Brown v. McCullough

Opinion by

Kephabt, J.,

The opinion of the learned president judge of the court below, which will be found in the report of this case, fully sustains appellee’s- right to subrogation. The appellee agreed at the argument that the decree should be modified so as to subordinate his claim to the lien of the Manayunk National Bank. It is within appellee’s right to have the decree so modified. “The plaintiff may at the hearing obviate an objection for want of a particular party by waiving the relief he is entitled to against that party:” Daniels’ Chancery Practice, p. 293; Story’s Eq. Pleading, sec. 228; Budd v. Olver, 148 Pa. 194. “Subrogation is a matter of grace, not of right, and is a creature of pure equity. It will never be decreed where it works injustice:” Budd v. Olver, supra. No effort was made by the appellee to secure contribution and subrogation on account of those liens which had absorbed a portion of the fund that he was entitled to receive until after the bank’s mortgage was executed and delivered. Those who may claim these rights should move promptly. Delay, if permitted, would seriously interfere with the rights of intervening parties. The Manayunk Bank was such intervening party. The appellee would only be injured by this modification to the amount that his claim, in event of a sale, might be reduced by reason of its lien being subordinated to that of the bank’s. His laches, in his efforts to secure subrogation, would not inure to the benefit of those whose properties have been relieved of liens at the expense of the appellee. Appellee may still have these liens kept alive for his use and benefit against these properties or interests. A part of the money from the sheriff’s sale of the cotenant's interest, against which appellee had his lien, was used to pay in full claims which were liens on all interests, thus diminishing the amount of money appellee was entitled to receive. Appellee’s right to contribution would not be destroyed or its enforcement through the equitable remedy of subrogation lost through his laches. “It is a settled principle that the holder of an equity must be vigilant in asserting it, if he would have the aid of a chancellor. Laches in such a holder will always postpone him to one who may have been injured by his inertness:” Douglass’s Appeal, 48 Pa. 223.

The complaint that the defendants, cotenants, had a set-off or claim against James A. McCullough, which would defeat any right of subrogation in him, or his judgment creditors, for the reason that during the co-tenancy of James A. McCullough and defendants, and before he sold his interest to the execution debtor, he was indebted to them, was answered by the learned court below as follows: “It does not appear when the money became due from James A. McCullough to his sisters, (defendants) or that it was prior to the judgment obtained by Kenworthy against McCullough and sold and transferred to the plaintiff or prior to the sale by McCullough to Dotlow. It is an answer also to his defense that it was Dotlow’s land, not James A. McCullough’s, that paid the portion of the liens that were due by Miss McCullough and Mrs. Taylor. There is no right of set-off against Dotlow, and consequently no right to a set-off against Brown’s right of subrogation.” Dotlow purchased the interest from James A. McCullough and he immediately gave a note upon which judgment was entered, execution issued and the land sold and the proceeds from its sale was used by the sheriff to pay the whole of the taxes and municipal liens to the loss of the appellee, Brown. Had there been any surplus from the sale after the payment of these liens, Dotlow, not McCullough, would have received it. When McCullough sold his interest to Dotlow, the appellee was a creditor of McCullough and a lien creditor of the land conveyed to Dotlow. Any claim which the cotenants had against McCullough while their cotenancy existed, and after its sale, was a personal claim. It was not in judgment, or in suit, and not a lien upon any interest McCullough might convey. McCullough is not a party to this proceeding. When he sold his interest it was subject to the tax and municipal liens against the entire tract, and the judgments against him. While the equity of subrogation may be said to be worked out through the debtor, it is not subject to the debtor’s control by assignment or release, but is personal to the judgment creditor whose rights are affected. Where the debtor is a co-tenant and conveys his interest to another and after-wards this interest is sold on execution and the proceeds pay off judgments against all interests, the right to subrogation would not be defeated or interfered with because the original cotenant, who thus conveyed his land, was indebted to the other cotenants. The right of subrogation would follow the interest upon which the judgment was a lien, unaffected by secret equities in favor of creditor cotenants, who have not established as a preference their claims upon the record. The rule may be carried further: had the cotenant not made his conveyance and owned his interest at the time the sheriff’s sale took place, this equitable right of subrogation, as to the liens affected, would not be defeated or impaired by secret counterclaims of his cotenants: Huston’s App., 69 Pa. 485.

Where the joint judgment or lien is de terris, concerning which the right to be subrogated exists, this right would not include the right to have a personal judgment or decree against those who are bound to contribute through the remedy of subrogation. Taxes and municipal claims are liens against specific land. Where one of several cotenants pays them, his equity of contribution would be limited to the land involved. He would be entitled to a decree directing the sum due from his cotenants to be paid from these lands, and would be entitled to be subrogated to just such rights which the lien creditors possessed and no more. The first paragraph of the decree is clearly an order directing the defendants to personally pay the sum therein mentioned, due as contribution. This part of the decree was beyond the power of the court to make.

The decree will be modified by limiting the collection of the amounts therein named to the land described in the decree. This is practically the effect of the second paragraph of the decree. The decree to be further modified by postponing the tax and municipal liens of the city of Philadelphia, for rise of Mack Paving Company, now for use of the appellee, and the city of Philadelphia, now for use of the appellee, in the.; amounts mentioned in said decree, to the mortgage of the Mánayunk National Bank, and as thus modified the decree is affirmed, the cost of this appeal to be paid by the appellee.