Appeals of the Forest Oil Co. , 118 Pa. 138 ( 1888 )

Opinion,

Mr. Justice Paxson :

Subrogation is a right arising in pure equity and benevolence. It is an equitable result, and depends, like other controversies in. equity, on facts to develop its necessity in order that justice may be done. To entitle a party to subrogation his equity must be strong and his case clear. It is an equity called into existence for the purpose of enabling a party secondarily liable, but who has paid the debt, to reap the benefit of any securities which the creditor may hold against the principal debtor, and by the use of which the party paying may thus be made whole; Bispham’s Equity, 18. But until the creditor has been fully paid substitution or subrogation cannot take place upon any terms whatever: Kyner v. Kyner, 6 W. 227.

In this case it is not claimed that Miller, the execution creditor, has been paid his debt. It is alleged, however, that there was a tender, which is the equivalent of payment. We. do not so regard it. The tender was not unconditional. It was accompanied with a request or demand that Miller should assign the judgment. The petitioner was not in a position to make such a demand. Miller was under no obligation to assign his security. Any demand for a receipt, discharge or assignment of the debt, renders the tender invalid: Sandford v. Balkley, 30 Conn. 344; Perkins v. Beck, 4 Cranch C. C. 68; Richardson v. Boston Chemical Laboratory, 9 Met. 42.

The petitioners were not vigilant in asserting their supposed rights. The real estate was advertised to be sold by the sheriff on August 15th. He adjourned the sale until August 17th. The alleged tender to Miller was made about two hours before the time fixed for the sale, and upon its being refused the parties applied to the court to postpone the sale until they could have time to prepare a petition for subrogation. The court gave the time asked for, and fixed August 19th, at 12 o’clock, noon, for a hearing, and directed the sheriff to adjourn the sale to the same day at one P. M.

When a court is asked to interfere with a judicial sale two hours before it is to take place, the reason why such application was not made at an earlier day should clearly appear. The only excuse for the laches of the petitioners is the averment in the petition that the sheriff’s sale was advertised “without notice to your petitioners, as terre-tenants or'otherwise.” This is an evasive averment. It is nowhere alleged that they did not know of the sale.

The application for subrogation was resisted by all the lien creditors and the defendant in the execution. It is easy to understand why the defendant opposed it. He was the owner of the farm upon which the oil lease, owned by the petitioners, was given. His farm was heavily incumbered. Miller’s judgment was the first lien and antedated the lease. The other judgments were subsequent to the lease. A sale upon the Miller judgment would discharge the lease as well as all the other liens, and thus make a clear title. It was his interest to have it so sold.

What was the equity of the petitioners that would enable them to override all the other equities in the case? We must judge of this by what appears in the petition. We have nowhere else to look for it.

The petitioners aver that they were the owners of an oil lease upon said premises, dated February 4,1884, and having twenty years to run: “that by divers good and lawful conveyances your petitioners are at the- present time joint owners of said leasehold estate for oil and gas purposes, . . . have expended large sums of money in developing the same,” etc. No copy of the lease was attached to the petition, nor was there any summary of its contents. After the subrogation had been refused, and a petition had been filed to set aside the sheriff’s sale, a copy of the lease was filed as an amendment to the last-named petition, and from it we learn that the lease was dated February 4,1884; that the lessees covenanted to “commence operation for said mining purposes within eight months from the execution of this lease on some one of the farms leased by second party in this township. And when oil in paying quantities is found, then second party agrees to commence operations within sixty days on the next adjoining farm leased, and so on till all lands in this township are tested to success or abandonment.”

This branch of the case must be decided upon the facts as they existed at the time the subrogation was refused. The court was asked to interfere at the last moment with a sheriff’s sale, and to make an order of subrogation against the consent of all other parties in interest, with no facts before it save the unsupported and vague allegations in the petition. The court was not even furnished with a copy of the lease that it might judge of the interest or rights of the petitioners under it. There was not even an averment that a consideration had been paid for the lease, or that a dollar had been expended upon this particular property. When, therefore, the court heard the application for subrogation on August 19th, it had nothing before it which would have justified such an order, or’ if it had, it does not appear in this record. We are of opinion that the court below did not err in denying subrogation and in refusing to further interfere with the sheriff’s sale.

This brings us to the second branch of the case. It appears that on August 19th, after the refusal of the court to interfere, the property was sold by the sheriff to James Kuntz for $10,050. Notice was given at said sale by the attorneys for the petitioners: “that the sheriff has been offered and tendered the full amount of the debt, interest, and costs to satisfy the writ or writs, upon which this sale is being made, and they (the bidders) therefore purchase the same at their peril, as the court will be asked to set said sale aside.” The purchaser was present when this notice was given. He also knew, or is supposed to know, that within the hour the court below had refused subrogation, and declined to interfere with the sale, upon the very questions embraced in the notice. An application was made by the petitioner to set the sale aside, substantially upon the same grounds as are contained in the original petition, which was refused by the' court; the purchase-money was paid, the sale confirmed, and the sheriff’s deed acknowledged. We see no error in this. The court having properly dismissed the petition for subrogation, the sale naturally followed, and the rights of the purchaser attached. It is true he had notice. But notice of what? Of matters which had been passed upon by the court adversely to the petitioners. It cannot be said that he was not a good-faith purchaser, or that he is affected by the notice. We see nothing to justify us in interfering with the discretion of the court below in this matter.

The decree is affirmed, and the appeal is dismissed at the costs of the appellants.

Mr. Justice Stebbett dissents.