Beaver Tr. Co. v. Morgan et al.

• Decision Date: 07 January 1918
• Citation: 259 Pa. 567
• Parties: Beaver Trust Company <I>v.</I> Morgan et al., Appellant.
• Court: Pennsylvania Supreme Court

Page 567

259 Pa. 567

Beaver Trust Company

v. Morgan et al., Appellant.

Supreme Court of Pennsylvania.

October 2, 1917.

January 7, 1918.

Argued Oct. 2, 1917.

Appeal, No. 31, Oct. T., 1917, by The Peoples National Bank of Rochester, Pa., from order of C. P. Beaver Co., June T., 1916, No. 220, sustaining exceptions to sheriff's return of distribution of proceeds of a sheriff's sale, in case of Beaver Trust Company v Guy H. Morgan, The Peoples National Bank of Rochester.

Before BROWN, C. J., MESTREZAT, STEWART, FRAZER and WALLING, JJ. Affirmed.

A. P. Marshall, with him Chas. R. Eckert, for appellant.

William A. McConnel, for appellee.

OPINION BY MR. JUSTICE STEWART, January 7, 1918:

This dispute arises out of the distribution of the proceeds of the sheriff's sale of the real estate of one J. W. Jack. The original transaction out of which the controversy arises presents no unusual feature; nor are the facts relating to the subject in dispute. On the 7th March, 1911, the Monaca National Bank loaned to M. L. Jack the sum of $1,450, taking as security therefor a judgment note signed by M. L. Jack and J. W. Jack in like amount, payable at four months, and also fifteen shares of the capital stock of the Rochester Trust Company owned by M. L. Jack, as collateral. The loan was renewed at regular intervals until 15th April, 1913, on which day judgment was confessed and entered upon the single bill given by way of renewal in favor of Robert C. Campbell, cashier, and against M. L. Jack and J. W. Jack, reduced later in amount to $1,425. On 4th December following the obligation was again renewed, but in somewhat different form, the change not affecting, however, in any way the legal status of the parties, except to make J. W. Jack guarantor instead of surety, leaving the contract in all other respects the same as before. On March 4, 1916, the Monaca National Bank sold, assigned and set over to the Peoples National Bank all its right, title and interest in the renewal note, and as part of the transaction turned over to the said bank the fifteen shares of Rochester Trust Company stock which M. L. Jack had deposited with it as collateral to the original loan, and assigned to said bank the judgment it had entered on the single bill of M. L. and J. W. Jack. Meanwhile, 18th February, 1916, M. L. Jack had obtained a loan from the Peoples National Bank of $1,780 on his own obligation, containing a power of attorney for the confession of judgment. As collateral security for this loan M. L. Jack pledged the fifteen shares of Rochester Trust Company stock that he had previously pledged to the Monaca Bank. These shares having come into the possession of the Peoples Bank, upon default of payment by M. L. Jack, the Peoples Bank, as it had a right to do under its contract, on 20th June, 1916, sold the fifteen shares of stock of the Rochester Trust Company for the sum of $1,290, and applied the same as a credit to the $1,780 note of M. L. Jack.

J. W. Jack, the surety, was the owner of certain lots of ground in the Borough of Rochester, in Beaver County, on which there was a first lien of $3,645.54 in favor of the Beaver Trust Company; next in priority was the lien of the judgment entered by the Monaca Bank to No. 215, June Term, 1913, against M. L. and J. W. Jack, for $1,450, for the loan to M. L. Jack, for which J. W. Jack was surety. Several other liens followed in their order. This was the situation when execution process was issued on the first lien by virtue of which the real estate of J. W. Jack was, on the 3d June, 1916, sold by the sheriff for $5,200. The sheriff in his return of sale applied out of the purchase-money $3,645.54 to the judgment held by the Beaver Trust Company, and, without discoverable reason, awarded the balance of the fund to the party from whom J. W. Jack had acquired title. Upon exceptions filed by the subsequent lien creditors, the court set aside so much of the return, and proceeded to a hearing in which the facts we have heretofore recited were developed. Disallowing entirely distribution to the judgment transferred to the Peoples National Bank by the Monaca Bank, next in order of priority, the court awarded the balance remaining to the subsequent lien creditors in their order and decreed accordingly. The...