Court Opinion

ID: 6235063
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:30:36.934096+00
Date Added: 2024-06-11T08:58:01.157637
License: Public Domain

Mr. Justice Sharswood
delivered the opinion of the court, October 12th 1875.
We cannot agree in opinion with the learned judge below, that to state the proposition upon which the appellants rest their case is to answer it. That proposition properly stated is, that the assignment of John A. Smeid and wife, on July 12th 1873, was in trust for all his creditors then existing, pro rat&, without regard to the nature of the securities they held. So far as regards the assigned estate, they were no longer creditors, but equitable owners. Graeff was not an equitable owner of as many separate shares as he had distinct debts. His interest was to the e'xtent of his whole claim on the estate. The payment in full of one .judgment no more changed his position than would the payment of one item of a book account. It cannot alter the case that the real estate on which the judgments were liens was first resorted to. This was for the benefit of the other creditors. It might have so happened that the proceeds of that fund would have paid his whole debt, or so much of it that his pro rata dividend on his whole claim would have more than paid the balance. Of course he would be entitled to no more than his entire debt. Now if ttíe proceeds of the personal property, the primary fund, had been distributed first in the order of time, there can be no doubt he would have been entitled to a full dividend, and if afterwards he had proceeded on his judgment, and made more than the balance, he would have been a trustee as to the excess for the assignee. The order of time in which he proceeds ought surely to make no difference. It is true the judgments were satisfied — 'the debts were paid in full; but that did not pro tanto extinguish his title to come on the assigned estate as one of the original cestuis que trust, until his entire interest was extinguished. The principle upon which this case must l’est was settled in Morris v. Olwine, 10 Harris 441, which cannot, we think, be distinguished from it. There a creditor by bond and notes, secured by mortgage, having proceeded on his mortgage and realized the greater portion of his claim, was held still entitled to a pro ratfi dividend on his whole claim. It was not suggested then that the law would appropriate the proceeds of the mortgage to pay and satisfy the earlier bonds, and leave him to his claim only on those remaining unpaid or only paid in part. The fact that the pro ratfi was ascertained by an auditor before the amount was made on the mortgage ought not to make any difference. In Miller’s Appeal, 11 Casey 481, the money was received on a security ob*149tained after the assignment, and before any pro ratá was declared. This must now be considered well settled law, and it will be unsafe to permit it to be modified by exceptional cases, which are clearly within the principle.
Decree reversed and record remitted that a decree may be entered in conformity to this opinion.
The appeal of Charles N. Meily dismissed at the cost of the appellant.
The costé in Graeff’s appeal to be paid from the fund.