Case Name: JOHN FEATHERSTONE, Respondent, v. S. P. EMERSON et al., Appellants
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1896-07-22
Citations: 14 Utah 12
Docket Number: No. 687
Parties: JOHN FEATHERSTONE, Respondent, v. S. P. EMERSON et al., Appellants.
Judges: Bartch, J., concurs.
Reporter: Utah Reports
Volume: 14
Pages: 12–31

Head Matter:
JOHN FEATHERSTONE, Respondent, v. S. P. EMERSON et al., Appellants.
Mortgages — SubRogation—When Allowed.
1. Page borrowed from Featherstone $2,000, which was secured by mortgage upon land which was afterwards sold to Brown and Emerson for $5,000. Brown and Emerson paid $1,000 cash, and agreed to pay the $2,000 mortgage thereon, and gave a purchase-money mortgage for $2,000 back on the property to Page. Emerson afterwards paid $1,200 on the last mortgage, and Brown, with the tacit agreement with Page that it should be a part of the old obligation, gave a new mortgage on his undivided half of the land for $800, which was given as a purchase-money mortgage, and Page released the $2,000 mortgage. Emerson had notice of the transaction. The $800 mortgage was assigned to Feather-stone, the plaintiff, who held both mortgages. After Feath-erstone had foreclosed the $800 mortgage, and obtained title to the undivided half of the land, Emerson paid $1,100, and tendered plaintiff the balance due on the $2,000 -mortgage that Brown and Emerson had jointly assumed, pio-vided that plaintiff would assign to Emerson the $2,000 mortgage. Plaintiff refused the tender or to make the assignment, but offered to assign the $2,000 and the $800 mortgage to Emerson, upon payment of the full amount due on both mortgages, which Emerson refused to do. Held, that Emerson was surety for Brown as to at least one-half of the two mortgages given and assumed by both; that the equities of Featherstone, as assignee of the $800 purchase-money mortgage given by Brown to Page, were superior to Emerson’s right; that Emerson was not entitled to be sub-rogated, without having paid or offered to pay the $800 mortgage; that, as between Brown and Emerson, both were bound to contribute towards the discharge of the common joint burden; that, when purchase money is the consideration of the instrument, it will continue to be the consideration of any other instrument, if expressed therein, executed by agreement in substitution of the old one, unless superior equities intervene, which have not in this case.
2. The release of the ’ $2,000 mortgage, which Brown and Emerson were both obligated to pay, on payment of $1,2(0 by Emerson, and the giving of the $800 purchase-money mortgage on one-half of the land by Brown to Mrs. Page, upon such release, coupled with the tacit agreement that such new $800 mortgage should be a part of the former obligation, and the express agreement that it should be a purchase-money mortgage, with notice to Emerson, was for Emerson’s benefit to the amount of $800, and should not be used as a weapon in the hands of Emerson to defeat Mrs. Page, nor her assignee, who succeeds to her rights in the mortgage, from recovering the purchase price of the land sold, without first paying or offering to pay the same.
8. The property was the primary fund to meet the obligation of both, and Mrs. Page held the mortgage as a purchase-money mortgage, and transferred her right to the plaintiff, whose equities are superior to those of Emerson or Brown, until tender or payment of the entire debt arising from • the purchase.
(No. 687.
Decided July 22, 1896.)
Appeal from the district court, Third judicial district, Territory of Utah. Hon. S. A. Merritt, Judge.
Action by John Featherstone against S. P. Emerson and others. From a judgment for. plaintiff, defendant Emerson appeals.
Affirmed.
The facts are set out in the opinion of the Justices.
Breeze & Burris and Moyle, Zone & Oostigan, for appellant.
As between purchasers in common of an estate bound by a joint lien or mortgage, each is bound to contribute only his proportion towards the discharge of the common burden and as to the remainder is to be considered simply as a surety;and if one of them is obliged to pay the whole amount to protect bis interests, be will be sub-rogated to the rights of the owner of the lien or of the mortgage, even without an express assignment of the lien or mortgage, and will be protected as far as equity can protect him. Subrogation depends not upon contract but upon natural justice, and “equality is equity.” Gearhardt v. Jordan, 11 Penn. St. Eep. 325; Aiken v. Gale, 37 N. H. 501; Hubbard v. Mill Dam Go., 20 Yt. 402; Simpson y. Gardiner, 97 Ill. 237; Laylin y. Knox, 41 Mich. 40; Cornell v. Prescott, 2 Barbour 16, Ellsworth y. Lockwood, 42 N. Y. 89-97; Fisher y. Billion, 62 Ill. 379; Young v. Morgan, 89 Ill. 199; Matthews y. Aiken, 1 Comstock (N. Y.) 595; Williams y. Perry, 20 Ind. 437; Duncan v. Drury, 9 Penn. St. 332; Ghamplin y. Williams, 9 Penn. St. 341; 3 Pomeroy’s Equity Jurisprudence (1st Ed), secs. 1211, 1212, 1220, 1922, and notes; 2 Brandt on Suretyship (2d Ed.), § 302, § 309, § 315; Harris on Subrogation, secs. 103 and 143.
“'The fact that the mortgage which the vendor takes at the time of the conveyance is expressed to be for the purchase money of the land is none the less a waiver of his vendor’s lien.” Avery v. Clark, 87 Cal. 619; Baum v. Grigsby, 21 Caí. 173; Camden v. Vail, 23 Cal. 633; Gaylord v. Knapp, 15 Hun. (N. Y.) 87; Pease v. Kelly, 3 Oregon 417; Rhynier v. Frank, 105 Ill. 326; Pomeroy’s Equity Jurisprudence (2d Ed.) § 1252 and cases collected in note p. 1928.
Even if the Pages had not waived their vendor’s lien by taking the $2,000 and the $800 mortgages and by canceling the $2,000 mortgage, that lien existed only for them and was lost by the assignment of the note and mortgage to the plaintiff Featherstone; for on principle and by the great weight of authority a vendor’s lien is a strictly personal right, and is therefore not assignable. First Nat. Bk. v. Salem Flour Mills Co., 39 Fed. Eep. 89; 'Hammond, v. Peyton, 34 Minn. 529; Keith v. Horner, 32 Ill. 524; Bonnell v. Holt, 89 Ill. 71; Gruhn v. Richardson, 128 Ill. 178; White v. Williams, 1 Paige (N. Y.) 502; Jackman v. Hallock, 1 Ohio 318; Baum v. Grigsby, 21 Cal. 173; Avery v. Clark, 87 Cal. 619; 2 Jones on Liens § 1092 and cases collected in notes.
Featherstone, the plaintiff here, was not the vendor, and oí course cannot avail himself of the equities embraced in a vendor’s lien.
Even if a vendor’s lien were assignable, the assignment of the $800 note and mortgage to the plaintiff would not and did not assign the lien to him.
The assignment (p. 50 of the abstract) of the note and mortgage of $800, does not purport to assign the vendor’s lien, and there is no evidence or finding that it does do' so. We submit that on the law it does not do so. White v. Williams, 1 Paige |N. Y.) 502; Jackman v. Hallock, 1 Ohio Rep. 318; Wellborn v. Williams, 9 Ga. 86.
The doctrine of vendor’s lien is indefensible and should not be recognized and enforced where it has never been adopted. Ahrend v. Odiorne, 118 Mass. 261; Philh ook v. Delano, 29 Me. 410; Kavffelt v. Boion, 7 S. & E. (Pa.) 64; Hammond v. Peyton, 34 Minn. 529; I/iesler v. Green, 48 Pa. St. 96; Edmunster v. Higgins, 6 Neb. 265. We submit the doctrine has not been and should not be adopted in Utah.
The contention of the plaintiff Featherstone that the $800 .mortgage of October 26, 1891, is superior in equity to the $2,000 mortgage of Dec. 17, 1890, or at least to the rights of Emerson therein acquired by subrogation, because it is expressed to be for the unpaid purchase money, and therefore is a purchase-money mortgage or is in the nature of a vendor’s lien is unsupported by the law; for a purchase-money mortgage given to the vendor or a vendor’s lien retained by Mm is not so peculiarly sacred that it is superior in equi ty to a mortgage previously given by the vendor on the same property, and since it is not superior in equity to such mortgage it is not superior to the rights acquired in such mortgage by subrogation. Brandt on Suretyship (2d Ed.), § 315.
Frank Fierce, for respondent.
Subrogation is a creature of equity.
This right does not grow out of contract relations, but depends upon principles of natural justice and equity. It is governed by no strict code or formal miles. Each case makes its own appeal to the court and wins on its inherent equity and justice. So far we agree with counsel for the appellant. To the many authorities cited in support of the above doctrine on pages 6 and 7 of his brief, we take pleasure in adding the following: II Brandt on Suretyship, sec. .298; Harris on Subrogation, secs. 162-163; Exchange Go. v. Bayless, 21 Southeastern 279; Spaul-ding v. Harvey, 28 Am. St. Rep. 176; 129 Ind. 106; Gheese-bro v. Millard, 7 Am. Deo. 494; Pease v. Egan, 131 N. Y. 262; Insurance Go. v. Fidelity Go., 123 Pa. St. 523.
A pro tanto subrogation is never allowed.
Emerson offers to pay only part of the obligation which he incurred to Mrs. Page on August 26, 1891, but seeks subrogation. He seeks a pro tanto subrogation.
Subrogation cannot be enforced until the whole debt is paid to the creditor.^ Emerson must extinguish his obligation in full before he invokes this extraordinary remedy. Until the creditor is paid there cannot be any interference with his securities which might prejudice or embarrass him in the collection of the residue of his claim. In the case at bar the property is the primary fund to meet the obligation, that inpayment of thepurchase-money. II Brandt on Suretyship, see. 306; Exchange Oo. v. Bayless, 21 Southeastern 279; II Brandt on Suretyship, secs. 308, 321; Wilcox v. Fairhaven Bank, 7 Allen 270; Harris on Subrogation, sec. 195; II Jones on Liens, sec. 1122; III Pome-roy Equity Jurisprudence, sec. 1220; Hollingsworth v. Floyd, 2 H. & G-. (Md.) 87; ICyner v. Eyner, 6 Watts (Pa.) 221; Receivers v. Wortendylce, 27 N. J. Eq. G58; Bank of Penn. v. Pontius, 10 Watts. (Pa.) 148; Magee y. Legelte, 48 Miss. 139; McConnell y. Beatty, 34 Ark. 123; Schoonover y, Allen, 40 Ark. 132; Zook v. Clenvmer, 44 Ind. 15.
Subrogation is never invoked to defeat or interfere with superior or equal equities. Exchange Co. v. Bayless, 21 Southeastern 279; III Pomeroy’s Equity Jurisprudence, sec. 1419, and note.
No equities were lost by the assignment of the $800 mortgage to plaintiff. The assignment of the |800 note and mortgage transferred to the plaintiff all rights which Mrs. Page had. An express lien, which is created by the parties by agreement, as a mortgage for the purchase money, as in the case at bar, is always assignable, but it is held by many authorities, although there is a conflict in the authorities, that an implied lien which arises by operation of law, is not assignable. II Warvelle on Vendors, 736; Stratton y. Gold, 40 Cal. 778; Lewis y.' Hawkins, 13 Wall. 119; Avery y. Clark, 87 Cal. 625; Taylor v. McKinney, 20 Cal. 618; II Jones on Liens, see. 1119.
The authorities cited by counsel deal with implied liens which the law gives the vendor after he has parted with his legal title and has made no express agreement for security for the unpaid purchase money.
The term purchase money as used in purchase-money mortgages, means money paid for land or the debt created by the purchase of land. When purchase money is the consideration of an instrument it will continue to be the consideration of any other instrument executed in substitution of the old one. Hence the purchase-money obligation of $2,000 of August 26, 1891, was carried into the $800 mortgage and no rights were waived. The $800 mortgage afterwards given was for part of the same purchase money. The court so finds. 19 Am. & Eng. Enc. 583; Austin v. Underwood, 37 Ill. 438; Kimbale v. Fsivorthy, 6 Ill. App. 517; Flanagan v. Cushman, 84 Texas 241.
A mortgage which is given subsequently to the conveyance of the land and execution of the mortgage thereon to secure the purchase money and which is intended to be substituted in place of such money, is a mortgage for purchase money, although by its terms it may extend the time of payment to a longer period. Jones v. Parker, 51 Wis. 218; Pratt v. Topeka Bank, 12 Kan. 570.
It is a well settled principle that a purchase-money mortgage given by the mortgagor to the .vendor of land to secure a balance of unpaid purchase money, has priority over every claim or lien of any kind arising thi’ough the mortgagor, to the extent of the land purchased. 19 Am. & Eng. Enc. 575.
Nearly all of the decided cases recognize that a mortgage for purchase money, whether it be expressed in the mortgage or not, is an equity in the vendor equal and in many cases superior to a common law vendor lien. Glark v. Brown, 3 Allen 509; Filis v Horrman, 90 N. Y. 466; Spring v. Short, 90 N. Y. Ó3&-,Wilson v. Smith, 52 Hun. 171; Gurtis v. Root, 20 Ill. 518; Christie v. Hale, 46 Ill. 117; Austin v. Underwood, 87 Am. Dec. 254; Bolles v. Corli, 12 Minn. 113.
For the purposes of subrogation there is no difference between a vendor’s lien and a mortgage given back to secure purchase money. II Warvelle on Vendors, 737.

Opinion:
MINER, J.:
It appears from the record that on December 17, 1890, the defendants Emily S. Page and E. J. Page borrowed from the plaintiff, Featherstone, the sum of $2,000, and gave him their note secured by a mortgage on the property in question. On August 26, 1891, the defendants Page and wife conveyed by warranty deed the said mortgaged property to defendants Brown and Emerson for the sum of $5,000, subject to the $2,000 mortgage of December 17, 1890, which the grantees jointly agreed to assume and pay. Brown and Emerson also paid to Page $1,000 in cash, and executed a purchase-money mortgage back to Page upon the property purchased for the sum of $2,000, as consideration for the premises conveyed to them. At the maturity of the $2,-000 mortgage, dated August 26,1891, defendant Emerson paid $1,200 thereon, and Brown gave to Page a new purchase-money mortgage, dated October .6, 1891,» upon his undivided half of the premises, for $800, to secure a part of the said purchase price, and Mrs. Page released t'he said $2,000 mortgage of August 26, 1891, of all of which Emerson had notice at the time. On March 1, 1892, Page assigned the said $800 mortgage to plaintiff Feather-stone, so that Featherstone then held both mortgages upon the property, to wit, the $2,000 mortgage which, both Brown and Emerson were obligated to pay, and the $800 purchase-money mortgage which Brown gave to Page upon his undivided half of the premises in order to release the former $2,000 mortgage upon which. Emerson was jointly liable. "On the 17th day of January, 1898/ there was due upon the note and mortgage of $2,000, given by said Emily S. Page to John Featherstone, December 17, 1890, the sum of $2,200, including interest, and thereafter, upon said day, said S. P. Emerson paid to the plaintiff $1,100 thereon, and tendered to plaintiff the balance due thereon if plaintiff would assign to Emerson the mortgage of $2,000. Plaintiff refused to accept said tender or make said assignment, but offered to assign said mortgages of $2,000 and $800 to said Emerson, upon payment to him of the full amount due upon both of said mortgages, which said Emerson refused to do." In answer to Emerson's cross complaint, plaintiff alleges that the $800 note and mortgage, given by Brown to Mrs. Page as part of the purchase-money mortgage, and which was assigned to plaintiff, had been foreclosed, and plaintiff had purchased Brown's interest in the land under such foreclosure; and it appears that the plaintiff was in the possession thereof, and no adverse claim had been set up in the foreclosure proceedings by Emerson.
The errors assigned by the defendant Emerson raise the question of his right to subrogation to the former rights of the plaintiff in the $2,000 mortgage of December 17, 1890, as against Brown and Mrs. Page, and her assignee, the plaintiff, and the superiority of that right over the rights of Featherstone acquired under the $800 note and mortgage, although no tender or payment of the $800 mortgage had been made. Emerson claims that he is subrogated to the prior incumbrance to which the $800 incumbrance is inferior. The plaintiff contends, and the trial court held, that while Emerson was a surety for Brown as to one-half of the $2,000 mortgage of December 17, 1890, the equities of Featherstone, the plaintiff, as assignee of the $800 mortgage of October 26, 1891, given by Brown to Page for unpaid purchase money, was superior to Emerson's right, and that Emerson was not entitled to subrogation without having paid or offered to pay the $800 mortgage. The court decreed a dismisal of 'Emerson's cross complaint, and gave judgment for the plaintiff. As between Brown and Emerson, who were purchasers of a common estate, and bound by a joint obligation created thereon by them selves, each was bound to contribute Ms proportion towards tbe discharge of the common burden, and either could be compelled to discharge the debt. It was a joint obligation. If Emerson was compelled to pay the whole to protect his rights, he could be subrogated to the rights of the owner of the security, as against Brown's interest, upon tender or payment of the debt secured, if no other or greater equities intervened. The plaintiff, who was the owner of the $2,000 mortgage of December 17, 1890, is first in time and equity as to that mortgage, because he loaned his money on the property before any other rights attached. The obligation which Emerson and Brown took upon themselves was to pay $5,000 for the property. They purchased as tenants in common, each to take an undivided one-half interest; but they voluntarily obligated themselves jointly to pay the full amount. As to the holder of the obligation, they are the principal debtors; as to themselves they were sureties for each other for one-half of the debt. Their promise to pay the purchase money is evidenced by the $2,000 mortgage of December 17, 1890, which they assumed and agreed to pay, and by the $2,000 note and mortgage of August 26, 1891, which they gave, and which both agreed to pay. These form the remaining obligation, and as to each other they were of equal equity, amounting, in fact, to one debt of equal importance. As between Brown and Emerson, the first mortgage has no equity in advance of the second.
A purchase-money mortgage is a mortgage upon real estate, given upon a conveyance thereof, to secure the balance of the purchase money remaining unpaid. It is the debt created by the purchase Such purchase-money mortgage usually has the priority over other claims or liens of any kind arising through the mortgage' to the extent of the land purchased, except as it may be affected by the recording laws; and when the purchase money is the consideration of the instrument, it will continue to be the consideration of any other instrument executed by agreement, in substitution of the old one, even though a part of the purchase money on the original mortgage has been paid before the execution of the second, unless other superior equities have intervened, which we do not find to exist in this case. 19 Am. & Eng. Enc. Law, 583, 575-578; Austin v. Underwood, 37 Ill. 438; Jones v. Parker, 51 Wis. 218; Pratt v. Bank, 12 Kan. 437; Flanagan v. Cushman, 48 Tex. 241; 2 Warv. Vend, pp. 736, 737.
The payment by Emerson of $1,200 on the $2,000 mortgage of August 26, 1891, paid so much of the joint debt. The fact that Mrs. Page released the $2,000 mortgage of August 26, 1891, on payment of the $1,200 by Emersion, and the giving back of the purchase-money mortgage of $800 by Brown on his'undivided part of the land, with the tacit agreement that such mortgage should be a part of the obligation of August 26, 1891, and the express agreement that it should be a purchase-money mortgage, of all of which Emerson had notice at the time, was to Emerson's benefit to the amount of $800 remaining unpaid, and should not be used as a subrogation weapon by Emerson to defeat Mrs. Page, nor the plaintiff, who succeeds to her rights in the mortgage, from recovering the purchase money actually due for the purchase price of the land sold, without first paying or offering to pay the same. Jones Mortg. § 229, and cases cited; 2 Warv. Vend. 736; 2 Jones, Liens, § 1116; Hurlbert v. Weaver, 24 Minn. 30; 19 Am. & Eng. Enc. Law, 583. As a general rule the right of subrogation cannot be enforced until the whole debt is paid or tendered to the creditor. Emerson ¡should have extinguished the debt before invoking the remedy sought. Until the creditor is paid, there cannot ordinarily be any interference with his security which might prejudice or embarrass him in collecting the balance of his claim. The property was the primary fund to meet the obligation, and Mrs. Page held the purchase-money mortgage as such, and transferred her right to the plaintiff. 3 Pom. Eq. Jur. § 1619; Sheld. Subr. § 127, 176, 177; Investment Co. v. Bayless (Va.) 21 S. E. 279; 2 Brandt, Sur. § 306, 308, 321, 446; 2 Warv. Vend. § 736, 737; Grubbs v. Wysors, 32 Grat. 127; Clark v. Warren, 55 Ga. 575.
The equity of Mrs. Page for the unpaid purchase-money mortgage of $800 is therefore superior to the equities of both Emerson and Brown, and, until she was paid in full, neither has any just equitable right against her. or her assignee, the plaintiff. Emerson, as surety for Brown, has an equity superior to that of Brown in the property, and, as against Brown, this equity could have been invoked after payment of the whole debt. Until payment, the plaintiff's equity is superior to the defendant's, Mrs. Page's equity is superior to that of Emerson, and Emerson's to that of Brown. We are of the opinion that the judgment of the court below should be affirmed. It is affirmed accordingly.
Bartch, J., concurs.