Gring's Appeal

Mr. Justice Gordon

delivered the .opinion of the court, March 24th 1879.

We regard the conclusion at which the court below arrived as entirely correct. To all appearance, the two Grings were joint debtors in the Mull judgment, and that judgment appeared, from the records, to have been fully satisfied by the money made upon the Gensemer writ.

If indeed the appellant was surety, then he was entitled to have the judgment marked to his use ; but for all other purposes, it was in fact satisfied. As between himself and subsequent creditors, this was a matter of grace, and could not be so exercised as to produce results inequitable to third parties. As was said in Himes v. Keller, 3 W. & S. 401, a substitution which will work a prejudice to other creditors, not parties to the arrangement, will be made only in a clear case. So in Armstrong’s Appeal, 5. ,W. & S. 352, it was held that substitution is a matter of benevolence and equity, and that regard is always had, in such questions, to third persons, whose rights may be affected thereby. Subrogation was, therefore, refused to one who was bail for stay of execution, as against subsequent judgments, and this, as it would, seem, because such bail effected a delay in the collection, not indeed of the later judgments, but of the precedent one, which perchance might, in the meantime, have been paid or collected in relief of those that were junior.

The principle in all these cases of subrogation is one of equity merely, and must be exercised with due regard for the rights of .others: Wallace’s Estate, 9 P. F. Smith 401; McGinnis’s Appeal, 4 Harris 445. This, too, involves the rule, that this right must be exercised with due diligence. Laches in this particular will operate to forfeit such equity, as against one injured by the inertness of the holder thereof. So it was held, that where a judgment, as in the case in hand, had been satisfied, the surety could not interpose, after a sale of the debtor’s property upon a subsequent writ, and claim subrogation to the exclusion of a later judgment. Now, the money, which went to the payment of Mull’s judgment, was made by the sale on the Gensemer vend, ex., April 14th 1877, and the decree for the appropriation of this money was entered on the 26th of May following. From this date David H. Gring was entitled to have this judgment marked to his use. This, however, he neglected to have done until the following April, long after the sale of David Gring’s property, and only about a month before the sitting of the auditor who was appointed to distribute the proceeds-of that sale. In the meantime, as we have before remarked, there was nothing to show that the Grings were not joint debtors in the Mull judgment— nothing to warn other creditors that it had not been fully and finally paid off and satisfied by the proceeds of the Gensemer writ. It was in this manner that the surety allowed his equity to sleep in secrecy until he discovered that the fund produced by the assignee’s sale might be made to reach the Mull judgment, if that of Seltzer could by any means he crowded out. This was too late. A subsequent creditor could not thus be disappointed -by a secret equity, which was sprung upon him, without previous notice, just when he had a right to expect that his claim would be satisfied.

- We must regard this case as within the spirit, if not within the very letter, of Douglass’s Appeal, above-mentioned.

Decree affirmed, wth costs to be paid by the appellant.