Miller v. Jacobs

The opinion of the Court was delivered by Gibson, C. J. When Mahon & Duncan executed the mortgage to Clark, on which the plaintiff claims, Stocker stood as a mortgage creditor of the same premises, his mortgage being reinforced by a bond and warrant to confess judgment, not then entered up. Subsequently to Clark’s mortgage and bonds, he entered it up in Philadelphia county and acquired a lien there on the real estate of Duncan, one of the mortgagors; after which other creditors of Mahon & Duncan, as well as Duncan’s separate creditors, recovered judgments which also bound it. It will be perceived, then, that immediately previous to the vacation of Stocker’s judgment, matters stood thus. Clark had a subsequent lien on the mortgage premises in Perry county, and various other creditors had subsequent liens on the estate in Philadelphia, while Stocker had the earliest lien on each. Now if a chancellor would not have compelled him to apply his judgment in Philadelphia, it will follow that Clark had not an interest which could be prejudiced by withdrawing it; and he would have been compellable to apply it but on the foot of an equity in Clark against the other subsequent incumbrancers. A creditor with a right of recourse to two funds, must carve for himself so as to stand as little as possible in the way of those whose recourse is to-but one of them; because he might else cover the residue for the debtor to the prejudice of others having an undoubted right to it. But he is not bound to make room for the admission of one by incommoding another who has equal claims. In that predicament it is at his option to stand still: Between subsequent lien creditors on distinct parts of the general fund, whose equities are balanced, the legal course of execution, therefore, is not to be disturbed; and a chancellor suffers the general creditor to take satisfaction in the way most conducive to his convenience, or the gratification of his caprice. The rule which gives a separate creditor the exclusive enjoyment of his own peculiar fund, is founded in benevolence, and regulated in [488] its application by the nicest principles of justice; for which reason it will not be enforced to cast the debt on one who is but a surety, or otherwise not bound to bear it. In Dorr v. Shaw, 4 Johns. Ch. Rep. 17, Chancellor Kent refused to direct a prior creditor of A and B to raise his debt from the land of Aj in favour of a subsequent judgment creditor of B, because it did not appear whether A or B ought .ultimately to pay it, or that B had an equity to have it charged on A exclusively. What equity, then, can Clark claim which the subsequent creditors could not ? They were alike subsequent creditors on separate parts of a general fund, bound by a common lien. It is said his lien bound the estate in Perry county before their liens bound the estate in Philadelphia; and that the maxim prior in tempore, potior injure, gives him a preference. But what has his lien in Perry county to do with an estate not bound by it ? It is urged that the subsequent lien creditors stand in relation to it exactly as the mortgagors themselves stood; and that Clark, or the plaintiff holding his title, could have had the same recourse to it paramount their liens, that he could have had to it unincumbered in the hands of Duncan the owner, from whom the liens are derived. But what recourse could he have had to it in his hands, indirectly, by the means of another? . Had Stocker’s bond been entered up when Clark took his mortgage, an equity might have grown out of that circumstance, referable, in point of date, to the period of the transaction, and not subject to be disturbed by the introduction of fresh parties. But it was not entered up, nor did it appear that Stocker intended to enter it; and what recourse could Clark, have had to him, before a chancellor, to compel him to enter it? The estate in Philadelphia would not, but for his own supineness, have been more accessible to any one than to himself. He might have stipulated for what would have enabled him to pursue it with his own means without invoking the means of another; and if his bond were not so expeditious for want of a warrant to confess judgment on it, that surely would not entitle him to the advantages of one who had>made the warrant a condition of his loan. If Clark had not consented to advance his money on less security, he ought to have done the same. But Mahon and Duncan may have refused to treat on terms so favourable to him ; and from his having omitted to insist on conditions more favourable, it is fair to infer that they did refuse. He ought in that case to have kept his money in his pocket. How then can he secure to himself'better terms than they consented to give, by using, to the disadvantage of the judgment creditors who stand in their place, the bond and warrant of another ? Had Stocker withdrawn his judgment, having for a time kept him at bay with it, he might have had a more specious ground of complaint; but instead of that, Stocker had left the Philadelphia estate uncovered for two years from the date of his own mortgage, and for a year and four months from the date of Clark’s. But had he entered his judgment the next day, still Clark might, by due diligence, have secured the [489] next earliest lien, which would have put him in an attitude as favourable as if the two estates had been originally included in each mortgage, and, in any event, have given him the residue, after satisfaction had by Stocker from either fund, or from both. Neglecting to press his own securities, how could he require Stocker to press his bond and warrant in lieu of them ? The annals of equitable administration afford no instance of such a requisition. The nature of the principle supposed to lie at the root of Clark’s title to the fund is just this. A creditor who has laid his security on more parcels than are necessary to its satisfaction, may not manage the application of it to keep off subsequent creditors on particular parcels, so as to secure the excess to the debtor, by interposing his lien against them, first on this side, and then on that; and when he attempts it, a chancellor does what? simply uncovers a portion of the property to their demands by shoving the broader security measurably aside in order to let them in, but still reserving enough for its satisfaction. This is the foundation of the relief, and the extent of it. Now had Clark called on Stocker to enter up his bond, he would have called on him to interpose the very obstacle which it is the business of a chancellor to remove ; and he certainly could not have procured an equity against the other incumbrancers by procuring an act to his detriment as a pretext for it. In withdrawing his judgment for the benefit of the other creditors, Stocker did nothing which a chancellor would forbid. A creditor taking a security on one of two funds already incumbered, may fairly speculate on the chances of being paid by a proper application of the liens; and he may, therefore, be said to take his security on the credit of both. Here, however, but a single fund was incumbered ; and by taking a security on it alone, Clark showed that he was content to repose on it as sufficient for his purpose, at least in connexion with his bonds. As to these he stood in relation to the other property but on a footing with the other creditors. The real estate in Philadelphia was as open to him on them as it was to Stocker or any one else; and he cannot complain that they have distanced him. Having parted with his money on the security of a mortgage and bonds without warrant: he could not complain of having been thrown out, had he even started ; nor could he have complained of being refused the use of means to get the lead for which he had not stipulated. He stipulated but for the residue of the mortgage premises; he has had it as far as it could avail him, and he can ask no more. Judgment reversed, and a venire facias de novo awarded.