Lead Opinion
delivered the opinion of the court.
Repeated examination of the record has failed to satisfy us that Allen & Co. agreed that the mortgage executed by Peace to the appellant, was to have priority over the one he executed to them. There is much in the record suggesting th^t they did, but the fact is not stated to be true by any witness having personal knowledge thereof. Martin, who was a party to the negotiations, is not clear, and seems to have made contradictory statements. Peace is dead, and the Allens both testify that they thought the debt having precedence over their security was that secured by the mortgage to the Freehold Company, as to which there is no controversy in reference to their waiver. The whole correspondence between the senior member of the firm Avhile in New York, with his firm in Memphis, strongly supports his testimony that in his negotiations with attorneys in New York, he thought the attorney was the representative of
Cases may undoubtedly be found which would deny subro-gation, under the circumstances, even as between the appellant and Peace. Our dissenting brother will collect them in his opinion; they are cited in the briefs of appellees' counsel, and need not be here again set down. But there are other cases holding a different view, and we think with better reason. The principle of equitable subrogation does not arise from contract (for that is conventional subrogation!, but is a creation of the court of equity, and is applied in the absence of an agreement between the parties, where otherwise, there would be a manifest failure of jristice. It is never enforced for the protection of mere strangers and intermeddlers in the affairs of others, nor can it be invoked to override and displace the real contract of the parties; that is, where the security contracted for is in fact given but its legal effect is not that expected, as in IIowell v. Bush, 54 Miss., 437. Equitable subrogation is in some of its characteristics nearly related to the principle of equitable es-toppel, and may, in a sense, be called the acting and moving, while equitable estoppel is the obstructive, member of the same family.
The objections made by counsel for the appellees (1) that appellant was a stranger to the property, and, therefore, cannot invoke the rule of subrogation, and (2) that, since it was agreed that the securities to which subrogation is now sought should be paid off and discharged, there is nothing to which appellant can be subrogated, are answered by many authorities, [a) One who at the instance of the debtor advances money to be used by the debtor in the payment of a prior security, is not a stranger or intermeddler in his affairs. Sheldon on Subrogation, § 247; Milton v. Mayberriy (Wis.), 6 Law' Rep. Annotated, 61; Emmert v. Thompson, 49 Minn., 386, s.c. 32 Am.
The present case is, as to the matters hereinbefore referred to, fully covered by the decision of this court at the April term, 1894, in the case of McMullen v. Home Investment Co., in which no opinion was written. That case and Cansler v. Sallis, 54 Miss., 446, are decisive also that, since Allen & Co. are, by applying the principles of subrogation, placed in no worse attitude than they originally were,'the fact that they have a mortgage upon the same property cannot defeat the right of subrogation invoked by the appellant.
The fact that the debts protected by the securities to which subrogation is sought are now barred by limitation cannot avail. Peace's representative will not, in equity, be permitted to invoke the statute of limitations to defeat the security to which subrogation is sought. The fraud of Peace, in representing that the property was unincumbered and of accepting from the appellant the large sum of money it advanced on the faith of his representations, would preclude him, if alive, from invoking the lapse of time as a bar to the remedy by which the injury he has sought to inflict can be avoided. He would be estopped to interpose the defense, and his representative, who stands in his shoes, is bound by the same rule. Staton v. Bryant, 55 Miss., 261; Barnett v. Nichols, 56 Ib., 622; Kelley v. Wagner, 61 Ib., 299.
Tim decree is reversed, and cause rernmded, to he further proceeded -with in riccordcm.ce with this opinion.
Dissenting Opinion
dissenting:
I dissent from the judgment of the court. First, the case, as to subrogation, may be condensed thus: Peace, the common debtor of the Freehold Company and Allen & Co., owed the former, say, $26,000, and the latter $25,000, the Freehold Company having the senior and Allen & Company the junior mortgage. Peace wanted more money to pay off the Freehold Company and to farm on. He applied to the Union Company, through its agent, the Corbin Banking Company, for a loan of $38,000, the Corbin Banking Company intentionally and fraudulently keeping off the application the Freehold mortgage and all the Allen & Co. mortgages, the Corbin Banking-Company being the agent of the Union Company. The Union Company, through its said agent, and Dr. Peace, agreed expressly that the Freehold Company’s mortgage should be paid
The reason why the Corbin Banking Company did, as the agent of the Union Company, so agree that the Freehold Company’s mortgage should be paid and satisfied, and not kept alive, is obvious. That company wanted to shift a bad debt from its shoulders to those of its principal, and secure, besides, to itself the $8,000 it was already out in the purchase of the Hopson decree, and $8,700 it charged as commissions for negotiating, as it puts it, the loan of $38,000; and it purposely concealed from its principal the fact of the existence of the Freehold mortgage, by paying it and discharging it and sending it actually to Martin to be delivered to Peace. The Union Company, through its agent, the Corbin Banking Company, finding out that Allen & Co. stood. upon their legal rights (the Union Company's mortgage not having been executed for some months after the payment of the Freehold mortgage and the execution and recording the Allen & Co. mortgage), that company asks this court, not to apply the principles of subrogation
I refer .especially, also, to Howell v. Bush, 54 Miss., 437, within the principle of which case this case, in my judgment, falls precisely. With all deference, I think the opinion of the court overrules that case. It is impossible for me to distinguish it in principle from the case at bar, and, in my judgment, it is controlling and decisive here.
But, secondly, the Union Company elected its remedy. It repudiated the “Freehold” mortgage as a basis of its claim. Tt allowed it actually, as to Peace, to run past maturity, perhaps the full statutory period, without selling under it. It did sue under its own mortgage, bought under it, is in possession under it, and is sued in ejectment as.so in possession. It is estopped now to change its election.