Mosier's Appeal , 56 Pa. 76 ( 1868 )

The opinion of the court was delivered, January 7th 1868, by

Thompson, C. J.

Subrogation is purely an equitable result, and depends like other controversies in equity on facts to develop its necessity, in order that justice may be done. Privity of contract is not necessary to its support; it may, and does, exist on principles of mere equity and benevolence: 1 Johns. Ch. 409; Cottrel’s Appeal, 11 Harris'294. It will not arise in favor of a stranger, but only in favor of a party who on some sort of compulsion discharges a demand against a common debtor. For instance, a surety who pays the debt of his principal, will be entitled to the securities of the creditor. So, where one of several joint sureties has paid the whole debt, he will be entitled to the judgment to enforce contribution by his co-sureties : 9 Wright 451. In Cottrel’s Appeal, to prevent a salé the defendant in the judgment gave his note with an endorser, to the plaintiff, for the amount of the judgment, and took up the single bill on which the judgment had been entered. The note went to protest, and was paid by the endorser, and it was held that the endorser was entitled to he subrogated to the judgment of the plaintiff, which the proceeds of his note went to pay, in preference to a subsequent judgment, entered previously to the giving of the note.

In The Silver Lake Bank v. North, 4 Johns. Ch. 370, a mort gagee, compelled for- his own security to satisfy an execution on a prior judgment in favor of another, was by Kent, Ch., held by right of subrogation to stand in the place of the judgment-creditor, and entitled, on a sale of the mortgaged premises, to receive out of the fund the amount of the judgment as well as the mortgage-debt. See also Paine v. Hathaway, 3 Ves. R. 212; Dixon on Subr. 166, to the same effect. In Wallace’s Appeal, 5 Barr 103, it was decided that an administratrix, who had paid her own money in relief of the estate of her intestate, was entitled to substitution to those whose debts her money paid. Kelchner v. Forney, 5 Casey 47, was the case of an advance by a guardian to his ward, and he was subrogated to the ward’s security for money coming to him. Greiner’s Appeal, 2 Watts 414, recognises the same doctrine, and there are many other decisions to the same effect. '

The principles of subrogation do not apply in favor of volunteers as already said. -They can obtain the right of substitution only by contract. The cases which I have referred to above, illustrate who are not to be regarded as volunteers and strangers. One was the case of an endorser, who was substituted to the judgment creditor, whose judgment the proceeds of the note paid. His endorsement was voluntary. Another paid off, for his own security, an execution on a prior judgment. He was not legally compelled to pay. A third and fourth advanced money, one in favor of an estate and another to his ward. They were all subrogated and not regarded as strangers. I regard the doctrine as applicable in all cases, where a payment has been made under a legitimate and fair effort to protect the ascertained interests of the party paying, and when intervening rights are not legally jeopardized or defeated. Such payments, whatever might be their effect in law as extinguishing the indebtedness to which they apply, will not be so regarded in equity, if contrary to equity to regard them so.

In the case in hand it became very apparent, as I think the proof shows, that the order in which the sale of the joint property of E. and C. II. Olmstead was directed to be made by the court out of which the executions in favor of the First National Bank of Susquehanna Depot v. William Hamnet and Charles Olmstead; The First National Bank of Meadville v. E. and C. H. Olmstead; S. G. Thurston v. W. B. Hunter and C. H. Olmstead; and G. Mosier v. E. Olmstead, C. H. Olmstead and James Irvin, issued, would defeat a junior judgment of J. B. Dick & Co. To save it and under the pressure of this circumstance, they advanced money to pay off these executions. This was done not only with the knowledge of the defendants, but they were very solicitous that the Dicks should do so, as they believed that the sale of the property in detail, that is, by a sale of an undivided interest at a time, would in a measure sacrifice it. It is very obvious that connected property, as it was, would not sell as well in undivided interests as in solido; and as the whole would be required to be sold to pay the liens upon it against the defendants, it is not apparent why such an order was made. But the fact that it was so made, left the Messrs. Dick no alternative but to do as they did, or lose their judgments.

Subrogation to the judgments, the executions on which were paid by the money of the Messrs. Dick, was applied for and resisted; not by new lien creditors, but by those existing when. the money was paid. It is true the appellants claim that there was an intervening judgment in favor of Gr. Hosier and O. Derrickson v. C. H. Olmstead for $25,000 entered. Why this judgment should have been made the foundation of objection, I do not see, for it was marked' satisfied in full on the docket, and at the time of the decree its nature was understood to be merely cautionary with nothing due on it. The case stood solely as it did between the creditors when the money was paid, and when the decree in this case was entered. Their liens were, in legal contemplation, in no way impaired by the acts of the appellees. They were not postponed in any of their legal rights or remedies. Any of those whose judgments were ripe for execution, might have proceeded to put the property to sale the next day after it was stopped by the payment of the executions if they had chosen. The entry of satisfaction on the judgments by the plaintiffs did not extinguish them, excepting in favor of intervening liens, of which, as we have seen, there were none ; and equity would not allow its principles to be set aside by an act against equity, which the satisfaction entered would result in. The right of sub - rogation having been found to exist, it was certainly proper, on part of the court, to decree that the entry of satisfaction should be cancelled, and that the judgments should stand for the use of the plaintiffs in the bill.

The fact that the Messrs. Dick entered judgment against the defendants, E. and C. H. Olmstead, for the money advanced, did not destroy their equity, unless it could have been shown that it was in effect so intended. Nothing of this was shown. The appellants were not prejudiced by the act, and it would be hard to hold that the appellees were, if the former were not.

The case was well decided below, and the decree is affirmed at the costs of the appellant.