Fessler v. Hickernell & Bomberger

1. A partner who has paid a firm debt is not entitled to subrogation against Ms eo-partner until an account has been settled between them. 2. The equitable doctrine of subrogation only applies when both funds are i in the hands of a common debtor of both creditors. 8. Section 9 of the Act of 22d April 1856 does not apply to any case in which the amount which the substituted creditor has a right to collect from the adverse party under the judgment has not been ascertained. 4. II. and B. were partners and insolvent. F. held a judgment against the firm and also a joint bond of the firm of like amount, and levied an execution under his judgment upon the personal and real estate of H.; whereupon L., a junior mortgage creditor of H., tendered F. the amount of his debt and costs, and demanded to have the judgment assigned to himself: Held (reversing the court below), that section 9 of the Act of 22d April 1856 did not apply to such a case, and that L. had no equitable right to such an assignment. •

Appeals from a decree of the Court of Common Pleas of Lebanon county: Of May Term 1876, Nos. 92 and 93. These were appeals from a decree subrogating Jacob Lauser, a mortgage creditor of Hickernell, as plaintiff in the case of Eessler v. Hickernell and Bomberger, upon the payment to Eessler of the amount of Ms judgment and costs in that-case. The judgment in that case was entered by Eessler on December 21st 1874, upon a bond with warrant of attorney against Hickernell and Bomberger; in November 1875, execution was issued thereon and a levy was made upon certain real estate belonging to Hickernell. Plickernell and La-user thereupon presented a petition to the court below, setting forth these facts and also that Lauser held two mortgages upon the land of Hickernell, the lien of which was immediately subsequent to Eessler’s judgment; the petition prayed for a rule on Eessler to show cause why Eessler should not receive from Lauser the amount due on his judgment and costs, stay the execution thereon, mark the judgment to the use of Lauser and proceed against the lands of Bomberger for part of his debt. The petition further showed that the lien of Lauser’s mortgages would be divested by the sale under the execution, and Lauser, on account of the financial depression, would be obliged to pay more for the land than it was worth at that time in order to protect him-, self, and that Hickernell’s property would be sacrificed. Eessler filed an answer to it, setting forth that he held another bond of Hickernell and Bomberger for the same amount, which was still unpaid; that he was willing to look to Bomberger alone for the payment of this latter bond if Hiekernell would pay the amount due upon the judgment, and that he would be willing to mark the judgment to Lauser’s use upon payment thereof, but only upon condition that before doing so he should be allowed to release Bomberger, who was his son-in-law, from any liability thereupon ; the answer denied the power of the court to make the order prayed for by Lauser and Hiekernell. Bomberger also filed an answer in which he set forth that he and Hiekernell had formerly been partners, that the accounts of the firm were still unsettled and that he believed that Hiekernell would be largely indebted to him upon a settlement; that Hiekernell was insolvent and if the judgment in question was marked to the use of Lauser and not collected from the sale of Hickernell’s real estate, he, Bomberger, would be obliged to pay the same, as well as the amount of the other bond to Fessler. Hiekernell filed replications to the answers of Fessler and Bomberger, denying that a settlement of his partnership affairs with Bomberger would show a balance due Bomberger, and that Lauser was endeavoring to put the burden of the judgment upon Bomberger alone, but, on the contrary, averring that Fessler and Bomberger were colluding to make him pay more than his share of the judgment. The court below (Henderson, A. L. J.) held that the case came within the Act of 22d April 1856, sect. 9, and ordered that “ Fessler upon the payment of the debt, interest and costs of said judgment by Lauser, do assign the same to Lauser without recourse, to the end that he may receive and collect from the other defendant, Bomberger, the amount to which he Avould be entitled by subrogation or by way of contribution. And, if the said plaintiff should refuse to accept the same, the execution and all proceedings thereon should be stayed.” Section 9 of the Act of the 22d April 1856, is as follows:— “ Whensoever the real estate of several persons shall be subject to the lien of any judgment to which they should by law or equity contribute, or to which one should have subrogation against another or others, it shall be lawful for any one having right to have contribution or subrogation, in case of payment, upon suggestion by affidavit and proof of the facts necessary to establish such right, to obtain a rule on the plaintiff, to show cause why he should not levy upon and make sale of the real estate liable to execution, for the payment of said judgment in .the proportion or in the succession in which the properties of thb'.several owners shall, in law or equity, be liable to contribute towards- the discharge of the common encumbrance, othenoise upon the payment of such judgment to assign the same for such uses as the court may direct; and the court shall have power to direct to what uses the said judgment shall be assigned, and when assigned, direct all executions thereupon, so as to subserve the rights and equities of all parties whose real estate shall be liable thereto; and if the plaintiff shall refuse to accept his debt and make such assignment of his judgment, the executions thereupon in the hands of the plaintiff, shall be so controlled and directed by the court as to subserve said rights and equities.” Fessler and Bomberger appealed from this decree, and assigned "for error, (U that the court had not dismissed the petition of Hickernell and Lauser, and (2) the above decree.