Work v. Prall

Opinion by Henderson, J.,

The defendants gave their judgment promissory note to the plaintiff on March 21,1902. A judgment was entered thereon by virtue of the warrant of attorney which the note contained, *107 on March 22, 1902, and on the twenty-fourth of the same month the judgment was assigned to the use plaintiffs. The note was payable in three months froái date and no notice of the assignment of the judgment was given to the defendants until about five months after the same became due. The defendants’ evidence, taken on the rule to open the judgment, was uncontradicted and would warrant a jury in finding that payments had been made by Lydá M. Prall sufficient in amount to discharge the debt before the defendants had notice that the judgment had been assigned. ' These payments ivere made to one,' Richardson, a partner of the plaintiff to whom a note for a similar amount had been given by the defendants for a like consideration.

As between the plaintiff and the defendants the latter showed a sufficient cause to entitle them to have the judgment opened. Unless therefore, the equitable plaintiffs have a better position than the payee of the note, the-relief asked for should be granted.

By the confession of judgment the plaintiffs’ cause of action became merged in the judgment. The original claim having served its purpose as evidence upon which a judgment was obtained, expended its force and the warrant of attorney authorizing the judgment was exhausted: Black on Judgments, sec. 674; Ries v. Rowland, 11 Fed. Repr. 657; Schuler v. Israel, 27 Fed. Repr. 851. The note does not suiwive as a cause of action. In the very nature of the case the inferior obligation evidenced by the note has been changed into a matter of record and-the remedy of the payee is on the judgment. The judgment obtained thereon does not possess the qualities of a negotiable note.

The assignee of a judgment takes the same subject to existing equities between the parties thereto and has no better position than would the judgment creditor have occupied if he had not executed an assignment: Filbert v. Hawk, 8 Watts, 443 ; Noble v. Thompson Oil Co., 79 Pa. 354 ; Black on Judgments, sec. 953. In order to avoid the effect of the payment by the defendant to the plaintiff it was the duty of the assignee to give the former notice of the assignment. “ It is impossible to conceive upon what principle of justice a debtor should be prejudiced by an assignment of which he knows nothing. If *108 the party whose interest and duty it is to give him notice so that he can regulate his conduct according to the new relation, fails to do so he should certainly not be compelled to suffer:” Gaullagher v. Caldwell, 22 Pa. 300 ; Noble v. Thompson Oil Co., 79 Pa. 354 ; Lee v. Delehanty, 25 Hun, 197 ; May v. Newingham, 17 Pa. Superior Ct. 469 ; Black on Judgments, sec. 950. This rule applies to the assignment of a mortgage : Foster v. Carson, 159 Pa. 477 . The entry of the assignment on the records in the court of common pleas was not notice to the defendants. The judgment docket was not for their benefit and they are not required to examine it: Henry v. Brothers, 48 Pa. 70 ; Horstman v. Gerker, 49 Pa. 282 .

It is contended, however, that the defendants are concluded by a promise to pay alleged to have been made by H. L. Prall to one of the plaintiffs. The evidence shows that defendant said to H. M. Crouch, one of the plaintiffs, that: “He didn’t have the money at the time, but he would try and get it raised. .... He never refused to pay and always said he would.” According to the testimony of C. M. Crouch, the other use plaintiff, H. L. Prall, “ Agreed to pay one note at that time, or in a few days from that time, saying he had some money coming from an oil man at that time in Ohio and that when he returned one of his sons would help and they would pay one note. And we agreed to wait on the other note for some time, indefinitely. That was all.”

The learned judge of the court below was of the opinion that by such promise the defendants were estopped from setting up the defense of which they sought to avail themselves. In reaching this conclusion the court overlooked the rule that there can be no estoppel unless the party who alleges it relied •upon the representation and took some action induced thereby and this action must be of such a nature that the legal position of the party would be changed for the worse if the estoppel be not inforced. “ He must have placed himself in such a situation that he would suffer a loss as the consequence of his action if the other party were allowed to deny the truth of the representation or repudiate the effects of his conduct: ” 2 Pomeroy’s Eq. Jur. sec. 812. A party is only estopped when his conduct or representation induces action in another which cannot be withdrawn from without loss: 2 Beach Mod. Eq. *109 sec. 1097; Waring v. Somborn, 82 N. Y. 604 ; Hurd v. Kelly, 78 N. Y. 588 ; McKinzie v. Steele, 18 Ohio, 38; Townsend Savings Bk. v. Todd, 47 Conn. 190 ; Tyler v. Odd Fellows Assn., 145 Mass. 134 . “ The rule is that one shall be estopped from alleging the truth only when his falsehood or his silence has induced action by the other party that would lead to loss except for the estoppel:” Ayres v. Wattson, 57 Pa. 360 ; Reel v. Elder, 62 Pa. 308 ; Sensinger v. Boyer, 153 Pa. 628 .

It is not pretended that the equitable plaintiffs sustained any loss by reason of the alleged promise or that they had.taken any action by reason thereof the withdrawal from which would subject' them to detriment. The judgment and the lien acquired thereby was and still is their security. The presumption of payment would not arise for many years and it cannot be said that the parties had been lulled into false security. The promise to pay the judgment, if made as claimed, gave the equitable plaintiffs no additional security or right of action. They parted with nothing and no consideration passed to the promisor. Their agreement to wait awhile for the payment of the second judgment if the defendants would pay this judgment created no legal liability and had no legal effect. So far as Lyda M. Prall is concerned there is not the slightest evidence that she made any promise or had any knowledge of any promise made by H. L. Prall.

The defense of .failure of consideration raised by the defendants’ evidence is applicable to the judgments entered on both of the notes as is also the evidence of payment. As claimed by the defendants, payment was first to be made on the Work note and unless-something be shown to the contrary payments, if proved, would be first applicable on that note.

In the case as presented the defendants are entitled to relief. The Recree of -the court is therefore reversed, the rule to open the judgment is reinstated and is now made absolute and the record remitted for further proceedings.