Arbogast v. Hays

• Court: Indiana Supreme Court
• Writing for the Court: Niblack, J.
• Citation: Arbogast v. Hays, 98 Ind. 26 (Ind. 1884)
• Decision Date: 16 October 1884
• Docket Number: 11,449
• Parties: Arbogast v. Hays

98 Ind. 26

Arbogast v. Hays

No. 11,449

Supreme Court of Indiana

October 16, 1884

From the Randolph Circuit Court.

The judgment is affirmed with costs.

E. L Watson and J. S. Engle, for appellant.

J. A Moorman, W. A. Thompson and J. W. Thompson, for appellee.

OPINION

Niblack J.

Suit by Sanford Arbogast against Elizabeth Hays, commenced on the 24th day of January, 1883.

The facts relied on for a recovery in the action were substantially as follows:

On the 6th day of September, 1869, the First National Bank of Winchester sold and conveyed to Benjamin Hays and Elizabeth Hays, his wife, a tract of land in Randolph county, and for the purchase-money took from Hays and wife four promissory notes, executed by them jointly and severally, payable at different periods of time. The first note was for $ 900, and was made payable on the 25th day of December, 1869, and was also signed by Sanford Arbogast, the appellant herein, as surety for both Hays and his wife, who on their part also executed to the bank a mortgage on the land to secure the payment of all the notes. The concluding clause of the mortgage was in these words, "and the mortgagors expressly agree to pay the sums of money, above secured without relief from valuation laws." After the first note fell due, that is to say, in the latter part of December, 1869, Arbogast paid thereon the sum of $ 500 which has never been repaid to him. What remained of the purchase-money evidenced by the notes, has since been fully paid. In 1882, Benjamin Hays died, whereupon his widow, Elizabeth Hays, became the owner of the land described in the mortgage as his surviving co-tenant. Arbogast, claiming to have become subrogated to the rights of the bank in the mortgage executed to it by Hays and wife in the proportionate amount paid by him as surety on the first note, commenced this suit against Mrs. Hays to foreclose the mortgage for his reimbursement.

The defendant answered in several paragraphs. The third paragraph set up the six years' statute of limitations as a defence, and a demurrer to that paragraph for want of sufficient facts was overruled. Issue being joined, there was a finding and judgment for the defendant.

The plaintiff, appealing, assigns error only upon the overruling of his demurrer to the third paragraph of the answer.

There is no substantial disagreement between counsel as to the general doctrine of subrogation. Whether the six years' statute of limitations is applicable to and constitutes a defence in a case like this, comprises the only subject upon which there is serious difference in argument. In other words it is admitted that Arbogast acquired the right to be subrogated to the mortgage taken by the bank, and that the right he so acquired still continues unless it has been defeated by his more than six years' delay in bringing this suit.

In the case of Lilly v. Dunn, 96 Ind. 220, it was held that where a mortgage, containing no express stipulation for the repayment of any sum of money in case of default, had been executed to the surety to indemnify him on account of his suretyship, the six years' statute of limitations ran against proceedings instituted upon the mortgage by the surety for the recovery of money paid by him for the principal; but counsel for the appellant claim that the fair and necessary inference from that case is, that where the mortgage, as in this case, contains an express agreement to pay the money it was given to secure, the statute limiting actions on written instruments only applies.

Chancellor Kent, in the case of Hayes v. Ward, 4 Johns. Ch. 123, in commenting upon the law of subrogation, said: "This doctrine does not belong merely to the civil law system. It is equally a settled principle in the English chancery, that a surety will be entitled to every remedy which the creditor has against the principal debtor, to enforce every security, and to stand in the place of the creditor, and have his securities transferred to him, and to avail himself of those securities against the debtor. This right of the surety stands not upon contract, but upon the same principle of natural justice, upon which one surety is entitled to contribution from another."

This summary of the doctrine of subrogation has been very generally accepted in this country as authoritative, and has been recognized by this court as a fair summary of that doctrine, as applicable to this State, in the case of Gerber v. Sharp, 72 Ind. 553. See, also, Vert v. Voss, 74 Ind. 565; Sidener v. Pavey, 77 Ind. 241; Kane v. State, ex rel., 78 Ind. 103; Mathews v. Aikin, 1 N.Y. 595; Sheldon Subrogation, section 1, et sequitur; Brandt Suretyship, section 274.

Brandt supra, at section 176, says: "Upon payment by the surety or guarantor of the debt for...