57 Mo. App. 277 | Mo. Ct. App. | 1894
— The petition, amongst other things, stated that there was a certain suit in partition pending in the circuit court of Cass county, wherein certain persons named were plaintiff’s and defendants, the object of which was to obtain a decree and judgment of partition of certain real estate; that during the pendency of said suit the said court made an order appointing E. P. Whalen receiver in said suit, and as a part of his duties as such he was required to take charge of, control, rent, and collect the rents of the said real estate and pay over the proceeds thereof to the successful party in the said suit whenever the same should finally terminate; that said receiver before entering upon his duties was required and did enter into a bond in the sum of $3000 conditioned for the faithful performance of his duties as such receiver with the
The question therefore is, whether or not, if the . facts alleged in the petition are proved, the plaintiff is entitled to equitable relief. The defendant objects that the plaintiffs as sureties have no standing in a court of equity and can not maintain this suit without first having recovered a judgment in assumpsit against their principal, the receiver, and exhausted their legal remedies against him and his property. It is incontrovertibly true that the general rule is that a creditor, before he can maintain a creditor’s bill, must show that he has exhausted his remedy at law, and this is so because a court of equity will not entertain such suit when the plaintiff has a complete and adequate remedy at law. In general it must be shown that the judgment has been recovered and an execution has been issued and returned nulla bona. Humphreys v. Milling Co., 98 Mo. 542; Mullen v. Hewett, 103 Mo. 637; Crim v. Walker, 79 Mo. 335; Fisher v. Tallman, 74 Mo. 39. To this rule there are a few exceptions allowed, as will be seen by reference to the following cases: Turner v. Adams, 46 Mo. 95; Merry v. Fremon, 44 Mo. 518; Lyons v. Murray, 95 Mo. 23; Pendleton v. Perkins, 49 Mo. 565.
But if the surety has not brought his suit in assumpsit against his principal for the recovery of the amount which he has been compelled to pay for him and has not pursued any remedy at law against him, still may not such surety by invoking the application of the equitable principle of subrogation to the facts in a case like this be granted relief? “In the civil law,
This rule has been recognized in this state, for in Furnold v. Bank, 44 Mo. 336, it was declared that as soon as a surety has paid the debt an equity arises in his favor to have all the securities, original and collateral, which the creditor held against the person or property of the principal debtor, transferred to him and to avail himself of them as fully as the creditor could have done, for the purpose of obtaining indemnity from the principal. He is considerecl at once subrogated to all the rights, remedies and securities of the creditor as substituted in the place of the creditor.” And a like recognition may be found in the following other cases in this state: Allison v. Sutherlan, 50 Mo. 274; Sevier v. Roddie, 51 Mo. 580; Ferguson v. Carson, 86 Mo. 673; Miller v. Woodward, 8 Mo. 168; McCune v. Belt, 38 Mo. 281; Sweet v. Jeffries, 48 Mo. 279.
The doctrine of subrogation is a doctrine of the court of chancery and can not be usually enforced in a court of law. In eases where a person paying a debt stands in the situation of a surety, equity substitutes him in the place of the creditor as a matter of course.
The result of the authorities is that a surety who has paid the debt of his principal is, upon the equity which springs out of the relation of principal and surety, and the fact of his payment, subrogated to all the rights and remedies of the creditor. It may, therefore, be stated that the right of a surety, when he has paid the debt of his principal, to invoke the doctrine of subrogation is not dependent upon whether he has recovered judgment against the principal and issued thereon execution which has been returned nulla Iona, as it does in cases where the creditor by a creditor’s bill seeks the aid of a court of equity to obtain relief. We can not, therefore, uphold the defendant’s contention, which we must think results from a misconception of the nature of the equitable doctrine of subrogation and of the class of cases in which it may be appropriately invoked and applied.
The money collected by the receiver was in custodia legis, and when the partition suit was terminated there only remained to the receiver the duty to settle his accounts with the court and pay over to the beneficiaries, the plaintiffs, the amount remaining in his hands.
The law is that when a person who has received money for the use of another neglects or refuses to pay it over to his cestui que trust, the person entitled thereto may maintain an action against him for money had and received. Phelps v. Conant, 30 Vt. 277; Glasscock v. Lyons, 20 Ind. 1; Catlin v. Brickhard, 13 Mich. 110. And it is of no importance how the money came into his hands if the plaintiff is legally entitled thereto. The beneficiaries were entitled to recover it of the receiver by an action for money had and received. If the rent money had been deposited in defendant bank to the credit of the receiver, and had there been found-after the receiver had become fimctus officio and both the defendant and the receiver had refused to pay it over to the beneficiaries, it is clear enough that they could have recovered it under the generally recognized rule that when one receives money that ex aequo et bono belongs to another, the law implies a. promise on the part of the person receiving it to pay it over to the true owner. Robins v. Insurance Co., 12 Mo. 380; Reed v. Foot, 36 Mo. App. 471; Norway v. Clear Lake, 11 Iowa, 506; Jacobs v. Pollard, 10 Cush. (Mass.) 287.
Nor is it perceived that the rule of liability would be different in a case like this where the bank receiving the money did not enter the amount of it to the credit of the receiver on its books, but applied the same to the payment of the individual debt of the receiver to
The defendant contends that the word “receiver,” which was added to the name of the payee in the notes, was no notice to the defendant that the payee held them in a fiduciary capacity. It is true that this addendum alone would be insufficient to impart such notice but it seems to us that this in'connection with the information which the receiver and Mr. Burney testified they gave the president of the defendant was ample to apprize defendant of the fact that said notes and the proceeds thereof were held by the receiver in his fiduciary capacity. 'Without entering into a discussion of the testimony further we may say that since there is some conflict in it, we shall defer to the finding of the circuit court. . The rule of practice now is, that when there is a conflict of testimony, or where the testimony is evenly balanced, and the finding of the chancellor appears to be correct, then the supervising court will so far defer to the finding as to sanction it by an affirmance. Benne v. Schnecko, 100 Mo. 250.
It seems, therefore, clear to us that the defendant was liable to the beneficiaries in the partition suit for the amount of money collected by them for the receiver and applied to the payment of his individual indebtedness to it, and that it follows as an inevitable corollary to this proposition that the plaintiffs, who were compelled as sureties for the receiver on his bond to pay the amount specified in the order of the court to the beneficiaries, in consequence thereof, became in equity subrogated to their rights as respects the fund which
In relation to tfie sufficiency of the petition it may be stated rfiat it has been ruled that a petition filed to enforce tfie right acquired by tfie equitable doctrine of subrogation should state all tfie matters and facts which give rise to the right claimed and upon which tfie plaintiff relies to sustain his claim so as to fully advise tfie court of tfie material facts of tfie case.. Lilly v. Dunn, 96 Ind. 220; Harris’ Law of Subrogation, sec. 222. And this accords with tfie rule of pleading required by our practice act. Tested by this rule we think tfie petition stated all tfie facts necessary to entitle tfie plaintiffs to tfie equitable doctrine they invoked.
Upon tfie whole case we think tfie plaintiff was entitled to the relief granted by tfie decree, which we will affirm accordingly.