Bankers' Loan & Inv. Co v. Hornish

• Decision Date: 17 June 1897
• Citation: 27 S.E. 459,94 Va. 608
• Court: Virginia Supreme Court
• Parties: BANKERS' LOAN & INVESTMENT CO. v. HORNISH et al.

27 S.E. 459

94 Va. 608

BANKERS' LOAN & INVESTMENT CO.

v.HORNISH et al.

Supreme Court of Appeals of Virginia.

June 17, 1897.

Mortgages—Intermediate Judgment Creditors —Subrogation—Pleading.

1. On the maturity of notes secured by first mortgage on realty, the amount due was borrowed by the mortgagor from a third person, under an agreement for a first lien on the realty. A mortgage to him was executed and recorded, and, to avoid complications, the money was paid directly to the holder of the matured notes, and they were delivered to the last mortgagee uncanceled, the original mortgage remaining unreleased. Held that, as against intermediate judg ment creditors of the mortgagor, the last mortgagee was subrogated to the lien of the original mortgage.

2. Though a party does not specifically claim the right of subrogation, equity will grant the relief where it is justified by the facts alleged and established.

Appeal from corporation court of Roanoke.

Bill by Theodore C. Hornish and others against the Bankers' Loan & Investment Company and others. Prom a decree in favor of complainants, the investment company appeals. Reversed.

McHugh & Baker and Cocke & Glasgow, for appellant.

Smith & King, R. E. Scott, R. R. Hicks, A. L. Payne, and J. R. Bryan, Jr., for appellees.

HARRISON, J. The charge of fraud contained in the bill filed by appellees in this case is wholly unsustained so far as it concerns the Bankers' Loan & Investment Company, the appellant here.

On August 20, 1890, B. D. Downey purchased of Mrs. May M. Simmons a house and lot in the city of Roanoke, and executed certain notes for the deferred payments. On the day of sale, Mrs. Simmons and husband executed a deed conveying the property to B. D. Downey, the purchaser, and the latter at the same time executed a deed of trust conveying the property to a trustee, to secure to Mrs. Simmons the notes which had been executed to her for the purchase money. The deed of trust was duly recorded, but the deed of conveyance from Mrs. Simmons to Downey was lost or destroyed, and never recorded. The purchase money secured by the deed of trust was evidenced by three notes, —one for $1,378, which was paid at maturity, and two each for the sum of $3,087.45, payable one and two years from date, which were transferred by Mrs. Simmons to the Fidelity Loan & Trust Company.

Afterwards, in September, 1891, B. D. Downey requested Mrs. Simmons and husband, who had previously conveyed the property to him, to execute a new deed, conveying the same property to his wife. The new deed was executed and dated back to August 20, 1890, and acknowledged on September 20, 1891. In this deed, Mrs. Downey assumes and agrees to pay, as part of the purchase money, the notes executed by her husband, and secured by the deed of trust already mentioned.

Being pressed by the Fidelity Loan & Trust Company for payment of these notes, either Downey or his wife (it does not clearly appear which) applied to appellant for a loan with which to pay off the purchase-money notes held by the Fidelity Loan & Trust Company, amounting to $7,000, agreeing to secure the amount by first lien on the property. Appellant agreed to make the loan, and accordingly, on October 1, 1891, Mrs. Downey and her husband conveyed the house and lot to a trustee, to secure the same. This entire amount was paid by appellant, at the request of Mrs. Downey and her husband, to the Fidelity Loan & Trust Company, and the purchase-money notes to that amount held by said company were taken up uncanceled, and held by appe...