Home Owners' Loan Corp. v. Dougherty

Fairchild, J. The trial court found as a fact that at the time the Home Owners’ Loan Corporation mortgage was executed and delivered there was a definite agreement between the owners of the premises and the Home Owners’ Loan Corporation that the latter have security in the form of a first mortgage for the money advanced to pay an existing mortgage. The then existing mortgage was a prior lien to the claim of the A. Lentz Company. By placing the Home Owners’ Loan Corporation mortgage in the position of the mortgage which was paid by use of its proceeds, the A. Lentz Company is not injured. The whole transaction is but the equivalent of an assignment of the first mortgage to the new mortgagee. In a review of the cases dealing with similar situations in Bank of Baraboo v. Prothero, 215 Wis. 552, 255 N. W. 126, [10] the law governing this case is stated. While a volunteer paying an existing debt and relieving property of a lien is not entitled to subrogation, one doing so under an agreement that he is to have the benefit of security is not a volunteer, and under circumstances existing in this case is entitled to subrogation. By the Court. Judgment affirmed.