Court Opinion

ID: 6279347
Source: CourtListenerOpinion
Date Created: 2022-02-18 16:11:00.797811+00
Date Added: 2024-06-11T09:00:09.433546
License: Public Domain

Opinion by
Head, J.,
At the date of the death of Samuel M. Fulton, October 24, 1912, the appellant was his creditor. The debt was evidenced by a promissory note dated August 29, 1912. The estate of the decedent- was insolvent. His death, *442under such circumstances, practically effected an assignment of all of his property to his creditors and thereafter it belonged to them in proportion to the amount of the debt due to each. In such cases interest is calculated to the date of the death of the debtor and there it stops, so far as unsecured creditors are concerned. The legal rule applicable in such cases and the reasons for it have often been stated: Jamison’s Est., 163 Pa. 143; Peckham’s Est., 35 Pa. Superior Ct. 330; Blum Bros. v. Girard Nat. Bank, 248 Pa. 148.
But the appellant was also the pledgee of certain shares of bank stock which, through a trustee, he held as collateral security for the payment of his debt. Under the terms of the pledge he could not be compelled to surrender his security until his debt was paid in full. The insolvency or death of his debtor would in no way affect his right to the full use of his collateral. That right rested not on general laws disposing of the property of insolvent debtors, dead or alive, but on the contract of the parties. The fact that he thus had recourse to two funds in no way impaired his right to proceed against either or both so long as he did not claim or secure more 'than was justly due. As we said in Peckham’s Est., supra: “He was entitled to pursue all of his remedies and use all of his securities without having the efficiency of any one diminished by the fruits derived from any other, so long as the result of all was to give him less than his debt”: Miller’s App., 35 Pa. 481; Graeff’s App., 79 Pa. 146.
But it does not follow because the creditor had recourse to two funds, his rights as against each were identical. As against the fund produced by the sale of his collateral, he had the complete and exclusive right to charge the whole of his debt with interest to the date of the sale of the pledge. Had the security in the present case been adequate, his debt with interest would have been paid in full and no general creditor would have had cause for complaint. This conclusion necessarily follows from the contract that produced the pledge. If *443authority be needed to sustain it, Peterson v. Guarantee Trust, Etc., Co., 4 Walker 430, would furnish it.
The application of these principles to the case in hand properly results in the consideration first of the consequences following the sale of the collateral on March 15, 1913, before the first adjudication of the decedent’s estate. At that date the note with interest down to that time amounted to $18,361.45. The proceeds of the sale were $12,292. Their application to the debt left a remainder of $5,369.45, as to which the general fund only could be resorted to. But the creditor was entitled to his pro rata share of that fund based on his debt as it existed at the date of the death of the debtor. The learned court below, recognizing this principle, awarded him $1,432.49 on the adjudication of the first account. There still remained due $3,936.96. For some reason, not quite clear to us, but probably because no right to charge the collateral fund with interest after the death was recognized, there was allowed on the second adjudication but $3,900.56. The error is trifling and can be easily corrected on the return of this record or-later.
It was not, however, to rectify this small error the present appeal was taken. It rests on the claim that appellant could and should recover interest down to the date of the confirmation of the second adjudication. We have attentively considered the supporting argument but are unable to regard it as sound. No one of the cases cited and relied on appears to us to warrant the conclusion urged upon us. Nor can we perceive that it is supported by just reasoning from established principles. The appellant has been permitted to pursue both of the remedies in his hands at the death of his debtor until both have been exhausted. He cannot successfully ask more. The assignments of error must therefore be overruled and the decree of the learned court below, with the slight modification indicated, must be affirmed.
Decree affirmed.