Bleakley's Appeal

The opinion of the court was delivered, October 27th 1870, by Agnew, J. — The facts of this case are few. Robert Lamberton was the owner of a judgment for $31,000, entered against Samuel P. Irvin on the 8th day of June 1865. Irvin had purchased of E. D. Kinnear, Esq., lot No. 449 in Eranklin at $2600, of which $820 only remained unpaid, and would fall due on the 6th of August 1865, with a provision for forfeiture of the contract in case of non-payment for thirty days after it fell due. On the 19th of July 1865, Irvin assigned his contract to James Bleakley, binding him to pay the $820 to save the forfeiture, and with the admitted understanding that Irvin should refund the $820 to Bleakley, settle his indebtedness to the bank, of which Bleakley was cashier, and that then Bleakley should reconvey to Irvin’s wife. But the assignment was antedated to the 1st of May 1865, thus overreaching Lamberton’s judgment. The master finds that this was done to defraud the plaintiff. The finding is ably vindicated in the opinion of Judge Trunkey. The absolute character of the paper, though but a security, the agreement to reconvey to Irvin’s wife instead of himself, and the attempt of Bleakley to use the paper to defeat the sheriff’s sale of the property by Lamberton on his judgment, evince the true motive for antedating the paper. Bleakley paid the $820 to Kinnear, and now claims a decree for this sum, before specific performance shall be decreed to Lamberton, who purchased Irvin’s title at the sheriff’s sale. Kin-near does not resist specific performance, but stands ready to convey to Lamberton, whenever the eovinous assignment to Bleakley is put out of his way. It is Bleakley who resists the decree until he is refunded the $820, paid upon the footing of the fraudulent [191] agreement with Irvin, to defeat Lamberton’s judgment. Bleakley is made a party to the bill only for the purpose of putting aside the covinous assignment to enable Kinnear to convey to Lamberton. The question then is whether a chancellor would require Lamberton to refund the $820 to Bleakley, as a condition to setting aside the assignment and entitling Lamberton to specific performance of Kinnear. But clearly Bleakley cannot demand repayment of Lamberton either at law or equity. And first he is not entitled to subrogation to Kinnear’s rights. Subrogation is not a matter of contract but of pure equity and benevolence: Kyner v. Kyner, 6 Watts 221; Wallen’s Appeal, 5 Barr 108. On what pretence, in foro conscientice, can a party attempting to carry out a scheme of fraud against another, by a payment, claim compensation of the party he has attempted to defraud ? Conscience and benevolence revolt at such an iniquity. Again Bleakley did not recognise Kinnear’s title by the payment. He did not profess to bargain for it, and Kinnear did not profess to sell it to him. His act was simply a payment and no more, made by him because of Irvin’s duty to pay, and accepted by Kinnear because of his right to receive from Irvin. Besides the payment was accepted by Kinnear in ignorance of the attempted fraud. There can be no legal intendment therefore of a bargain on Kinnear’s part to vest his right to receive the money in Bleakley. As to Lamberton the payment by Bleakley was not only fraudulent and intended to displace his judgment, but it was also voluntary. It was not paid at Lamberton’s request nor for his use and benefit; but on the contrary was intended to defeat his right, as a creditor by overlapping his judgment, by means of the covinous transfer. Bleakley is therefore neither a'purchaser, nor a creditor of Lamberton, nor an object of benevolence, but is forced upon the record to compel him to put out of the way the fraudulent barrier to Kinnear’s specific performance to Lamberton. He cannot, thus standing before a chancellor, ask him to make repayment to him a condition to a decree to remove the fraudulent obstruction he threw in the way. The payment is one of the very steps he took to consummate the fraud upon Lamberton. If he have a legal right of recovery he must resort to his action at law, and if he can have none, it is a test of his want of equity. And in addition to all this, it is a rule that a chancellor will not assist a party to obtain any benefit arising from a fraud. He' must come into a court of equity with clean hands. It would be a singular exercise of equity, which would assist a party, who had paid money to enable him to perpetrate a fraud, to recover his money, just when the chancellor was engaged in thrusting out of the way of his doing equity to the injured party, the very instrument of the- fraud. [192] Who does iniquity shall not have equity : Hackney v. Weitney, 14 Wright 244-5. We are therefore of opinion the court committed no error in refusing compensation, and the decree of the court below is confirmed.