170 Ga. 747 | Ga. | 1930
At the March term, 1929, of the city court of Quit-man the Cornelia Bank obtained a judgment against S. O. Ingram. The execution issued on this judgment was levied upon a described tract of land containing 55 acres, more or less. The First National Bank of Quitman filed its claim to this land, and in aid thereof filed an equitable amendment in which it set up these facts: In the year 1926 the claimant was the owner of a tract of land in Brooks County, designated as the Alderman tract. At the same time Ingram owned two tracts of land, for convenience designated as tract No. 1 and tract No. 2-, Each of said tracts was encumbered by a security deed in favor of Pearsons Taft Company (name afterward changed to Taft & Company), each debt for approximately the same sum. Tract No. 1 contained approximately 55 acres, and tract No. 2 contained approximately 78 acres. On November 26, 1926, the claimant sold to Ingram the Alderman tract, and in part payment of the purchase-price received from him a warranty deed to tract No. 2. The outstanding debt on tract No. 2 was for the principal sum of $1,200, and two installments of interest, one for $72.35, and the other for $78. Subsequently the claimant desired to discharge the lien .on its land, and applied to Taft & Company to ascertain the amount which would be necessary to discharge the lien on tract No. 2. On receipt of this information the claimant, in November, 1928, paid to said company the indebtedness against said tract and requested that company to cancel the security deed thereon and forward the same to claimant. Instead of cancelling the security deed against tract No. 2, said compan}'applied this payment in discharge of the lien of the security deed upon tract No. 1, canceled the deed on that tract, and forwarded it to the claimant. When claimant received the canceled security deed it assumed that the correct paper had been sent to it. Its officers neglected to examine the canceled instrument; but sent it to the clerk of the superior court for cancellation, and it was canceled of record on November 22, 1928. This left tract No. 1 free and clear of all liens and encumbrancess. Discovering that tract No. 1 was free and clear of all liens, the plaintiff, on March 18, 1929, caused the execution from its judgment to be levied upon said tract, and proceeded to advertise it for sale. Ingram was and is insolvent, and there was no other property on which the plaintiff
The case was submitted to the trial judge, without a jury, upon an agreed'statement of facts, from which the foregoing appears. The judge rendered judgment in favor of the claimant, holding that it was subrogated to the rights of Taft & Company under its security deed to tract No. 1; and ordered a sale and application of proceeds in accordance with the prayer of the amendment to the claim. To this judgment the plaintiff excepted upon the grounds: (a) that is contrary to the evidence; (b) that it is contrary to law; (c) that it is contrary to the principles of equity and justice; (d) that the court held as a matter of law that the claimant, although admitting that it was guilty of negligence in causing the wrong-instrument to be canceled, and although indirectly responsible for the mistake, could yet come into a court of equity and obtain subrogation to all the rights and priorities of the original lienholder; (e) that the court held as a matter of law and equity that the bank was not guilty of such negligence as would prevent it from obtaining subrogation; (f) that the court held as a matter of law and equity that the bank was entitled to subrogation even though there was no agreement, express or implied, with the debtor or creditor to be subrogated to the rights of the original lienholder merely by the payment of a debt which the bank was in no wise bound to pay; (g) that the court held as a matter of law and equity that the bank, having discharged a lien upon property in which it had no interest, having paid an indebtedness which it was not bound to pay or even requested to pay, 'and upon which the plaintiff had a vested lien, was entitled to be subrogated to the lien of the holder of the security deed; (h) that the court held as a matter of law and equity that the bank, having paid an indebtedness of the defendant without the knowledge or consent of the
Subrogation is the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor. The substitute is put in all respects in the place of the party to whose rights he is subrogated. The doctrine is of equitable origin and benevolence. It is founded upon the dictates of refined justice. Its basis is the doing of complete, essential, and perfect justice between all the parties, without regard to form, and its object is the prevention of injustice. This right does not necessarily rest on contract or privitj, but upon principles of natural equity, and does not depend upon the act of the creditor, hut may be independent of both creditor and debtor. 37 Cyc. 363. The courts incline rather to extend than restrict the principle. The doctrine has been steadily growing and expanding in importance, and becoming general in its application to various subjects and classes of persons, the principle being modified to meet the.circumstances of eases as they have arisen. The doctrine has been, under the original guidance of Chancellor Kent, applied much more extensively in American than in English jurisprudence. 37 Cyc. 373; Gowan v. Bland, 2 How. (Miss.) 813; Emmert v. Thompson, 49 Minn. 386 (32 Am. St. R. 566); Fernold v. State Bank, 44 Mo. 336; Snelling v. McIntyre, 6 Abb. N. C. (N. Y.) 469; Ipswich Bank v. Brock, 13 S. D. 409 (83 N. W. 436); Sands v. Durham, 99 Va. 263 (38 S. E. 145, 86 Am. St. R. 84, 54 L. R. A. 614). Subrogation is of two kinds. One is legal subrogation, which takes place as a matter of equity, without any agreement to that effect made with the person paying the debt. The other is conventional subrogation, which is applied where an agreement is made with the person paying the debt that he shall be subrogated to the rights and remedies of the original creditor. It is never applied for the benefit of a mere volunteer who pays the debt of another without any assignment or agreement for subrogation, and who is under no legal obligation to make the payment, and is not compelled to do so for the preservation of any rights or property of his own. Wilkins v. Gibson, 113 Ga. 31, 42 (38 S. E. 374, 84 Am. St. R. 204). It is insisted by counsel for the plaintiff that the claimant voluntarily
Where the funds of another person are applied by a' creditor to the satisfaction of a debt or encumbrance, without the consent of the owner of such funds, the owner is subrogated to the rights of the creditor or encumbrancer. “One whose property is applied by others to the satisfaction of a debt or encumbrance is subrogated to the rights of the creditor or encumbrancer; and subrogation may also be allowed where funds to which one is equitably entitled have been applied to the payment of debts of another, in which case the former is subrogated to the position of the latter.” 37 Cyc. 467. In Ferguson v. Station, 19 Ky. L. R. 979 (42 S. W. 732), it was held that where the court erroneously appropriated the proceeds of collateral deposited by F. with the bank to secure a note which d. & Co. owed the bank, to the discharge of a mortgage debt of S. & P., J. & Co. were entitled to be substituted to the lien of S. & P. to the extent of the note to the bank which they had in the meantime paid off. In Mississippi &c. Canal Co. v. Noyes, 25 La. Ann. 62, it was held that where the money of plaintiff was appropriated to the payment of a judgment for which the owuiers of a
In Webber v. Hausler, 77 Minn. 49 (79 N. W. 380), Webber entrusted to K. $1,000 to be loaned for him on a first mortgage on real estate. K., for the purpose of lending the money to himself without the knowledge of his principal, procured H. to execute to W. a note for $1,000 and a collateral mortgage on land owned by K., on which there was a prior mortgage of $1,000 to O., and then transmitted the note and mortgage to W., representing to him that it was a first mortgage and that H. had good title to the land. It was the intention and purpose of both H. and K. that the mortgage to W. should be a first mortgage, that before it was executed K. should convey the land to H., and that W’s $1,000 should be applied in payment of C’s mortgage; but by inadvertence and oversight of the parties no such conveyance was ever executed. K. had deposited
In Colton v. Dacey, 61 Fed. 481, it was held that one who
So we are of the opinion that where the claimant purchased from the defendant in execution tract No. 2 and assumed the payment of
Judgment affirmed.