49 Minn. 386 | Minn. | 1892
When the loan of money was made by defendant Cornwell to defendant Marr, to secure which, as agreed .upon, the latter mortgaged his entire farm, consisting of two hundred and forty acres, it was for the stipulated purpose of relieving one tract, (one hundred and sixty acres) from the trust deed held by Ormsby, the balance (eighty acres) from the Hayes mortgage, and the entire farm from delinquent taxes. The trust deed, the mortgage last referred to, and the taxes were represented to be, and in fact were, first liens upon the premises; and Cornwell believed — and it was implied from what Marr stated when applying for the loan — there were no other incumbrances, and that, with these paid off and discharged, his mortgage would take their place, and become the first and only charge upon the property. The taxes and the amounts due on the incumbrances, aggregating $1,434.82, were paid out of the proceeds of the loan, in accordance with the agreement under which it was made. Proper releases and discharges were procured and at once recorded, in the mistaken belief on the part of Cornwell, and
It has been well said that the doctrine of subrogation has been steadily growing and expanding in importance, and becoming more general in its application to various subjects and classes of persons. It is not founded upon contract, but is the creation of equity, — is enforced solely for accomplishing the ends of substantial justice; and, being administered upon equitable principles, it is only when an applicant has an equity to invoke, and where innocent persons will not be injured, that a court can interfere. It is a mode which equity adopts to compel the ultimate payment of a debt by one who in justice and good conscience ought to pay it, and is not dependent upon contract, privity, or strict suretyship. Stevens v. Goodenough, 26 Vt. 676; Harnsberger v. Yancey, 33 Grat. 527; Smith v. Foran, 43 Conn. 244. That in this way a court, under a great variety of circumstances, may relieve one who has acted under a justifiable or excusable mistake of fact, is readily conceded by appellant; but he invokes and seeks to have applied to respondent’s case the general rule that the doctrine of subrogation will not be exercised 'in favor of a volunteer or a stranger who officiously intermeddles, such as a person who pays without any obligation so to do, or one who, without, any interest to protect, liquidates the debt of another. There are a very respectable number of cases, several having been cited, in which relief has been refused under circumstances precisely like those now before us, where one who has loaned and used his money in
It is contended by appellant that Cornwell must, under the circumstances, be declared culpably negligent when taking his security and discharging of record the Ormsby and Hayes liens; and, further, that, as the plaintiff’s mortgage was then of record, he had notice of it, in contemplation of law, and could not have been misled or mistaken. Marr’s application for a loan was for the avowed purpose of taking up and discharging the Ormsby and Hayes liens, and was well calculated to convey the impression that these were the only incum-brances. He intentionally or otherwise concealed the truth, omitting
It is a common thing for courts of equity to relieve parties who have by mistake discharged mortgages upon the record, and to fully •protect them from the consequences of their acts, when such relief will not result prejudicially to third or innocent persons. Gerdine v. Menage, 41 Minn. 417, (43 N. W. Rep. 91.) Paraphrasing slightly a remark made in the opinion therein, it may be said that, considering this case as it stands between the appellant and respondent Corn-well, it is obvious that it would be most unjust and inequitable not to place the parties in statu quo with respect to the "amounts paid out. upon liens which were superior to that held by plaintiff, now being foreclosed. It is true that at the outset the mistake grew out of an error in the abstract books kept by Cornwell’s agents: but later, when examining the records in the office of the register of deeds, the error was unnoticed and the mistake undiscovered. It was a mistake of fact, and, in our judgment, not of such a character as to bar the respondents’ claim to equitable relief. That, in a proper case of mistake of fact, such relief may be afforded notwithstanding the intervening mortgage was of record when the error was committed, is well settled. Geib v. Reynolds, 35 Minn. 331, (28 N. W. Rep. 923.) Corn-well misunderstood, and was justifiably ignorant of, the facts, and acted, through his agents, upon the assumption that he' and they knew the true state of the title when the liens which his money had discharged were satisfied of record, and plaintiff’s mortgage advanced to the position of the senior incumbrance, without a single act of his, and to'the very great detriment of the person who had brought it about. The court was right in applying the principle of subrogation, or “equitable assignment,” as it is frequently called.
Judgment was entered below, directing that the premises be sold, on foreclosure of plaintiff’s mortgage, as one farm, and that, out of the net proceeds, there be first paid to respondent Cornwell the sums
It is evident from the record that the attention of the trial court was not called to this point, and hence the order that the sale be of the whole as one body of land. But we are unable to see how the result now suggested by counsel would have been avoided by the adoption of his plan without selling the tracts separately, keeping the funds derived from each distinct, and applying the same to the liquidation of the liens, so far as they might go. Counsel does not contend that the two tracts of land should have been sold separately, but, as before stated, indorses the judgment directing a sale en masse. He is concluded on this point by his position as to the manner of sale.
Judgment affirmed.
