101 Ind. 178 | Ind. | 1885
The contest is here waged between the appellant and James C. Collett, one of the appellees, and it is only necessary to state such facts as relate to that contest. ¥e extract from the special finding and state in an abridged form those facts. On the 9th day of March, 1879, William Peirce, the appellant, bought a tract of land from Martin Higgins, paid the purchase-money in cash and by discharging a mortgage lien existing on the land, and received a warranty deed. On the 3d day of July, 1878, Zerelda Kendall obtained a judgment against Higgins for $424.14, and the court decreed that the judgment was a lien on the land which Higgins afterwards conveyed to the appellant. In November, 1878, Higgins appealed from that judgment and executed an appeal bond with Collett as surety, wherein it was agreed that Higgins should prosecute his appeal and pay the judgment that might be rendered or affirmed against him in the Supreme Court. The appeal was unsuccessful, and in May, 1881, the judgment was affirmed. Of the judgment in favor of Zerelda Kendall and of the appeal the appellant had notice at the time he bought the land. Sale was made on that judgment and decree, and Zerelda Kendall bought the land for $686.86 and received a sheriff’s certificate. This certificate subsequently passed into the hands of William and Isaac Thompson. In June, 1882, the appellant, to protect his title and prevent eviction, purchased the sheriff’s certificate. * It is argued with much force and no little ingenuity, that the appellant by operation of the doctrine of subrogation is entitled to the rights which Zerelda Kendall had against Collett upon the appeal bond. As not infrequently happens, an elaborate argument is sapped by one defect in the foundation upon which it is constructed. A defect in one spot in the foundation of a structure may sometimes overthrow it as
The surety in the appeal bond had a right to assume that the judgment.bound the land, and that if he was ultimately compelled to pay it, he would be subrogated to the rights of the creditor and could seize and sell the land upon which the judgment lien rested. When the appellant purchased, he was bound to take cognizance of the legal rights of the surety. It is a fundamental principle that a party who.has full knowledge of the facts is bound to know their legal consequences. Trentman v. Eldridge, 98 Ind. 525; Anderson v. Hubble, 93 Ind. 570; S. C., 47 Am. R. 394; Dodge v. Pope, 93 Ind. 480, vide p. 487; Barnes v. McKay, 7 Ind. 301. The essential thing in such cases as this, and in cases of a kindred character, is knowledge of the facts, for, when this exists, knowledge of legal consequences is necessarily implied.
The surety’s right to subrogation comes into existence with his contract; his rights flow from that contract' and accrue when it is executed. His own acts may impair them; the acts of others can not. These rights continue in undiminished vigor from their inception until the termination of his liability. It needs no particular form of contract to create them, for they are created by law and are legal incidents of the undertaking. Parties who subsequently acquire rights with notice of a lien securing the debt for which the surety has bound himself can not deprive him of his rights to be subrogated to that lien. The plainest principles of justice forbid that a purchaser of land bound by a judgment lien should be preferred to a surety who has undertaken to pay the judgment in order to secure for his principal the benefit of an appeal.
It is true that the surety on the appeal bond undertook to pay the judgment, but the principles of equity entered into that contract as a silent but potent factor. The principles of law enter into all contracts, and parties in contracting assume that the law is one of the elements of their contract. It is never necessary to embody the law in an agreement; it goes into it without any express provision. The law entered into the contract of Collett and gave him a right of subrogation, and that element can no more be excluded than can any other. He contracted, therefore, upon the assumption that the lien
As the surety had a'clear right of subrogation from the time he entered into the contract of suretyship, he has the senior equity as against the' appellant who bought after that right had fully vested, and the latter can not save his land at the expense of the former. The conclusion of the whole matter is that the action against the surety has no foundation, for a surety can not .be postponed in favor of a purchaser who purchased with full knowledge of his rights.
The special finding affirmatively shows that no injúry resulted to the appellant from the ruling on the motion to strike out part of the complaint, and even if there was error in that ruling, it was a harmless one, not warranting a reversal.
Judgment affirmed.