Hemperley v. Tyson

Opinion by Mr. Justice McCollum, Anna Tyson borrowed $1,400 of the Serial Building and Loan Association of Mahanoy City, Pa., on the third of January, 1883, and to secure the payment of the same she gave to the lender a mortgage on her real estate and an assignment of seven shares of its stock. Hemperley recovered a judgment against her on the twenty-first of November, 1887, and nine days thereafter issued process upon it, on which he attached the assigned stock and summoned the association as garnishee. His judgment was a lien on the real estate covered by the mortgage, and by virtue of other process issued thereon he sold the former, subject to the latter. He acquired nothing by his sale, as the proceeds of it were insufficient to satisfy the prior judgment liens. In 1892 the stock matured, and the association, in compliance with the direction contained in the assignment of it, appropriated the amount realized from it in satisfaction of the mortgage debt. The association having entered the plea of nulla bona in the attachment proceeding, a trial was had on the issue so made, [394] which by direction of the court resulted in a verdict for the defendant. From the judgment entered on the verdict this appeal was taken. The appellant’s contention is that by his attachment he acquired a lien on the stock, which ipso facto cast on the association the duty of exhausting the security furnished by the mortgage, before resorting to the security afforded by the assignment, and further, that if the association was not bound to exhaust the mortgage security first, it was estopped by what occurred at his sale of the real estate, from appropriating so much of the stock fund as was necessary to satisfy his claim. The first obstacle that we notice in the path of this contention appears in the assignment. It is the election by the assignor to appropriate the amount realized from the stock, at its maturity, in payment of the association’s loan to her. This election shows that it was her purpose to make the stock fund primarily liable for the loan, and the acceptance by the association of the assignment subject to the election, involved an agreement on its part to so regard it. The subsequent action of the association was therefore in strict accordance with the mutual purpose and understanding of the parties to the transaction, and with the nineteenth article of the by-laws of the association. The rights of the association under and by virtue of this election were not taken away or qualified by the attachment, but the latter was subject to them: In Early & Lane’s App., 89 Pa. 411, it was expressly decided that the rights of the attaching creditor were subject to the prior election of the shareholder in regard to the appropriation of the stock payments, and this appears to be conclusive against the appellant’s contention respecting the effect of the lien acquired by the attachment. In the case before us the borrower, after her election, could not compel the lender to sell her real estate before resorting to the stock fund for payment of the loan, nor could her creditor do so. Whether the latter had an equity arising from his lien which would have entitled him to subrogation to the rights of the mortgagee if he had taken timely and proper measures to enforce it, is a question we need not consider, because there is nothing on the record which raises it. If he had such an equit}’’, and it was his intention to enforce it, his plain duty was to notify the association of both, and to caution it “ to do no act by which his security might be diminished: ” Taylor’s Exrs. [395] v. Maris, 5 Rawle, 51, and McIlvain v. Mutual Assurance Co., 93 Pa. 30. Neither the lien of his judgment nor the lien of his attachment was such notice, or dispensed with it. As the appellant gave no notice or hint to the association of his purpose to compel it to resort in the first instance to the real estate for payment of its claim, or in the event of its refusal to do so, to demand subrogation to its rights as mortgagee, he cannot justly complain of the payment of the loan from the amount realized on the stock, or of the cancellation of the mortgage. He had a lien on the.real estate and a lien on the stock, but the lien upon the former was subject to the mortgage, and the lien upon the latter was subject to the assignment held by the association. If he had maintained his liens until the stock matured, the cancellation of the mortgage would have enabled him to obtain satisfaction of his claim out of the real estate, provided the same was of sufficient value to pay it and the prior judgment liens. But he voluntarily destroyed his lien on the land and surrendered the equities arising from it. Why he did SO' does not distinctly appear nor is it necessary to inquire. Was the association estopped from exercising its right of appropriation under the assignment by anything that Lyon said at the sale of the real estate on the appellant’s judgment? In answering this question we must not overlook the fact that the time for the payment of the loan was at the maturity of the stock, and that when the real estate was sold the mortgage was a valid lien upon it for the whole debt. The statement which Lyon is alleged to have made at the sale was therefore in harmony with the facts and the legal rights of the association. It was in no sense a misrepresentation, or inconsistent with the claim of the association under the election of its assignor. It was made three months after the attachment proceedings were instituted, and there was nothing in it which rendered necessary or furnished good reason for a sale of the real estate upon the appellant’s judgment at that time. According to his own showing he knew the value of the stock and how it was held, and that he could realize nothing on his judgment by the sale. Our conclusion is that the association was not estopped by the statement we have considered from exercising its contract rights. The case was correctly tried in the court below, and the charge of the learned judge amply justified the judgment entered there. Judgment affirmed.