Bartholomew v. First National Bank

Johnston, J. The only contention here is between J. B. Bartholomew, who took up one of the Zeiner notes, and the First National Bank of Salina, Kansas, the payee of the note. Bartholomew claims that he purchased the note and was entitled to be subrogated to the rights of the Bank and to have the mortgage securing the note foreclosed in his favor. The Bank insists that there was no purchase or assignment of the note, and that only payment was contemplated by either party. The claim that the testimony fails to support the findings of fact cannot be sustained, and this is the principal error assigned. In the negotiations between Bartholomew and the Bank nothing was said indicating a purpose on his part to purchase the note, nor concerning its assignment to him. When arrangements were made for the taking up of the note by Bartholomew he paid $313.87, which was indorsed upon the note as any payment would have been. This amount appears to have been indorsed [599] upon the note as a payment, in the presence of Bartholomew, and no objection was then made nor any claim that it should be treated as a purchase. According to the testimony of Bartholomew he had no interest in the land to protect, was under no obligation to assume the burden of this debt, and had no agreement with the debtors that he would assume or pay the same. The Bank appears to have proceeded upon the theory that Norton, who held the equity in the Zeiner land, was a member of the firm of Bartholomew & Co., and that therefore Bartholomew was interested in the payment of the incumbrance against his.land for the protection of his own interests. He claims, however, that he was only acting as the agent of Norton, and had no interest in the equity which Norton had purchased. From the testimony it would seem that the object of the Bank was to secure the payment of a part of the mortgage debt so that the security would be sufficient for the portion remaining unpaid. The lien of the Bank was subsesequent to the $7,000 mortgage of the New England Loan and Trust Company, and when the transaction was had with Bartholomew it held another note secured by the same mortgage amounting to nearly $2,500, and still another note for $258.19, together with accumulated interest, secured by another mortgage upon the same land. Under the testimony and findings we must assume that there was no assignment, nor intention that Bartholomew should be substituted for the Bank when payment was made. In view of the large incumbrance which was prior to that of the Bank, and of the fact that only a little more than half of the secured debt to the Bank was paid by Bartholomew, there is much plausibility in the claim of the Bank that it was seeking to reduce [600] the indebtedness by payment so that the security would safely cover the unpaid portion of the debt. The Bank would have little to gain by the sale and assignment of the note if Bartholomew was to be substituted and given a lien as against the Bank for the unpaid portion of the mortgage debt, which at the trial amounted to considerably more than $3,000. The Bank was not required to assign the debt; and the rule of equitable assignment is never applied in aid of a mere volunteer, nor where it will operate inequitably upon the creditor. -.If Bartholomew was to be treated as a surety, he would not be entitled to subrogation, because only a portion of the mortgage debt has been paid. “The creditor is entitled to full satisfaction of the debt before the right of subrogation may be invoked ; the surety may not meddle with any of his rights and securities so long as any portion of the debt remains unsatisfied.” 24 Am. & Eng. Encyc. Law, 200, and cases cited. In our view there is sufficient testimony to support the findings of the Court, and its judgment must be affirmed. All the Justices concurring.