Court Opinion

ID: 4721437
Source: CourtListenerOpinion
Date Created: 2021-08-12 02:36:47.593374+00
Date Added: 2024-06-11T08:07:39.530363
License: Public Domain

Tolman, J.
(dissenting) — I am unable to concur in the views of the majority. As is said, the general rule is that, “the payment of a judgment by one primarily liable will extinguish the debt, ’ ’ and, in my opinion, the majority errs in holding that the intention of the parties, as such, can defeat this rule. On the contrary, except there be an equitable right of subrogation, the intention of the parties cannot defeat the legal effect of the payment. While some of the following authorities, because of divergent facts, may, on hasty consideration, be said not to be in point, yet all support the view that the intention of the parties, of itself, is not a governing factor, and the rule must be applied notwithstanding the contrary intention. Lagrange v. Greer-Wilkinson Lumber Co., 59 Ind. App. 488; Lillie v. Dennert, 232 Fed. 104; Ebel v. Stringer, 73 Neb. 249, 102 N. W. 466; Shaw v. Clark, 6 Vt. 507, 27 Am. Dec. 578; Fowler v. Wood, 31 S. C. 398, 10 S. E. *17793, 5 L. R. A. 721; Vermont Loan & Trust Co. v. McGregor, 6 Idaho 134, 53 Pac. 399; White v. Brown, 29 N. J. L. 307; Henry & Coatsworth Co. v. Halter, 58 Neb. 685, 79 N. W. 616; Donk Bros. & Co. v. St. Louis Glucose and Grape Sugar Co., 17 Ill. App. 369; Klippel v. Shields, 90 Ind. 81; Zimmerman v. Gaumer, 152 Ind. 552, 53 N. E. 829; 17 Am. & Eng. Ency. Law (2d ed.), 862.
The section of Black on Judgments referred to by the majority reads:
“It is a general rule that a judgment once fully paid, and thereby satisfied and extinguished, cannot be kept alive by the agreement of the parties, to stand as a security for other liabilities or for future advances. But in Pennsylvania it is said that ‘actual payment discharges a judgment at law, but not in equity, if justice require the parties in interest to be restrained from alleging it, or insisting on their legal rights.’ And in that state, and some others, it is held that the parties to a judgment (no rights of third persons being-involved) may agree to change the purposes for which the judgment is to be held as security, e. g., that when the judgment-debt is paid in full, it shall not be satisfied, but shall remain as security for another loan. No one but a lien-creditor whose rights would be affected can complain of such an agreement. If a debtor pays his judgment-creditor a sum equal to the amount of the judgment, and thereupon causes the judgment to be assigned as a payment to another of his creditors, the transaction does not discharge the judgment, but the same continues valid in the hands of the assignee. An entry upon the record of payment of the debt and interest, does not satisfy the judgment so far as to prevent further proceedings for the collection of costs.” Black on Judgments (2d ed.), § 991, p. 1464.
This, when read as a whole, presents a very different view from that adopted by the majority. Moreover, that portion of the section quoted by the majority is based alone upon the authority of Howk v. Kimball, *1782 Blackf. (Ind.) 309, decided in 1830. A careful reading of that case will show that it does not support the text in any material degree. There the judgment creditor sold real estate on execution, thereby satisfying the judgment in part. The judgment debtor, still having the right of redemption after the sale, deeded that right to the judgment creditor (the purchaser), who thereupon paid him $100 in money and assigned the unsatisfied portion of the judgment to another creditor of the judgment debtor. The court there held that the transaction was equivalent to the payment to the redemptioner of $150 for his right of redemption, the payment of $50 by him to his other creditor in satisfaction of his claim, and the purchase of the judgment by such other creditor with the $50- so paid. Rather unsound reasoning, as the court seems to have felt, for it sought to bolster up its decision with other reasons which we have not the space here to enumerate, and which lend even less support to the views of the majority. Mr. Black cites as contrary to his view the following: Henry & Coatsworth Co. v. Halter, supra, and First National Bank of Plattsmouth v. Gibson, 60 Neb. 767, 81 N. W. 259, which are modern cases and stronger authorities.
Except as herein noted, the writer, by an extended search, has been unable to find any authority holding to the contrary of the general rule, except that cases are not wanting which hold that the life and lien of a judgment or other incumbrance may, if that be the-intention of the parties, be preserved by an assignment in favor of a creditor of the judgment debtor who in equity is entitled to subrogation. Lagrange v. Greer-Wilkinson Lumber Co., supra; Boice v. Conover, 69 N. J. Eq. 580, 61 Atl. 159; Graff’s Estate, 139 Pa. St. *17969, 21 Atl. 233; Flagg v. Kirk, 20 D. C. (9 Mackey) 335; Carter v. Sheriff of Halifax, 8 N. C. 483.
Howk v. Kimball, supra, should not he permitted to prevail over these authorities, and, in fact, can no longer be considered as an authority even in Indiana, as the Indiana court seems to have held to the doctrine here contended for in Lagrange v. Greer-Wilkinson Lumber Co., supra.
Even the case of Peirce v. Black, 105 Pa. St. 342, which the majority cites and upon which it relies, specifically recognizes that no such assignment will be permitted to stand if the rights of a lien creditor are thereby affected. Moreover, that case, instead of being an authority for the majority, is a strong authority in favor of the doctrine for which the writer now contends. In that case the judgment debtor borrowed money with which to pay the judgment. One Clark was security for the judgment debtor in obtaining the loan for that purpose, and the judgment was assigned to Clark to indemnify him as such surety. Therefore he had an equitable right of subrogation, and we might rest this dissent upon that case alone. In any event, the respondent here is more than a lien creditor. He is a purchaser for value and his rights ara assuredly affected by the assignment, if it stands, and therefore Peirce v. Black, supra, in no way supports the view of the majority.
In my opinion, it only remains to inquire whether appellants had a right of subrogation which equity will recognize. There is nothing in the record to so indicate. Appellant was a mere contract creditor at and before the time of the taking of the assignment. He had no lien or other security for his claim, and because of having no judgment, he had no legal means of preventing his debtor from paying the judgment to the *180exclusion of any payment to himself, and no means to compel payment to himself. By the payment which was made to the judgment creditor he was deprived of no right, and of no security for his debt, and therefore had no right of subrogation which equity will recognize and enforce as to his original claim, and of course none whatever as to the advances made after the judgment was in law satisfied. If the reversal of the judgment meant that appellants would receive their money, the writer would be inclined to go as far as the law will permit to protect them, but since at best, with a reversal of the judgment, they secure only the right to defend against the foreclosure of the prior mortgages, and to redeem, if such defense be unsuccessful, it does not appear that there is anything in the case which warrants us in departing from the general and settled rule which is prevalent throughout the .land. The question is not one which frequently arises, but the law should be settled and uniform. Under the great weight of authority, the judgment should be affirmed.