Case ID: okla_118/html/0239-01.html
Source: Caselaw Access Project
Author: {"author": "RAY, • C.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HELMS et al. v. JENKINS.
    No. 16388
    Opinion Filed June 8, 1926.
    1. Subrogation — Right not; Acquired by Volunteer ^Payment ipf Mortgage.
    One owing no duty, who voluntarily and without request so to do, pays; the mortgage indebtedness of another and .onuses ihe mortgage to be discharged and released, is not thereby entitled to subrogation.
    
      %. Same — Appeal and ¡Error — Mandate— Proceedings in Lower Court in Conformity — Settling Equities.
    Where, in such case, the trial court, pursuant ro a mandate of this court to settle the equities between the parties, finds that the indebtedness 'so paid was paid for the benefit of the mortgagors, aud that they received the full benefit thereof, and enters judigmenc for the plaintiff, payor, for the amount so paid, and erroneously holds Che payor entitled to subrogation, but, notwithstanding such holding, dees not foreclose the mortgage, but decrees the judgment to, be an equitable lien on the land described in the mortgage, die judgment will be affirmed, where it is authorized by the mandate and supported by the evidence.
    ('Syllabus by Ray, C.)
    Commissioners’ Opinion, Division No'. 1.
    Error from District Court, Sequoyah County; J. T. Parks, Judge.
    Action by George R. Jenkins against Mollie Helms and 'Sidney R. Helms. Judgment for plaintiff, and defendants appeal.
    Affirmed.
    Cleveland Holland and Caswell S. Neal, for plaintiffs in error.
    9'. M. McCombs, for defendant in .error.
   Opinion by

RAY, • C.

This suit was originally brought by George R. Jenkins against S. R. Helms and Mollie Helms to recover on a promissory note in the sum of $2 200 and interest, executed to Aureldus-Swanson Company, and assigned to the plain biff, Jenkins, and to foreclose a mortgage given to secure the payment of the note. Defendants, by their answer alleged, in substance, that the note and mortgage were executed without consideration, and that the plaintiff, Jenkins, was not a purchaser in (Inc course for value.

Tlie evidence showed the note and mortgage were executed October 11, 1919, to Aurelius-Swanson Company, and offered for sale to the plaintiff, Jenkins, a resident of Chicago. December 5, 1919, Jenkins forwarded his check to Aurelius- Swanson Company for the amount of die note, less the commission, ,and in the letter of transmittal stated he was paying the amount for the Helms loan, subject to approval of the abstract when received; that if the title were not satisfactory, he would return the papers and ask tor ,a return of the money, ■but, if the abstract were approved, he would send the assignment for record, and, on March 1, 1920, sent the assignment to Aurelius-'Swanson Compainy tot be placed of record. The evidence further showed that the proposed loan by defendants Helms was to pay a mlortgage held by the State School Land Department in the sum of approximately $1500. The Aurelius-Swanssn Company, on the 3rd of January, 1920, paid to the School Land Department the .amount of the Helms mortgage, and, on the 19th day of January, it release of the mlortgage was executed and delivered to Aurelius-Swanson Company, and thereafter filed for record. The evidence further showed that the balance of the $2,200 loan, above the amount paid the School Land Department in payment of the Helms mortgage, was rendered by Aurelius-Swianson Company to the defendants Helms, and they refused to accept it.

Defendant S. R. Helms testified that at the time he executed the application for the loan, and the nore and mortgage sued on, and left them with Aurelius-Swansota Company’s local agent iat Sallisaw, it was agreed •by them that the local agent would hold the application, note, and mortgage until he, Helms, could decide whether he wanted to make application for ihe loan of a larger sum; that he executed another note and mortgage fok the sum of $2,700, and delivered them to Aurelius-Swanson Company’s llocal' agent at-Sallisaw, and that tlie agent, in his presence, took from his desk papers purporting to be the original note and mortgage executed toy him, tore them up, and threw them away, with the statement, iri substance, -that he would get rid of the old mortgage. On this evidence judgment was for the defendants against the plaintiff, from which plaintiff appealed. In that case (Jenkins v. Helms, 89 Okla. 77, 213 Pac. 322), it was held that the Aurelius-Swanson Company was bound by the agreement of its local agent, if such agreement were made, to hold the note and mortgage pending Helm’s decision as to whether he wanted toi make a larger lo.au, and that the act of the local agent in (earing up certain papers and representing he was destroying the note and mortgage for $2,200, when in fact he was not, amounted to a false representation and fraud. It was also held that plaintiff, Jenkins, was not an innocent purchaser, and the judgment was affirmed. It was further held, however, that the court should have settled the equities between the parties, and “Aurelius-Swanson Company having paid the School Land Department the amount lof its mortgage, tlie court should have subrogated the plaintiff to the rights of the School Land Department, and protected the plaintiff in the amount actually paid out .and interest.” The opinión concluded:

“The judgment of the court in finding that the plaintiff was not an innocent purchaser is affirmed, and the cause remanded, with directions, to the trial court to proceed and settle the equities between the parties nob inconsistent with the views herein expressed, with costs of this appeal taxed toi the plaintiff in error.”

On rehearing, the directions to tlie trial court were modified, in a per curiam opinion, in this language:

“The petition for rehearing in this case is denied, and the cause is remanded to Ihe district, court of Sequoyah county, with directions to the trial court to hear and determine the cause as to any equities existing- between the parties and the right oi ilie plaintiff in error, if any, to be subrogated to the rights of the state of Oklahoma under a mortgage paid to the Commissioners of tlie School Land Department.”

On the going drawn of rhe mandato tlie plaintiff, Jenkins, filed an amendment to ms petition, in which he alleged, in substame, that at the time'of the purchase of the note and mortgage from Aurelius-Swanson Company, he remitted the amount1 due, and wirli tlie funds so transmitted tlie Aurelius-Swanson Company, under the directions of the defendants, paid to the Commissioners of the Land Office, the amount of their mortgage, together with the accumulated interest in the total sum of $1,559; that upon such' payment the mortgage held by the Land Department was released, and by reason of such payment, he was entitled to be sub-rogated to ail the rights of the Land Department in and to the mortgage lien. The defendants, by their answer, specifically de-' nied that they ever requested Aurelius-Swanson Company to pay the note and mortgage held by the School Land Department.

Tile case was tried on the same evidence as on the farmer trial, and the court found that the plaintiff was entitled to he sub-rogated to all rights of the Commissioners of the Land Office of the state of Oklahoma', and rendered judgment for the amount paid by the Aurelius-Swanson Company to the Land Department in payment of its mortgage and interest, and the judgment was decreed to be a first and valid lien on the real estate mortgaged to the School Land Department.

Defendants, in their appeal, present but one question: “Should the doctrine of sub-rogation be held to extend to the defendant in error, George R. Jenkins, under the facts as presented by this record?”.

The fact that Aurelius-Swanson Company paid the indebtedness due from Jenkins to the state and secured a release of its mortgage, did not give Jenkins a right to sub-rogation. Neither did the fact, if a fact, that Aurelius-Swanson Company paid the state’s mortgage out of the money advanced by Jenkins in payment for Helms’ mortgage, entitled him to subrogation. He was under no duty to pay it. He was a volunteer. Kahn v. McConnell, 37 Okla. 219, 131 Pac. 682.

The fourth paragraph of the syllabus in the case of Kiniry v. Davis, 82 Okla. 211, 200 Pac. 439, is as follows:

“Where the proceeds of a toan, secured by a mortgage, are used to pay a prior mortgage and judgment lien upon the property mortgaged, and said mortgage and judgment lien are released ctf record, the mortgagee furnishing the money to pay such mortgage and judgment lien, being in no way obligated to pay the same, and there being no agreement that such mortgagee be substituted to the rights of the mortgagee or judgment creditors, the doctrine of sub-rogatidn -in such a situation has no application.”

It is argued by counsel for Jenkins that the holding in the opinion by Justice Mc-Neill, on the former appeal, that Jenkins was entitled to 'be subrogated to all of the rights of the School Land Department under its mortgage, is the law of 'the case. In making, such contention counsel apparently have overlooked the fact that the language of the opinion was. modified by the per curiam.opinion quoted. The court’s final directions in remanding the case were to herein determine the cause as to any equities existing between the parties and the right of the .plaintiff in error, if any, to be subro-gated to the rights of the state under its mortgage. It was for the trial court to determine whether, on the facts, Jenkins was enitled to be subrogated to the rights of the Sohooi, Hand Department, and we think the trial colurt erred in holding that he had such right.

It is contended for Jenkins that the Helms, in their application for a loan to pay the mortgage held by the state, authorized Aurelius-Swanson Company to pay to the state the amount due. That question is disposed of oh the former .appeal, when it was held that the local agent was guilty of fraud in transmitting the $2,200 mur.-gage to Aurelius-Swanson Company, and that Aurelius-Swanson Company had no more right to the mortgage than the local agent would have had. The applicatioh tor ■a loan referred to was the application for the $2,200 loan, and was received by the local agent .and transmitted to Aurelius-Swanson Company under the same conditions and circumstances as were the note and mortgage. However, notwithstanding the loKver court held, as a matter of law, that Jenkins was entitled to subrogation, the doctrine of subrogation was not applied in the decree The mortgage to¡ the School Land Department was not foreclosed. Judgment was fetr the. amount paid for the release of the (mortgage and interest, and the judgment was decreed to be a first and valid lien on the land described in the mortgage. The lien decreed was, in effect, an equitable lien for -money paid for the benefit of ihe defendants, and for which they had received lull value in the satisfaction and release of their mortgage to the School Land Department. While the court erred in holding that the voluntary payment of the. mortgage by Aurelius-Swanson with the money of Jenkins emitted Jenkins to subrogation, the equitable lien decreed was authcirized by ihe mandate and supported by the evidence.

While the question is not presented by the briefs, we think section 319, O. S. 1921, which provides that the court, in every stage, paust. disregard any error, defect in the pleadings or proceedings, which does not affect the substantial rights of the adverse party, and that no judgment shall be reversed or affected by such error otr detect, is peculiarly applicable here. On the former appeal, it was held that Jenkins had constructive notice of the defect in Aurelius-Swanson Company’s title, ¡and, for that reason, he could not foreclose his mortgage. TJpcta his prayer for general equitable relief, the case was remanded, with directions bo determine the equities between the parties. The court, on a second trial, properly found that Aurelius-Swanson Company paid to the School Land Department, with Jen-kin’s money, the amount owing' l)y the defendants, and caused their mclrtguge to be discharged, and entered judgment for the .amount so paid, and decreed ihe judgment to bo an equitable lien on defendants' land described in the mortgage.

Note. — See under (1) 37 Cyc. p. 375; anno-16 L. R. A. (N. S.) 235; 25 R. C. L. p. 1325; 5 R. C. L. Supp. p. 1372. (2) 4. C. J. p. 1168* sec. 3190.

The decree was authorized by the mandate and supported by the evidence. The judgment is affirmed.

By the Court: Ic is so ordered.