Crane v. Noel

103 Mo. App. 122 | Mo. Ct. App. | 1903

GOODE, J.

(after stating the facts as above).— The judgment in this case is assailed from the premises that the agreed facts show the respondent was a volunteer in becoming surety and in making good to the insurance company any defalcation that occurred during Levy’s agency.

The agreed statement of facts says respondent was appointed agent for the insurance company prior to the accrual of Levy’s indebtedness; that he contracted to become surety for the latter and the appellants, and to pay whatever premiums they failed to pay; but that appellant Noel and Cohn had no knowledge of the arrangement. It is not stated whether Levy knew or was ignorant of it. Neither is it stated that the insurance company asked respondent to become surety or made his appointment as agent dependent on his doing so.

Choses in action are now assignable and respondent could have purchased the demand of the insurance company against Levy and the appellants. That fact is pressed on us; but in appraising its force we must remember that choses have always been assignable in equity, and that the pale of the right of subrogation was fixed by chancery courts with their assignability and all the implications which flow from that equity rule in mind. No strength is lent to respondent’s case by the change in the law rendering choses assignable and permitting assignees to sue on them. But the argument is persuasive that, as equity tolerates the assignment of a debt, it should also accord the full benefit of all securities held by a creditor to a party who, instead of buying the demand and taking an assignment of it, voluntarily •binds himself as surety for the demand and afterwards pays it. The barrier against the right of subrogation in such instances is technical but firmly established. Subrogation is a remedy made use of by courts of equity as an efficient aid to justice, and in the main does not depend on a contractual obligation; though a man may acquire the right to a conventional subrogation by contract. This happens when one liquidates a demand secured by lien or guaranty and takes an assignment of it, or agrees with the creditor that any security held by the latter shall continue available for the collection of the demand. No proof exists that an agreement was made between Crane and the insurance company which would entitle the former to sne Levy’s bondsmen for reimbursement of the snm paid to the company on account of Levy’s defalcation. Yet we can find none but a technical reason why Crane should not have the same right to sue on the bond that the company had before it was paid; and to decide in favor of Crane’s right might advance the remedy along the path of justice. But the rule has ever been that a volunteer who pays a debt without being requested, and without any interest in the matter or compulsion to pay in order to protect himself, acquires no right of subrogation by paying, unless he contracts for it with the creditor; that is, becomes, in effect, an equitable assignee of the debt. Bunn v. Lindsay, 95 Mo. 250; Sheldon, Subrogation (2 Ed.), sec. 3. One may think of a stranger paying a debt of some one else in circumstances that would constitute an officious intermeddling with the debtor’s business and afford the payer no good claim in equity to the securities held by. the creditor. If the test of the right to be substituted was the purpose for which payment is made, as being a purpose laudable in itself and including an intention to preserve the debt and obligations collateral thereto, for the benefit of the payer, instead of extinguishing the debt, Crane’s standing would be better. But the test is not the motive of the party who pays, but whether or not he acted as a volunteer. Whether he did or not is sometimes difficult .to say. But according to the decisions in this State and the great weight of outside authority, Crane’s status, when he bound himself as surety for Levy and these appellants, was that of volunteer. That Noel and Cohn knew nothing of his act is certain. It does not appear that Levy knew of it, or that the insurance company required or even requested it. For aught that is disclosed, it was an unnecessary step taken by him on his own motion. It was not a compulsory one, we know. Hence, if he desired to stand in the shoes of the insurance company in the event he had to pay money on account of his self-imposed suretyship, he •ought to have stipulated that Levy’s bond should be assigned to him or enure to his benefit. We find precedents in Missouri, and elsewhere, too, whose force we are unable to escape, as they look to be undistinguishable, on principle, from this case. Bunn v. Lindsay, supra; Norton v. Highleyman, 88 Mo. 621; Price v. Courtney, 87 Mo. 387; Evans v. Halleck, 83 Mo. 376; Francis Mill Co. v. Sugg, Mo. 476; Woolridge v. Scott, 69 Mo. 669; Anglade v. St. Avit, 67 Mo. 434; Wolff v. Walter, 56 Mo. 293; McPherson v. Meek, 30 Mo. 345; Kleimann v. Geiselmann, 45 Mo. App. 497, 114 Mo. 437; see, also, Aetna Life Ins. Co. v. Middleport, 124 U. S. 534; Exers. White v. White, Trustee, 30 Vt. 338; Carter v. Black, 4 Dev. & Bat. Law 425; Shinn v. Budd, 14 N. J. Eq. 234; Sheldon, Subrogation (2 Ed.), 240; 24 Am. and Eng. Ency. Law (1 Ed.), 281. Some of those cases presented a stronger equity in favor of the parties asking subrogation than this one shows for Crane; because those parties assumed and discharged liens under conditions requiring them to do so, or suffer loss by legal enforcement of the liens. We refer particularly to Woolridge v. Scott; Evans v. Halleck; Norton v. Highleyman, and Kleimann v. Gieselmann. In the case last cited, money had been loaned to a widow and secured by a deed of trust on land devised to her by her deceased husband, to lift a prior deed of trust executed by the husband. The loan was made on the supposition that the widow was the devisee of the fee; but she turned out to have only a life estate, subject to the homestead estate of minor children of the deceased. As the money went to discharge the first lien, and, therefore, for the benefit not only of the widow as life tenant, but of the ehilddren as owners of the fee, the assignee of the note given for the loan claimed to be entitled by subrogation to the lien of the discharged deed of trust. But the lender was held to be a mere volunteer and relief was denied. The other eases are of the same tenor.

In Carter v. Black, 4 Dev. & Bat. (N. C.) 425, the facts were like we have here. A bond signed by a principal and surety was offered to the sheriff of a county in satisfaction of certain executions. The parties on the bond were non-residents of the county and the sheriff refused to accept it without resident security. Thereupon Carter, the plaintiff, bound himself as surety on the bond in order to save the execution debtor. Carter had to pay and afterwards sued the principal and original surety on the bond. Pie was ruled to be a mere volunteer who had become surety at the instance of the holder of the bond instead of the maker. But Crane does not occupy as favorable a position as Carter did; for the former became surety, so far as we know, on his own motion.

We have been cited by respondent’s counsel to certain decisions supposed to have accorded the right of subrogation on facts similar to those before us. Mathews v. Aiken, 1 N. Y. 595; Chapeze v. Young, 87 Ky. 476; Hough v. Ins. Co., 57 Ill. 318. The last case does not aid the respondent’s contention; for the party claiming subrogation was bound in the first instance to pay the debt. Some of the reasons given in Mathews v. Aiken support the position of the respondent; but it is to be noted that there were valid grounds, according to the settled principles of the law of subrogation, for granting relief to the plaintiff in that case.

The opinion in Chapeze v. Young favors the respondent.

Those cases, in so far as they go beyond the current of authority, seem to us to logically extend the equity of subrogation.. But the decisions of the courts of this State, as well as the overshadowing weight of authority elsewhere, constrain us to deny the relief which the respondent prays. The judgment is, therefore, reversed.

Bland, P. J., and Beyburn, J., concur.