187 Ga. 292 | Ga. | 1938
John McCollum and the Home Owners Loan Corporation brought suit in Richmond County against Moses Lark, a non-resident of the State, and the sheriff and his deputies of Richmond County, seeking to restrain a sale of certain realty levied on by virtue of an execution held by Lark against McCollum. The facts alleged are substantially as follows: McCollum is the owner
While, as said in Colonial Hill Co. v. Mortgage Bond &c. Co., 174 Ga. 204, 208 (162 S. E. 272), "it can serve no useful purpose to discuss in detail the long list of decisions rendered by this court involving the subject of subrogation. Many of them contain elaborate opinions. Each ease is founded upon its own facts, and in comparing them the dividing lines in some instances are difficult to trace,” yet we do think that it would serve a useful purpose if we should discuss and attempt to clarify some of the propositions stated in some of the cases which are directly in conflict with the rulings stated in the headnotes in the instant case, although it may be that the cases themselves, in so far as the judgment is concerned, may be distinguished on their facts. The cases referred to are Investors Syndicate v. Thompson, 172 Ga. 203 (158 S. E. 20); Federal Land Bank of Columbia v. Barron, 173 Ga. 242 (160 S. E. 228) ; Bank of Canton v. Nelson, 173 Ga. 185 (160 S. E. 232), held controlled by the principles ruled in the Barron case, supra; Colonial Hill Co. v. Mortgage Bond &c. Co., supra. In Investors Syndicate v. Thompson, supra, the Investors Syndicate, one of the defendants, which claimed subrogation to the rights and remedies of the Merchants & Mechanics Bank, the liens and loan deeds of which it had paid off, in its motion for new trial complained that the court erred in failing to charge the jury to the effect that if the money derived from the Investors S3'ndicate was used to pay off the liens or loan deeds superior at the time to the loan deed under which Thompson claimed his rights, with the understanding or agreement between Investors Syndicate and the Merchants &
In Federal Land Bank of Columbia v. Barron, supra, the facts stated show that the Federal Land Bank, upon application of Henry Barron for a loan to be secured by first mortgage on certain described realty, and to pay the Prudential Insurance Company $4000 evidenced by a security deed duly recorded, took a deed from Henry Barron to secure a loan for $5000, which deed was duly recorded. Out of this loan the sum of $4234.06 was paid to the insurance company in full settlement and liquidation of its security deed, but the deed was not canceled of record. Subsequently H. B. Barron, to whom Henry Barron had executed a deed to secure a debt, subject to the insurance company deed but prior by several years in execution and record to the deed held by the Federal Land Bank, filed suit against Henry Barron, seeking to foreclose his deed. The abstract of title procured by Henry Barron and furnished to the Federal Land Bank at the time it made its loan failed to show this deed executed to II. B. Barron. The bank brought suit against Henry Barron and II. B. Barron, seeking to enjoin the suit instituted by H. B. Barron against Henry Barron, and to have itself declared subrogated to the rights of the insurance company under the loan deed executed to it which had been paid. A demurrer to the petition of the bank was sustained. In the opinion by this court it was said: "“In Benenson v. Evans, 162 Ga. 578 (2) (134 S. E. 441), it was held: 'A purchaser of property who has discharged an incumbrance thereon will be subrogated to the lien of such incumbrance as against the holders of other incumbrances of which he had no notice, either actual or constructive.-’ At the time the Federal Land Bank of Columbia made its loan and took a security deed it had constructive notice of the deed of H. B. Barron, which was executed and recorded several years previous to the security deed to the Federal Land Bank. The Land Bank was a third party and took the deed to the land with constructive notice that H. B. Barron had a deed on record of superior dignity to its own. The petition does not allege that TI. B. Barron expressly agreed to see the debt of the Federal Land Bank paid,; nor can it be held that by necessary implication he agreed to do so. In fact there is no allegation that H. B. Barron had any notice whatever of the transaction between the Federal Land Bank and H. A. Bar
To the same effect see Brown v. Hooks, 133 Ga. 345 (65 S. E. 780); Citizens Mercantile Co. v. Easom, 158 Ga. 604 (123 S. E. 883, 37 A. L. R. 378); McCowan v. Brooks, 113 Ga. 532 (39 S. E. 115). As in the Ragan case, it was stated in the opinion in the Benenson case, '“In order for Benenson to assert a valid claim of subrogation to the rights of Forman, it would be necessary that he have an express contract to that effect either with Clark [the debtor] or Forman, or that he was compelled to pay off the former lien in order to protect an existing valid lien of his own; but, as already pointed out, no such contract existed, and therefore he can not be subrogated to the rights of Forman.” Justices Beck and Hines dissented on the ground that subrogation arose in that ease even in the absence of an “express” agreement. A discussion of that feature of the case is not necessary, because here we do have an express agreement. We do not deem it amiss to call attention to the fact that in the Barron case there was no express agreement with either the debtor or the creditor whose debt was paid, although the decision was based on the ground that no agreement had been made with the intervening creditor. Whether the Barron case is distinguishable on that ground we do not decide. It is sufficient to say that neither Standard Scale Co. v. Ragan, nor Benenson v. Evans, supra, is authority for the ruling that constructive notice of an intervening lien is sufficient to defeat subrogation unless there is an express agreement with the intervening creditor that his lien shall be subordinate to the lien taken by the new creditor, or that the new creditor shall be subrogated to the rights and remedies of the creditor paid. However, it might be argued that these two decisions, in so far as they may be said to hold that an agreement with the debtor or creditor paid is sufficient to overcome constructive notice of the intervening lien, may contain obiter dicta if the cases of Wilkins v. Gibson and Merchants & Mechanics Bank v. Tillman, supra, are not authority for the ruling that an agreement so made with the debtor or creditor is sufficient. At this point we desire to call attention to Peagler v. Davis, 143 Ga. 11 (84 S. E.
This court, in a full-bench decision, Wilkins v. Gibson, supra, likewise construed the decision in the Tillman case. It was there said: “According to these authorities [previously mentioned], this agreement may be made with the person paying the debt by either the creditor or the debtor. . . The doctrine has been recently applied by this court in such a case,” citing the Tillman case. Further it was said: “In Merchants Bank v. Tillman . . the law with reference to the doctrine of conventional subrogation was thoroughly considered, and the conclusion was reached that One who advances money to pay off an incumbrance upon realty, at the instance of the owner thereof, and upon the express understanding