106 Ga. 55 | Ga. | 1898
The record before us presents for decision the single question, whether or not the plaintiff in the court below could invoke in his behalf the doctrine of equitable subrogation, Doubtless, under the circumstances disclosed, he may be in need of the protection sought; yet, as this is not the criterion which should be applied in determining his right to demand the aid of the courts, we will, before undertaking to deal with the peculiar facts of this case, enter upon a brief discussion of the general principles upon which equitable jurisdiction in this class of cases is based, with a view to ascertaining his attitude as regards the other parties at interest. As defined in 24 Am. & Eng. Ene. L. 187, “ Subrogation is the substitution of another person in the place of. a creditor or claimant, to whose rights he succeeds in relation to the debt or claim asserted, ■which has been paid by him not voluntarily, and contemplates some original privilege on the part of him to whose place sub
Considered in the light of the principles above enunciated, we see no merit in the contention, insisted upon by the Merchants and Mechanics Bank in the present case, that Tillman, who claims to have advanced his money upon the distinct un•derstanding that he was to acquire a first lien on the property in question, is to be regarded as a mere volunteer. Jefferson, the debtor of the bank and the owner of land bought subject to a security-deed in favor of Larned, procured Tillman to advance the money necessary to remove this encumbrance. At the time, the bank was the holder of a junior mortgage lien upon the same • premises, Jefferson having previously executed a mortgage in its favor to secure his debt to it. Of the existence of this mortgage.lien Tillman had no actual knowledge. Therefore, when he accepted the papers executed with a view to giving him the first and highest lien on the ¡property, it can not be said that he made a mistake of law as to the legal effect of these clocumonts, and consequently can not complain, for the reason that he got exactly what he bargained for. Had it not been for the bank’s mortgage, of which Tillman was ignorant, the security accepted by him would have fully come up to that contracted
■It is urged by the plaintiff in error that this remedy, the writ of injunction, is a harsh one and should be granted only where absolutely demanded. But what other recourse is open to Tillman? The bank refuses to recognize that he is entitled to a lien superior to its mortgage, which it is proceeding to foreclose. If a sale of the property takes place thereunder, he will not be in a position to file a claim in a court of law to the proceeds realized from the sale, and the bank will thus be enabled to gain an undue advantage over him. The reply is made to this, that he does not affirmatively show that he will suffer irreparable loss, as he holds other security for his claim, of a character apparently as good or better than the land itself. This argument, however, fails to fully meet the issue. Tillman undertakes to show that, as between himsélf and the bank, he is entitled to first be paid out of the land in question, and if so, the mere fact that he holds other security will not defeat this right, or furnish any excuse for the bank to disregard the same. On the contrary, the bank may, and should, be restrained from seeking to gain an inequitable advantage over Tillman by an attempt to enforce its lien as the apparently senior, though in point of fact the junior, encumbrance upon the property. The present action has for its object merely the adjudication of the question whether or not the claim of Tillman should, in equity and good conscience, take precedence over the lien being asserted by the bank. Whether Jefferson is or is not insolvent can have no bearing upon this issue, which involves only the determination of the relative dignity of the two liens relied on,
Again, it is insisted that Tillman is not entitled to any relief, because, by the exercise of ordinary prudence, he could have discovered all the facts and taken the necessary steps to protect himself. As above pointed out, however, the mistake made by him was one of fact, not of law, in supposing the papers taken by him as security constituted a first lien on the property. He had no actual knowledge of the bank’s mortgage, though it is true he had constructive notice thereof, the same having been duly recorded. “To be sure, he might have learned the fact of the existence of [this lien] had he exercised the prudence of a man of business dealing with a stranger in relation to land ” title to which was claimed by the latter. “ But a searching of the record [was] not indispensable.” Cobb v. Dyer, supra, citing Grimes v. Kimball, 3 Allen, 518, 522. The doctrine of constructive notice is resorted to from necessity, its object being to protect the rights of innocent third persons, and should never be applied in favor of parties not entitled to the protection it affords. See cases cited in note 1, pages 791 and 792 of 16 Am. & Eng. Ene. L., under the subhead: “When the Doctrine is Applied.” Obviously, culpable neglect on the part of one seeking the aid of a court of equity never constitutes a valid defense to the action which his adversary can set up as matter of right. The attention of the court may very properly be called to the fact that the plaintiff is chargeable with an improvident omission to take care of himself; but the refusal of the court to lend him aid always proceeds upon the
Judgment affirmed.