Mosher v. Conway

• Decision Date: 03 June 1935
• Docket Number: Civil 3554
• Citation: 46 P.2d 110,45 Ariz. 463
• Parties: HATTIE L. MOSHER, Appellant, v. E. POWER CONWAY, Appellee
• Court: Arizona Supreme Court

46 P.2d 110

45 Ariz. 463

HATTIE L. MOSHER, Appellant, v. E. POWER CONWAY, Appellee

Civil No. 3554

Supreme Court of Arizona

June 3, 1935

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment reversed and case remanded, with instructions.

Mr John W. Ray, for Appellant.

Messrs Kibbey, Bennett, Gust, Smith & Rosenfeld, for Appellee.

OPINION

LOCKWOOD, C.J.

This is a suit by E. Power Conway, hereinafter called plaintiff against Hattie L. Mosher, hereinafter called defendant, and others, to enforce certain paving liens alleged to have been acquired by plaintiff by virtue of a subrogation and assignment. The property involved is lots 6 and 7 in block 14, east Evergreen addition to the city of Phoenix, which adjoins Fifth and Culver Streets in that city, and the facts, with one possible exception, are not in dispute, and may be stated as follows:

Defendant Mosher was the original owner of the lots. At some time between the years 1913 and 1919, certain street improvements were made on Fifth Street under the provisions of chapter 13, title 7, Revised Statutes of Arizona 1913 (paragraph 1953 et seq., Civ. Code), known as the act of 1912. Under this act separate bonds for the amount of the assessments were issued against each of the said lots. At a later period Culver Street was improved under the provisions of chapter 144, Session Laws of 1919, Known as the act of 1919. Under this act separate assessments were made against each of the two lots and bonds issued against the funds created by the assessments levied upon all of the property in the district assessed. At a later period another improvement was made on Fifth Street under the act of 1919, but the lien for that improvement attached only to lot 7, the assessment against lot 6 having been paid in cash. Defendant made payment of the assessments for the first improvement for a number of years, but finally made default in payment, and the holder of the bonds caused the city treasurer to make separate sales of said lots in accordance with the provisions of the act of 1912. At said sale both the lots were purchased by Coit I. Hughes, subject to the right of redemption authorized under the act.

Defendant Mosher thereafter made default in payment of the assessments levied for the second improvement and the superintendent of streets sold lots 6 and 7 for such assessments, in the manner provided by the act of 1919. One Maurice F. Fox was interested in the bonds issued for this improvement and purchased the lots at that sale, receiving the usual certificates of sale, but since the lots had previously been sold to Hughes for a default of the first assessment, Fox, prior to the expiration of the right to redeem from the first sale, paid to the city treasurer for redemption from the Hughes sale the amount bid at the sale by the latter, plus the statutory penalty. Hughes had sought to prevent the sale under the second improvement, but this court held in the case of City of Phoenix v. Hughes, 36 Ariz. 399, 286 P. 191, that the sale to him did not cut off the city's right to make a second sale of the lot for the lien of the second improvements, and Hughes finally accepted the payment made by Fox for redemption, as aforesaid. Before the expiration of the time to redeem from the second sale at which Fox had purchased, defendant Mosher paid to the superintendent of streets the amount required to redeem from that sale plus the penalties, but did not pay or tender to said superintendent, or anyone else, the amount paid by Fox to redeem from the sale to Hughes. Thereafter the superintendent of streets, the assessments thereon being in default, sold lot 7 under the third improvement and it was purchased by Don P. Skousen. The situation then existing was that Fox, the purchaser under the second sale, had redeemed from the first sale, and that defendant Mosher, the original owner of the lot, had attempted to redeem from the second sale by paying the amount for which the lots were sold under said sale, plus penalties, but without paying or tendering to pay to Fox, the purchaser at the second sale, the amount which he had paid to Hughes to redeem from the first sale, and that Skousen had purchased at a third sale. Fox was in doubt as to the effect of the purchase by Skousen under the third sale upon his interest, and paid to the superintendent of streets the proper amount to redeem from the sale to Skousen, which money was accepted by the latter. Thereafter Fox assigned all the rights which he had acquired by virtue of the various proceedings set forth above, to plaintiff, Conway, and the latter brought this suit asking that the lots be again sold for the amounts paid by Fox to redeem from the Hughes and Skousen sales, his theory apparently being that redemption by Fox from the first sale subrogated the latter to the rights of Hughes, and that since Fox had redeemed from the Skousen sale, in order to prevent the acquisition by the latter of a legal title which might prevail over the equitable rights of Fox, he was also subrogated to the rights of Skousen.

The first question involved in this appeal is the applicability of the right of subrogation to the redemptions made by Fox from the various sales above set forth. Subrogation is the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt. It is a creature of equity, and was adopted from the Roman and not from the common law. Its purpose is the prevention of injustice and is the made which equity adopts to compel the ultimate payment of a debt by one who in justice, equity and good conscience ought to pay it. It rests upon the principle that substantial justice should be attained, regardless of form. While the nature and grounds of subrogation are very clear, the difficulty arises in its application to the innumerable complications of business, and no general rule can be stated which will afford a test in all cases for its application. Whether it is applicable or not depends upon the particular facts and circumstances of each case as it arises. This remedy has been applied much more extensively in American than in English jurisprudence, and the modern tendency is to extend its use rather than to restrict it. While it was originally limited to transactions between principals and sureties, it now has a very liberal application, its principle being modified to meet the circumstances of cases as they arise. The general rule of equity which is probably most often invoked in cases of subrogation is that he who seeks equity must do equity, and subrogation can only be granted when an equitable result will be reached. It involves three elements: (1) A valuable right; (2) a person who owns the right; and (3) a person who seeks to be substituted in that ownership. There must exist a claim or obligation against the debtor; an original right to that claim on the part of him in whose place substitution is sought, and some right belonging to him who seeks the substitution which will be protected thereby. So when one, being himself a creditor, pays another creditor, whose claim is preferable to his, it is held that the person so paying is subrogated to the rights of the other creditor. Fox was entitled to redeem from Hughes under subdivision (g), paragraph 1973, Revised Statutes of Arizona 1913 (Civ. Code), which reads as follows:

"Subdivision g. A redemption of the property sold may be made by the owner of the property, or any party in interest, within twelve months from the date of purchase, or at any time prior to the application for a deed, as hereinafter provided. Redemption must be made in lawful money of the United States, and when made to the city treasurer he must credit the amount paid to the person named in his certificate, and pay it on demand to him or his assignee."

It seems clear to us, according to the principles above stated, that when Fox, in order to protect his lien under the second improvement, redeemed from Hughes' purchase under the first sale, he was subrogated to the rights which Hughes had acquired by his purchase against the land involved. These rights are set forth in subdivisions (f) and (i), paragraph 1973, Revised Statutes of Arizona 1913 (Civ. Code), as follows:

"Subdivision f. Immediately on the sale, the purchaser shall become vested with a lien on the property, so sold to him, to the extent of his bid, and is only divested of such lien by the payment to the city treasurer of the purchase money, including costs herein provided for, with interest thereon at...