Van Ormer's Estate , 25 Pa. Super. 234 ( 1904 )

Opinion by

Smith, J.,

At law, a man cannot be his own creditor or debtor;. hence, when he acquires an estate subject to a charge in his own favor, the charge will, in law, merge in the estate. But in equity he may keep it in force, and it will be preserved or extinguished in accordance with the equities involved: Pennock v. Eagles, 102 Pa. 290.

In the present case the vesting of the estate in Susan Hamilton, the creation of the charge thereon, and the engagement of David Smith as surety for the payment of that charge were simultaneous. In consequence of the insolvency of Susan Hamilton, her share of the purchase money payable in one year was practically sunk, and the surety was obliged also to pay $1,110 to make good the shares of the other heirs. Had her interest alone been involved in the proceedings, her share of the deferred payment would have merged, in the absence of any act or agreement of the parties manifesting a different intent. Nothing of this kind appears. On the contrary, everything bearing on the point indicates a purpose to keep alive her interests in the deferred payment. The recognizance of Susan Hamilton and David Smith, while requiring payment to the other four heirs of Samuel Hamilton, by name, of their shares.of the money payable in one year, provided 'for payment “ to the heirs of the decedent,” upon the death of his widow, of $8,690.66 (one third of the purchase price), one fifth of which represented the interest of Susan Hamilton. The same provision was continued through the subsequent changes of title, in the hands of the last purchaser, payable “ to the heirs of the decedent.”

The contention of the appellants that the interest of Susan Hamilton in the deferred payment merged in the fee, if tenable, really proves too much. If it merged, the merger took effect against them as well as against her and those claiming under her, and left nothing for them to claim. The only basis for this demand is that there was no merger. They cannot claim the money in controversy as heirs of Samuel Hamilton, for without it they have received their full shares of his estate, and if there has been no merger it belongs to Susan Hamilton’s estate. Nor, upon their own contention, can they claim as next of kin to Susan Hamilton, for they assert a merger that extinguished her interest in it. And any claim they may have as next of kin is subject to the paramount right of the surety to subrogation. Since the money is now in the hands of the appellee, there has clearly been no merger in fact. As this result has been reached and the surety has the primary claim on the fund, Susan Hamilton’s interest in the deferred payment, as an heir of Samuel Hamilton, must be regarded as having, in equity, been preserved for his benefit. Hence the money must be awarded to his legatee. Though the surety’s right originated in his engagement, right of action on it did not accrue until the death of Samuel Hamilton’s widow, when the money became payable. It was debitum in praesenti, solvendmn in futuro. Therefore the claim is not barred by the statute of limitations.

Decree affirmed.

Henderson, J., dissents.