Felton v. Bissel

• Decision Date: 20 April 1878
• Citation: Felton v. Bissel, 25 Minn. 15 (Minn. 1878)
• Parties: JOHN FELTON, JR., <I>vs.</I> PETER BISSEL, Administrator, and others.
• Court: Minnesota Supreme Court

25 Minn. 15

JOHN FELTON, JR.,vs.PETER BISSEL, Administrator, and others.

Supreme Court of Minnesota.

April 20, 1878.

This action was brought in the district court for Dakota county against the administrator, the widow, and the heirs-at-law of Joseph Bissel, deceased, (the defendant Seagrave Smith being the guardian ad litem for the infant defendants,) the plaintiff praying that a certain mortgage given by him to one Latto be declared to have been fully paid and to be no longer a lien on the mortgaged premises, that a certificate of sale of the mortgaged premises on foreclosure by advertisement be declared void, and that such certificate and the mortgage be cancelled; that plaintiff be let into possession of the mortgaged premises; that defendants account for the use and occupation of such premises, and for general relief. The action was tried by Crosby, J., who ordered judgment for the plaintiff, which was entered, and the defendants appealed.

Smith & Hale, for appellants.

F. F. Wilde and J. N. Searles, for respondent.

GILFILLAN, C. J.

On April 16, 1868, one Steinhauer, as principal, and Joseph Bissel and plaintiff as cosureties, executed to one Latto two promissory notes of five hundred dollars each, with interest at twelve per cent. per annum, one payable October 1, 1869, the other October 1, 1870, and, to secure their payment, Steinhauer executed to Latto a mortgage upon forty acres of land belonging to him, and plaintiff executed a mortgage to Latto upon another forty acres of land belonging to him.Each mortgage contained the usual power, and was duly recorded.The first of these notes having fallen due, Latto, on December 16, 1869, recovered judgment against Joseph Bissel and plaintiff for the amount then due on that note and costs, amounting to $529.57.No execution was issued on this judgment, and, on December 28, 1869, Latto, for a valuable consideration paid him by Bissel, released and discharged it.On the same day, Joseph Bissel, without any request or assent of plaintiff, (further than is evidenced by their execution of the notes as cosureties,) paid to Latto the full amount of the indebtedness secured by the notes and mortgages, and, in consideration thereof, Latto, without the knowledge of the plaintiff, assigned the mortgages and debts secured by them to Joseph Bissel, and the assignment thereof was duly recorded.On April 21, 1870, Joseph Bissel, as assignee of the mortgages, foreclosed each of them under the power of sale contained in it, and at the sales became the purchaser, and received the proper certificates of sale.The property covered by the Steinhauer mortgage was purchased by Bissel at the sum of $675.50 — considerably more than was due on the first debt or judgment.From the order in which the foreclosures are stated by the court below, we assume — and defendants in their points admit it to be the fact — that this mortgage was foreclosed first.Bissel then proceeded to sell the plaintiff's forty acres under the mortgage executed by him, and became the purchaser at such sale.It is the validity of this latter foreclosure, and the standing of plaintiff's mortgage, which this action involves.

That as between Bissel and Steinhauer the debt represented by the first note was not extinguished by Bissel paying it, will appear presently; and consequently, so far as the case shows, he had the right to foreclose Steinhauer's mortgage to satisfy that debt.The foreclosure satisfied it, leaving the second note and the mortgage of plaintiff as security for it.As this note is stated by the court below, the interest was not payable till the principal should become due, — to wit, on October 1, 1870 — so that, the first note having been satisfied by the Steinhauer foreclosure, there was nothing due at the date of the foreclosure against plaintiff, April 21, 1870, upon the debt for which his mortgage remained security.This is sufficient to avoid the foreclosure.

The foreclosure was void for another reason, which will be apparent when we consider the status and rights of the parties with respect to the mortgages and the debts they were given to secure.It is necessary for us to do this, because the defendants complain that the judgment of the court below is not only erroneous in adjudging the foreclosure to be void, but also in adjudging that the mortgage by plaintiff is paid, and no longer a lien on the premises, and directing it to be cancelled, and in adjudging to be void the assignment from Latto to Bissel.The only ground upon which the mortgage is adjudged paid, and the assignment by Latto to Bissel void, is the payment, by the latter to the former, of the amount of the debts, at the time of the assignment of the debts and mortgages, and of the entry of satisfaction of the judgment.Ordinarily the payment by one joint debtor extinguishes the debt, and discharges all collaterals, so that there is nothing which can pass through an assignment from the creditor.This is the case, except where, as a consequence of the payment, the right of subrogation or substitution arises, to prevent the extinction of the debt and securities, and to keep them alive for the benefit of the party paying.That a surety paying the debt is entitled to be subrogated, as between him and the principal debtor, to all securities for the debt is, both in England and America, an elementary principle of equity jurisprudence.And although it is held otherwise in England, in America it is too well settled to require citation of authorities, that, as between them, payment by the surety does not extinguish the debt, but is,...