Indiana County Bank's Appeal , 1880 Pa. LEXIS 359 ( 1880 )

Mr. Justice Sterrett

delivered the opinion of the court,

The separate real estate of J. B. Morris, John Carey and John Couch was sold by the sheriff in the order named and all on the same day, except a portion of Couch’s property which was sold several weeks afterwards for $2605. The proceeds of these several sales, amounting in the aggregate to $9866, were distributed by the auditor among the respective lien-creditors in their order as they stood at the time of the sales. Out of the fund realized from the sale of Morris’s real estate, he appropriated $574.07 to the payment of judgment in favor of McGregor, to use of Gillespie, against Couch and Morris, entered October 18th 1875, on the joint , and several note of the defendants. There was nothing upon the face of the record to indicate that the relation of the defendants to each other was not that of joint debtors; and assuming, as creditors were bound to do, that they were both principals in the debt secured by the judgment, the correctness of the distribution made by the auditor cannot be questioned. It was, however, shown aliunde, on the hearing, that Morris was merely surety for Couch, and on this ground it was claimed that the amount thus taken out of the Morris fund to pay Couch’s proper debt should, on the principle of equitable subrogation, be given to Morris’s creditors, thereby diminishing to that extent the fund to which appellant, as a lien-creditor of Couch, looked for payment. The auditor refused to recognise the principle of substitution thus contended for by the creditors of Morris, but the court, adopting the opposite view, reversed the auditor in this particular, awarded the $574.07 to Morris’s creditors and deducted the same from the distributive share of the appellant. This action of the court is substantially the only matter assigned for error.

As was held in Douglass’s Appeal, 12 Wright 223, the rights of those claiming to participate in the proceeds of a sheriff’s sale are to be determined by their status, as shown by the record at the time of the sale. All liens then on the land, except first mortgages and other fixed liens, are divested by the sale and the lien-holders are turned over to the proceeds. No lien upon the fund, and consequently no right to participate in its distribution can ordinarily be acquired aftex-wards. It was on this principle that the learned auditor proceeded in distxúbuting the funds, and we are satisfied he was right. The only safe guide that lien-creditors can have in bidding at sheriff’s sale of real estate in which they are interested, is the record as it stands at the time of the sale.

An examination of the records after the first sheriff’s sales would show that the proceeds of those sales applied to the judgments in their order would neaxdy satisfy all the liens that were ahead of appellant’s second judgment, so that when the sale of Couch’s property took place in December following, appellant would have a right to assume that the proceeds of that sale, with the exception of a small amount, would be applicable to its second judgment which was nearly reached by the first sales; and thus relying upon the state of the record at that time, might well be governed by it in bidding at the last sale. As we have already seen, thex’e was nothing on the face of the record to indicate that any right of subrogation existed, and in fact, none did exist. Morris, as surety of Couch, might have paid the debt before the sales, and upon satisfying the court as to the proper facts, might íxave been subrogated to the rights of the plaintiff in that judgment, but he did not do so then or at any other time; and the last sale took place without anything to warn appellant or other creditors that tlxe proceeds of the sale would not be applicable to the judgments in their order as they then stood on the judgment-docket. Under such circumstances, it would be inequitable to permit Morris or any of his creditors claiming through him to displace a creditor who, as the record stood at the time of the last sale, was entitled to the proceeds. We -think the principle upon which the auditor distributed the funds was correct, and his report should have been confirmed.

Decree reversed, report of the auditor confirmed, and it is ordered and decreed that the funds be paid out in accox’dance therewith — the costs of this appeal to be paid by the appellee.