Fidelity & Deposit Co. of Maryland v. Richeson

• Decision Date: 30 June 1925
• Docket Number: 8 Div. 758
• Court: Alabama Supreme Court
• Parties: FIDELITY & DEPOSIT CO. OF MARYLAND v. RICHESON et al.

105 So. 193

213 Ala. 461

FIDELITY & DEPOSIT CO. OF MARYLAND v. RICHESON et al.

8 Div. 758

Supreme Court of Alabama

June 30, 1925

Appeal from Circuit Court, Franklin County; Charles P. Almon, Judge.

Bill in equity by the Fidelity & Deposit Company of Maryland against I.M. Richeson and W.T. Richeson. From a decree denying relief and dismissing the bill, complainant appeals. Affirmed.

J. Foy Guin, of Russellville, for appellant.

Stell &amp Quillin, of Russellville, for appellees.

SOMERVILLE J.

The appellant, complainant in the court below, was surety on the official bond of S.J. Petree, tax collector of Franklin county. The bond was executed on November 10, 1920, and the principal died in June, 1922, leaving a shortage in his official accounts of about $17,000, the full amount of which was paid by complainant as surety. The statute (section 2603, Code 1923) gave to the state, from the date of the execution of the bond, a lien on all of the tax collector's property for the amount of this shortage, and complainant, by its payment to the state, became subrogated to the lien of the state (Singleton v. U.S. Fid. & Guaranty Co., 195 Ala. 506, 70 So. 169; Turner v. Teague, 73 Ala 554).

Complainant seeks in this proceeding to enforce the lien thus acquired by subrogation against certain property owned by the deceased officer, which the officer sold in 1921 to the respondent I.M. Richeson, and which he in turn sold to the respondent W.T. Richeson in 1922, taking from the latter a mortgage security on the land purporting to secure an indebtedness of $2,900.

On these showings in the absence of any equities available to respondents, complainant would obviously be entitled to relief by having his lien satisfied out of the land.

But the respondents assert an equity arising out of the following facts: Prior to the execution of the said official bond, the principal, S.J. Petree, had mortgaged this particular realty along with other property, to one Margaret C. Broadus to secure an indebtedness to her of $3,000, which was duly recorded. Upon its maturity on January 1, 1921, the mortgagor, Petree, was without the means to pay it, and proposed to sell I.M. Richeson the property in suit for $3,000, of which $2,900, was to be paid to Mrs. Broadus on the mortgage, for which she was to release the property to said Richeson in a legal way. This offer was accepted and executed in full, except that Petree paid to the mortgagee only $1,600 of the purchase money, instead of $2,900, as previously agreed, for which she executed a proper release of this property.

Under these conditions the purchaser, Richeson, was unquestionably entitled to equitable subrogation to the lien of the Broadus mortgage, to the extent that his money had been used for the discharge of this property from that mortgage. As said in Fouche v. Swain, 80 Ala. 151:

"There would be but a poor show of logic in holding that this strengthening of her title by Mrs. Swain [by Richeson here], has, after all, served but to weaken it. It is common practice for courts of chancery to keep alive equitable liens and encumbrances as against strangers or third parties."

To say that this complainant can now come in and appropriate to itself the benefit of Richeson's payment to Mrs. Broadus by subjecting to its claim the property thus freed from a superior lien would require a new definition of equity and its doctrine of subrogation. And the rule is well settled that "the purchaser of an equity of redemption upon paying off prior mortgages is subrogated to the rights of the mortgagees paid off, the mortgages paid being considered part...