Prestridge v. Lazar

• Decision Date: 23 April 1923
• Docket Number: 22921
• Citation: 132 Miss. 168,95 So. 837
• Court: Mississippi Supreme Court
• Parties: PRESTRIDGE v. LAZAR

95 So. 837

132 Miss. 168

PRESTRIDGE v. LAZAR

No. 22921

Supreme Court of Mississippi

April 23, 1923

1 SUBROGATION. Operation of doctrine.

The doctrine of subrogation is one of equity and benevolence, its basis is the doing of complete and essential justice between the parties without regard to form, its object is the prevention of injustice, and it rests upon principles of natural equity. The court should rather incl'ne to extend than restrict the operation of the doctrine. It applies wherever any person, other than a mere volunteer, pays a debt or demand which in equity or good conscience should have been satisfied by another, or where one person finds it necessary for his own protection to pay the debt for which another is primarily liable, or where one has such an interest in property as makes it necessary for him to get in an outstanding claim or equity for its protection.

2 SUBROGATION. Vendee of land contract paying mortgages out of purchase money entitled to subrogation, where subsequent mortgage disclosed.

Where a vendee of land, in order to clear the title of incumbrances with the consent of the vendor discharged out of the purchase money two mortgages, given on the land by the latter, which were prior mortgages, and afterwards the vendee learned that there was an unsatisfied subsequent mortgage on the land given by the vendor, of which the vendee had no knowledge or information at the time he paid the purchase money,. held the vendee was entitled to be subrogated to the rights of the two mortgagees in the mortgages so discharged by him to the extent of the amount paid by him in their discharge, and in equity said mortgages will be revived for the benefit of the said vendee, and have priority over said third mortgage.

HON. R W. CUTRER, Chancellor.

APPEAL from chancery court of Pike county, HON. R. W. CUTRER Chancellor.

Suit by W. E. Prestridge against A. J. Lazar. From a decree for defendant, plaintiff appeals. Reversed, and judgment for plaintiff.

See, also, 94 So. 799.

Judgment reversed.

F. D. Hewett, for appellant.

The cases all cited by the appellee, A. J. Lazar, when analyzed and differentiated, have very little, if any, bearing on the present case. The case of the Union Mortgage, Banking & Trust Company et al. v. Peters et al., in 18 So. 497, cited by the appellee, is authority for the contention of the appellant Prestridge. On page 500 of that case the court answers the objections and says: "First. One who, at the instance of the debtor, advances money to be used by the debtor in payment of a prior security is not a stranger and intermeddler in his affairs. Shield, Subr. 247; Wilton v. Mayberry (Wis.), 43 N.W. 901, etc. Second. The fact that the mortgage was paid and intended to be paid is immaterial. Equity will consider it as yet alive so long as the rights of parties require. Walker v. King, 45 Vt. 525; Cobb v. Oyer, 69 Me. 494; Wheeler v. Wullard, 44 Vt. 640; Barnes v. Mott, 64 N.Y. 397; Loan Co. v. Bailock, 76 Tex. 85, 13 S.W. 12; Crippen v. Chappel, 35 Kan. 495, 11 P. 453; Cansler v. Sallis, 54 Miss. 446.

"The status quo ante the cancellation of the securities should be restored; the appellants held to account as mortgagees in possession of the land entitled to charge against it all prior incumbrances discharged by the money they loaned." The appellee does not cite any Mississippi case in support of his contention, in fact all of the Mississippi cases hold that any person who advances the money for the purchase price of the land is subrogated to all the rights and equities of the person holding the securities.

Third. That a cancellation of the record of a mortgage does not bar the right of a person, nor the application of the doctrine of subrogation, but that a court of equity will hold alive and enforce the rights of persons entitled to them.

In the instant case, Prestridge being just a plain farmer, at the request of debtor who owed, according to the undisputed testimony, three thousand one hundred dollars or more the purchase price of the land, advanced the money to pay off and discharge prior liens, and that the same by mistake and oversight, was cancelled on the record, but not to the prejudice of Lazar. The undisputed testimony is that Prestridge paid the money to Lampton and just how the chancellor could render a decision giving to Lazar a first mortgage to the extent of nine hundred ninety-three dollars, is not easily understood. Prestridge was subrogated to the rights of Lampton; and as there was a balance of three thousand one hundred dollars due Lampton on the purchase price of the land, the court was certainly wrong in ordering the land sold and nine hundred ninety-three dollars be paid to Lazar first. The court should have ordered the land sold at public auction and that Prestridge first be paid the amount of the purchase price, four thousand dollars, and if not four thousand dollars, certainly three thousand one hundred dollars with cost and expenses and the balance, if any, paid to Lazar on his whole note of one thousand three hundred twenty dollars.

The undisputed testimony is that Prestridge furnished the money to discharge the mortgage executed for the purchase money. He was, therefore, subrogated to the rights of Lampton. In the case of the American Trust & Savings Bank v. Turner et al., 80 So. 176, the Alabama court holds: "One who pays off another's obligation, secured by mortgage, or advances money for its payment, at the instance of the debtor and for his benefit, is not a mere stranger or 'volunteer,' but is entitled to subrogation to the rights of the original creditor."

In the case of Good v. Golden et al., 19 So. 100, the court holds: "That one who pays off the debt of another is entitled to subrogation," and that is held in a number of Mississippi cases. Howell v. Busch, 54 Miss. 437; Nixon v. Julian, 72 Miss. 570; Conway v. Strong, 24 Miss. 665; Cansley v. Salis, 54 Miss. 446.

The doctrine of subrogation is ably discussed in Bispham's Principles of Equity (7 Ed.) par. 335. It holds that one who pays off the mortgage executed for the pur chase price of land will be subrogated to the rights of the original creditor, in order that exact justice may be done between the persons, and that even though the mortgage is cancelled equity will keep alive the security for the benefit of the person advancing the money.

It was held in a case in South Carolina, decided in 1893, that where a bona-fide purchaser at a void judicial sale, who thought he was taking a good title, has paid his bid and the money has been applied to the payment of a mortgage debt, he is entitled to be subrogated to the rights of the mortgagee. Upon the same ground it was held in Everston v. Central Bank, that where money was loaned on a forged mortgage, was applied to a prior and valid mortgage, the mortgagee, under the forged mortgage, could successfully claim to be subrogated to the rights of the prior mortgage. Bispham's Principles of Equity, pages 481 and 482, it holds: "But where a debtor borrows money for the purpose of discharging a lien, the person advancing the money may be subrogated by the debtor to the creditor's right, and is not deemed a volunteer."

There is no question in the instant case that equity will hold that Prestridge is subrogated to the rights of Lampton and will keep alive the mortgage, because Lazar is not hurt at all, and his claim is not prejudiced, Lazar loaned the money knowing that there was four thousand dollars due on it, and at the time Prestridge bought it and took up these mortgages he was not an intervening lienor, and Lazar cannot say that what Prestridge did in any way injure him, and therefore, he cannot complain if Prestridge asked the court to put the land up and sell it so as to return him his money.

We respectfully urge that the court reverse this case and render judgment for the appellant.

C. T. Gordon and Price & Price, for appellee.

Counsel, in his brief, cites but one, authority--Robertson v. Sullivan et al., 59 So. 846, which, from our viewpoint is not applicable here. That decision announces a wise, wholesome and righteous doctrine. In that case Mrs. Sullivan was not a volunteer, as in the case at bar, but she had a vested equity and interest in the property by virtue of inheritance, and so did her children, but in the case at bar Prestridge was a mere volunteer, had no interest in the property and no interest to serve and volunteered without any investigation of the record, to pay off the balance due on two mortgages without ever investigating the record to see whether or not Lazar had been paid, and in the face of Lazar's mortgage he voluntarily paid Daughtery nine hundred ninety-three dollars and seventeen cents.

In Purnell v. Gillespie, decided by this court, June 13, 1921, 88 So. 637, it is said: "Whether the payment to the holder of a promissory note by a stranger thereto of the amount due thereon is a payment and discharge of the note or a purchase of it depends on the intention of the parties to that transaction, particularly on the intention of the holder of the note." Norton on Bills & Notes (4 Ed.) 401; 3 R. C. L. 1286; 8 C. J. 588.

It will be observed that there was no intention on the part of the holder of the note, or the maker, or of Prestridge, to have the note transferred, but it was the intention of all these parties that the trust deed would be canceled and that Daughtery would make Prestridge a deed.

"It will be observed that there was no intention on the part of the holder of the note, or the maker, or of Prestridge, to have the note transferred, but it was the intention of all three of the parties that the trust deed would be canceled and that Daughtery would make Prestridge a deed. "This is but an...