Ebenhardt's Appeal
Ebenhardt's Appeal
Opinion of the Court
The opinion of the Court was delivered by
Appeal by M. D. Ebenhardt and Charles P. Diekenschiedt from the decree of the Court of Common Pleas of Lehigh county, in the matter of the distribution of the moneys arising from a sheriff’s sale of the real estate of John Rice, and as it would seem also, in effect, from a like sale made of the real estate of George Spinner- The controversy in this case does not exist between judgment creditors of the same debtor, but between the judgment.creditors of John Rice on the one side, and the judgment creditors, of George Spinner on the other. Were it between the judgment or lien creditors of John Rice alone, where some of them, having a right to go only upon or against one fund, were seeking to be substituted to the rights of others, having a right to go upon two funds belonging to Rice, the debtor, the court might very well interpose, so. that both funds might, as far as requisite, be applied to the satisfaction of both descriptions of judgments, provided no injustice should be done thereby to Rice. (1 Story’s Equity,
In the case before us, Henry Hein obtained a judgment against John Rice first, as early as the 26th of April 1842, for a debt of $1200, which became a lien on the real estate owned at the time by Rice, consisting of a lot of ground situate in Allentown, of seven acres of meadow situate in the same place, and of another lot of ground situate in Allentown, which he, on the 26th of October following, sold and conveyed to George Spinner for the consideration of $400, of which $100 was paid, and a note given by Spinner to Rice for the payment of the remaining $300 on or before the 27th May 1843; and was intended, as would appear from the tenor of the note and an endorsement thereon, to be applied towards discharging the judgment of Plein. After this, from the 5th November 1842 to the 21st June 1843, several judgments were obtained by Henry Bender, John A. Waechter and George Probst respectively against Rice, amounting in all to a sum exceeding $2800, which became liens upon the two parcels of Rice’s real estate before mentioned, which remained unsold, and were taken in execution afterwards, and sold by the sheriff on the 20th January 1844, under Henry Plein’s judgment, for the sum of $1310-; of which sum, after paying the costs of sale, a prior lien of $232.42 to the widow Heimbach, $919.93, the balance -due on Hein’s judgment, and $71.89, the amount due on Bender’s judgment, there remained a residuum in the hands of the.sheriff, of $53.96.
Upon this state of facts the court below, on the 1st May 1844, decreed that John A. Waechter should be substituted to the right of Henry Hein, to proceed on his judgment against John Rice, to levy, by virtue thereof, out of the Jot of ground sold by Rice to Spinner, the sum of $68.14, being the balance still due on his judgment against Rice, after applying towards the payment thereof, the residuum in the hands of the sheriff; and that George Probst should be substituted also, to proceed in like manner to levy out of the same lot of ground the further sum of $243.51, these two sums being, as it was alleged, the amount of the principal and in
Now, according to the principles laid down above, which seem to govern in regard to the right of substitution, I confess I am unable to discover any clear ground upon which either Waechter or Probst is entitled to claim it in this case. It is true that they and Henry Hein were severally the creditors of John Rice, and that he was their common debtor; but then the funds against which the demands in question are made, are not the property of the same person or debtor. This, according to Lord Eldon, would seem to be necessary. In Ex parte Kendall, (17 Vez. 520), he says, “We have gone this length: if A. has a right to go upon two funds, and B. upon one, having both the same debtor, A. shall take payment from that fund to which he can resort exclusively, that by those means of distribution both may be paid. That course takes place where both are creditors of the same person, and have demands against funds, the property of the same person.” And in further illustration of the subject he adds, “ It has never been said that if I have a demand against A. and B., a creditor of B. shall compel me to go against A. without more; as if B. himself could insist that A. ought to pay in the first instance; as in the ordinary case of a drawer and acceptor, or principal and surety; to the intent that all the obligations arising out of these complicated relations may be satisfied ; but if I have-a demand against both, the creditors of B. have no right to compel me to seek payment from A., if not founded upon some equity, giving B. the right for his own sake to compel me to seek payment from A.” Now apply the principle here advanced by Lord Eldon, as between Hein and Rice; and what colour, or even shadow of equity, I would ask, had Rice to say to Hein, that he must or ought to go first against Spinner or the property of Spinner for any portion of his judgment against Rice ? There was no privity of contract whatever between Hein and Spinner, though there was between Spinner and Rice. Spinner was debtor to Rice, and Rice was debtor to Hein; and this seems to be the whole extent of the relationship that existed between them. But surely it has never been thought that a debtor who is the creditor of others, has the slightest colour of equity on his part to demand of his creditor that the latter shall proceed in any form or upon any terms and conditions whatsoever, first, to
Dissenting Opinion
dissenting. — The exercise of the power of substitution is often necessary to do justice between contending claimants, and has accordingly been applied in practice by this court, on chancery principles. In the present case it is imperiously demanded to prevent a result which would be unfair and inequitable, were the mere legal powers of the parties rigidly carried out under the forms of our ordinary proceedings. Hein has a judgment against Rice which binds his lands. Rice afterwards sells a portion of the land thus bound .to Spinner. Spinner, therefore, buys it subject to this lien, and his creditors can be in no better situation. This is the legal position of the parties, and by it Hein might at law resort to the land still owned by Rice, or that owned by Spinner, at his own election. There might, however, be circumstances which would operate in equity to compel Hein to limit his demand to the land still owned by Rice. But all these are put aside here by the express agreement of Spinner, as shown by his note to Rice, that the $300 of the purchase money was to be paid on account of the lien to become due to Hein in April 1843. This was an express engagement by Spinner that the land he purchased should pay off the" $300. It cannot, therefore, be pretended that
Decree reversed.
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