Court Opinion

ID: 6315215
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:26:49.401758+00
Date Added: 2024-06-11T08:59:13.912637
License: Public Domain

The opinion of the court was delivered January 3, 1859, at Philadelphia, by
Strong, J.
— The auditor’s report finds, that Mr. Kerr had two securities for the debt due to him, the mortgage dated January 8, 1853, and the sum of money left in Blakeley’s hands, specifically designated to the discharge of the mortgage. This sum of money was a part of that for which the mortgage to Garrison was given. It had been lent only upon condition, that it should be applied in satisfaction of the debt due to Kerr, and by the agreement of the lender, the borrower, and a judgment creditor, subsequent to the Kerr mortgage, had been set apart to pay that mortgage, in relief both of Garrison and McDevitt, the judgment-creditor. It was not, therefore, the general property of Burke, the assignor, but it had become clothed with a trust in favor of Mr. Kerr. It matters not that the deposit had been made without his knowledge. It was still money held for his use, and he had his choice, either to resort to it, or to his security upon the bond. Nor could its character, as trust money, be changed, without the joint consent of Burke, of Garrison, and McDevitt. Kerr, having thus two funds, and Garrison but one, belonging to a common debtor, and the former having obtained a payment from the fund which was common to both, why is not Garrison entitled to subrogation to Kerr’s rights upon the other fund ? Surely, not because the general creditors of the assignor have any equity to prevent it. They stand in no better position than Burke, the assignor. They are affected by the same trusts and equities with which he was affected. Ramsey’s Appeal, 2 Watts, 332. Clearly, Burke, the assignor, could not have objected to the payment of Kerr’s mortgage, with the money deposited in Blakeley’s hands, in trust to make such payment, and as the general creditors claim through him, neither can they.
The auditor was of opinion, that the recovery at law by the assignee of Burke against Blakely, the' depositary, divested the fund of the trust which had been impressed upon it, and converted it into a fund for the general creditors. The recovery, however, was not conclusive of the right, either as against Kerr or against Garrison, for they were not parties to it.' Its effect *219was, therefore, no more than to change the trustee. The money in the hands of the assignee, remained clothed with the same trust with which it was originally invested. It had an earmark, and is easily followed. The assignee can marshal the fund in his hands, in no way more advantageously to the creditors, than Burke could have done. The remedy of the creditors against the assignee, is in a Court of Equity, and a chancellor would lay hold of the fund, in whosoever hands found, and enforce the trust. Marshall v. Hoff, 1 Watts, 440.
It follows, that the decree of the court below, confirming the auditor’s report, was erroneous, and that the appellant is entitled to the sum of $1074.50, recovered from Blakeley.
Decree of the Court of Common Pleas reversed, and the record remitted, with instructions to make distribution in accordance with the foregoing opinion.