Morris v. Olwine

The opinion of the Court was delivered by Lewis, J. At the time of, and immediately before, the assignment for the benefit of creditors, those having judgments on, the real estate had not only a right, but the law imposed it upon them as a duty to resort to the personal estate as the primary fund for the payment of their debts. If that was sufficient for the purpose, the real estate was entitled to exoneration. This obligation may not exist where a creditor has two remedies, both of which may be pursued until he obtains full satisfaction; but the accumulation of remedies certainly does not diminish his rights. If a judgment creditor has a right to resort to the personal estate for the payment of his whole debt, without regard to his lien on the real estate, one who has a bond, which may be turned into a judgment, has the, same right; and that right is not impaired by any lien which he may have by mortgage on the land. One who has collateral, securities for his debt is not obliged to surrender or exhaust them as a prerequisite to the pursuit of his other remedies: Kittera’s Estate, 5 Karris 416. If this was the right of the ere [443] ditor before the assignment, it remained the same afterwards, except so far as if was changed by the instrument itself. It is not alleged that any preference was proposéd by the assignor, or that any condition was annexed to the mortgagee’s right to come upon the fund as a creditor for a pro rata distribution. The only change in his condition, produced by the assignment, is, that instead of resorting to an execution he must resort to the assignee. The rule applicable to his case, as stated in Shunk’s and Freedley’s Appeals, 2 Barr 309, is that “ lien creditors may have recourse to the personal estate as the primary fund, for their whole demand in the first instance, and subsequently to the land for the residue.” If the other creditors think the land is more than sufficient to discharge the liens, this may be ascertained in the way adopted by the Common Pleas; or they may, if they agree, discharge the liens by the application of the personal estate in the first instance, and then divide the proceeds of the real estate pro rata among themselves. They have no equity beyond this. A creditor who has collateral securities for his demand is not thereby deprived of his other remedies for its collection. In this case the dividend was ascertained and reported by the auditor before the debt was reduced by the application of the proceeds of the mortgaged premises ; and all that is at present decided is, that the subsequent reduction of the debt by the proceedings on the mortgage, does not deprive the creditor of the dividend thus previously ascertained. The final decree of the Court of Common Pleas was correct, and it is therefore affirmed. Decree affirmed.