Rhawn v. Commonwealth

Mr. Justice Paxson delivered the opinion of the court, April 9th 1883. The single question presented by this record is whether the original sureties on the bond of an assignee for the benefit of creditors are liable for the proceeds of real estate sold by the assignee under the Act of Feb. 17th 1876, P. L. 4. The second section of said Act authorizes assignees for creditors to apply to the court of common pleas for an order to sell the real estate of assignors in all cases where there are existing incumbrances to such an extent as “ to render it difficult to determine whether the same (the real estate) can be sold for enough to pay all the liens ” &c. A sale under this Act discharges all liens except such mortgages as are prior to all other liens except “ other mortgages, ground rents and the purchase money due the commonwealth.” The proviso to said section requires that “ Before said sale is authorized the assignee or assignees shall file a bond with two approved sureties, in double the estimated value of the real estate conditioned for a faithful appropriation of the proceeds thereof.” The bond in suit was given on the 14th day of February, which was the day following the appraisement of the assigned estate. The court below found as a fact that the bond was intended as the bond required to be given under the Act of the 14th June 1836, P. L. 630. It is certainly in the precise language of said Act. No additional security was given upon the sale of the veal estate. The. assignment was made on February 12th 1878, the appraisement made on February 13th and the bond given February 14th. The application for an order of sale was made February 21st. From the finding of the court below it is probable this bond was handed to the court upon the application for an order of sale as and for the bond required by the Act of 1876. The learned judge says in his opinion: “ It is no doubt the duty of the court to see to it that the proper security was given, and we have no doubt that the bond in question was approved by the court without reading the conditions, being told that it was the proper bond in case of sale. The sureties being approved it was not further examined.” This, as the learned judge correctly said, was a fraud upon the court and the creditors, not upon the sureties. [454] The bond which the sureties signed contained the broad condition that the assignee should “in all tilings comply with the provisions of the Act of Assembly in such case made and provided, and should faithfully execute the trust confided to him.” The very first step which this assignee took after giving this bond was a breach of its condition. The faithful execution of his trust required him to give a special bond for the sale of the real estate under the Act of 1876. This duty was not only neglected, but there are strong grounds for the belief that he avoided it by an imposition upon the court. Aside from this, it is perfectly clear that the sureties are liable for the proceeds of the sale of the real estate. The sale passed a good title to the purchaser. The want of the security required by the Act of 1876, does not affect the validity of the sale after the confirmation: Lockhart v. John, 7 Barr 137. The confirmed account of the assignee is conclusive of the fact that he received the purchase money. The bond required by the Act of 1836 is always taken in double the appraised value of the estate, both real and personal. It has never been doubted that the sureties on such bonds are liable for the proceeds of real estate where the assignee sells the same without an order of court. The bond required by the Act of 1876 is cumulative merely, and when taken does not relieve the original sureties from their liability under the bond required by the Act of 1836. Judgment affirmed.