Evison v. Hallock

The following opinion was filed October 30, 1900: Winslow, J. The facts stated in the complaint are, in substance, as follows: In 1891 the general guardian of one Bement, an insane person, obtained authority from the circuit court, under the provisions of the statutes, to sell his ward’s real estate, upon which there existed a past-due mortgage of $500, for which the estate of the ward was liable. No mention was made of the mortgage either in the petition of the guardian or in the order of sale. The order required a bond in the sum of $6,000, with sureties, conditioned for the faithful performance of the trust, for paying over, investing, or accounting for all the moneys received by the guardian according to the order of any court having authority to give direction in the premises, and for the observance of the directions of the court in "relation to said [251] trust. The bond was given and signed by the defendants-Halloole and Wehls as sureties, and approved by the court. The guardian then made a written contract with one Yes-per for the sale of the real estate for $5,000 in cash, and reported the same to the court. The court confirmed the sale,, and directed the guardian to make a good, valid, and sufficient deed of the lands to the purchaser on payment of the agreed price. Yesper, for value, assigned his rights to the plaintiff, who thereafter paid the guardian the agreed price of $5,000 for the lands and for a clear title thereto, and the guardian made the usual guardian’s deed of the land to the plaintiff without warranties. The guardian received said $5,000 in full consideration for the lands and for a clear title to the same, and agreed to pay the mortgage and have it discharged, but failed to do so, and, on the other hand, converted and embezzled the money, with other moneys of the ward, and died insolvent in October, 1896. The plaintiff, soon after his purchase in 1891, conveyed the premises-by warranty deed, and first learned that the mortgage was-not paid in December, 1896, and in January, 1897, paid the mortgage debt, with interest, to the holder thereof, in order to make good the warranties in his deed, and caused the same to be discharged. Upon these facts the plaintiff claims judgment against the sureties upon the bond for the amount paid to discharge the mortgage, upon the theory that he is entitled to be subro-gated to the rights of the insane person or of the owner of the mortgage against said sureties. The equitable right of subrogation arises under various-conditions, but the fundamental principles which govern it are always the same. Briefly, it may be said to be that equitable right by which one person who has paid a debt for which he is only secondarily liable is entitled to succeed to and utilize the securities and remedies possessed by the original creditor. Bispham, Eq. § 335. Manifestly, the right. [252] of the person subrogated is measured by the right of the original creditor, and cannot be extended further. Franklin S. Bank v. Taylor, 131 Ill. 376. Conceding that plaintiff, on account of his warranty of title, was secondarily liable to pay the mortgage debt on the land, the vital question is whether either Bement, the insane person, or the holder of the mortgage became a creditor of Rambusch and his sureties on the bond when Rambusch failed to pay the mortgage, and could bring action for such failure. If this question must be answered in the negative, then there can be no subrogation, because there is no original creditor to whose rights the plaintiff can be subrogated. It seems plain that as against the respondents, who were simply sureties on the guardian’s bond, there was no liability, either to Bement or to the mortgagee, resulting from the guardian’s failure to pay off the mortgage. Their liability was that of sureties only, and limited to the stipulations of the bond. Those stipulations were, in substance, that the guardian should faithfully perform his trust, and pay over, invest, or account for the moneys received by him according to the directions of any court having authority to direct in the matter. No court has at any time directed or authorized the guardian to pay off this mortgage; hence the failure to pay it was not the breach of any duty, and consequently not the foundation of any right of recovery by either the ward or the mortgagee. The statute upon this subject (R. S. 1878, sec. 3515) provided that the court or judge should make an order for the application and disposition of the proceeds of such sale and of the income derived from the investment thereof, etc. No such order was here made, and the guardian could not be charged with breach of duty until such an order was made and not complied with. It may be that under the circumstances here alleged the court would have been authorized to incorporate in the original order granting leave to sell a provision that the [253] guardian sell free of incumbrances and at once discharge the mortgage (it appearing that the mortgage was past due and could be paid at any time); but it is sufficient to say that no such order is alleged to have been made, either before or after the sale. The plaintiff’s cause of action must be founded upon a breach of duty by the guardian in not paying off the mortgage; but, as we have seen, there had no such duty arisen, hence there was no breach, and consequently no liability on the bond. If, as alleged in the complaint, the guardian himself agreed with the plaintiff to pay the ■ mortgage, this was plainly his own individual contract, and not an official act, for the court had neither expressly nor impliedly authorized him to make such an agreement. This view of the case renders the discussion of any other questions unnecessary. By the Court.— Order affirmed.