Featherstone v. Emerson

• Decision Date: 22 July 1896
• Docket Number: 687
• Citation: 45 P. 713,14 Utah 12
• Court: Utah Supreme Court
• Parties: JOHN FEATHERSTONE, RESPONDENT, v. S. P. EMERSON ET AL., APPELLANTS

45 P. 713

14 Utah 12

JOHN FEATHERSTONE, RESPONDENT, v. S. P. EMERSON ET AL., APPELLANTS

No. 687

Supreme Court of Utah

July 22, 1896

Appeal from the district court, Third judicial district, Territory of Utah. Hon. S. A. Merritt, Judge.

Action by John Featherstone against S. P. Emerson and others. From a judgment for plaintiff, defendant Emerson appeals. Affirmed. The facts are set out in the opinion of the Justices.

Affirmed.

Breeze & Burris and Moyle, Zane & Costigan, for appellant.

As between purchasers in common of an estate bound by a joint lien or mortgage, each is bound to contribute only his proportion towards the discharge of the common burden and as to the remainder is to be considered simply as a surety; and if one of them is obliged to pay the whole amount to protect his interests,he will be subrogated to the rights of the owner of the lien or of the mortgage, even without an express assignment of the lien or mortgage, and will be protected as far as equity can protect him. Subrogation depends not upon contract but upon natural justice, and "equality is equity." Gearhardt v. Jordan, 11 Penn. St. Rep 325; Aiken v. Gale, 37 N.H. 501; Hubbard v. Mill Dam Co., 20 Vt. 402; Simpson v. Gardiner, 97 Ill. 237; Laylin v. Knox, 41 Mich. 40; Cornell v. Prescott, 2 Barbour 16, Ellsworth v Lockwood, 42 N.Y. 89-97; Fisher v. Dillion, 62 Ill. 379; Young v. Morgan, 89 Ill. 199; Matthews v. Aiken, 1 Comstock (N.Y.) 595; Williams v Perry, 20 Ind. 437; Duncan v. Drury, 9 Penn. St. 332; Champlin v. Williams, 9 Penn. St. 341; 3 Pomeroy's Equity Jurisprudence (1st Ed), secs. 1211, 1212, 1220, 1922, and notes; 2 Brandt on Suretyship (2d Ed.), § 302, § 309, § 315; Harris on Subrogation, secs. 103 and 143.

"The fact that the mortgage which the vendor takes at the time of the conveyance is expressed to be for the purchase money of the land is none the less a waiver of his vendor's lien." Avery v. Clark, 87 Cal. 619; Baum v. Grigsby, 21 Cal. 173; Camden v. Vail, 23 Cal. 633; Gaylord v. Knapp, 15 Hun. (N.Y.) 87; Pease v. Kelly, 3 Oregon 417; Rhynier v. Frank, 105 Ill. 326; Pomeroy's Equity Jurisprudence (2d Ed.) § 1252 and cases collected in note p. 1928.

Even if the Pages had not waived their vendor's lien by taking the $ 2,000 and the $ 800 mortgages and by canceling the $ 2,000 mortgage, that lien existed only for them and was lost by the assignment of the note and mortgage to the plaintiff Featherstone; for on principle and by the great weight of authority a vendor's lien is a strictly personal right, and is therefore not assignable. First Nat. Bk. v. Salem Flour Mills Co., 39 F. 89; Hammond v. Peyton, 34 Minn. 529; Keith v. Horner, 32 Ill. 524; Bonnell v. Holt, 89 Ill. 71; Gruhn v. Richardson, 128 Ill. 178; White v. Williams, 1 Paige (N.Y.) 502; Jackman v. Hallock, 1 Ohio 318; Baum v. Grigsby, 21 Cal. 173; Avery v. Clark, 87 Cal. 619; 2 Jones on Liens § 1092 and cases collected in notes.

Featherstone, the plaintiff here, was not the vendor, and of course cannot avail himself of the equities embraced in a vendor's lien.

Even if a vendor's lien were assignable, the assignment of the $ 800 note and mortgage to the plaintiff would not and did not assign the lien to him.

The assignment (p. 50 of the abstract) of the note and mortgage of $ 800, does not purport to assign the vendor's lien, and there is no evidence or finding that it does do so. We submit that on the law it does not do so. White v. Williams, 1 Paige (N.Y.) 502; Jackman v. Hallock, 1 Ohio Rep. 318; Wellborn v. Williams, 9 Ga. 86.

The doctrine of vendor's lien is indefensible and should not be recognized and enforced where it has never been adopted. Ahrend v. Odiorne, 118 Mass. 261; Philbrook v. Delano, 29 Me. 410; Kauffelt v. Bown, 7 S. & R. (Pa.) 64; Hammond v. Peyton, 34 Minn. 529; Hiesler v. Green, 48 Pa. St. 96; Edmunster v. Higgins, 6 Neb. 265. We submit the doctrine has not been and should not be adopted in Utah.

The contention of the plaintiff Featherstone that the $ 800 mortgage of October 26, 1891, is superior in equity to the $ 2,000 mortgage of Dec. 17, 1890, or at least to the rights of Emerson therein acquired by subrogation, because it is expressed to be for the unpaid purchase money, and therefore is a purchase-money mortgage or is in the nature of a vendor's lien is unsupported by the law; for a purchase-money mortgage given to the vendor or a vendor's lien retained by him is not so peculiarly sacred that it is superior in equity to a mortgage previously given by the vendor on the same property, and since it is not superior in equity to such mortgage it is not superior to the rights acquired in such mortgage by subrogation. Brandt on Suretyship (2d Ed.), § 315.

Frank Pierce, for respondent.

Subrogation is a creature of equity.

This right does not grow out of contract relations, but depends upon principles of natural justice and equity. It is governed by no strict code or formal rules. Each case makes its own appeal to the court and wins on its inherent equity and justice. So far we agree with counsel for the appellant. To the many authorities cited in support of the above doctrine on pages 6 and 7 of his brief, we take pleasure in adding the following: II Brandt on Suretyship, sec. 298; Harris on Subrogation, secs. 162-163; Exchange Co. v. Bayless, 21 S.E. 279; Spaulding v. Harrey, 28 Am. St. Rep. 176; 129 Ind. 106; Cheesebro v. Millard, 7 Am. Dec. 494; Pease v. Egan, 131 N.Y. 262; Insurance Co. v. Fidelity Co., 123 Pa. St. 523.

A pro tanto subrogation is never allowed.

Emerson offers to pay only part of the obligation which he incurred to Mrs. Page on August 26, 1891, but seeks subrogation. He seeks a pro tanto subrogation.

Subrogation cannot be enforced until the whole debt is paid to the creditor. Emerson must extinguish his obligation in full before he invokes this extraordinary remedy. Until the creditor is paid there cannot be any interference with his securities which might prejudice or embarrass him in the collection of the residue of his claim. In the case at bar the property is the primary fund to meet the obligation, that is, payment of the purchase-money. II Brandt on Suretyship, sec. 306; Exchange Co. v. Bayless, 21 S.E. 279; II Brandt on Suretyship, secs. 308, 321; Wilcox v. Fairhaven Bank, 7 Allen 270; Harris on Subrogation, sec. 195; II Jones on Liens, sec. 1122; III Pomeroy Equity Jurisprudence, sec. 1220; Hollingsworth v. Floyd, 2 H. & G. (Md.)87; Kyner v. Kyner, 6 Watts (Pa.) 221; Receivers v. Wortendyke, 27 N. J. Eq. 658; Bank of Penn. v. Pontius, 10 Watts. (Pa.) 148; Magee v. Legette, 48 Miss. 139; McConnell v. Beatty, 34 Ark. 123; Schoonover v. Allen, 40 Ark. 132; Zook v. Clemmer, 44 Ind. 15.

Subrogation is never invoked to defeat or interfere with superior or equal equities. Exchange Co. v. Bayless, 21 S.E. 279; III Pomeroy's Equity Jurisprudence, sec. 1419, and note.

No equities were lost by the assignment of the $ 800 mortgage to plaintiff. The assignment of the $ 800 note and mortgage transferred to the plaintiff all rights which Mrs. Page had. An express lien, which is created by the parties by agreement, as a mortgage for the purchase money, as in the case at bar, is always assignable, but it is held by many authorities, although there is a conflict in the authorities, that an implied lien which arises by operation of law, is not assignable. II Warvelle on Vendors, 736; Stratton v. Gold, 40 Cal. 778; Lewis v. Hawkins, 13 Wall. 119; Avery v. Clark, 87 Cal. 625; Taylor v. McKinney, 20 Cal. 618; II Jones on Liens, sec. 1119.

The authorities cited by counsel deal with implied liens which the law gives the vendor after he has parted with his legal title and has made no express agreement for security for the unpaid purchase money.

The term purchase money as used in purchase-money mortgages, means money paid for land or the debt created by the purchase of land. When purchase money is the consideration of an instrument it will continue to be the consideration of any other instrument executed in substitution of the old one. Hence the purchase-money obligation of $ 2,000 of August 26, 1891, was carried into the $ 800 mortgage and no rights were waived. The $ 800 mortgage afterwards given was for part of the same purchase money. The court so finds. 19 Am. & Eng. Enc. 583; Austin v. Underwood, 37 Ill. 438; Kimbale v. Esworthy, 6 Ill.App. 517; Flanagan v. Cushman, 84 Texas 241.

A mortgage which is given subsequently to the conveyance of the land and execution of the mortgage thereon to secure the purchase money and which is intended to be substituted in place of such money, is a mortgage for purchase money, although by its terms it may extend the time of payment to a longer period. Jones v. Parker, 51 Wis. 218; Pratt v. Topeka Bank, 12 Kan. 570.

It is a well settled principle that a purchase-money mortgage given by the mortgagor to the vendor of land to secure a balance of unpaid purchase money, has priority over every claim or lien of any kind arising through the mortgagor, to the extent of the land purchased. 19 Am. & Eng. Enc. 575.

Nearly all of the decided cases recognize that a mortgage for purchase money, whether it be expressed in the mortgage or not, is an equity in the vendor equal and in many cases superior to a common law vendor lien. Clark v. Brown, 3 Allen 509; Ellis v Horrman, 90 N.Y. 466; Spring v. Short, 90 N.Y. 538; Wilson v. Smith, 52 Hun. 171; Curtis v. Root, 20 Ill. 518; Christie v. Hale, 46 Ill. 117; Austin v. Underwood, 87 Am. Dec. 254; Bolles v. Corli, 12 Minn. 113.

For the purposes of subrogation there is no difference between a vendor's lien and a mortgage given back to secure purchase money. II Warvelle on Vendors, 737.

MINER, J. BARTCH, J., concurs. ZANE, C. J., dissenting.

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