Tabor Manufacturing Co. v. Lovell

Citations

• 37 Pa. Super. 592

Syllabus

<p>Contract — Agreement among creditors — Chattel mortgage.</p> <p>One of three creditors held a chattel mortgage under the laws of Massachusetts on a machine belonging to the debtor. The three creditors entered into an agreement by which the mortgagee was to foreclose the mortgage and divide the proceeds among the three creditors. Subsequently and immediately before the foreclosure sale the three creditors entered into another agreement by which it was provided that if the mortgagee bought in the property, it should operate the same and divide the net profits equally with the others until the other two creditors were paid in full. The property was bought in by the.mortgagee at a price stated, but no part of the purchase price was paid by the mortgagee to the other two creditors. Subsequently the mortgagee resold the property and divided the amount received equally with the other two creditors. One of these creditors whose account had been guaranteed, had taken a note from the guarantor and had agreed to credit against the note one-half of the moneys which should be received by such creditor from the sale of the property. Held, that the guarantor was entitled to credit only on one-half of the amount received from the resale, and was not entitled to an additional credit of one-half of one-third of the purchase price at the foreclosure sale.</p>