Court Opinion

ID: 6234256
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:28:50.882422+00
Date Added: 2024-06-11T08:57:41.325262
License: Public Domain

The opinion of the. court was delivered, January 9th 1872, by
Williams, J.
It is clear that Hollen was entitled to be subrogated to the judgment of Sylvis as against Titterington for whom he was surety. And if his right of subrogation was merely a personal one, it passed to Clawson by the assignment, and the appellants were not entitled to be subrogated to the judgment as against him. But if they were entitled to subrogation as against Hollen, then they were entitled to subrogation as against Clawson, the appellee. The court below decided the question in favor of the appellee on the authority of The Harrisburg Bank v. German, 3 *488Barr 303. That case is in all respects like the present, and, if it is to be regarded as authority, is decisive of the appellee’s right to subrogation under the assignment. But the decision there, as it seems to us, was not only modified by the subsequent cases of Neff v. Miller, 8 Barr 347, and Gearhart v. Jordan, 1 Jones 325, but virtually overruled. The doctrine of these latter cases was subsequently recognised in Lloyd v. Galbraith, 8 Casey 103, where it was said, subrogation may indeed be admitted in some cases where the two funds belong to different persons, if the fund not taken be the one in equity primarily liable. Thus, where one creditor has a judgment against principal and surety, and another has a judgment against the surety alone; if in such a case, the creditor of the two collect his debt from the surety, the other creditor is entitled to the use of his judgment. It is true that the case of The Harrisburg Bank v. German was not directly overruled in either of the cases cited, and it differs from them in the fact that there the debtor had assigned his right of substitution to a judgment-creditor other than the one who claimed to be subrogated. But this, as it would seem, is an immaterial circumstance, for if the surety’s right of subrogation is a personal one, then his judgment-creditors are not entitled to be substituted to it on any principle of equity, and can only claim the right in virtue of an express assignment or transfer. If then the case of The Harrisburg Bank v. German has not been directly overruled, the doctrine of that cáse has been so far shaken by the subsequent decisions to which we have referred,.that the question arising here must be regarded as an open one, which we are at liberty to determine on principles of equity and justice, unembarrassed by the decision in that case. Why then were not the appellants entitled to be subrogated to the equitable rights of Hollen under the judgment for which he was surety ? The proceeds of his real estate on which their judgment was a lien, were appropriated to its payment, and as against their judgment-debtor, the appellants were clearly entitled to the proceeds thus applied, and would have received them but for the superior legal right of Sylvis under the prior lien of his judgment. It is true that the appellants’ right of subrogation depends on the equity of Hollen, hut, as between them, their equity is superior to his. If then the fund which they would otherwise have received, has been applied to the payment of the judgment for which he was surety, on what principle of equity or justice could he claim subrogation to the judgment which has taken the fund to the prejudice of the appellants, and he allowed to pocket its fruits, leaving their judgment against him unpaid ? If they had had no lien on the fund applied to the payment of the judgment, then they would have had no equity to be substituted to the rights of the surety under it. But having a lien on the fund, they would be entitled to sub*489rogation as against Hollen on the plainest principles of equity, and to decree otherwise would shock all sense of justice.
Hollen’s right to subrogation as against the appellants can be maintained only on the ground that it is a personal right which he may dispose of as he sees fit. But it is not a mere personal right, if his judgment-creditors are entitled to be subrogated to it, as ruled in Neff v. Miller. If it is a mere personal right, which he may waive or assign at will, then his judgment-creditors could only claim it by assignment or transfer. But the cases cited clearly show that they are entitled to it on principles of equity and good conscience. And if so, the right to subrogation attached the instant that the proceeds of the sale of IioIIen’s real estate were applied to the payment of the judgment against him as surety, and could not be defeated or set aside by his subsequent assignment. His equity was subordinate to the equity of the appellants, and therefore the assignment of his right of subrogation to the appellee was of no avail as against the superior equity of the appellants. It is evident that the court below would have so decided if the question had been regarded as an open one.
Decree reversed at the costs of the appellee, and record remitted, with instructions to enter decree in favor of the appellants.
Agnew, J., dissented.