30 A.2d 330 | Pa. Super. Ct. | 1942
Argued December 14, 1942. Bill in equity.
Preliminary objections sustained and decree entered dismissing bill, before KEENAN, P.J., LAIRD and McWHERTER, JJ., opinion by McWHERTER, J. Plaintiff appealed. This appeal is from a decree of the court below sustaining defendants' preliminary objections and dismissing the bill in equity filed by the plaintiff.
The following are substantially the facts averred in the bill. W.H. Mitchell acquired in 1909 title to a lot of ground in Derry Township, Westmoreland County, upon which he subsequently built a house where he and his family reside. On April 29, 1925 the First Savings and Trust Company of Derry, hereinafter called the trust company, entered a judgment against Mitchell and Amanda his wife, in the sum of $5460, which was a first lien on their home. This judgment was revived on March 19, 1930, in the sum of $4880. On June 4, 1925, Homer Crouse caused a judgment in the sum of $682.50 to be entered against Mitchell, which since that time has been duly revived. Mitchell and wife on March 8, 1934, filed with the Home Owners' *261 Loan Corporation a written application for a loan for the purpose of paying the liens against their home. They set forth therein that their property was encumbered by a judgment, a first lien on the property, in favor of the trust company and there were also liens for the 1932, 1933, and 1934 county, township, and school taxes, but no reference was made to the Crouse judgment, and it appears that the H.O.L.C. had no knowledge of it. On March 16, 1934, J.M. Nicholson caused a judgment to be entered against the Mitchells in the sum of $113. The trust company, through its trustees and assignees who, in the meantime, had been appointed pursuant to a plan of reorganization, agreed to accept $3958.66 in payment and satisfaction of its judgment and Nicholson consented to postpone and subordinate his lien to the mortgage to be executed by the Mitchells as security for a loan granted by the H.O.L.C. for $4193.81. The H.O.L.C. paid from the proceeds of this loan the trust company's judgment, which was satisfied, and the taxes together with certain costs. In the early part of 1939 the appellant learned of the existence of the Crouse judgment. Request was then made that Crouse subordinate his lien to that of the H.O.L.C. mortgage. This he refused to do.
The complainant averred that Crouse was unjustly enriched at its expense and prayed for relief, which included striking off of the satisfaction of the trust company's judgment and the lien for taxes assessed against the Mitchell property; that the assignees and trustees of the company be directed to assign the judgment to the complainant; that the tax liens be decreed to be in favor of complainant and that it be subrogated to all rights, remedies and priorities of the trust company and the municipal authority in the tax liens.
Courts are inclined to favor and further the doctrine of subrogation or, as it is sometimes called, substitution, but that is not a universal remedy for those who *262
have parted with their money and obtained less security than they expected. To entitle one to subrogation his equity should be strong and superior to those who oppose it: Appeal of Forest OilCompany,
"It always requires something more than the mere payment of a debt in order to entitle the person paying the same to be substituted in the place of the original creditor. A mere volunteer or intermeddler who, having no interest to protect, without any legal or moral obligation to pay, and without an agreement for subrogation, or an assignment of the debt, pays the debt of another is not entitled to subrogation, the payment in his case absolutely extinguishing the debt. The payor must have acted on compulsion, and it is only in cases where the person paying the debt of another will be liable in the event of a default or is compelled to pay in order to protect his own interests, or by virtue of legal process, that equity substitutes him in the place of the creditor without any agreement to that effect; in other cases the debt is absolutely extinguished." 60 C.J. p. 716, § 27.
One who is under no legal obligation or liability to pay a debt and who has no interest in, or relation to, the property is a stranger or volunteer with reference to the subject of subrogation: 25 R.C.L. p. 1324, § 11. See, also, In Re Account ofCommonwealth Trust Co., Trustee (No. 1),
In Mary W. Campbell v. Foster Home Association,
The H.O.L.C. was a stranger to Mitchell. There was no legal obligation or compulsion for it to pay his debts. It was an entirely voluntary agent with no interest in the property and at liberty to make its own bargain — agree or refuse to make the loan as it saw fit.
Subrogation, being of equitable origin and nature, may be resorted to only when one has an equity to invoke which does not injure an innocent party. The appellant was a lender of money and occupies, in so far as the rights of Crouse the lien owner are concerned, the same position as anyone who lends money. It can hardly be said that Crouse, after six years had elapsed since the mortgage to the H.O.L.C. was given, is not prejudiced by having his lien postponed and the trust company's judgment, which has not been revived since 1930, given priority. We have held that the courts of equity will not relieve a party from the consequences of an error due to his own ignorance or carelessness when there were available means which would have enabled him to avoid the mistake if reasonable care had been exercised: Felin v.Futcher,
In Weir et al. v. Potter Title Mortgage Guarantee Co. et al.,
When the trust company's judgment was paid it no longer was in existence in so far as lien creditors were affected: Marshall v.Klein et al.,
The appellant asserts that the Act of Congress of June 13, 1933, and its amendment, U.S. Code, Title 12, § 1463, Par. (d), permitted it to make loans only when it obtains a first lien. Even so, that mandate cannot defeat the property rights of Crouse, a third and innocent party who had nothing whatever to do with the transaction between the H.O.L.C. and Mitchells. We recognize that the decisions on the right of subrogation by one who lends money to discharge a lien are not in harmony, and that courts in a number, probably a majority, of our sister states have given judicial approval to appellant's position. See HomeOwners' Loan Corporation v. Collins et al.,
Decree of the court below is affirmed at appellant's costs.