66 P. 644 | Kan. | 1901
Tbe opinion of the court was delivered by
This was an action to recover on a promissory note for $850 purporting to have been executed on December 9, 1889, by Ozro H. Lewis and Sarah A. Lewis, his wife, and to foreclose a mortgage of the same date given as security for the payment of
The plaintiff replied with a general denial, and also with averments that the note and mortgage in. suit were given for the purpose of procuring money to pay off encumbrances then existing on the mortgaged land.' One was a mortgage lien of $500, and another of $50, which had been executed by the defendants, and which, were paid off and discharged at the request of defendants with the money obtained on the loan. The plaintiff therefore asked that she- be subrogated to all rights and interests in the mortgages so paid off, and for other equitable relief.
At the trial, Ozro H. Lewis testified in a self-accusing way that he signed his wife’s name to plaintiff’s note and mortgage, and that it was done without her authority. This was corroborated by the testimony of his wife, and together they were able to satisfy a jury that Mrs. Lewis did not join in the execution. The plaintiff was equally unsuccessful in securing subrogation to the rights of the mortgage liens paid off with the money which the Lewises obtained on the defective note and mortgage. The court sustained a demurrer to the reply setting up the right of subrogation and rejected testimony offered in support of the right. In that there was error.
It appears that, almost immediately after the execution of the mortgage in suit, Mrs. Lewis was informed by her husband that he had signed her name to the instrument. She knew, too, that the greater part of the money obtained by the loan was intended to be used, and was in fact used, in paying" off liens on the property sought to be mortgaged. Interest on the
The facts bring the case within the authority of Everston v. Central Bank, 33 Kan. 352, 6 Pac. 605, where it was held that, if money is loaned on a forged mortgage, supposed to be valid, to be used, and which was used, to pay off a valid mortgage, the mortgagee or his assignee may be subrogated to the rights of the prior mortgagee, if there are no intervening liens or encumbrances. The general rule is that, where it is equitable and just that a person furnishing money to pay off a debt should be substituted for the creditor, he will be substituted and subrogated to all the rights held by the creditor. (Crippen v. Chappel, 35 Kan. 495, 11 Pac. 453, 57 Am. Rep. 187; Yaple v. Stephens, 36 id. 680, 14 Pac. 222; Hofman v. Demple, 52 id. 756, 35 Pac. 803; Farm Land Co. v. Elsbree, 55 id. 562, 40 Pac. 906; Armstead v. Neptune, 56 id. 750, 44 Pac. 998.) There are no intervening liens or encumbrances, and
The pleadings warranted the plaintiff in asking for subrogation. She pleaded and sought to establish the validity of the instrument, and then when answers alleging invalidity were filed she set up facts entitling her to subrogation if the mortgage was found to be void, praying for subrogation and other equitable relief. This is a common and proper course of practice where invalidity of a mortgage sought to be foreclosed is brought out in answer and grounds for ■subrogation exist in favor of the plaintiff.
It is argued, however, that because more than five years have elapsed since the maturity and payment of the prior mortgage liens the defense is barred. If it should be considered that equity has kept the prior debts and liens alive for the benefit of the party who furnished the money to pay them, the payments of interest would be sufficient to toll the statute. The right of subrogation, however, is not founded alone on the notes and mortgages, but is founded on all the facts and circumstances which give rise to the claim
For the errors mentioned the judgment of the district court will be reversed, and the cause remanded for further proceedings in accordance with this decision.