Ragan v. Standard Scale Co.

• Decision Date: 15 June 1907
• Parties: RAGAN v. STANDARD SCALE CO.
• Court: Georgia Supreme Court

58 S.E. 31

128 Ga. 544

RAGAN v. STANDARD SCALE CO.

Supreme Court of Georgia

June 15, 1907

Syllabus by the Court.

Where one purchases a certain piece of property against which there are two recorded mortgages, and pays off the senior mortgage out of the purchase money, and it is canceled, equity will not, in the absence of an agreement between the parties to that effect, subrogate him to the rights of the senior mortgagee, as against the other incumbrancer, whose lien was subject to the senior mortgage, but prior to the purchase.

[Ed Note.-For cases in point, see Cent. Dig. vol. 44 Subrogation, § 38.]

Error from Superior Court, Floyd County; Moses Wright, Judge.

Action by the Standard Scale Company against R. J. Ragan. Judgment for plaintiff, and defendant brings error. Reversed.

The Standard Scale Company filed an equitable petition against Ragan, and alleged the following facts: On May 26, 1902, one Corley executed and delivered to the Exchange Bank of Rome certain promissory notes for the principal sum of $240, and secured the notes by a mortgage on one "De Loach paragon" planer, and the mortgage was recorded on May 27, 1902. Subsequently Corley executed to Ragan a mortgage covering the same property, which was recorded on October 8 1902, and "some time during the month of November, 1902 petitioner bought said property from said Corley for the sum of $200, and out of said purchase price it [plaintiff] paid the Exchange Bank of Rome the sum of $160; said amount being the balance due said bank upon said note and mortgage held by it. Upon receipt of said sum, said bank canceled its said mortgage, and surrendered the same to Corley." Ragan obtained a judgment in the city court against Corley on Corley's note and mortgage to him, and the execution was levied on the property described in the mortgage; and to this levy the Standard Scale Company interposed a claim. Corley is insolvent and has left the state. It was prayed "that said Ragan be enjoined from proceeding further with said case in the city court until this cause can be heard and disposed of; that petitioner be subrogated to the rights of said bank as against said property; that said Ragan be required to pay *** petitioner the sum of $160, with 8 per cent. interest thereon from November 6, 1902; and that upon failure to pay said amount, with interest, said property be found not subject to the mortgage fi. fa. held by said Ragan." The case was submitted to the presiding judge upon an agreed statement of facts, which accorded with the foregoing statement, and the court rendered judgment as follows: "That the property levied upon and claimed in said cause be, and the same is hereby, found not subject to the lien of plaintiff's fi. fa. unless plaintiff in fi. fa. (Ragan) pay over to claimant (Standard Scale Company) within thirty days from the date hereof the sum of $160, with 8 per cent. interest thereon from November 6, 1902." Ragan excepted.

C. E. Davis and J. W. & G. E. Maddox, for plaintiff in error.

Dean & Dean, for defendant in error.

BECK J.

1. The doctrine of subrogation was ably discussed by Justice Cobb in the case of Wilkins v. Gibson, 113 Ga. 31, 38 S.E 374, 84 Am.St.Rep. 204, where the rule was announced (page 47 of 113 Ga., and page 381 of 38 S.E. ) that "subrogation will arise only in those cases where the party claiming it advanced...