Earley's Appeal

Mr. Justice Gobdon

delivered the opinion of the court,

On the 11th of September 1879, a judgment was obtained by Roger Wood, for the use of M. C. Earley, against the borough of Pleasant "Valley, in the sum of $476.93. On the 30th of August 1880, a mandamus was issued for the collection of this judgment, which was returned served upon M. T. Iloban, the treasurer of said borough, who, for answer thereto, alleged that there .was no money in the treasury. It seems that at the same time, Hoban, the treasurer, was the owner of two judgments against Earley, numbered 378 and 379 of May term 1877, which, as it appears, turned out tobe worthless, because of the insolvency of the defendant. Then, on the 14th of June 1881, the borough council, at a special meeting, passed an ordinance directing the purchase of said judgments from Hoban, for the sum of $150. It does not appear, from this ordinance, for what reason or purpose these judgments were purchased, but. Hoban, in his testimony, explains that he brought about the arrangement, and made the assignment, for the purpose of having them collected through the aid of the borough. It further appears, that he agreed to indemnify it for any costs and expenses that might be incurred by its officers in the conduct of this business. The meaning of this transaction is easy of comprehension ; the borough was to be used as an instrument for the collection of Hoban’s judgments ; hence, we find, that the next step which was taken, after the alleged purchase by the borough, was to obtain the rule to show cause why these judgments should not be set off against that which Earley was endeavoring to collect from the borough, and this rule, the court below, on the 16th of July, 1882, made absolute.

Granting, however, that these judgments were bought and paid for, in good faith, and for the sole purpose of subserving the interests of the borough, there yet remains this question to be disposed of ; whence did this municipality acquire the power to purchase the outstanding judgments or other obligations of its creditors ? Wé confess that even with the help of the argument of the learned counsel of the appellee, we have not been able to solve this proposition. It does seetn to us, that if a borough, city, township or county, may buy up the judgments, bonds, or notes of its creditors, it may buy those of any other person, and may thus, in effect, become a broker or banker. But the evils which must, in the nature of things, arise from the exercise of such a power by the various municipalities of this commonwealth are so obvious, and the power itself so contrary to every idea that we, as a people, have hitherto entertained concerning the constitution of these public corporations, that we may set it down as certain that it accords not with the policy of our government, and that its exercise is, therefore, not allowable.

But, as we have already observed, the facts of this case demonstrate that the borough is here being used as a mere instrument for the collection of the whole, or part of Hoban’s claim against Earley. Hoban, for this purpose, could not use the process of attachment, hence, asa substitute, a sale and assignment were resorted to, and in this manner he gets the borough’s right of set-off; that is, he is credited with that right as against Earley. But as this is clearly a loan of the credit of the municipality, it comes within the ban of the seventh section of the ninth article of the constitution of 1874, and we are, therefore, compelled to pronounce against this carefully planned and ingenious scheme for the collection of a debt.

The decree of the court below is now reversed and set aside, and it is ordered that the appellee pay the costs.