Schuessler v. Shelnutt, 5 Div. 236

Decision Date03 December 1936
Docket Number5 Div. 236
Citation233 Ala. 188,171 So. 259
CourtAlabama Supreme Court

Appeal from Circuit Court, Chambers County; W.B. Bowling, Judge.

Bill for subrogation by O.L. Shelnutt against Chas. Schuessler Carl Schuessler, Lewis Schuessler, and Gertrude B Schuessler, as administratrix of the estate of Rea Schuessler, deceased. From a decree overruling a demurrer to the bill, respondents appeal.


BROWN and FOSTER, JJ., dissenting.

Chas E. Fuller, Jr., of LaFayette, for appellants.

D.W. Jackson, of LaFayette, for appellee.

THOMAS Justice.

The bill sought subrogation for taxes paid on lands specifically described therein.

It is averred, "That in 1931 Chas. Schuessler & Sons was a partnership composed of Chas. Schuessler, Carl Schuessler, Rea Schuessler and Lewis Schuessler and the said Chas. Schuessler & Sons had formerly conducted a mercantile business in LaFayette, Alabama; that said partnership listed for taxation in the Tax Assessor's office of Chambers County, Alabama, on January 28, 1931, *** the following described real estate (describing the property); that the said Chas. Schuessler & Sons failed to pay the taxes assessed to them, which amounted to $167.79, in Chambers County, Alabama, for the year 1931, which were due on October 1, 1931, and became delinquent after January 1, 1932, but the Federal Land Bank of New Orleans, Louisiana, made a payment of $35.88 on June 16, 1932, on the Chas. Schuessler & Sons taxes to cover the taxes on the following described lands on which it had a mortgage (describing the portion on which taxes were paid), which left a balance of $145.31, which included interest, fees, and cost of the sale that was made on June 25, 1932; that after March 1, 1932, the complainant, as Tax Collector, reported to the Probate Court of Chambers County, Alabama, that Chas. Schuessler & Sons' taxes were delinquent, and that he was unable to collect same without a sale of some real estate, by filling in some blank places on a docket book which had been used by the Tax Collectors of Chambers County, Alabama, for forty years in reporting delinquent taxes to the Probate Court. The Probate Court of Chambers County, Alabama, issued a decree signed by W.C. Batson, Judge of Probate, ordering the complainant as Tax Collector of Chambers County, Alabama, to sell the following described real estate for said delinquent taxes (describing the property to be sold), which was a part of the real estate composing the assessment for taxes in the Tax Assessor's office in Chambers County, Alabama, for the year of 1931 of the said Chas. Schuessler & Sons. The said sale was ordered to be held on May 23, 1932, but was continued over to June 25th, 1932, at which time the complainant complied with said decree from the said Probate Court by selling the lands ordered to be sold, *** to the Bank of LaFayette for $145.31; that O.L. Shelnutt, as Tax Collector of Chambers County, *** made his final report of the 1931 taxes to the State Auditor on July 11, 1932, in which he turned over to the State Treasurer the money paid to him by the Bank of LaFayette as purchaser of the lands sold for the delinquent taxes of Chas. Schuessler & Sons."

It is then averred that on April 22, 1933, the Federal Land Bank of New Orleans filed suit in that court against the Bank of LaFayette, showing "that it held title by mortgage to 108 1/6 acres of the land ***, and that said mortgage had been foreclosed, at which foreclosure sale the said Federal Land Bank became the purchaser of the property which was sold by O.L. Shelnutt as Tax Collector of Chambers County *** to the Bank of LaFayette for the delinquent taxes of Chas. Schuessler & Sons," and praying "that the said sale be set aside because it held title as stated and that the docket book containing the report of delinquent taxes to the Probate Court by the Tax Collector did not conform to the requirements of the Revenue Laws of the State of Alabama, and that the certificate of sale issued by O.L. Shelnutt as Tax Collector *** to the said Bank of LaFayette, pursuant to said sale, was a cloud on the title to said real estate owned by the said Federal Land Bank"; and on May 10, 1934, a final decree was rendered, stating and decreeing "that the Federal Land Bank of New Orleans *** was the owner and held title to 108 1/6 acres of the land sold by the complainant *** for delinquent taxes of Chas. Schuessler & Sons for 1931, by reason of a mortgage which it had foreclosed and the said Federal Land Bank was the purchaser and that the certificate of purchase issued by the said Tax Collector was not a cloud on the title and the sale was declared null and void because of said title, and further: 'The Tax Collector for Chambers County, Alabama, failed to comply with the law made and provided in this State for the sale of lands for taxes in that said official had no proper docket book for the purpose of making the entries therein, as required by law, and that the said Tax Collector failed to make a proper and legal report to the Probate Court of Chambers County, Alabama, all as required by the Revenue Laws of the State of Alabama, in that said purported report of the Tax Collector in the instant case utterly fails to show a description of the property.' "

It is averred that, by reason of the foregoing decree, the complainant, as tax collector of Chambers county, was duly required to refund the amount of $210.80, and that complainant, as such official, was subrogated to all rights and remedies formerly held by the state and county against the other lands embraced in the assessment return, under and by virtue of the provisions of the statute, section 3097, Code 1923.

It is prayed that plaintiff be granted the right of sale and a decree to sell all of the other lands so assessed and specifically described to enforce the payment of the said taxes to the plaintiff in order that he may be fully repaid with interest and cost; that is, "for the taxes he has been forced to pay that should have been paid by the said Chas. Schuessler & Sons; and if complainant has mistaken the relief to which he is entitled, then your complainant prays that he may have such other, further and proper relief in the premises to which he has shown himself entitled, and which may seem meet and proper."

The bill shows no stale demand or laches which would prevent recovery, if complainant is entitled thereto. There is no change in the relative positions of the parties or the property now sought to be impressed and sold; no unreasonable delay or long acquiescence that is unexplained, or such as to render the enforcement of the claim within the rule inequitable. First National Bank v. Nelson, 106 Ala. 535, 18 So. 154; Wooddy v. Matthews, 194 Ala. 390, 69 So. 607; Crowder v. Crowder, 217 Ala. 230, 115 So. 256; Salvo v. Coursey et al., 220 Ala. 300, 124 So. 874; Galliher v. Cadwell, 145 U.S. 368, 12 S.Ct. 873, 36 L.Ed. 738.

The general rule as to subrogation is based upon principles of natural reason, justice, and equity, with reference to a lawful claim, lien, or right. It is substitution, under recognized circumstances, of a new for an old creditor or lienholder, or permitting a transfer of a person or thing in the place of another, with the rights and obligations in the premises of the person or thing for whom transferred. "The doctrine of subrogation, being the creature of courts of equity, is so administered as to secure essential justice, without regard to form, and is independent of any contractual relation between the parties to be affected by it." McNeil v. Miller et al., 29 W.Va. 480, 483, 2 S.E. 335, 337. See our early cases of Foster v. Trustees of The Athenaeum, 3 Ala. 302; Lyon v. Bolling et al., 9 Ala. 463, 44 Am.Dec. 444; Houston, Ex'r, etc., v. Branch Bank at Huntsville, 25 Ala. 250, and Craythorne v. Swinburne, 14 Vesey, Jr. 160. Later decisions are collected in United States Fidelity & Guaranty Co. et al. v. First Nat. Bank of Lincoln, 224 Ala. 375, 140 So. 755; Montgomery, Superintendent of Banks, v. Wadsworth, 226 Ala. 667, 148 So. 419; Montgomery, Superintendent of Banks, et al. v. Ward, 227 Ala. 641, 151 So. 583.

It should be further observed that subrogation is a mode of relief adopted by equitable principles to compel payment of a debt or discharge of a lien by one who in justice and good conscience should have paid or discharged the debt; and that the maxim, "He who comes into equity, must come with clean hands," applies to such procedure. United States Fidelity & Guaranty Co. v. R.S. Armstrong & Bro. (Southern Bank & Trust Co., Intervener), 225 Ala. 276, 142 So. 576; Foster v. Winchester, 92 Ala. 497, 9 So. 83.

It would result from this rule that if the party invoking the rule is not a volunteer, and both parties are merely negligent in the matter, there being no violation of law, contract, or superior equity, and no injury done to defendant, then application of justice and good conscience to the particular circumstances justifies the burden falling on him whose negligence or default primarily caused or induced the situation.

In Panhandle Lumber Co. v. Rancour, 24 Idaho, 603, 611, 135 P. 558, Chief Justice Ailshie observed: "The rule that 'courts of equity will not relieve parties from the consequences of their own folly, or assist them when their condition is attributable to their failure to exercise ordinary care for their protection,' will be administered by courts, in the light of the facts and circumstances of each particular case, with such discretion and flexibility as will accomplish substantial justice in the case then before the court." To like effect is Taylor v. Godfrey et al., 62 W.Va. 677, 59 S.E. 631.

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    • July 31, 2002 obtain reimbursement for payment of that obligation. See Mitchell v. Conway, 257 Ala. 648, 60 So.2d 676 (1952); Schuessler v. Shelnutt, 233 Ala. 188, 171 So. 259 (1936). The New Jersey trial court in Fidelity Union accepted the argument, advanced by the government in the current estate t......
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