Rice v. Winters
| Decision Date | 19 June 1895 |
| Docket Number | 6435 |
| Citation | 63 N.W. 830,45 Neb. 517 |
| Parties | W. B. RICE, APPELLEE, v. WILLIAM WINTERS ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court of Buffalo county. Heard below before NEVILLE, J.
REVERSED AND REMANDED.
Calkins & Pratt, for appellants:
The appellants contend that the appellee, not being a surety or guarantor of the defendant Winters, nor having any junior lien upon the premises of any kind to protect, and not being under any obligation, moral or legal, to pay the notes and mortgages executed by Winters to Moore, was a stranger. (Suppiger v. Garrels, 20 Ill.App. 625; AEtna Life Ins. Co. v. Town of Middleport, 124 U.S. 549.)
When appellee loaned Winters the money with which to liquidate, he was a volunteer. (AEtna Life Ins. Co. v. Town of Middleport, 124 U.S. 549; Suppiger v. Garrels, 20 Ill.App. 625; Richards v. Griffith, 28 P. [Cal.], 485.)
There being no agreement or understanding between Winters and the appellee that the Moore mortgages were to be assigned to the appellee or that they were to be kept alive and on foot for his use and benefit, he is not entitled, as a matter of course, in equity to be subrogated.
Winston & Meagher, also for appellants:
The demand of a creditor which is paid with the money of a third person, without any agreement that the security shall be assigned or kept on foot for the benefit of such third person, is absolutely extinguished.
Where the demand of a creditor is paid by the money of a third person, not himself a creditor, without any agreement that the security shall be assigned or kept on foot for the benefit of such third person, the demand is absolutely extinguished. (White v. Cannon, 125 Ill. 412; Bayard v. McGraw, 1 Ill. App., 134.)
A mere stranger or volunteer cannot, by paying a debt for which another is bound, be subrogated to the creditor's rights, in respect to the security, by the real debtor; but if the person who pays the debt is compelled to pay for the protection of his own interests and rights, then subrogation should be made. (Beaver v. Slanker, 94 Ill. 183; Downer v. Miller, 15 Wis. 677; Wilkes v. Harper, 1 N.Y. 586; Van Winkle v. Williams, 38 N.J.Eq. 105; Paige, Modern Equity Jurisprudence, p. 875; Wadsworth v. Blake, 43 Minn. 509; Evans v. Rhea, 14 S.W. [Ky.], 82.)
Where the creditor of a debtor, out of necessity to protect his own interest, purchases a prior lien or incumbrance he will be entitled in equity to be subrogated; but the mere volunteer or a stranger will not be. (Beaver v. Slanker, 94 Ill. 175.)
Where there was an agreement, the doctrine of subrogation is recognized. (Gans v. Thieme, 93 N.Y. 225; Tradesmen's Building Association v. Thompson, 32 N.J.Eq. 133; Detroit Fire & Marine Ins. Co. v. Aspinwall, 12 N.W. [Mich.], 214; Sidener v. Pavey, 77 Ind. 241; New Jersey M. R. Co. v. Wortendyke, 27 N.J.Eq. 660; Shinn v. Budd, 14 N.J.Eq. 234.)
Where there is no agreement that the party so advancing the money shall be subrogated to the prior lien-holder, there can be no subrogation in equity.
Even where there is an agreement it has been held that a volunteer cannot be subrogated to the position of a prior claimant. (Mather v. Jenswold, 32 N.W. [Ia.], 512; Wormer v. Waterloo Agricultural Works, 62 Iowa 699; Weidner v. Thompson, 28 N.W. [Ia.], 422.)
The mere fact that a party is a subsequent mortgagee does not entitle him to an assignment of a prior mortgage. There must be some peculiar equity. (Vandercook v. Cohoes Savings Institution, 5 Hun [N. Y.], 641; Dings v. Parshall, 7 Hun [N. Y.], 522.)
R. A. Moore, contra, cited as to plaintiff's rights to subrogation: McKenzie v. McKenzie, 52 Vt. 271; Cobb v. Dyer, 69 Me. 494; Levy v. Martin, 48 Wis. 198; Blodgett v. Hitt, 29 Wis. 169; Crippen v. Chappel, 35 Kan. 495; Harris, Subrogation, secs. 811, 816; Betts v. Sims, 35 Neb. 840; Cheesebrough v. Millard, 1 Johns. Ch. [N. Y.], 412; Everston v. Central Bank of Kansas, 6 P. [Kan.], 611.)
Marston & Nevius, also for appellee.
The facts are stated by the commissioner.
From the transcript of the record and the briefs of counsel we understand the facts in this case to be substantially these On the 15th of June, 1887, William Winters became indebted to one R. A. Moore, and as an evidence of such indebtedness executed and delivered to Moore on said date two notes of $ 700, each due respectively on the 15th days of June, 1888 and 1889, and secured said debt by a mortgage upon certain real estate. On the 30th day of April, 1888, Winters also became indebted to Grommes & Ullrich in the sum of $ 3,829.76, and as an evidence of said debt gave to them a series of notes the last two of which were for $ 600 and $ 429.76, respectively, and due October 31 and November 30, 1888. To secure this debt Winters executed to Grommes & Ullrich a mortgage upon the same real estate which he had previously pledged to Moore; the Grommes & Ullrich mortgage became a second lien upon the property, the incumbrance of Moore being a first lien. Winters subsequently paid all the mortgage debt owing to Grommes & Ullrich except the aforesaid last two notes of the series. In June, 1889, one John M. Lay, resided in the city of Kearney, Nebraska, and was in the habit of taking applications of persons desiring to borrow money and of referring such applications to one W. B. Rice, who, if the security proved acceptable, would make the loan applied for. About this date one E. B. Jones, an attorney at law at Kearney, seems to have had in his possession for collection the Moore mortgage, at least he was then pressing Winters for its payment. Lay, learning of this fact, took Winters' application for a loan of $ 1,300, to be secured by a first mortgage on the premises already mortgaged by Winters to Moore, such loan to be used for the purpose of paying the Moore mortgage. June 1, 1889, Rice accepted Winter's application and loaned him $ 1,300, taking his note therefor, secured by a mortgage on the same premises mortgaged by Winters to Moore, and with the $ 1,300 the Moore mortgage was paid off and by Moore duly discharged of record on the 6th of June, 1889. About the same date said Jones released and discharged on the margin of the record where it was recorded the Grommes & Ullrich mortgage, or attempted to do so. It seems also that an abstract of the title of the real estate mortgaged was furnished to Rice before he parted with the money loaned to Winters, and that this abstract contained a notation of the abstracter that the Grommes & Ullrich mortgage had been released on the margin of the record where recorded. Rice brought this suit in equity in the district court of Buffalo county to foreclose the mortgage given him by Winters on the 1st of June, 1889, prayed for an accounting of the amount due him on said mortgage from Winters, and that he might be given a first lien upon the real estate described in said mortgage to secure the payment of the amount found due. Winters was made a party defendant to this action, but his connection with the case need not be further noticed. Grommes & Ullrich were made or became parties to the suit, and filed an answer in the nature of a cross-petition, setting out the execution and delivery to them of the mortgage, above mentioned, by Winters; that the last two notes which the mortgage was given to secure, namely, the notes for $ 600 and $ 429.76, with interest, remained past due and wholly unpaid; they prayed for an accounting of the amount due them from Winters, and that they be given a first lien upon said mortgaged premises for its payment. To this answer and cross-petition of Grommes & Ullrich, Rice replied: (1) That the Grommes & Ullrich mortgage had been fully paid and that there was nothing due thereon; (2) that it had been duly released and discharged of record by one E. B. Jones, acting as the agent and attorney for Grommes & Ullrich; (3) the execution of the mortgage of the 15th of June, 1887, by Winters to Moore; that the mortgage he, Rice, sought to foreclose in this action was made for the purpose of and the...
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