Capen v. Garrison

• Decision Date: 22 February 1906
• Citation: 92 S.W. 368,193 Mo. 335
• Parties: CAPEN v. GARRISON et al.
• Court: Missouri Supreme Court

92 S.W. 368

193 Mo. 335

CAPEN v. GARRISON et al.

Supreme Court of Missouri, Division No. 1.

February 22, 1906.

1. GUARDIAN AND WARD — POWER TO BORROW MONEY.

Under Rev. St. 1899, § 3504, prescribing the purposes for which a curator may mortgage his ward's land to obtain money, expressly authorizing such a proceeding to obtain money for the education and maintenance of a ward, but not authorizing it to obtain money to discharge a pre-existing incumbrance on the land, no power to borrow for this latter purpose can be implied from the statute.

2. SUBROGATION — FURNISHING MONEY TO PAY MORTGAGE — ACCEPTANCE OF NEW MORTGAGE.

Where a curator, with the sanction of the probate court, executed a mortgage on his ward's land to obtain money to satisfy a preexisting incumbrance under which the land was about to be sold, and the lender expressly refused to accept a transfer of the old incumbrance, and insisted upon the making of a new mortgage, she was not entitled to be subrogated to the rights of the mortgagee in the first mortgage.

3. LIENS — EQUITABLE LIENS.

Neither was the mortgagee in the second mortgage entitled to an equitable lien upon the property.

Appeal from St. Louis Circuit Court; Jas. R. Kinealy, Judge.

Suit by Frances I. Capen against Mary B. Garrison and others. From a judgment for plaintiff, defendants appeal. Reversed.

T. Percy Carr, for appellants. Boyle & Priest and Geo. W. Easley, for respondent.

VALLIANT, J.

This is a suit in equity in which plaintiff seeks to subject certain real estate belonging to minors to the payment of money loaned by the plaintiff to the curator of the minors for the purpose of paying off a pre-existing incumbrance on the property.

The main facts in the case are these: The property in question is a dwelling house and lot in St. Louis. Cornelius K. Garrison bought the property in 1893 and resided in it as his home until his death in 1895. He left a widow Mary B. Garrison and three minor children who, together with Daniel E. Garrison, the duly appointed curator of the children, are the defendants in this suit. When Cornelius K. Garrison bought this property it was incumbered with a debt of $5,200 principal, secured by deed of trust the payment of which he assumed, but which he left unpaid at his death. In March, 1899, there was due on this debt the whole of the principal and $182 of interest, and the creditor was demanding payment; besides this there was due the state and city, for taxes, the sum of $742.22, a portion of which was required to be paid at once to avoid suit. There was no personal property available to the curator for the payment of these incumbrances and he feared that the real estate of his wards would be sacrificed in the threatened foreclosure sales. Thereupon he petitioned the probate court, stating these facts and praying to be authorized to borrow $5,500 with which to pay these incumbrances and to secure the loan by a deed of trust to be executed by himself as curator for the children and by the widow of Cornelius K. Garrison. The probate court made the order as requested, the curator borrowed the $5,500 from the plaintiff in this suit, and he in his representative capacity and the widow executed a note for that amount due in three years with six semiannual 6 per cent. interest notes, and a deed of trust on the real estate mentioned to secure the same. The plaintiff was represented in the transaction by a real estate agent. The curator said to the agent that he desired to conduct the business with as little expense as possible, and therefore preferred to have the old deed of trust and notes transferred to the lender, but the agent said that his clients preferred to take new papers and accordingly, when the negotiations were ended and the agreement reached, the agent received from his client the $5,500 and with it went to the bank where the old notes were, paid them, had the old deed of trust satisfied on the record, and presented to the curator an account of the expenditures one item of which was $5,474.50, paid to the bank on the old notes and deed of trust, besides $0.70 paid for releasing the old deed on record, expense of executing new deed of trust, the agent's own commissions and other items, the aggregate of all which exhausted the $5,500 and showed a balance of $62.74 as due the real estate agent, which balance Mr. Garrison, the curator, paid with his individual check. Mr. Garrison also paid the accumulated taxes. The old notes and deed of trust after being canceled and entered as satisfied on the record were delivered to the curator. The new deed of trust was duly recorded. A title examiner gave the certificate of title on which this transaction was based and which was delivered by the real estate agent to the plaintiff (or to her son who acted for her) along with the new deed of trust. In this certificate, referring to this new deed of trust, was this notation: "This is an equitable lien, and a decree of the circuit court will be necessary to foreclose as to all interest of minors." The interest notes on this loan were paid as they matured except the last one, due when the principal fell due three years after date. At that time the curator was unable to renew the note or obtain a new loan, no lender could be found who would take a curator's deed and the curator having no means of his wards with which to pay the debt, this suit resulted. The prayer of the petition is, first, that the deed of trust be decreed to be a valid lien and that it be foreclosed as a mortgage; second, if that cannot be done, then that an account be taken to show the amount of plaintiff's money that was used to pay off the former incumbrances, that the entry of satisfaction of the old deed of trust be set aside and the plaintiff subrogated to the rights of that creditor; third, if that cannot be done, then that the debt due plaintiff be decreed to be an equitable lien on the property in question and a foreclosure accordingly. The trial court took the last named theory as the correct one, declared plaintiff's claim an equitable lien on the property and decreed a foreclosure. From that judgment the minors appeal.

Subrogation is a doctrine of equity jurisprudence: "It does not depend on privity or contract, express or implied, except in so far as the known equity may be supposed to be imported into the transaction and thus raise a contract by implication." 27 Am. & Eng. Ency. L. (2d Ed.) 203. It is a consequence which equity jurisprudence attaches to certain conditions. The parties may not have contracted for it either expressly or by legal implication, but if, in the performance of that contract which they did make, certain conditions have resulted which make it necessary for equity to interpose its authority in this respect it will do so, provided that in so doing it will violate no law and not alter the contract. Equity violates no law, and it does not assume to make a contract for the parties; it follows the law and upholds it, and when it comes to the relief of one to whom the law cannot afford adequate remedy it does not in so doing infringe the law or impair its force, nor does it reconstruct the contract between the parties. Whilst the right of subrogation as understood in equity jurisprudence is not the direct legal effect of a contract, yet parties may by express contract accomplish the same practical result, for example you may agree with a mortgagor to purchase and hold, on agreed terms, his outstanding mortgage obligation and when you have made the purchase you stand, as to the security, in the shoes of the original mortgagee, but that is the direct legal consequence of your purchase, it is not the equitable subrogation that we are now discussing. Whilst the right of subrogation, as imported into the transaction by equity jurisprudence, does not flow as a direct legal consequence from a contract expressed or legally implied, yet to this extent it is dependent on the contract; that is, it grows out of conditions resulting from the due observance of the contract and it must not be inconsistent with the terms of the contract. As the law writer above quoted in effect says, subrogation is to this extent implied; that is, we will presume that the parties making the contract knew of this equity principle and contracted in reference to it, so if the contract will bear the importation and the conditions demand it, subrogation will be imported into it. The contract may be silent on the subject, yet its terms may leave it open to the introduction of this equitable principle and in such case the principle may be applied. But the terms of the contract, and the conditions arising from its performance, may be such as to show that the parties did not intend that subrogation should result and in such case it will not result. Equity will not engraft this doctrine on the transaction in the face of a contract that negatives the idea of subrogation. In other words, the contract may be silent on the subject yet not inconsistent with the idea of subrogation, or, on the other hand, it may be silent on the subject yet its terms expressly or by implication forbid the application of the doctrine. So it may be said that...