Hemperley v. Tyson

• Decision Date: 07 October 1895
• Docket Number: 17
• Parties: J. M. Hemperley, Appellant, v. Anna Tyson, Defendant, and the Serial Building and Loan Association of Mahanoy City, Garnishee
• Court: Pennsylvania Supreme Court

32 A. 1081

J. M. Hemperley, Appellant, v. Anna Tyson, Defendant, and the Serial Building and Loan Association of Mahanoy City, Garnishee

170 Pa. 385

No. 17

Supreme Court of Pennsylvania

October 7, 1895

Argued February 18, 1895

Appeal No. 17, July T., 1894, by plaintiff, from judgment of C.P Schuylkill Co., Jan. T., 1888, No. 95, on verdict for defendant. Affirmed.

Attachment execution. Before BECHTEL, J.

At the trial it appeared that in January, 1883, Mrs. Anna Tyson obtained from the Serial Building and Loan Association of Mahanoy City, the garnishee, seven loans of $200 each on seven shares of the stock of the association, series one giving bond and mortgage to the association in the sum of $1,730 to secure the payment of the loan, together with the premium bid for obtaining them, and on the same day and at the time assigned the seven shares of stock to the association as security for the loans. On November 21, 1887 the plaintiff, Hemperley, recovered a judgment against Mrs Tyson for $457.83 and issued attachment execution November 30, 1887, and summoned the building association as garnishee. The real estate of defendant was sold in March, 1888, on an execution issued under plaintiff's judgment. At the sale T.H.B. Lyon, Esq., notified the intending purchasers that whoever bought the property bought it subject to the mortgage.

The evidence in the case showed that default was not at any period made for six months in payment of the monthly installments due on the seven shares of stock, nor in payment of the monthly installments of premium, until the shares were worth $200 each, and that the stock of the series matured in the fall of 1892. The evidence in the case further showed that when the stock matured it was applied in payment of the mortgage debt and the mortgage was satisfied. The nineteenth article of the by-laws of the association was as follows "When the shares of stock of any series upon which loans shall have been granted shall reach the matured value of $200 each, such value shall be credited to the account of such loanholders, when the loan shall be declared fully paid and satisfied, and the stock shall be canceled and shall revert back to this corporation."

The assignment of the stock made by Mrs. Tyson to the association when she obtained the loans was in the following language: "Know all men by these presents that I, Anna Tyson, have assigned, transferred and set over and by these presents do assign, transfer and set over unto the The Serial Building and Loan Association of Mahanoy City, all my right, title and interest in one share of stock of said association as per certificate No. , Series One, in trust that said association shall have and hold the same as collateral security for the payment of a certain debt of 1730 dollars, for which I have this day executed to them bond and mortgage; the amount realized from said stock to be appropriated toward the payment of any amount in which I may be indebted to said association either on account of the principal of said debt, interest, premiums or fines for which I am now or may hereafter become responsible to said association."

John Latham was called by defendant and asked whether or not the shares at their maturity were applied in payment of the mortgage, and the mortgage canceled. To this plaintiff objected that it made no difference in the issue trying whether the stock was appropriated at maturity or not, the question being whether Mrs. Tyson had any interest in this stock at the time it was attached; and the testimony of appropriation subsequent to the attachment was irrelevant, immaterial and incompetent.

The objection was overruled, evidence admitted and bill sealed.

The witness, in reply to the question, then stated that the shares at their maturity were applied in payment of the mortgage, and the mortgage canceled in pursuance of the by-laws of the association, and that no proceedings were ever had on the bond and mortgage. [1]

The court charged in part as follows:

"J M. Hemperley is the plaintiff in this case. Anna Tyson is the defendant, and the Serial Building and Loan Association has been summoned here as garnishee. This proceeding was instituted to No. 95 January term, 1888, and the object of this proceeding, which is known as an attachment execution, is for the plaintiff to seize certain stock that Anna Tyson at one time held in the Building Association, and apply that stock to the payment of this debt. [Anna Tyson is not here to make any objection to this proceeding one way or the other so far as anything has appeared in this case;] but the saving fund has answered this proceeding in such a way as to create the issue that is now presented to the court and jury, and the saving fund says that Anna Tyson had no stock which she could have called upon it to deliver or pay at the time this attachment execution issued, for the reason that it claims that the stock had been delivered to it; that she had borrowed the money out of the saving fund, and handed over her stock to secure payment of it, and that therefore when Hemperley, the plaintiff in this case, proceeded with this attachment execution, he took whatever he would get out of it, subject to the rights of the saving fund, it having years previous to the time of the issuing of his attachment obtained an assignment of the stock, and that assignment accompanied by the delivery of the possession of the stock to the saving fund, to secure the payment of their mortgage. . . .

"The nineteenth article of the by-laws of the association . . . provides that when the stock gets to be worth $200 in the case of a person who has borrowed money on his stock from the saving fund, that the stock shall be applied to the payment of the money borrowed, and it shall revert to the corporation.

"[Our judgment in relation to that article in the by-laws is that it made this stock the primary fund for the payment of the mortgage and one to which the saving fund should first resort to pay itself back the money it had loaned to Anna Tyson;] but in addition to this the shareholder, Anna Tyson, on the 3d of January, 1883, executed an assignment of this stock to the association. The important part of this assignment follows in this language, 'The amount realized from said stock to be appropriated toward the payment of any amount in which I may be indebted to said association either on account of the principal of said debt, interest, premiums, or fines for which I now am or may hereafter become responsible to said association.'

"[As I understand this language she then and there agreed in 1883 when she borrowed this money from the saving fund and transferred this stock to the saving fund that it should be so appropriated to the payment of the mortgage. We think it is self-evident that the association not only had the right to apply whatever might become necessary of the proceeds of said stock to the payment of the mortgage,] but that it is at least doubtful whether under the assignment of by-laws it was not required to so apply the proceeds of the stock. The language of the assignment would seem to require this. 'The amount realized from said stock to be appropriated toward the payment of any amount' would seem to warrant this conclusion. Certain it would seem to be that as against Anna Tyson it possesses the right to so appropriate the funds arising from said stock both under the assignment and the by-law above mentioned. . . .

"She had no equity by virtue of the same that would require the association to first proceed against the land and then pay over to her the value of the stock at its maturity. When the stock matured the association held the money in its own hands, and was not required to hand it over to her and then to collect the amount of the mortgage out of the land, and forsooth, take the chances of whether it would not thereby be required to buy and hold the mortgage premises.

"The plaintiff here is J. M. Hemperley, who is the attaching execution creditor. The plaintiff's right is by virtue of his attachment execution issued to No. 95, January term, 1888. It is well settled than an attaching creditor stands exactly in the shoes of his debtor, and any equities that could be set up against the latter are equally available against the former. That the attaching creditor has no other or greater right than his debtor is apparent from a number of cases, among them may be mentioned, Patten v. Wilson, 34 Pa. 299; Bank's App., 123 Pa. 473.

"The mortgage was never proceeded upon by the association, and no fund ever arose from any sale upon either the bond or mortgage. If under these circumstances the attaching creditor can claim that moneys realized upon the stock cannot be applied to the payment of anything accruing on the mortgage after the attachment was served, or that the amount realized upon the stock at the time of its maturity in August, 1892 could not be applied to the payment of the amount that is due upon the mortgage, then the plaintiff, by virtue of his attachment, nullifies and absolutely sets aside the assignment made to the saving fund, and the stock delivered to the saving fund in pursuance thereof five years before his writ issued. So that you may understand that, I will make an explanation in relation to it. That as the assignment occurred in 1883 by Anna Tyson to the saving fund, the attaching creditor comes with his attachment five years after that, in 1888, and seeks to set aside the assignment and say to the saving fund, you must deliver this stock over to me, or you must pay to me the value of this stock, and you must go and look to the land for the amount of your mortgage. We say we do not believe that can be done because the land might or might not be worth the amount of the...