Opp v. Ward

• Decision Date: 28 May 1890
• Docket Number: 14,251
• Citation: 24 N.E. 974,125 Ind. 241
• Parties: Opp v. Ward et al
• Court: Indiana Supreme Court

24 N.E. 974

125 Ind. 241

Opp v. Ward et al

No. 14,251

Supreme Court of Indiana

May 28, 1890

Petition for a Rehearing Overruled Oct. 7, 1890.

From the Tippecanoe Circuit Court.

The judgment is affirmed, with costs.

B. W Langdon and T. F. Gaylord, for appellant.

R. P Davidson and R. P. Davidson, Jr., for appellees.

OPINION

Mitchell, J.

The questions for decision arise upon the following facts: In 1876, Wilson & Hanna leased certain premises, in the city of Lafayette, to James H. Telford, who agreed to pay a stipulated sum as rent, and to surrender the premises at the end of one year. Ward became bound as guarantor for the faithful performance by the lessee of the covenants or agreements contained in the lease. Telford went into possession but refused to surrender at the end of his term, and the lessors recovered judgment against him for possession, and for $ 164.44 damages. Telford appealed to this court, Opp becoming surety on his appeal bond, by means of which all proceedings to enforce the judgment were suspended, and the lessors were thereby kept out of possession from the 31st day of January, 1878, the date of the judgment, until the 20th day of May, 1881, the judgment having been affirmed on the 15th day of February, 1881. Telford v. Wilson, 71 Ind. 555. Thereupon, Wilson & Hanna brought suit and recovered judgment against Ward, on his contract of guaranty. The amount recovered was $ 676, besides costs, the amount specified being the rental value of the leased premises from the date of the judgment appealed from to the 16th day of July, 1880, at which date Telford died, having previously paid the judgment recovered against him for damages. The judgment against Ward was afterwards affirmed by this court on appeal. Ward v. Wilson, 100 Ind. 52. Ward subsequently paid the judgment recovered against him, which, with accumulated interest and costs, amounted when paid to $ 838.30, and thereupon he brought this suit against Opp, on the appeal bond. Wilson & Hanna were made parties defendant to answer. They disclaimed any interest in the appeal bond, except that they claimed judgment in their favor for a small amount of costs which remained unpaid in their suit against Telford. The finding of the court was in favor of the plaintiff below.

If the plaintiff was entitled to recover it was because after paying the judgment recovered by Wilson & Hanna against him for the rent that accrued pending the appeal taken by Telford he became subrogated to their rights and remedies upon the appeal bond.

Subrogation is an equitable device, and rests upon the principles of justice and equity which it is intended to accomplish. The doctrine is well established, that one who occupies the attitude of a surety will be subrogated to all the rights, remedies, and securities which the creditor held, in case the former has been compelled to pay a debt which, in equity and good conscience, should have been paid by another. Payment by the surety is equivalent to a purchase from the creditor, and operates as an equitable assignment of the debt, and all its incidents, to the former. Thomas v. Stewart, 117 Ind. 50, 18 N.E. 505; Pence v. Armstrong, 95 Ind. 191; Arbogast v. Hays, 98 Ind. 26; Acer v. Hotchkiss, 97 N.Y. 395. These principles are familiar, and of frequent application.

The application of the doctrine of subrogation requires (1) that a person must have paid a debt due to a third person, for the payment of which another was in equity primarily liable; and (2) that in paying the debt the person paying acted under the compulsion of saving himself from loss, and not as a mere volunteer. Aetna Life Ins. Co. v. Middleport, 124 U.S. 534, 31 L.Ed. 537, 8 S.Ct. 625; Hoover v. Epler, 52 Pa. 522; Southall v. Farish, 1 Lawyers' Rep. Ann. 641; Sheldon Subrogation, section 240.

It is insisted, however, that in the case of successive sureties, who become bound by separate obligations for the payment of the same debt, the equity of the last surety is superior to that of the first, and that as the liability of the plaintiff below, as guarantor, was prior in point of time to that of the appellant as surety on the appeal bond, both being bound for the same debt, the equity of the latter was at least equal, if not superior, to that of the former. This view is not maintainable in a case like the one under consideration. It is quite true the plaintiff below became liable, as guarantor, for the payment of all rent, as well as for all damages growing out of the unlawful detention of the property by the tenant. But it is also true that his liability, which theretofore was uncertain and contingent, became certain and fixed when the landlord recovered judgment for the possession of the leased premises, and for damages for their unlawful detention. The guarantor had the right to pay the amount of the judgment recovered against his principal, and thus put an end to his liability at once. By the voluntary intervention of the appellant, in becoming surety on the appeal bond, all further proceedings on the judgment by which the landlord was awarded the right of immediate possession, were stayed, and the hands of the guarantor were effectually tied until the appeal was disposed of. It is settled that the sureties on an appeal bond given by a judgment defendant on appeal from a judgment for the possession of real estate are liable not only for the money judgment, but also for the rental value of the real estate pending the appeal, to an amount not exceeding the penalty of the bond. Opp v. Ten Eyck, 99 Ind. 345; Hays v. Wilstach, 101 Ind. 100; Graeter v. DeWolf, 112 Ind. 1; Stults v. Zahn, 117 Ind. 297, 20 N.E. 154.

Upon the determination of the appeal, the landlord had his election to sue on the appeal bond and recover the rental value of the premises unlawfully detained, or to proceed against the guarantor on the lease. He adopted the latter alternative. If he had sued on the appeal bond and recovered judgment against the surety, it is quite certain that the latter would have had no standing in a court of equity to recover...