Ebenhardt's Appeal

The opinion of the Court was delivered by Kennedy, J. Appeal by M. D. Ebenhardt and Charles P. Diekenschiedt from the decree of the Court of Common Pleas of Lehigh county, in the matter of the distribution of the moneys arising from a sheriff’s sale of the real estate of John Rice, and as it would seem also, in effect, from a like sale made of the real estate of George Spinner- The controversy in this case does not exist between judgment creditors of the same debtor, but between the judgment.creditors of John Rice on the one side, and the judgment creditors, of George Spinner on the other. Were it between the judgment or lien creditors of John Rice alone, where some of them, having a right to go only upon or against one fund, were seeking to be substituted to the rights of others, having a right to go upon two funds belonging to Rice, the debtor, the court might very well interpose, so. that both funds might, as far as requisite, be applied to the satisfaction of both descriptions of judgments, provided no injustice should be done thereby to Rice. (1 Story’s Equity, [331] pl. 634, 642.) But where the parties seeking the aid of the court are not creditors of the same common debtor, they cannot claim to have the funds marshalled, in order to have a larger dividend out of one fund for those who can claim only against that. For example, if a joint debt be due to one creditor by two persons, and a several debt be due by one of them to another creditor, and the joint creditor obtains a judgment against the joint debtors, and the several creditor obtains a subsequent judgment against his own several debtor, a court of equity will not compel the joint creditor to resort to the funds of one of the joint debtors, so as to leave the second judgment in full force against the funds of the other, several debtor, unless, indeed, it should appear that the debt, though joint in form, ought to be paid by one of the debtors only, or there should be some other supervening equity. .Story's Equity, pl. 642; Dorr v. Shaw (4 Johns. Ch. 17, 20). In the case before us, Henry Hein obtained a judgment against John Rice first, as early as the 26th of April 1842, for a debt of $1200, which became a lien on the real estate owned at the time by Rice, consisting of a lot of ground situate in Allentown, of seven acres of meadow situate in the same place, and of another lot of ground situate in Allentown, which he, on the 26th of October following, sold and conveyed to George Spinner for the consideration of $400, of which $100 was paid, and a note given by Spinner to Rice for the payment of the remaining $300 on or before the 27th May 1843; and was intended, as would appear from the tenor of the note and an endorsement thereon, to be applied towards discharging the judgment of Plein. After this, from the 5th November 1842 to the 21st June 1843, several judgments were obtained by Henry Bender, John A. Waechter and George Probst respectively against Rice, amounting in all to a sum exceeding $2800, which became liens upon the two parcels of Rice’s real estate before mentioned, which remained unsold, and were taken in execution afterwards, and sold by the sheriff on the 20th January 1844, under Henry Plein’s judgment, for the sum of $1310-; of which sum, after paying the costs of sale, a prior lien of $232.42 to the widow Heimbach, $919.93, the balance -due on Hein’s judgment, and $71.89, the amount due on Bender’s judgment, there remained a residuum in the hands of the.sheriff, of $53.96. Upon this state of facts the court below, on the 1st May 1844, decreed that John A. Waechter should be substituted to the right of Henry Hein, to proceed on his judgment against John Rice, to levy, by virtue thereof, out of the Jot of ground sold by Rice to Spinner, the sum of $68.14, being the balance still due on his judgment against Rice, after applying towards the payment thereof, the residuum in the hands of the sheriff; and that George Probst should be substituted also, to proceed in like manner to levy out of the same lot of ground the further sum of $243.51, these two sums being, as it was alleged, the amount of the principal and in [332] terest still due on the note given by Spinner to Rice for the balance of the purchase money of the lot. At the time of making this decree, there were several judgments against Spinner for various sums, amounting in all to several hundred dollars, though none of them were obtained until after Waechter and Probst had obtained their judgments respectively against Rice. Other judgments were subsequently obtained against Spinner, and on the 8th of August 1844, his real estate, including the lot of ground he purchased of Rice, having been taken in execution, was sold by the sheriff for the purpose of paying his debts, for a sum which fell short of the amount thereof. Now, according to the principles laid down above, which seem to govern in regard to the right of substitution, I confess I am unable to discover any clear ground upon which either Waechter or Probst is entitled to claim it in this case. It is true that they and Henry Hein were severally the creditors of John Rice, and that he was their common debtor; but then the funds against which the demands in question are made, are not the property of the same person or debtor. This, according to Lord Eldon, would seem to be necessary. In Ex parte Kendall, (17 Vez. 520), he says, “We have gone this length: if A. has a right to go upon two funds, and B. upon one, having both the same debtor, A. shall take payment from that fund to which he can resort exclusively, that by those means of distribution both may be paid. That course takes place where both are creditors of the same person, and have demands against funds, the property of the same person.” And in further illustration of the subject he adds, “ It has never been said that if I have a demand against A. and B., a creditor of B. shall compel me to go against A. without more; as if B. himself could insist that A. ought to pay in the first instance; as in the ordinary case of a drawer and acceptor, or principal and surety; to the intent that all the obligations arising out of these complicated relations may be satisfied ; but if I have-a demand against both, the creditors of B. have no right to compel me to seek payment from A., if not founded upon some equity, giving B. the right for his own sake to compel me to seek payment from A.” Now apply the principle here advanced by Lord Eldon, as between Hein and Rice; and what colour, or even shadow of equity, I would ask, had Rice to say to Hein, that he must or ought to go first against Spinner or the property of Spinner for any portion of his judgment against Rice ? There was no privity of contract whatever between Hein and Spinner, though there was between Spinner and Rice. Spinner was debtor to Rice, and Rice was debtor to Hein; and this seems to be the whole extent of the relationship that existed between them. But surely it has never been thought that a debtor who is the creditor of others, has the slightest colour of equity on his part to demand of his creditor that the latter shall proceed in any form or upon any terms and conditions whatsoever, first, to [333] recover his claim from the debtors of the former. There would, therefore, seem to be no ground for substitution in such case, and I am not aware of any, in which it has ever been made. Rice is not the owner of both funds 'here, so as to entitle his junior judgment creditors to claim substitution upon that ground; neither can he be said to be a surety merely for the payment of the judgment or any part thereof, against him in favour of Hein, for the payment of which Spinner is bound as principal; and therefore he or his creditors cannot set up a claim to substitution upon the principle which governs in favour of a surety. The case, indeed, does not present to my mind, under any view that can be taken of it, sufficient ground to support the claim to substitution that has been made; but on the contrary, as it appears to me, there are insuperable objections to its being allowed. The creditors of Spinner are affected by it, whose claims to the fund in contest (that is, to the lot of ground sold by Rice to Spinner, or otherwise to $311.65 of the moneys arising from the sale made thereof by the sheriff) are of a legal character, and, for aught that appears, founded upon as much equity as those of the creditors of Rice. The claims, however, of the latter can at most be only said to be equitable, and upon this ground, if there were no other, would have to be postponed to the former. The decree of substitution, made by the court below in favour of John A. Waechter and George Probst severally, as to the $311.65, in the proportions thereof therein mentioned, is reversed; and the costs accrued thereon, as also those which have accrued on the appeal, are directed and ordered to be paid by them.