Neff v. Miller

• Citation: 8 Pa. 347
• Parties: NEFF v. MILLER.
• Decision Date: 01 January 1848
• Court: United States State Supreme Court of Pennsylvania

8 Pa. 347

NEFF v. MILLER.

Supreme Court of Pennsylvania.

FROM the Common Pleas of Huntingdon county.

Miles, for appellant.

McAllister and Orbison, contrà.

BELL, J. (after stating the case as given above.)

Under this state of facts, the question is, whether the owners of Jane Smith's judgment are entitled to be subrogated as they claim to be. This question is not affected by the fact that they were defendants in the judgment, for it is part of the case that they were merely sureties, to whom equity accords all the securities and means of payment within the power of the creditor.

It will be perceived that this is not the ordinary case of a lien creditor, with power of recourse to two funds belonging to his debtor, in satisfaction of his lien, and another lien creditor of the same debtor, having only one of these funds to which he can resort for the payment of his debt. In such a case, a chancellor will, of course, interfere by compelling the first creditor to look to the fund against which the other has no remedy, or, if the first creditor has already satisfied his debt from the fund to which the second creditor can alone apply, equity will substitute the latter to the place of the former, so as to permit him to avail himself of the unappropriated fund.

But the peculiarity of the question before us is, that one creditor, having a joint and several encumbrance against the estates of two distinct debtors, claimed and received the amount of that encumbrance from the separate estate of one of the debtors, and thus defeated the claim of a lien creditor of the latter. It is then the case of two funds belonging to different debtors, and not an instance of a double fund belonging to a common debtor. Under such circumstances, a court of equity will not, in general, compel the joint creditor to resort to one of his debtors for payment, so as to leave the estate of the other debtor for the payment of his separate and several debt, for, as between the two debtors, this might be inequitable; and the equity subsisting between them ought not to be sacrificed merely to promote the interest of the separate creditor. Nor will chancery, for the same reason, substitute the several to the place of the joint creditor, who has compelled payment from the estate of the debtor of the former. But where the joint debt ought to be paid by one of the debtors, a court of equity will so marshal the securities as to compel the joint creditors to have recourse to that debtor, so as to leave the estate of the other open to the claims of his individual creditors; or, if the joint creditor has already appropriated the latter fund, it will permit the several creditor to come in pro tanto, by way of subrogation upon the fund which ought to have paid the joint debt: 1 Story Eq. sec. 642-3; Per Ld. Eldon, Ex parte Kendall, 17 Ves. 520; Sterling v. Brightbill, 5 W. 229. Thus, if A. have a judgment which is a lien on the lands of B. and C., and D. own a younger judgment which is a lien on the land of C. only, and the joint judgment be levied on and paid out of the estate of C., to the exclusion of the younger judgment, D. will not be subrogated to the rights of A., to enable him to obtain from the estate of B. payment of his several judgment; for B. was not the debtor of D., and for aught that appears, C. may be indebted to B. to the full amount of A.'s judgment. But if B. and C. were partners, and gave the first judgment on the partnership account; and on a settlement of accounts between them, it appeared that B. was indebted to C. to the amount of the joint judgment, the judgment creditor of C. would be substituted as against the estate of B., pro tanto: Dorr v. Shaw, 4 Johns. C. Rep. 17. It would be the same if the judgment was recovered by A. for B.'s proper debt,...