Home Owners' Loan Corp. v. Parker
| Decision Date | 28 September 1937 |
| Docket Number | 27465. |
| Parties | HOME OWNERS' LOAN CORPORATION v. PARKER. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Nov. 16, 1937.
Syllabus by the Court.
1. One who lends money upon real estate security for the express purpose of paying and discharging valid incumbrances upon the same property believing in good faith that his security will be substituted of record for that discharged is not a volunteer or intermeddler and upon failure to obtain such lien is entitled to be subrogated to the prior valid liens to the extent of incumbrances which he has discharged.
2. Subrogation is a creature of equity and controlled by its rules. Subrogation should always be granted when to do so will be to promote justice and to do equity and when the legal and equitable rights of others will not thereby be infringed.
Appeal from District Court, Payne County; Henry W. Hoel, Judge.
Action by H. L. Parker, a sole trader doing business under the firm name and style of Thompson-Parker Lumber Company, against the Home Owners' Loan Corporation and others, wherein the named defendant filed a cross petition. From a judgment in favor of the plaintiff, the named defendant appeals.
Reversed and remanded, with directions.
C. E Hall and Hardin Ballard, both of Oklahoma City, Brown Moore of Stillwater (A. M. Frazier and W. D. Masterson, Jr., on the brief), for plaintiff in error.
Wilcox & Swank, of Stillwater, for defendant in error.
This is an appeal from a judgment of the district court of Payne county adjudicating priority of liens and denying a claim of the plaintiff in error to subrogation.
The action was instituted by the defendant in error for the purpose of foreclosing a materialman's lien upon certain real estate in the city of Cushing.
The defendants in the trial court, with the exception of plaintiff in error, permitted judgment to go against them by default. The plaintiff in error, defendant below, appeared and filed an answer and cross petition wherein it alleged, in substance, that it had taken a mortgage on the premises in suit with the assurance and in the belief that it was obtaining a first mortgage lien thereon and that to said end it had paid and discharged certain valid liens existing against said property which were prior and superior to any claim of the defendant in error and that in so doing the plaintiff had acted without any knowledge of any claim or lien on the part of the defendant in error and upon the express assurance that no such claim existed. The plaintiff in error sought to have its mortgage adjudicated a first lien upon the premises therein described and foreclosed as such and, in the alternative, in the event that the lien of the defendant in error should be found to be prior to the mortgage of the plaintiff in error, that then it be subrogated to the rights of the parties under the prior valid liens which it had discharged and that it be granted a foreclosure of said liens. A jury was waived and the cause was tried to the court. At the request of the plaintiff in error the court made written findings of fact and conclusions of law wherein it was found that the plaintiff in error in paying and discharging the prior valid liens had acted as a volunteer and had received no express agreement to retain and preserve the prior valid liens. Wherefore the court was of the opinion that the rule respecting volunteers was applicable and rendered judgment decreeing the lien of the defendant in error to be a first and prior lien and subordinated the lien of the plaintiff in error thereto and denied subrogation. The action being one in equity we have read and examined the entire record to ascertain whether or not the judgment of the trial court is contrary to the clear weight of the evidence. The essential facts are not in dispute. The plaintiff in error was created during the late emergency for the purpose of assisting distressed home owners to save their homes from foreclosure and tax sales. On September 14, 1933, one L. Z Wade, who was then the owner of the property here involved, made a written application to the plaintiff in error for a loan on said property for the purpose of discharging a prior lien thereon held by the Ætna Building & Loan Association, and the delinquent general and special taxes which were due and unpaid on said property and for which it was subject to sale. The application was approved, the property was examined and appraised and an abstract of title thereto was procured and examined from which it appeared that upon the discharge of the aforesaid liens that a mortgage duly executed by the applicant and his wife would vest in the plaintiff in error a valid first mortgage lien on said property. Thereupon on August 18, 1934, the aforesaid applicant and his wife duly executed to the plaintiff in error their promissory note for the amount of money necessary to pay and discharge the existing valid liens against said property as shown by the record, and at the same time executed, acknowledged and delivered to the plaintiff in error their certain real estate mortgage in writing whereby they bargained, sold, conveyed and mortgaged to the plaintiff in error the real estate herein involved. This mortgage was filed for record in the office of the county clerk of Payne county on the 14th day of September, 1934, and the abstract was re-extended and re-examined and it appearing therefrom that there were no intervening liens the plaintiff in error proceeded to pay and discharge the prior liens shown of record. As an additional precaution plaintiff in error procured from the applicant and his wife a written statement wherein they represented that the property mortgaged was their actual and bona fide home and that they were in the occupancy thereof and that there were no debts or claims outstanding for labor performed or material furnished in the making of improvements upon the mortgaged premises. Actually between the date of the execution of the mortgage and the recording of the same and on the 7th day of September, 1934, the defendant in error had furnished certain material and supplies and had performed certain work and labor on the mortgaged premises at the instance of the mortgagors and for which they had agreed to pay the sum of $200. A lien claim therefor was subsequently filed by the defendant in error on November, 1934. The defendant in error was unable to collect the amount due him from the mortgagors and thereupon brought this suit.
The question for determination here is whether under the circumstances narrated the trial...
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