Citizens National Bank v. Wisecarver

The sole question for our consideration is whether the court below abused its discretion in refusing to open the judgment. As the facts are of interest only to the parties, it would serve no useful purpose to relate them in detail.

Appellant, her brother and his wife were indebted to the Citizens Bank in the amount of $187,338.21. Under agreement, the parties jointly gave the bank a bond and mortgage and deed of trust, and assigned certain stocks as collateral. It was stipulated that, in the case of a sale, appellant's property was to be sold after that of her brother and his wife. In 1927, they still owed approximately $125,000. At that time, another agreement was made: the brother and his wife assigned to appellant all their real and personal property except a house; the bank satisfied the previous mortgage; and appellant agreed to pay the entire indebtedness, giving therefor two judgment notes, which were entered. The Citizens Bank was later closed and its assets sold to the First National Bank, the use-plaintiff. On default, execution was issued on the judgments. Appellant's position before the court below was that, when the agreement of 1927 was made, there was a contemporaneous parol agreement, by which it was understood her property was to be applied to the debt only after that of her brother and his wife was exhausted, — in other words, that her standing was to be the same as under the first agreement; that she was consequently a mere guarantor, and the use-plaintiff could collect only the sum for which the indebtedness was sold, namely, $50,000.

The court below found that the bank gave up all its original claims and received the notes in lieu thereof, and that the entire indebtedness was merged therein; and further that there was no competent evidence of the parol agreement, since the appellant's testimony on the subject was entirely hearsay, and her sole witness did not refer to the agreement of 1927. Even if the contemporaneous agreement could have been proven by direct evidence, it could not affect the contract without an averment in the pleadings that it had been omitted through fraud, accident or mistake: Gianni v. Russell, 281 Pa. 320; Bank of Hooversville v. Sagerson, 283 Pa. 406; U.S. Nat. Bank v. Evans, 296 Pa. 541. Prima facie, appellant was primarily liable on the bond, which became due on her default. Even if she could have established the contract of guaranty, that fact would not reduce her indebtedness to the use-plaintiff. Appellant's counsel contends that where a debt is sold for less than its face value, the assignee cannot collect the full amount thereof. This is indeed a novel proposition. Rights acquired by assignment are not to be confused with those of subrogation, as illustrated in the case of Miller v. Myers, 300 Pa. 192. There a trustee attempted to have claims purchased by him awarded at their face value from trust funds in his hands, thereby profiting at the expense of the cestuis que trust. We held that he could only be subrogated to the amount paid by him.

Assignments of error overruled and judgment affirmed.