Lyon v. Colonial United States Mortgage Co.

Smith, C. J., delivered the opinion of the court. The appellee exhibited an original bill of complaint in the court below against the appellants and two other [58] parties, from which the following facts appear: In March, 1912, J. H. Watson and his wife, Fannie M. Watson, executed and delivered to the complainant a mortgage on certain described lands to secure the payment of an indebtedness due by them to the complainant. J. H. Watson died shortly thereafter leaving a will by which he devised the land to his widow. Watson left surviving him three children by a former marriage who in October, 1912, filed a suit in the chancery court of Holmes county against Mrs. Fannie M. Watson and the complainant herein, setting forth that the land was formerly owned by their now deceased mother, whose sole heirs were themselves and their father, J. H. Watson; that they own a tliree-fonrths interest and Mrs. Fannie M. Watson by virtue of their father’s will owns a one-fourth interest in the land; that three-fourths of the proceeds thereof be paid to them, and one-fourth to the mortgage company or so much thereof as would be necessary to discharge its mortgage, and the remainder, if any, to Mrs. Fannie M. Watson; that the suit for partition was heard on bill, answer of the defendants therein, and proof, resulting in a decree as prayed for, from which an appeal was prosecuted by Mrs. Watson and the mortgage company to the supreme court, they executing an appeal bond, one of the conditions of which was that they would “pay such costs, damages, and rents as shall be awarded against them,” etc. The decree appealed from was affirmed by this court in January, 1915. Watson v. Vinson, 108 Miss. 600, 67 So. 61. Shortly after the filing of the bill for partition, Mrs. Watson leased the land to A. A. and L. H. Lyon, the appellants herein, doing business under the firm name of Lyon Bros., for a term of three years beginning January 1, 1913, for an annual rental of one thousand, seven hundred and thirty-six. dollars and seventy-two cents, for which three promissory notes were given. These notes were collected by Mrs. Watson. The lessees knew when the lease Avas made of the claim of the Watson children to a three-fourths undivided interest in the land and of the institution by them of the suit for a [59] partition, anil one of the stipulations of the lease was that it Avas made “subject to the alleged rights of heirs to said section 34 hoay in litigation in the chancery court of Holmes county, Miss., and not yet passed on by said court.” When the land Avas sold under the decree for a partition, the rents therefor for the Watson children’s three-fourths interest therein AAras decreed, on their petition, to be paid out of the one-fourth of the proceeds of the land set apart for Mrs. Watson and the mortgage company. The prayer of the bill is that the complainant, the Colonial United' States Mortgage Company, be subrogated to the right of the Watson children to collect from Lyon Bros, three-fourths of the rent agreed to be paid by them for the land for the years 1913 and 1914. The appellants, Lyon Bros., answered practically admitting the allegations of the bill but denying the complainants’ right to a recovery. The cause Avas heard on bill and ansAver, and a decree Avas rendered in accordance with the prayer of the bill, from Avhich this appeal is taken. “ ‘Subrogation is the substitution of oné person in place of another, Avhether as a creditor or as the possessor of any rightful claim, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and to its rights, remedies, or securities.’ Words and Phrases, vol. 7, p. 6722. “The doctrine is one of equity and benevolence, . . . and its basis is the doing of complete, essential, and perfect justice betAveen all the parties, without regard to form, and its object is the prevention of injustice.’ 37 Cyc. 363.” Robinson v. Sullivan, 102 Miss. 596, 59 So. 847. It “is a creation of the court of equity, and is applied, in the absence of an agreement between the parties, where otherwise there would be a manifest failure of justice.” Trust Co. v. Peters, 72 Miss. 1058, 18 So. 497, 30 L. R. A. 829. It will not be applied unless the applicant’s cause is just and innocent persons will not be injured thereby. Emmett v. Thompson, 49 Minn. 386, 52 N. W. 31, 32 Am. St. [60] Rep. 566; 25 R. C. L. 1314, 99 Am. St. Rep. 574, npte. In order for tbe doctrine to be applied here, it must appear that the appellee has been required to pay a debt for which the appellants are primarily liable and which in equity and good conscience should be discharged by them. The bond because of the making of which the appellee was compelled to pay the rent on the land leased by the appellants was executed in a litigation in which the appellee was attempting, as this court has decided, to wrongfully deprive Mrs. Watson’s cotenants of their interest in the land, and the collection of the rent by Mrs. Watson was not only made possible by this wrongful conduct on the part of the appellee, but the appellants, in so far as the appellee is concerned, were justified in paying the rent to Mrs. Watson, for it had joined with her in, and one of the purposes for which the bond was executed was to maintain, her claim of ownership of the land. To force the appellants to again pay the rent in order to relieve the ap-pellee from the consequences of its own wrong would be inequitable. The decree of the court below will be reversed in so far as it affects the appellants and the bill as to them will be dismissed. Reversed and dismissed.