Sprowls v. Sprowls

| S.D. | Jun 8, 1914

McCOY, J.

In October, 1907, appellant A. C. Sprowls and respondent Smith then being the owners, as tenants in common, of certain real estate situated in Sully County, jointly executed and delivered to one Krahn, as mortgagee, a certain mortgage upon said real estate to secure the payment of a note for $2000.00, signed by appellant and respondent Smith, due three years after date-, and which note represented a joint debt owed by them. T-hi's Krahn mortgage was duly recorded on the 18th of October, 1907. On the 4th day of March, 1909, respondent Smith executed and delivered ito respondent A. H. Sprowls, as mortgagee, a 'mortgage upon the undivided individual interest of said Smith in said land to1 secure an. individual debt of Smith to respondent Sprowls. When the note and mortgage to Krahn became due and the same not having been paid by the said mortgagors thereof, said note was paid1 'by .respondent A. H. Sprawls. In the month of January, 19x1, Smith executed' and delivered to respondent Rotdher a deed of his undivided one-half interest -in said1 real estate. Thereafter respondent A. H. Sprawls secured a judgment jointly against the appellant and' said Smith on said $2000.00 Krahn note, in the courts of tibe state of .Illinois to the amount of $2,079.67, and ins May, 1911, respondent Sprawls, as plaintiff, commenced an action in the circuit court of Sully County against tíre appellant and said Smith, as defendants, but only made service of process upon appellant. At the time of the commencement of said last mentioned action, a warrant of -attachment was- issued therein, on the ground of non-residence of appellant, and a levy was made thereunder alone on the interest of appellant in -said real estate; and appellant not appearing, such action proceeded to- judgment, and an execution issued, and on the 18th day of November, 1911, the undivided individual share of appellant in said real estate was alone sold to A. H. Sprawls, respondent, for the sum- of $2,234.89, being the full amount of principal, .interest -and cost .due on said Illinois judgment, -and which execution was returned f-ully satisfying said judgment

Appellant, as plaintiff, instituted1 this action against respondents Sprawls, Rtoitoher and Smith, as. defendants, claiming to be subrogated, through A. TT. Sprawls, respondent, to one-half interest in said $2,000.00 Krahn note and mortgage indebtedness to protect the common interest of appellant as against the common interest of said Smith, which was liable for the payment of one-half of said indebtedness, and those claiming -under him -subsequent to the recording of the Krahn mortgage, and seeks to 'have one-half of -the said Krahn indebtedness foreclosed as against the interest -or common share in said- land formerly owned by said Smith. On the trial the facts' hereinbefore stated, among other's, were found, and conclusions -of law made therefrom as follows: “That .plaintiff’s action is without equity as to A. H. Sprawls; that -at the commencement of this -action plaintiff had an adequate remedy at law- as to' A. H. Sprawls; that plaintiff should be subrogated to the right of Rotoher; that said action be dismissed as to A. IT. Sprawls.;” and judgment being accordingly -entered thereon, plaintiff -appeals', assigning t'he insufficiency of the evidence to sustain certain, of the findings; that the findings do not sustain the conclusions anid judgment; that the findings are sufficient to sustain a judgment and decree in favor of plaintiff.

It is the contention of appellant that when bis common share and interest in said Teal estate -was sold and made to pay and satisfy the whole of the indebtedness secured by the Krabn mortgage, and which should in equity have been satisfied by a sale of 'both the common interests in- said land, he became subrogated to the right of Kra'hni to foreclose said mortgage to the amount of the excess over and above his share, that should have been paid by the Smith common share, — that the Smith common share or interest in said land, no matter by whom' now owned or incumbered, cannot elude or escape its obligation for the satisfaction of its common share of the Krabn mortgage. We are' of the view that the contention of appellant is sound and well taken, and that the learned trial court was in error in rendering judgment that plaintiff’s action was without equity as to respondent Sprowls. It seems to be generally held that where a tenant in common pays off an incumbrance on the common estate,' equity will consider the incumbrance as still existing in order to enforce contribution from the co-tenant, or as extinguished, according to the justice of the case. Generally as between tenants in common of an estate bound by a joint lien, the part of each is held liable to contribute only its 'proportion toward the discharge of the common burden, and beyond this, is regarded as the surety for the remaining part, and if the part 'of one is called on to pay mere than its proportion, the tenant thus paying the .excess is entitled to 'stand in the place of the satisfied creditor to the extent of the excess which ought to 'have been paid out of the other share. 37 Cyc. 398. 38 Cyc. 47. Jones on Mort. Sec. 1089. Pomeroy’s Eq. Jur. Sec. 411. Hogan v. McMahon, 115 Md. 195, 80 Atl. 695 Ann. Cas. 1912C, 1260 and note. Watson’s Appeal, 90 Pa. St. 426. It is apparent from the foregoing authorities that the estate or interest- in common in -the land is held to contribution under subrogation regardless of any personal right or obligation of the owner of such common share. It is the estate or interest in the land owned by Smith as a tenant in common that was charged with the burden of paying one-half of the Kra'hu mortgage, regardless of who. might subsequently become the owner or incumbrancer of such share. The mortgage from Smith to Respondent Sprowls, and also toe deed from Smith to Rotcher, were boto expressly made subject to toe Krahn mortgage, and both were also subject and junior, in legal right, to toe Krahn mortgage under toe recording statute of this state. Whether the mortgage under which the subrogation takes place was assigned or simply paid is immaterial. It is toe fact of payment or satisfaction that constitutes the tenant in common an equitable assignee and keeps the. lien alive for the purpose: of subrogation and contribution. 2 Pom. Eq. Jur. Sec. 729. When the share of appellant, by judicial sale, w'as made to- stand the whole burden of toe Krahn mortgage it was in effect the same as if he had paid said mortgage lien in money, — his property was taken instead of -his money. Appellant’s share in said land was gone and he had no further interest therein, — 'the value of his land paid' $1,117.45 that should 'have been paid by toe Smith interest. The ■respondent Sprawls is now toe owner of the share formerly owned by appellant. Respondent, Sprawls, under the Krahn mortgage, had toe right to sell both common toares in satisfaction of toe Kraihn indebtedness, and 'had he clone so' and both interests bad only brought 'sufficient to satisfy said lien, then appellant would 'have been in no position to complain, but it is fair to presume that if both common interests had.- been sold, they would have brought double what the one-half interest brought, and, under which circumstances, appellant 'would have been entitled to one-half toe surplus, or $1,117.45.

The other facts found by toe court, — that there was no fraud or collusion betwen respondents Sprawls and Rotcher, and that Smith is insolvent, are wholly immaterial.

The judgment appealed from is reversed and the cause remanded with directions to the lower court to' enter judgment and decree in favor of appellant against both respondents Sprawls and Rotcher, adjudging that 'appellant be 'subrogated to the rights -and lien of the Krahn mortgage to- the extent of $1,117.45, with interest and costs, in and against the undivided one-half interest in and 'to said land owned by Rotcher and covered by the mortgage given by Smith to A. H. Sprawl's; that such interest be sold amd foreclosed to satisfy ¡appellant’s said claim thereon, the balance, if any received upon such foreclosure sale, after payment of appellant’s! claim, interest and costs, to1 be applied in payment of the mortgage' given A. H. Sprowls by Smith.