Heegaard v. Kopka
| Decision Date | 14 February 1927 |
| Docket Number | No. 5190.,5190. |
| Citation | 212 N.W. 440,55 N.D. 77 |
| Parties | HEEGAARD et al. v. KOPKA et al. |
| Court | North Dakota Supreme Court |
Plaintiffs loaned money to the defendant Kopka. They took as security a third mortgage on his real estate, with the understanding that the first and second mortgages thereon should be discharged either from the proceeds of the loan or by Kopka from other sources. Plaintiffs paid the first mortgage debt and charged the payment against Kopka on account of the loan. The loan was insufficient to pay the second mortgage indebtedness, and Kopka failed to pay it from other sources. Plaintiffs brought this action to foreclose the first mortgage, claiming as assignees or subrogees. Held, for reasons stated in the opinion, that the plaintiffs paid and discharged the first mortgage debt and were not assignees thereof.
The doctrine of subrogation is purely equitable. It was conceived of a desire to attain substantial justice. It proceeds upon the theory that he who invokes it has rightfully discharged a debt at the instance and for the benefit of the debtor and may be substituted in the place of the creditor who was thus paid. But the doctrine is always subject to the provision that it will not be applied where he who claims its benefit was a volunteer, a stranger, or an intermeddler, or where its application will result in an injustice to another. Held, for reasons stated in the opinion, that the plaintiffs are not entitled to the right of subrogation to the first mortgage debt as against the defendant, the second mortgagee.
Appeal from District Court, Dunn County; Thos. H. Pugh, Judge.
Action by C. L. Heegaard and others against W. F. Kopka and others to foreclose mortgages. From the judgment, plaintiffs appeal. Affirmed.Sullivan, Hanley & Sullivan, of Mandan, for appellants.
T. F. Murtha, of Dickinson, and H. L. Malloy, of Halliday, for respondents.
This action was brought to foreclose three mortgages executed by the defendant Kopka-one for $1,800, one for $10,000, and a third for $1,000. This last was a commission mortgage, being commission on the $10,000 mortgage. Defendant Nordahl asserted title to a portion of the real estate involved under a sheriff's deed issued pursuant to foreclosure of a mortgage which he claimed was superior to the mortgages of the plaintiffs. The trial court adjudged a foreclosure of the plaintiff's mortgages, but held that the rights of the defendant Nordahl in the premises in question were superior to those of the plaintiff with respect thereto, and quieted title in the defendant. Judgment was entered accordingly. The appeal is from such a judgment. Plaintiffs ask for a trial de novo in this court.
[1] It appears that in 1917 the defendant Kopka owned some 1,400 acres of real estate in Dunn county. On a half section of this real estate he had given a mortgage for $1,800, which was then owned by one Head. In January, 1918, he gave a second mortgage on this half section to the defendant Nordahl to secure a loan of $2,000. He told Nordahl this obligation or the first mortgage would be paid before the fall of 1918, as he was going to make a new loan and would then take it up. The note to Nordahl was made payable December 1, 1918. Thereafter, and in 1918, he arranged with the plaintiffs to float a bond issue for $10,000 on all of the land, including the half section mortgaged to Nordahl, and pursuant thereto Kopka on November 21, 1918, executed the mortgage for $10,000 and the commission mortgage for $1,000. According to Kopka's testimony, under this arrangement the plaintiffs were to use the proceeds of the bond issue in paying off all the various liens and claims against the land in question. According to the testimony of Jacobs, the secretary of the plaintiff company, Kopka was to discharge the Nordahl claim himself from other sources. In any event the matter of the bond issue proceeded; the plaintiffs paid all of the claims excepting the Nordahl mortgage. They did not, however, take a satisfaction of the Head mortgage, or, if they did, did not put it of record. Kopka's account in their books was credited with the amount of the bond issue, $10,000, and charged with their various disbursements in his behalf, including the payment of the Head mortgage, which was made in November, 1918. In 1920 they rendered a statement to Kopka showing that the Head mortgage was paid. In this statement Kopka was charged with a cash commission of $400, and it appeared that a balance of $154.27 remained due him. In 1919, Jacobs saw Nordahl and told him that he need not worry about his mortgage as the Head mortgage was paid. Nordahl, however, foreclosed his mortgage in April, 1920, and bid the mortgaged premises in at foreclosure sale for the full amount of the mortgage debt and costs, aggregating about $2,400. This was as much as the property was worth. No redemption was made from this sale, and sheriff's deed issued to Nordahl. In June, 1921, the plaintiffs procured an assignment of the Head mortgage to themselves. So far as appears from the record, at the time that the mortgages in question were given, Kopka was a man of some property and solvent. This likewise appears to have been the case at the time of the foreclosure of the Nordahl mortgage. Kopka made no payments of principal or interest, and in November, 1921, the plaintiffs began the instant action to foreclose the $10,000 mortgage given to secure the bond issue, the $1,000 commission mortgage, and the Head mortgage, claiming the Head mortgage as assignees. The trial court held that the Head mortgage had been paid and that Nordahl was the owner under his sheriff's deed of the land on which he had had his mortgage, and that he was entitled to have title thereto quieted in him as against the plaintiffs. Judgment was entered accordingly, and from this judgment the plaintiffs now appeal.
The plaintiffs contend that under the terms of their agreement with Kopka they were to have a first mortgage on all of the land, including that mortgaged to Nordahl; that the Nordahl mortgage was to be discharged by Kopka with money other than that derived from the bond issue; that this agreement with Kopka contemplated that the proceeds of the bond issue should be used in paying off...
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Grinnell Mut. Reinsurance Co. v. Center Mut. Ins. Co.
...was a volunteer, a stranger, or an intermeddler, or where its application will result in injustice to another." Heegaard v. Kopka, 55 N.D. 77, 81-82, 212 N.W. 440, 442 (1927). See also Nelson v. Nelson, 58 N.D. 134, 140, 226 N.W. 476, 477 (1929); Beyer v. Investors' Syndicate, 31 N.D. 247, ......
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Morris v. Twichell
... ... invokes it has rightfully discharged a debt at the instance ... of and for the benefit of the debtor. Heegaard v ... Kopka, 55 N.D. 77, 212 N.W. 440. Subrogation takes place ... only where one has performed the obligation of another, or ... has paid his ... ...
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Morris v. Twichell
...that he who invokes it has rightfully discharged a debt at the instance of and for the benefit of the debtor. Heegaard et al. v. Kopka et al., 55 N. D. 77, 212 N. W. 440. Subrogation takes place only where one has performed the obligation of another, or has paid his own debt, the burden of ......
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Land Title Ins. Cor. v. Ameriquest Mor. Co., No. 07SC937.
...or purchases the property at the foreclosure sale in detrimental reliance on the record state of title. See Heegaard v. Kopka, 55 N.D. 77, 212 N.W. 440, 442 (1927); Richards v. Griffith, 92 Cal. 493, 28 P. 484, 485 (1891); 2 Grant S. Nelson & Dale A. Whitman, Real Estate Finance Law § 10.6 ......