Peirce v. Black , 105 Pa. 342 ( 1884 )

Mr. Justice Paxson

delivered the opinion of the court, March 10, 1884.

We are of opinion that the evidence rejected by the court below should have been admitted. The object of it was to show that at the time the defendant paid the judgment he requested the plaintiff not to satisfy it; that he wanted to borrow more money on it, and that it would save expense if satisfaction were not entered ; that the plaintiff assented to this and handed the prothonotary’s certificate of the entry of the judgment to the defendant, who kept it about six months, then returned it to the plaintiff, and obtained another loan of $200 from him upon the security of the same judgment.

It is undoubtedly true that as against subsequent lien creditors a mortgage or judgment once paid cannot be kept alive. Anderson v. Neff, 11 S. & R., 208; Craft v. Webster, 4 Rawle, 255. So where a mortgage is given to secure future advances, the agreement to advance must appear on the face of the instrument. Irwin v. Tabb, 17 S. & R., 418. No question as to subsequent creditors arises in this case. We have only to consider whether such an arrangement'1 is good as between the parties.

We have no doubt that it is competent for the parties to a judgment, by their own agreement, to change the purposes for which it may be held. Thus in Shenk’s Appeal, 9 Casey, 371, where a judgment had been confessed in favor of a firm to secure future advances, it may, on the withdrawal of one of its members, by agreement of the parties, remain a valid security in the hands of the remaining partners. And I ain unable to see any reason why, in the case of an agreement between a judgment debtor and his creditor, that certain payments shall be applied to the judgment, the parties may not subsequently agree otherwise, and apply the payments to some other account. No one but a subsequent lien creditor can be heard to complain of this. It would be inequitable to allow the debtor to do so after his judgment creditor has acted upon it at his request. Thus in Mitchell v. Coombs, 15 Norris, 430, where it was attempted to hold a mortgage of $1000 as security for future discounts, after it had been paid by the mortgagor with an agreement or understanding on his part that it might bo so held by the bank, this court held that it could not be done as against other creditors. At the same time it was said by Justice Gobdon, at page 434: “ As to Coombs, his acquiescence in this arrangement would, no doubt, estop him from setting tip the payment of the bond to defeat the mortgage, but as to his judgment creditors, the transaction was of no legal force.” While this remark was used by way of illustration the force of it is obvious.

In. the case in hand the defendant did not desire satisfaction of the judgment when it was paid. He intended to keep it alive for the purpose of obtaining a further loan, and in fact did obtain §200 from the plaintiff upon the security of the judgment. While this arrangement is of no legal force as to creditors it is good between the parties. It was a valid contract between parties capable of contracting, and we are clearly of opinion the defendant is estopped from alleging the contrary. The plaintiff has advanced his money upon the faith of it, and common honesty requires that the defendant shall be held to his agreement.

Mode’s Appeal, 6 W. & S., 280, and a number of cases cited for the defendant, have no application. They were instances where an attempt had been made to keep a lien alive as against third parties. It is admitted this cannot be done. None of them decides that'an agreement to keep a lien alive, may not be enforced between the parties when one of them has advanced his money, upon the faith of such agreement.

Judgment reversed and a venire facias de novo awarded.