54 Mo. App. 94 | Mo. Ct. App. | 1893
— The following are the facts over which this litigation has arisen. Defendant Reed gave a first mortgage on his land to St. Clair county to secure a loan of $1,000. He afterwards borrowed $805 of one Burch and gave him a note and second mortgage therefor on the same land, the defendant Taylor also signing as his (Reed’s) surety., 'After-wards defendant Reed being indebted to one Maus in the sum of $1,200 executed his note and third mortgage on the land to him for that amount. Plaintiff afterwards purchased the Burch note, secured by the second mortgage and by defendant Taylor, and .the Maus note secured by the third mortgage. Plaintiff afterwards foreclosed the third mortgage and bid in the land at much less than the note secured thereby. That afterwards in order, as plaintiff states, to protect its title to the land thus acquired, it paid off the judgment which had been obtained foreclosing the first-mortgage to St. Clair county.
The question arising on the foregoing facts is whether a surety must pay off a subsequent mortgage (securing a distinct debt) in order to be subrogated to the rights of his principal on the debt for which he was surety? We think he need not do so. It is a clear principle of equity that a surety has the right of subrogation to all the securities which the creditor has against the principal debtor. Reyburn v. Mitchell, 106 Mo. 380; Taylor v. Tarr, 84 Mo. 426; Orrick v. Durham, 79 Mo. 174. The surety on the payment of the debt stands as against the principal debtor, whose debt he has paid, in the shoes of the creditor and can make available to his benefit all rights which the creditor could have enforced. In this case the creditor held a mortgage. It was a junior mortgage to that held by the county of St. Clair.- The creditor’s rights in respect to these was a right to redeem the prior county mortgage and to foreclose his own. To these rights the surety 'succeeded. No subsequent deal or manipulation of the securities without the consent of the surety could affect his rights, for such rights of- his accrued at the time he entered into the obligation of
But we are cited by plaintiff to some authority in seeming contradiction to what we have said, viz: 1 Hillard on Mortgages [4 Ed.] 342; 1 Jones on Mortgages, sec. 834; Sheldop on Subrogation, sec. 148. Each of these authors, although the law is stated by them in other parts of their works in conformity to the principles we have mentioned, yet on the authority of an English case (Williams v. Owens, 13 Sim. 597) they state' that a mortgagee who also has a surety for the debt may afterwards make a further advance on the mortgage to the mortgagor, and the surety cannot be subrogated to the mortgage without paying both the original sum and the subsequent advance. This statement can only be upheld under the rule of tacking, a rule not recognized here and no longer in vogue in England. Such is the view taken by the master of the rolls in Drew v. Lockett, 32 Beav. 499, and by the supreme court of New York in the case of National Exchange Bank v. Silliman, 65 N. Y. 475, cases wherein the law is stated in keeping with what we have said in this opinion. The master states in Drew v. Lockett, that the surety in the case of Williams v. Owens, would be assumed to have entered upon his suretyship with a knowledge of the right of the creditor to tack.
We have discussed the surety’s rights with reference to such securities as the creditor took or had at the time the surety entered into his obligation. What rights the surety would have in securities which the creditor might take after the surety entered into his obligation we have not considered. The cases of Stone v. Furber, 22 Mo. App. 498, and Logan v. Mitchell, 67 Mo. 524, have no application to the facts of this case. "Those cases have relation to the equities in favor of "the creditor" as to securities which have been taken of the principal debtor by the surety. Neither is the case of Wilcox v. Fairhaven, 7 Allen, 270, at all applicable to "this case. In that case a security was taken by the •creditor to secure several debts, some of which were signed by sureties and some not. It was held that the creditor could apply the proceeds of the security {insufficient for all) to the debts which had no sureties, and that the sureties if they wished to be subrogated
The result of our conclusion is, that since BurchT the creditor, with the second mortgage securing his debt on which Taylor was surety, had a right to subject the land to the payment of his mortgage debt; and that as holder of such second mortgage he had a right to-redeem the first mortgage to St. Clair county, that Taylor, as surety, succeeded to Burch’s rights; and that these rights remain unaffected in the hands of the plaintiff as assignee, who took the Burch note with notice of Taylor’s suretyship. The judgment will therefore be affirmed.