Sheffy's Appeal

Mr. Justice Trunkey

delivered the opinion of the Court, March 28th 1881.

Under the Act of 1876 the court authorized sale of certain real estate. Return was made of sale to R. Clay Hamersly for $5210, which was confirmed; and on September 13th 1877, deed was executed to said Hamersly, who, on the same day, reconveyed to the assignee. Hamersly was attorney for the assignee, he neither paid nor received money on the purchase and reconveyance. In fact, William J. Craig was the purchaser of the property sold by himself' as trustee under the order of court.

Upon Hamersly’s petition, two years after the said conveyances, the court decreed as follows: — “Now, November 10th 1879, leave is granted to amend the return to the order of sale of the real estate, as prayed for in petition filed September 6th 1879, to wit: That the price bid, $5210, includes the ameunt of mortgages undivested by said sale, and interest thereon to the date of confirmation, amounting to $4392, that said real estate was sold for $818.” Hamersly testified: “It was publicly stated before the time of sale and when the conditions were made known, that there were three mortgages on the Lehigh county property, which would not be divested, and that the amount thereof would be deducted from the bid. The hid was five thousand two hundred and ten dollars, which included the three mortgages. They had been paid by the accountant.” It thus appears by the testimony of the purchaser’s attorney, with which tho amendment accords, that the purchaser expressly treated the mortgages as part of his bid. We think the court had power to allow the amendment, even after the long lapse of time. That it was just can hardly he denied, for there is no pretence that any creditor understood that the property sold for $5210 in addition to the amount of the mortgages.

The actual mistake was in the assignee making return that the property sold for tho whole amount of the bid, and charging himself therewith in his account and claiming credit for the mortgage debts. By law, the sale did not divest the lien of tho mortgages. In fact, all understood these liens were to remain and be deducted from the bid. Before the auditor, creditors whose liens were divested, claimed that the sum of $5210 should be distributed instead of $818, and the amendment became necessary to protect the assignee. Now he claims subrogation to the rights of the mortgagees for the purpose of reaching the personal estate fund, and this i-s as unconscionable as was the attempt to make him pay the amount of the mortgages to creditors, after he had paid the same to the mortgagees.

Craig was assignee, purchaser and judgment-creditor. The land was sold subject to the mortgages, and the proceeds belong to creditors whose liens were divested. In pursuance of his obligation, the purchaser paid the mortgagees; but if anything were due them they would have the right to receive a dividend out of tho personal estate fund on the whole amount, if necessary, for their entire payment. Had they not been paid, and come in on that fund, to the extent of appropriations to them out of said fund other creditors wonld have equitable right of subrogation, so as to recover back said appropriations out of the land. But the purchaser has no equity to support subrogation. It would be in the teeth of the express understanding at the sale.

The mortgagees had the right to look to the land'alone for payment, whether the debtor made assignment or not. Had Frey paid the mortgages, no judgment creditor could use them for his own benefit. The purchaser of Frey’s equity of redemption, or his legal title, paid tho mortgages, and the posterior judgment-creditors have no right of substitution. Counsel have failed to cite a precedent showing that where an anterior lien has been paid by the debtor, or one who stands in the debtor’s shoes, a posterior lien-creditor shall be subrogated to the rights of the anterior. Because the assignee became purchaser and holds a judgment, he cannot manipulate the estate to his advantage as a creditor beyond what he would have did he appear only as a lien-creditor.

Appellant alleges that the land in Northampton county was sold without an order of court, and that the purchaser paid the mortgage thereon, $1293.50. There may be good reason for allowing Craig a dividend on the amount of that mortgage, but we discover no trace of it in the paper-books. It does not appear that his judgment was filed in that county.

The fifth assignment of error is sustained, and the distribution must be corrected accordingly.

Decree reversed and record remitted for further proceeding. Costs of this appeal to be paid by the appellee, William J. Craig.