs, No. S4, March T., 1885, and, subsequent thereto, a test. fi. fa. by Sowers for $402.15, which included costs), sold the smaller tract to Hefflick. Lewis subsequently issued execution upon his judgment, with notice to Hefflick, as terre tenant, and sold both tracts, the first for $1805, and the second to Lewis for $525. Hefflick petitioned the court to set aside the sale of the smaller tract; Sowers objected; but the sale was set aside upon Hefflick’s payment into court of $490, and $15 to Lewis for expenses in afidabout the sale. Sowers thereupon issued a test. vend, ex., under which the smaller tract was sold for $430. The funds for distribution were $2235. Before the auditor, Hefflick clailned to be subrogated to the rights of the Lewis judgment on account of his payment into court of $490. It appeared that this amount lacked $30.83 of satisfying the Lewis judgment in full, debt, interest and costs. Sowers claimed that this sxxm, paid into court, should be treated as a payment on account, and a pro tanto extinguishment of-the debt, and as the judgment had not been paid in futí there could be no sxxbrogation.
    The auditor found that if the sheriff had applied the money realized from the first sale of the two tracts to the judgment liens in the order in which they were entitled to participate, there would have been $15.98 to apply to the Sowers jxxdgment. This calculation did not take into account the expenses of the audit, $53.44; after deducting these expenses the Sowers judgment would not be reached. The auditor was appointed to make distribution upon the application of Sowers’s attorney.
    Testimony was also offered to prove an agreement for an assignment of the Lewis judgment to Hefflick. The auditor held that the evidence related to negotiations subsequent to the payment, and that Lewis agreed to assign only on condition his jxxdgment was-paid in full. Tlie auditor also found that there was nothing to show that the Lewis judgment was to be kept alive forLIefflick’s protection, and that the payment was to be treated as a credit on account; and that subrogation could not be decreed because the .Lewis judgment was not paid in full, and because Sowers would be injured thereby. The auditor accordingly, after deducting costs and uucontested claims, awarded to Lewis $30.83, balance due on his judgment; and the residue of the fund to Sowers.
    Exceptions were filed on Hefflick’s behalf, alleging that the auditor erred, 1, in awarding the balance of the money to the judgment of Sowers, instead of awarding it to Heffiick, assignee of judgment in favor of Lewis against Stiver; and, 2, in not finding that there was an equitable assignment by Lewis of his judgment to Heffiick.
    The exceptions were sustained by the court in the following-opinion by White, P. J.:
    “ Heffiick, as terre tenant in the Lewis judgments, and Stiver’s vendee, for the 31 acres, for which it appears he had paid all' the purchase money to Stiver, presented his petition to set aside the sale of the 31 acres, complaining that he had purchased, had a deed and paid for them to Stiver and the sale would destroy his interest in this land [and asking the sale to be set aside so that he could have opportunity to make some arrangements to protect his interests]. This petition seems to have been mislaid or lost. While the court delivered no opinion, reciting the history of the matter, and giving the reasons for its action, yet the circumstances and arguments of counsel are refreshed to the mind of the court by referring to the orders of record made at the time. While the court may properly consider what occurred judicially before us, in another stage of the controversy, yet we will only take the matters now found of record, with the reasonable and legitimate inferences resulting, in determining the particular question now in hand. Lewis and Sowers both resisted setting aside the sheriff’s sale of the 31 acres.
    [“ It would appear, had the sale of both pieces been confirmed, taking the list of liens, in their order, as reported by the auditor, the Sowers lien would have taken nothing out of the proceeds and the Lewis judgment, No. 84, March Term, 1885, in question, would not have been paid in full.] This appears as follows : whole proceeds, $2330 ; the cost of audit, $53.44, deducted, would leave $2276.56 for distribution. The aggregate amount of liens before reaching the Lewis judgment, in question, is $1803.01, leaving but $472.75 to apply on this Lewis judgment, while its entire amount seems to be $512.03. Sowers’s lien'being subsequent to this would have received nothing. This appears clear, taking the amount of the judgments reported by the auditor. Although the auditor reports a small amount of the first sale would have gone to Sowers, yet we cannot so find, after a careful computation of the judgments on the auditor’s report. It is quite true a small amount, probably $14, would have gone to the Sowers judgment had no auditor been appointed. But we must take the situation as we find it. The court, after hearing some affidavits and the argument of counsel, on the application about tbe sale, set it aside. On the record, appears the following £ September 22, 1886, exceptions to confirmation of sale to W. G. Lewis filed ; and now, Oct. 4, 1886, by leave of the court, John Heffiick, the exceptant, pays into court the sum of $490, without' prejudice to his rights to withdraw such portion thereof as may-hereafter appear to be unnecessary to pay the judgment of W. G. Lewis v. Abram Stiver.’ Then, following the above, in regular succession on the page of the record, we find the following order setting aside the sale : £ And now, to wit, Oct. 4, 1886, it appears to the court that $490, which is said to be the amount of the judgment of W. G. Lewis, the execution creditor, the sale made of the 27 acres to Wm. G. Lewis is now set aside upon condition, however, that within 20 days from this date, John Heffiick, the exceptant, shall pay to Wm. G. Lewis, the sum of $15 for the reasonable expenses of the said Lewis in and about the sale, and on failure to pay such $15 the setting aside the sale shall be of no effect.’ It appears,further, on the record, that the $490 was received by the prothonotary from Mr. Heffiick; in his receipt, he recites : £ Paid in, as per leave of court.’ Then $481.20 of this, being $490 less the prothonotary’s commission, are receipted by Mr. Lewis’s attorney. After this sale was set aside, the test. vend. ex. was issued, and on it this 31-acre piece was again sold for the sum of $430. The record also shows the $15 were paid into the court and received by Mr. Lewis’s attorney in fulfilment of the court’s order about expenses. The whole fund arising from the sales, being $1805 and $430, making $2235 were before the auditor for distribution.
    “Why, then, should not Heffiick, under all the circumstances of the payment of his money into court, be subrogated to the right of Lewis; not, however, in any way to prejudice Lewis’s full claim ?' While it is true there has been no formal subrogation, yet equity wilt regard that as done which, in equity and good conscience, should have been done. £ Equity regards the purpose, not the form.” Lyon’s Appeal, 61 Pa. 18.
    “ It is contended, however, there can be no subrogation where there is anything due the principal, to whose rights the subrogation is asked. This principle seems to have had a controlling effect on the mind of the auditor, in reporting against Mr. Hefflick’s subrogation to Lewis’s judgment. This, as a general rule, is well established by Keyner v. Keyner, 6 Watts, 221, and kindred cases. We do not, for a moment, question this principle. Is it controlling here, however, under the circumstances ? While we do not have a history before us of all that transpired, when leave was given Heffiick to pay his money into court, it is clear, from the court’s order, that it was the intention of the court, and, indeed, of all the parties, to have enough paid in to cover Lewis’s entire judgment. We find, in the order allowing payment, ‘ without prejudice to his rights to withdraw such portion as may hereafter appear unnecessary to pay' the judgment of Lewis v. Stiver.’ Then, in the order setting the sale aside, it is said : ‘ It appearing to the court that $490, which is said to be the amount of the judgment of W. G. Lewis, the execution creditor, etc.’ These expressions show satisfactorily [it was the intention of the court, in making the order, and of all concerned, to have paid in enough to cover this Lewis judgment]. If, then, by some error or mistake of calculation, about interest or costs, not quite enough was paid in, when the intention was to pay enough to meet the whole judgment, it would not be just or equitable to allow such mistake to defeat the equity the complainant may otherwise have, particularly when, out of the fund now distributing, the principal, Lewis, can be fully protected. £ Equity will grant relief in cases of mistake in written contracts, not only when the the mistake is expressly established ; but also when it is fairly implied from the nature of the transaction.’ Story’s Equity, 162. ‘Equity is liberal in granting relief to prevent injustice where the .party asking it cannot be charged with culpable negligence.’ Jenks v. Frits, 7 W. & S. 203.
    “It is contended, however, that this payment into court, by Hefflick, was a voluntary payment, and is but a general credit on the Lewis judgment, and Forest Oil Co.’s Appeal, 21 W. N. C. 157, with cases there cited, is relied on to support this position. íhafc case was decided on its own facts, declared well established principles, and is not, to our mind, conclusive against Hefflick, excepting here.
    “The auditor, also, appears to have emphasized the insufficiency of the evidence submitted, that Lewis had agreed to assign his judgment to Hefflick. "We do not put the case, here, on a qirestion of contract with Lewis to assign. The rule is well stated, in Cottrell’s Appeal, 23 Pa. 295: ‘Subrogation is founded on principles of equity and benevolence, and may be decreed where no contract or privity of any kind exists between the parties. Whenever one, not a mere volunteer, discharges the debt of another, he is entitled to all the remedies which the creditor possessed against the debtor.’ There one Hershey had a judgment against Bowers, whose property was about to be sold. Pusey went upon the note to raise money to pay Hershey. Hershey tools; the note as payment of his claim ; nothing said at the time about transferring the judgment. Bowers’s property was subsequently sold at sheriff’s sale, and, on distribution, Pusey was subrogated to the rights of Hershey. Notwithstanding there was subsequently an assignment of the judgment by Hershey to Pusey, the case appears to have been decided on Pusey’s equity for subrogation. In the recent case of Millers. Miller, 12 Cent. It. 274, Cottrell’s Appeal is approvingly quoted, and it is further declared there that subrogation is not confined to cases of strict suretyship; it is a mode which equity adopts to compel the ultimate discharge of a debt by him who, in good conscience, ought to pay it. Bender v. .George, 92 Pa. 36. In our case, the land of Stiver bought by Hefflick . was primarily, liable for the Lewis judgments. Hefflick, for reasons stated above, paid the Lewis debt by the payment into court. Thus he occupied the relation of a surety for the debt the land was primarily liable for. Then, again, in Mosier’s Appeal, 56 Pa. 80, Cottrell’s Appeal is fully recognized and the rule also stated: ‘Subrogation will not arise in favor of a stranger, but only in favor of a party who, in some sort of compulsion, discharges a demand against a common debtor.’ This is a strong case. Dicks’s junior creditors paid off prior executions about to sell property against which they had a lien. This was done under pressure of circumstances, by Dicks, to save their interest. Undivided interests in the property, against which these judgment were liens, in solido, were about to be sold. Such sale would have imperiled Dicks’s security and they paid off the prior execution. Executions were returned: ‘ Money made in full, debt, interest and costs,’ and the judgments marked satisfied. Subrogation was decreed and the entries of satisfaction cancelled. There were other subsequent judgments of record at the time Dicks paid off the executions and the subrogation was made, but none of these judgments, so existing, were entered between the payments of the executions and the subrogation. Again, in Champlin v. Williams, 9 Pa. 311, Champlin purchased land from Williams, took a deed and gave a mortgage for the purchase money. Gorham became an owner of an interest in the land. When Williams recovered judgment on his mortgage, and was about to sell, Gorham paid off the judgment, took an assignment and issued a sci. fa. judgment was resisted because the payment by Gorham, it was argued, extinguished the judgment. Justice Coulter, in reasoning the case, said : ‘A mortgage will not be considered as extinguished by the conveyance of the mortgagee’s interest to the owner of the equity of redemption, if it is the interest of the grantee to have it upheld, unless the intent of the parties to extinguish it is clear.” Gorham had purchased an interest in the land, by parol, yet he was entitled to be subrogated to the mortgage, not because he had an assignment of it, nor because of any privity of contract between him and the mortgagee, but because of the plainest principle of equity, under the circumstances of his paying off a lien upon the land he had purchased.
    “The learned auditor says: ‘This is certainly a hardship to Mr. Hefflick, and he asks that he be awarded in this distribution the money that he actually paid on the Lewis judgment.’ We agree that it would be a great hardship and grossly inequitable to refuse subrogation under the circumstances. We have, therefore, carefully collated the authorities quoted, to indicate the principles of subrogation established in favor of purchasers of real estate paying off liens under a pressure to save their interests. The intention of the court in allowing Hefflick to pay in the money, to meet the Lewis judgment, to avoid postponing Lewis’s right to the proceeds of the sale, was, by then setting aside the sale, to give Hefflick an opportunity, by another sale, to save his land. The effort was to preserve all the rights of Lewis, by allowing him his expenses and not subjecting him to delay in getting his money. Lewis cannot complain. Clearly it was not the intention of Hefflick at the time, or of the court, to require Hefflick to pay off Lewis’s judgment, in addition to Lewis’s expenses, without any opportunity for reimbursement. If Hefflick had desired to do this, he could have paid off the Lewis judgment before the sheriff’s sale, without the intervention of the court.
    “[Nor does it appear that Sowers has any equity here against Hefflick’s right of subrogation.] It does not appear that Lewis’s judgment, after Hefflick paid it, was marked satisfied on the judgment docket, so as to mislead Sowers or anyone else. It must be observed that, at the time Iiefflick paid his money into court, and long before, Sowers’s judgment was a subsisting lien. By reason of this payment by Iiefflick, it does not appear that Sowers gave to Stiver, the common debtor, any new credit, or assumed any new responsibility. He was at liberty at any time to issue upon his lien, and did so issue. Pie does not occupy the position of a creditor entering his judgment subsequent to the payment of this money on the Lewis judgment into court, and finding the Lewis judgment marked satisfied or receipted, on either the judgment, continuance or execution docket. It does not appear, upon surveying the whole case, that Sowers has any new or superior equity to any assignee, either by contract, or by subrogation of the Lewis judgment. It may be that the evidence of any actual assignment of this judgment by Lewis to Hefflick is not satisfactory. Certain it is, that the assignment was not actually made; but [the evidence of the negotiations between Lewis and Hefflick, for this assignment, indicates it was not the intention of the parties that the payment of the money into court by Hefflick was an extinguishment absolutely of the judgment; certainly, such appears not to have been the intention of Hefflick], We think, after a survey of all the orders made by the court at the time leave was given to Hefflick to pay this money in, that Hefflick should be subrogated to the rights of Lewis on - judgment No. 84, March Term, 1885, fi. fa. No. 38 of September Term, 1886, not, however, to prejudice Lewis’s right to take out of the proceeds of this sale, on such judgment, the amount of $30.83, which, it would appear, by some mistake or calculation, was not covered by the money Iiefflick paid in.”
    
      The assignments of error specified, 1-5, the portions of the opinion in brackets, quoting them; 6, the action of the court in subrogating John Hefflick to the rights of 'William Gr. Lewis; 7, in finding that it would appear, by some mistake of calculation, part of the Lewis judgment was not covered by the money which Hefflick paid in; 8, in failing to find that a portion of the proceeds of the first sale would have gone to the Sowers judgment; 9, in not awarding to Sowers the costs of sale; 10, in sustaining the exceptions to the auditor’s report, quoting them; and, 11, in not confirming the auditor’s report.
    
      D. B. Taylor, with him H. H. Brosius, for appellant.
    Subrogation is the substitution of another person in the place of the creditor to whose rights he succeeds in relation to the debts. 2 Bouv. L. Die. 676. This substitution may be made by express agreement of the parties. Moiser’s Ap., 56 Pa. 76; Receivers N. J. Midland Ry. Co. v. Wortendyke, 27 N. J. Eq. 661. Or it may arise from the payment of a debt from legal or moral obligation, or interest, being equitable, and working no injustice or hardship. Keely v. Cassidy, 93 Pa. 318.
    Hefflick did nothing at the time the payment was made which evinced an intention to protect his interests or to keep alive the part of the judgment paid by him. Diligence must be exercised in asserting a right to subrogation. Gring’s Ap., 89 Pa. 336; Mechling’s Ap., 22 W N. C. 138.
    The auditor found that the payment by Hefflick was a credit on account. No exception was taken to this; it is therefore conclusive. Wissel’s Ap., 15 Pitts. L. J. 306.
    The lien became extinct to the extent of the payment, there being no agreement to continue the lien. Noons v. Hartman, 7 Watts, 20; Pomeroy’s Eq. 792. Nor could it by after assignment be kept alive, to the prejudice of anybody else. Bryson v. Myers, 1 W. & S. 420; Monroe v. Wallace, 2 P. & W. 173.
    Hefflick’s interference with the sale was to the injury of Sowers, reducing the amount for distribution from $2,330 to $2,235, and to permit him to be subrogated to the rights of Lewis would be unjust to Sowers. In such case, subrogation will not be decreed. Pott v. Nathans, J W. & S. 155 ; Armstrong’s Ap., 5 W. & S. 352; Knouf’s Ap., 91 Pa. 78; Wagner v. Elliott, 95 Pa. 487; Webster & Goldsmith’s Ap., 86 Pa. 409; Gring’s Ap., 89 Pa. 339; Erb’s Ap., 2 P. & W. 298; Wallace’s Est., 59 Pa. 401. Where the equity^ of parties is equal, they should be left to their legal rights. Fleming v. Beaver, 2 Rawle, 131; Mechling’s Ap., 22 W. N. C. 138.
    Until the creditor has been fully paid, subrogation cannot take place upon any terms. Forest Oil Co.’s Ap., 118 Pa. 138; Allefheny National Bank’s Ap., 6 Cent. R. 274; Hoover v. Epler, 52 Pa. 522; D. & H. Canal Co.’s Ap., 38 Pa. 512; Cottrell’s Ap., 23 Pa. 294; Bank of Penna. v. Potius, 10 Watts, 148; Kyner v. Kyner, 6 Watts, 221.
    In all the cases cited in the opinion of the court below, the creditor was first fully paid. In no case has subrogation been allowed against the creditor, where the party seeking it interfered with the creditor’s execution, diminishing the fund or delaying him in the collection of his money.
    In the distribution of the proceeds of a sheriff’s sale, the rights of those claiming to participate are to be determined as they were at the time the sale was made. Douglass’s Ap., 48 Pa. 223 ; Indiana Co. Bank’s Ap., 95 Pa. 500.
    Hefflick should have taken a rule, under the Act of April 22, 1856, P. L. 534, to show cause why plaintiff should not sell the real estate in the order in which the properties shall be liable to contribute toward the discharge of the common encumbrance; otherwise upon the payment of such judgment, to assign the same for such uses as the court may direct; if the plaintiff refuse, the execution will be controlled by the court. Where a remedy is provided by Act of Assembly, the directions of the Act must be strictly pursued. Arna’s Ap., 65 Pa. 72.
    The court erred in not awarding at least the costs of the sale to Sowers. Pry’s Ap., 76 Pa. 82.
    
      John P. Blair, for appellee.
    The act of the court in setting-aside the sheriff’s sale is not a subject of review.
    When Hefflick paid the judgment, his land stood in the' situation of a surety for the personal debts of Stiver, and, having discharged it himself, he was entitled to the securities held by Lewis, the creditor. McGill’s Case, 6 Pa. 505.
    The application of the rule that a surety cannot be subrogated to the rights of the creditor until the creditor is satisfied in full, would, in this case, be an inequitable use of a sound equitable principle. Lewis’s debt was paid in full, the costs only were not fully paid, as they were not known then. Lewis is not complaining, and Sowers has no right to complain of this.
    The Act of 1856 does no more than to impose on a terre tenant who chooses to interfere with the execution process of the plaintiff in-the judgment, the duty of paying the debt before he can avail himself of its provisions. It was intended for cases where there has been no judicial sale. Milligan’s Ap., 104 Pa. 511.
    Oct. 29, 1888.
   Per Curiam,

-We discover nothing wrong in this case, and, for a full exposition of the facts, arid of the law governing them, we refer to the opinion of the learned judge of the court below.

The decree is affirmed, and the appeal dismissed at the costs of the appellant. A. B. W.