Fessler v. Hickernell & Bomberger

Mr. Justice Paxson delivered the opinion of the court, May 29th 1876. The radical error of the decree made by the court below consists in the fact that it attempts to work out the equities between Bomberger and his partner Hickernell in a summary manner. Where one partner has paid a partnership debt, he is not entitled to subrogation against his copartner until an account has been settled between them. In what other way can it be ascertained which is the creditor and which the debtor partner ? This difficulty confronts us instantly in any attempt to enforce the order made in this case. How can it be ascertained upon the execution how much of the debt Bomberger ought to pay ? Clearly this cannot be done without a set [153] tlement of the partnership accounts. It may be that upon such settlement it will be found that Hickemell ought to pay the whole of the judgment. . In such case Lauser, the appellee, would be in no condition to claim subrogation for the purpose of having the judgment enforced against Bomberger. Lauser has no equity. His mortgage post-dates the judgment. He had notice of the latter when he loaned his money. Nor can he successfully invoke the principle that when a creditor has a lien on two funds in the hands of the same debtor, and another creditor has a lien only upon one of the funds, the first may be compelled in equity to levy his debt out of the fund to which the other cannot resort. This equitable rule has never prevailed except in cases where both funds were in the hands of the common debtor of both creditors. The equity of the the second creditor is precisely that of the debtor, and is worked out through the equity of the latter: Lloyd v. Galbraith, 8 Casey 108. Here Lauser is the creditor of Hickemell alone. Fessler is a creditor of Hickemell and Bomberger. Hickemell is the common debtor, and he has but one fund. Lauser has no equity, unless he can work it out through his debtor Hickemell. ' The latter can have no equity to throw the claim upon his partner until by a settlement of the partnership accounts he shows Bomberger to be in his debt. The learned judge of the court below evidently based his decree upon the Act of 22d of April 1856 (Pamph. L. 534). We think it manifest from an examination of said act that it was not intended to apply to any case in which the amount the substituted creditor has a right to collect from the adverse party under the judgment has not been ascertained. This is the first step in subrogation. The decree is reversed and the petition dismissed, with costs.