#### Hughes, Appellant, vs. Thomas and others, Respondents.

*March 20*—

April *9, 1907.*

*Subrogation: Advances to pay off incumbrance: Defective*security.* *Laches: Limitation of actions: Mortgages: Extension of time by partial payment.*

1. One wlio advances money to pay off an incumbrance upon property under an agreement that be is to bave security tbereon will not be regarded as a mere volunteer, but will be subrogated to tbe rights of tbe original incumbrancer if bis own security turns out to be defective and there are no intervening equities.

2. Tbe widow of a testator was given a life estate in land and became executrix of the will. Tbe personal estate was insufficient to pay debts, and in order to obtain money to pay off an overdue mortgage on tbe land she gave to another person a new mortgage which was intended and understood to cover tbe fee and not merely her life estate. No equities having intervened, *316the new mortgagee is *held.*entitled to be subrogated to the rights of the original mortgagee, Ocm-ner WeZcTi, 51 Wis. 431, and *Watson v. Wilcox,*39 Wis. 643, distinguished.

3. The right to subrogation in such a case is not barred by mere delay short of the statutory period of limitation, in the absence of an equitable estoppel, no rights of third persons being prejudiced by the delay.

4. Payment of interest upon a past-due note secured by mortgage extends the time within which, under sec. 4220, Stats. (1898), an action may be brought to foreclose the mortgage to twenty years from the date of such payment.

Appeal from an order of .the circuit court for Winnebago ■county: Geo. W. BubNell, Circuit Judge.

*Reversed.*

This is an appeal from an order sustaining a demurrer to the plaintiff’s complaint. The complaint alleges, in substance, that one John S. Thomas and Ann Thomas, his wife, on the ■30th day of October, 1816, executed and delivered to one ■John E. Williams their promissory note in writing, by which, for value received, they promised to pay said John E. Williams, or order, four years after date, $400 with interest at ■eight per cent, per annum, payable annually; that to secure ■said note they did at the same time execute' under their hands and seals and deliver to said John E. Williams a mortgage upon the E. J of the S. W. J, sec. 13, town 17, range 15 E., which mortgage was in the usual form, and provided for the payment of $50 solicitor’s fees in case of nonperformance of -any of the conditions thereof, which mortgage was duly executed, witnessed, acknowledged, and recorded in the office of ■the register of deeds of Winnebago^ county, in which county said land is situate, on the 30th day of October, 1876; that on August 2, 1893, John S. Thomas died seised of said property, leaving a will duly admitted to probate November 14, 1893, wherein Ann Thomas was named as executrix, and let-ters testamentary issued to her on November 14, 1893; that by the terms of the will'said real estate was left to Ann Thomas during her life, and at her death to go in equal shares *io David E.*Thomas, *Evan J.*Thomas, and *John R.*Thomas, *317sons, *Margaret E.*Holdren> *Mary Ida Qooseman, Hannah-Maria Wiley,*daughters, and *J ohn B. Ellis*and *Sarah J. Ellis-Evans j*grandchildren; that the defendants *David E. Thomas, Evan J. Thomas, John B. Thomas, Margaret E. Holdren, Mary Ida Qooseman, Hannah Maoña WUey,*/o7wi J2. HK-is, and *Sarah J. Ellis Evans*are the said heirs and devisees of John S. Thomas, deceased, the defendant *Mrs. David E.. Thomas*being the wife of defendant *David E. Thomas, Mary Thomas*the wife of defendant *Evan J. Thomas,*and *Mary-Ellis*the wife of defendant *J ohn B. Ellis;*that so far as the action relates to *Margaret E. Holdren, Mary Ida Gooseman,. Hannah Maria Wiley,*and *Sarah J. Ellis Evans*it concerns-their separate property; that the personal property left by J ohn S. Thomas was insufficient to pay funeral expenses and' unsecured debts; that the interest on said indebtedness was-paid to J ohn E. Williams by J ohn S. Thomas whenever due..

The complaint then alleges that in 1898, the mortgage being due and John E. Williams pressing for. payment, Ann Thomas, widow of John S. Thomas, and executrix, solicited from O-wen J. Hughes a loan to be used solely and entirely to pay said note and mortgage; that in consideration of said loan Ann Thomas represented and promised to Owen J.. Hughes that she would deliver to him security for the payment of said loan which should bind and be a lien upon the mortgaged property; that relying upon such representations- and promises Hughes did, at the solicitation of Ann Thomas and upon her promises to secure the repayment thereof, and not in- self-interest but solely in kindness, on the 10th day of October, 1898, loan to Ann Thomas $400, which sum was on-the 10th day of October, 1898, in pursuance of the representations and agreements, paid by Ann Thomas to John E. Williams, who on said 10th day of October, 1898, released and discharged of record the mortgage hereinbefore referred to; that in pursuance of the agreements aforesaid Ann Thomas on the-10th day of October, 1898, executed and delivered to Owen-*318J. Hughes her promissory note; wherein she promised to pay to Hughes or his order, five years after date, $400, with interest at five per cent., and executed and delivered to Hughes •a mortgage upon the property in question and hereinbefore described to secure the payment of said note, which mortgage was in the usual form, said Ann Thomas covenanting in said mortgage to pay $30 solicitor’s fees in case of foreclosure; that the mortgage was duly executed, acknowledged, and recorded in the office of the register of deeds of Winnebago ■county on the 10th day of October, T898; that the interest on said note was paid up to the 10th day of October, 1901, by Ann Thomas; that on December 12, 1902, said mortgage and indebtedness represented thereby was for value received assigned by Owen J. Hughes to the plaintiff.

The complaint further alleges that Ann Thomas was not -on the 10th day of October, 1898, the owner of the property and had no authority to mortgage the premises, and that said mortgage is invalid; that the proceeds of the promissory note for which said mortgage was given were used expressly for the benefit of the estate of John S. Thomas, being used to pay a debt of the said estate; that Ann Thomas died March, 1902, and left no property out of which the claim of plaintiff can be collected; that no proceedings have been had at law or otherwise to recover the sum secured by the note and mortgage, and that no part thereof has been paid or collected.

' The complaint prays that the amount due the plaintiff be adjudged and be a lien against the premises; that the first-named mortgage be revived to the amount of the sum loaned by Owen J. Hughes, and that the plaintiff be subrogated to the rights of the mortgagee; that the satisfaction of said mortgage be canceled, and plaintiff’s claim be adjudged to be secured by said mortgage, and the defendants, or persons claiming under them, be barred and foreclosed of all right in the property; and for general relief.

The defendants demurred upon the following grounds: (1) That the action was not commenced within the time lim*319ited by sec. 4220, Stats. (1898) ; (2) that the action was not •commenced within the time limited by sec. 4222, Stats. (1898) ; (3) that said complaint does not state facts sufficient to constitute a cause of action.

*C. D. Cleveland, Jr.,*for the appellant.

*Charles H. Forward,*for the respondents.

Kerwin, J.

The right of subrogation exists independently of contract and is equitable in its nature. It is a means by which justice may be accomplished by subrogating one party to the rights of another in accordance with the recognized principles of equity jurisprudence. Sheldon, Subrogation, §§ 1-4; *Charmley v. Charmley,*125 Wis. 297, 103 N. W. 1106. There can be no doubt that in the case before us the life tenant, having an interest in the property covered by the mortgage, could have paid the mortgage in order to protect her interest, and upon such payment would have the right to be subrogated to the interest of the mortgagee, the object being to do substantial justice independent of form or contract relation between the parties to be affected by the subrogation. Sheldon, Subrogation, § § 1, 4, 7, 12; *Charmley v. Charmley, supra,*and cases cited. The claim of plaintiff upon the facts admitted by the demurrer is based mainly, if not wholly ¿ upon the relations arising between Hughes and Ann Thomas, the life tenant, by virtue of the transaction resulting in the loan by Owen J. Hughes to Ann Thomas and the execution and delivery by her to Hughes of the second mortgage. It appears from the record that the court below arrived at the. con•clusion, substantially, that upon the allegations of the complaint Owen J. Hughes got a mortgage upon the life interest of Ann Thomas only, and that it must be presumed that Hughes took the mortgage with knowledge of the state of the title, and, if he did not have knowledge, both he and his as-signee, the plaintiff, were guilty of gross negligence in not ascertaining the facts; that, assuming Ann Thomas agreed to give a mortgage on the fee, such mortgage did not bind the *320owners of tbe fee, and Hughes was a mere volunteer. There is considerable force in tbe position of tbe trial judge and tbe reasons advanced for bis decision, and we should be better pleased bad the pleader set up more specifically tbe facts going to show that Hughes understood that be was getting a mortgage upon tbe fee and not upon tbe life interest of Ann Thomas. Rut we are forced to tbe conclusion that upon a liberal construction 'of tbe complaint it is capable of tbe construction that Ann Thomas intended to give and Hughes to receive a mortgage upon tbe fee to the extent, at least, of giving-Hughes all tbe rights of tbe original mortgagee, whose mortgage was paid with tbe money loaned by Hughes upon the-property. Tbe mortgage to Hughes recited that it should “bind and be a lien upon said property,” and it is reasonable-to suppose that tbe parties intended it to cover tbe fee. It can hardly be said that Hughes would loan that amount of .money upon a life interest which might be terminated at any time and leave him without security. This is not the way prudent men ordinarily do business. The agreement of the-life tenant and executrix to give a mortgage on the fee, and the execution and delivery of it and payment of the original mortgage with the money, would bind the fee to the extent of' subrogating Hughes or his assignee to the interest of the original mortgagee. *Levy v.*Martin, 48 Wis. 198, 4 N. W. 35; *Morgan v.*Hammett, 23 Wis. 30; *Lashua v. Myhre,*117 Wis. 18, 93 N. W. 811; *Blodgett v. Hitt,*29 Wis. 169; *Bolman v.*Lohman, 74 Ala. 507; *Payne v.*Hathaway, 3 Vt. 212; *Crippen v.*Chappel, 35 Kan. 495, 11 Pac. 453. It seems to be well settled, and we think on sound principles, that where the-security given for the loan which is used to pay off an incum-brance turns out to be void, altKough the party taking it expected to get good security, he will be’subrogated to the rights-of the holder of the lien which the money advanced is used to pay, and that- in such case the party advancing the money cannot be regarded as a stranger or volunteer. This doctrine ■ is recognized in the cases in this court heretofore cited. The *321rule is that one who advances money tinder a contract that' he is to be secured on the property for the benefit of which the money is advanced is entitled to subrogation though it turns out that his security is defective or void. He is not regarded under such circumstances as a mere volunteer. *De Concillio v. Brownrigg,*51 N. J. Eq. 532, 25 Atl. 383; *Everston v. Central Bank,*33 Kan. 352, 6 Pac. 605; Sheldon, Subrogation, § 20. In the case before us, since we hold that the allegations of the complaint are sufficient on demurrer to show Hughes a *tona fide*holder of security which he understood to be on the fee and which it was agreed should bind the fee, he cannot be held a volunteer- or intermeddler. The doctrine of subrogation, rightly applied, is calculated to promote the ends of justice through courts of equity where the law is powerless to award relief and justice is promoted by the enforcement of the remedy and no one is injured. Where, as here, under tire allegations of the complaint, the money was raised to pay the prior mortgage and was applied for that purpose, the new mortgage given for the same amount as the old, with a smaller solicitor’s fee and rate of interest and no intervening rights or prejudice worked to any one, and both the life tenant and executrix, as well as the mortgagee, understanding that the mortgage covered the fee, it is contrary to the general current of authority to deny subrogation. On this question, in addition to the cases heretofore cited, we call attention to the fol-, lowing: *Motes v. Robertson,*133 Ala. 630, 32 South. 225; *Gans v.*Thieme, 93 N. Y. 225; *Ft. Jefferson I. Co. v. Dupoyster,*112 Ky. 792, 66 S. W. 1048; *Denton v. Tyson,*118 N. C. 542, 24 S. E. 116; *Woolley v. Pemberton,*41 N. J. Eq. 394, 5 Atl. 139; *Acer v. Hotchkiss,*97 N. Y. 395; *Heuser v. Sharman,*89 Iowa, 355, 56 N. W. 525; *Wilkins v. Gibson,*113 Ga. 31, 38 S. E. 374; *Rachal v. Smith,*101 Fed. 159, 42 C. C. A. 297; *Home Sav. Bank v. Bierstadt,*168 Ill. 618, 48 N. E. 161; *Suydam v. Voorhees,*58 N. J. Eq. 157, 43 Atl. 4.

The court below, in sustaining the demurrer, relied upon *322*Conner v. Welch,*51 Wis. 431, *8*N. W. *260,*and *Watson v. Wilcox,*39 Wis. 643. *Conner v. Welch*is quite different in its facts from tbe ease before us, for tbe reason that in that case tbe rights of a third party intervened. *Watson v. Wilcox*is distinguishable from tbe instant case. There tbe plaintiff was a stranger or volunteer and got what be bargained for. Tbe case is considered in connection with other Wisconsin cases in *Everston v. Central Bank,*33 Kan. 352, 6 Pac. 605.

Nor do we think upon tbe allegations of tbe complaint that laches can bar the rights of plaintiff. No rights of third parties have intervened who are prejudiced by the delay, so far at least as the case stands upon demurrer. In the absence of an equitable estoppel the ordinary rule is that nothing short of the statutory period of limitation will bar the right. Each case must stand upon its own facts, and, while a few years may be sufficient in some cases to bar a right of action, a long period of time in others will not have that effect. *Rogers v. Van Nortwick,*87 Wis. 414, 428, 58 N. W. 757, and cases cited in opinion. As said in *Fleming v. Ellison,*124 Wis. 36, 43, 102 N. W. 398:

> “All the cases proceed upon the theory that laches is not, like limitation, a mere matter of time, but principally a question of the inequity of permitting the claim to be enforced— an inequity founded upon some change in the condition or relation of the property or parties.”

It is further contended that the plaintiff is entitled to sub-rogation because Ann Thomas, upon payment of the Williams mortgage, was entitled to subrogation, and when she mortgaged her interest to Hughes her mortgage passed this right to Hughes, and that plaintiff is entitled to all the rights of 'Ann Thomas in the land in question, which include the right to avail herself of the Williams mortgage. But whether the complaint is sufficient to make such a case we shall not determine, but prefer to rest our decision upon the grounds heretofore stated.

*323Tbe only remaining question is the 'statute of limitation. The court below held the statute of limitation no bar to the action, and we agree with that conclusion. The contention of counsel for respondent is that the debt was barred under sec. 4222, Stats. (1898), and suit upon the mortgage under sec. 4220. The question is whether the present action was barred by sec. 4220, Stats. (1898), which provides for a twenty-year limitation. It is insisted by respondent that since the debt was barred and extinguished under sec. 4222, which provides a six-year limitation upon the debt in question, the right of action was also barred on the mortgage at the expiration of twenty years from the time the right of action accrued to foreclose the mortgage. Interest was paid upon the indebtedness up to October 30, 1892. But it is insisted that the payment of interest upon the debt did not have the effect of extending the twenty-year limitation upon the mortgage. It is well settled that the remedy upon the mortgage to enforce the lien may be enforced after the debt is barred. But the question here is whether payment of interest on the debt had the effect of extending the time for commencement of action to enforce the lien under the mortgage for twenty years from time of such payment; in other words, that part payment interrupted the running of the statute on the mortgage. It is well settled that payment of interest interrupts the running of the statute upon the debt. *Lyle v. Esser,*98 Wis. 234, 73 N. W. 1008; *Engmann v. Estate of Immel,*59 Wis. 249, 259, 18 N. W. 182; 19 Am. & Eng. Ency. of Law (2d ed.) 327; *Taylor v.*Perry, 48 Ala. 240; *Barron v. Kennedy, 17*Cal. 574. But it is strenuously insisted by counsel for respondent that, since the debt was .barred and extinguished at the time this action was commenced, the twenty-year limitation on the mortgage should begin to run not from time of last payment of interest, but from the time the right to foreclose accrued. The authorities seem to be against respondent’s contention. The insistence of respondent is that part payment upon the debt does *324.not extend the twenty-year limitation on the sealed instrument given to secure the debt beyond six years after the last part payment. The payment of interest had the effect of a new promise to pay the debt secured by the mortgage, and, a cause of action having accrued upon the debt at the time of such payment of interest and new promise, no reason is perceived why the cause of action to enforce the lien under the mortgage should not continue for twenty years from the date of such part payment. This view seems to be supported by the authorities. *Hough v.*Bailey, 32 Conn. 288; *Peck v. Mallams,*10 N. Y. 509; *Heyer v. Pruyn,*7 Paige Ch. 465; *Schifferstein v. Allison,*123 Ill. 662, 15 N. E. 275; *Kendall v.*Tracy, 64 Vt. 522, 24 Atl. 1118; 13 Am. & Eng. Ency. of Law (2d ed.) 794; 2 Jones, Mortg. (6th ed.) § 1198; *Spear v. Evans,*51 Wis. 42, 8 N. W. 20. We therefore hold that, the complaint states a cause of action.

*By the Court.*— The order appealed from is reversed.

Cassoday, C. J., took no part.