Prestridge v. Lazar

Anderson, J., delivered the opinion of the court. The -question involved in this case is one of subrogation. The appellant, W. E. Prestridge, sought by his bill against A: J. Lazar, the appellee, to be subrogated to the rights of two prior mortgages of lands owned by appellant on which appellee had a third mortgage. The trial court rendered a decree against appellant in favor of appellee, from which the former prosecutes this appeal. The facts necessary to an understanding of the question involved are as follows: The appellant bought certain land from one Daughtery for which he paid four thousand dollars, as follows: He discharged two mortgages on said land, one in favor of Mechanics’ Bank of McComb for .two thousand one hundred eight dollars and sixty-one cents, and the other in favor of Frank Lampton in the sum of nine hundred fifty-nine dollars and forty-two cents, [175] and the balance, nine hundred ninety-three dollars and seventeen cents, he paid to the vendor, Daughtery, in cash. Appellant was ignorant of the fact that' appellee held a mortgage against said land for one thousand three hundred twenty dollars junior to those of the Mechanics’ Bank and Lampton. He thought, when he- discharged out of the purchase money of said land the said two prior mortgages, that the title was clear of all incumbrances. Appellant later, however, learned of appellee’s said mortgage. Besides his mortgage on the land involved, Lampton held as collateral security for his indebtedness some notes which Daughtery had placed with him. When appellant purchased the land and paid the purchase money in the manner stated, the remainder of these notes unpaid, held by Lampton as collateral, were surrendered to Daughtery. Daughtery took the cash paid him by appellant, being the balance of the purchase money going to him after paving said two mortgages, and fled the country. The mortgages in favor of Lampton and Mechanics’ Bank, as well as the notes which they secured, were surrendered, and the former canceled on the record. This left on record appellee’s mortgage alone. Appellee contends that appellant OAvns the lands involved, subject alone to his mortgage. On the other hand, appellant contends that, under the facts stated, the mortgages of the Mechanics’ Bank and Lampton Avhich were discharged out of the purchase money which he paid Daughtery should be revived for his benefit, and he substituted to all the rights thereunder of said bank and Lampton as of the date of their, payment. Appellee contends that appellant is not entitled to subrogation to the rights of said mortgagees, because appellant in discharging said mortgages was a mere volunteer; that he was under no obligation to pay the same. Appellant contends that he was not a volunteer in discharging said mortgages for the purpose Of freeing the title to said land. The reason and philosophy of the principle involved should be kept in mind in determining this qnes [176] tion. The doctrine of subrogation, is “one of equity and benevolence; ... . its basis is the doing of complete, essential, and perfect justice between the parties, without regard to form, and its object is the prevention of injustice.” It does not rest on contract, but upon principles of natural equity. The courts should rather incline to extend than restrict the operation of the doctrine. It applies wherever any persqn other than a mere volunteer pays a debt or demand which in equity and good conscience should have been satisfied by another, or where one person finds it necessary for his own protection to pay the debt for which another is primarily liable, or where a party has such an interest in property as makes it incumbent on him to get in an, outstanding claim or equity for its protection. Robinson v. Sullivan, 102 Miss. 581, 59 So. 846. McIntyre v. Agriculture Bank, Freem. Ch. 105, and Ligon v. Barton, 88 Miss. 135, 40 So. 555, are in our judgment decisive of this question in favor of appellant. Under the facts of this case it seems eminently just that appellant should be subrogated to the rights of the bank and Lamp-ton under their mortgages. Appellant in the utmost good faith thought, when he discharged those mortgages, his land was free. Doubtless, if he had not thought so, he would have taken an assignment from Lampton and the bank of their rights under said mortgages, and certainly that would have protected appellant against the mortgage of appellee; and furthermore the principle works no injustice to appellee. When appellant bought the land from Daughtery, Lampton and the bank held mortgages prior to that of appellee aggregating three thousand one hundred dollars. By the application of the doctrine of subrogation as here made that'exact status is restored, except that appellant, instead of Lampton and the bank, will hold prior mortgages in the sum of three thousand one hundred dollars to that of appellee. Certainly that is working out natural justice; while, on the other hand, if the appellee’s [177] contention, should prevail great injustice would he done appellant. There is some contention made to the effect that appellant is not entitled to subrogation to the rights of Lamp-ton and the. bank, at least to the, extent of the value of the collateral notes held by Lampton, which were surrendered to Daughtery, when appellant’s purchase of the land was consummated. As we understand the record, this question is not presented by the pleadings, and furthermore the evidence is vague and uncertain as to what notes Lamp-ton surrendered to Daughtery, and whether they were of any value or not. And even if the question were presented by the pleadings, and the evidence showed the value of the notes so held and surrendered, we would not be understood as intimating that it would have any effect whatever on the right of appellant to subrogation as contended. And it is further contended by appellee that, if appellant is entitled to be subrogated, to the rights of the bank and Lampton under their mortgages, the amount for which subrogation is given should be reduced to the extent of the purchase money which appellant paid the vendor, Daughtery, in cash, because appellant, having constructive notice by the record of appellee’s mortgage, should have seen to the application of said cash payment to said mortgage. We are unable to see how constructive notice to appellant of appellee’s mortgage could have anything to do with the right of the former to subrogation. The controlling consideration is the actual facts. The question is: What is natural justice under the actual facts of the situation? Appellee’s security was not diminished by the cash payment to Daughtery; it stood, so far as the land security was concerned, exactly as it did before. We do not think there is any merit in this contention of appellee. We hold that appellant has the right, prior to appellee’s mortgage, to enforce the Lampton and bank mortgages to the extent of the money paid by appellant to discharge [178] them, with interest thereon from* date of such payment at the rate provided in the notes secured by said mortgage. Reversed, and judgment here for appellant. Reversed.