Bank of Pennsylvania ex rel. Echelman v. Winger

The opinion of-the court was, delivered by Gibson, C. J. It was long a. .moot point whether ’ the sale of land on execution would discharge a prior lien; but I believe no one eyer suspected that it would discharge .the debt. Such a consequence could be produced only by treating the debt and its' lien as inseparable. The lien is, however, but a security which may be released either before or after a sale, and, as any other security, without affecting the.existence of the debt. By a sale, the purchase money is substituted for the land; and as it is withdrawn from the control of the debtor, and put within that of the lien creditors', I admit that they are bound to look to the application of it, insomuch that a loss of any part of it,will have to be borne by him whose act occasioned it: in other words, that the debtor may,, in equity and conscience, consider whatever has perished in the hands of the sheriff, as actually paid to him who is entitled to‘ receive it. ,But can he do so. in respect of what has gone into his own pocket, or, what is the same thing, in easé of his debts ? It never has been supposed— certainly it never has been decided—that he can. Where a creditor has had two funds, we have .prevented him from frustrating the lien of another who had but one; yet that could Hot be done if the rights of the parties were1 fixed by the sale; for the'prior judgment creditor would be paid by operation of law, and before the court could interpose.. Hunt v. Breading (12 Serg. & Rawle, 37,) is cited to show that a levy to the Value of the debt, is-perse, satisfaction of the execution on which-the levy7 was made. It would be more.tp the purpose to show that it' discharges other executions which bind the goods. If such were the law, a multitude of cases would necessarily have arisen under it; and the total absence of decision on the subject, is satisfactory evidence that the principle does not exist. Surely a right to priority of payment may be waived without waiving that of which it is but ah accident. .A creditor may.-release the land without releasing the debt; and why not the purchase money, Which is in the place of the land ? It seems to me he does no more when he waives his preference in favour of those who claim under the debtor by title subsequent. It is a principle of common sense, which has been embodied as a maxim, that any one may waive a-right, r^egted for his own benefit. What injury can it do any one ? [303] Surely Reidebaugh, whose proper- debt was paid with his own money, could not object to the waiver of.preference by the bank: and -.let us see whether Winger, his co-debtor, has, any better right to do so. . . ' Winger and Reidebaugh originally stood in the relation of principal and surety; so that the refusal of the'bank to take satisfaction out of the land of the surety, was in furtherance of the equity between the debtors themselves; and to. this Reidebaugh, the surety, could not object. But, previous to this - Winger had put into his hands funds to discharge the whole debt, which Reidebaugh misapplied; and the original relation between'them, therefore, was, in fact, reversed. But of this the bank was not apprized, and it was therefore justifiable in acting in conformity to the equity of the original, relation. It waived its preference in favour of a surety to pursue the principal—the very thing-that a, court of equity would have compelled it to do. - I will not stop to inquire whether the relation of principal and surety is dissolved by a judgment at law, although the negative of the question is sustained by a solemn decision of this court, and there can be.no reason why the fixing of the parties at law should absolve the principal from the moral obligation to protect his surety. For the purposes, of the argument I will. admit that the relation is extinguished. The consequence is that both are principals, and stand in equal equity as between themselves. How then could Winger object to the waiver of its preference by the' bank, if Reidebaugh could not ?'■ A creditor may collect his debt from either of two principal debtors, dr from both, at his election. If then the sale by the sheriff wére not payment per se, the bank had nothing in its hands but the means of actual payment, which it is not bound to retain in favour of any one but a surety. This principle is well.settled both in Pennsylvnia and England. The Commonwealth v. Miller’s Administrators (8 Serg. & Rawle, 457.) Reed v. Garvin (12 Serg. & Rawle, 103.) The bank then might -well permit the proceeds of Reidebaugh’s land to go to his use without, injury to Winger, who was in no aspect entitled to be treated as-a surety, and who, had no other right to ob-' ject than that of Reidebaugh himself. Thus far I have considered the question as if it were between the defendants and the bank. The judgment is, however, owned, in part, by Echelman, the plaintiff in the judgment on which Reidebaugh’s land.was sold;and the question is whether he did not stand in, at least, as favourablé a situation' as did the bank. The case is just this: the bank had a judgment against two, which was bought in by a younger judgment creditor, to enable him to give a preference to his judgment against one of them. I cart see nothing wrong in that. An assignee .for valuable consideration, succeeds to all the rights of the assignor. Even an assignee, with notice, succeeds to the rights pf a purchaser without it, because, having paid for the advantage arising from the ignorance of the assignor, he is entitled [304] to 'the benefit of it. If then the bank might have used its judgment, so as to favour Echelman,- he acquired the same capacity; for when distinct rights concur in the same person, they are to be treated as if they existed separately in different persons. So far was it from being unconscionable in him to possess himself of the means and capacity of the; bank, that a court of .equity would have given him the benefit .of them. “ If,” says Chancellor Kent, “a creditor has a lien on two parcels of land, and another creditor has a lien, of a younger date, on one of these parcels only, and the prior creditor elects to take his whole demand out-of .the land on which the junior creditor has á lien, the latter .will be entitled- either to have the pri- or creditors thrown upon the other fund, or to have the prior lien assigned to him, and to receive all the aid it can afford. . (Cheesboraugh v. Millard, (1 Johns. Ch. 412.) I cite this case because it contains a principle, in every particular, applicable to the case before us, and also references to the authorities. Echelman, therefore, could have compelled the bank to exhaust its means of obtaining satisfaction from the lands of Winger,- or, on payment of the debt, to assign its lien. It has voluntarily done the latter; and'Echelman brings, in aid of the legal capacity of the bank, the equity of a junior judgment creditor to have that capacity exerted for his advantage. It seems to me that, independent of all ’other considerations, this is decisive in his favour. Iam therefore of opinion that the judgment be reversed. Judgment reversed.