Court Opinion

ID: 5585993
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:53:40.418877+00
Date Added: 2024-06-11T08:36:14.921750
License: Public Domain

Hines, J.
1. The charge of the court dealt with in the first division of the opinion is, in my opinion, 'erroneous. The effect of the transaction between W. C. Clark and his sisters, by which they were put in possession of the land in dispute, did not vest in them the title to this land, but only vested in them the equitable title of Clark thereto. The absolute title to this property was in Forman, under the security deed executed to him by Clark. Civil Code (1910), § 3306. It is conceded by the opinion of the majority that this instruction is inaccurate, but it is said that the inaccuracy does not require a reversal. This charge was calculated to mislead the jury, and the defendant was entitled to an accurate instruction upon the status of the title of plaintiffs to the premises in dispute.
2. Benenson claims that the court erred in failing to charge that an agreement between him and Clark, to the effect that he was to have a first lien on the property in question, would raise an implied agreement that he was to be subrogated to the rights of the creditor whose lien his funds retired. It seems to me that *587this contention is well taken. One who advances money to pay off an encumbrance upon realty, at the instance either of the encumbrancer or the holder of the encumbrance, under an agreement that the advance made is to be secured by a first lien on the property, is not a mere volunteer, and will be subrogated to all the rights of the person holding the encumbrance. In equity, that was an agreement that the security deed of the Sessions Loan & Trust Company should become security for Benenson’s loan. Watson v. Wilcox, 39 Wis. 643; Wilkins v. Gibson, 113 Ga. 31, 45 (supra). “That was the substance of the transaction, and equity will effectuate the real intention of the parties, where no injury is done to an innocent party by applying the principle of conventional subrogation.” So I think that the defendant was entitled to this instruction on this vital issue in the ease, without any request therefor; and the failure of the court to give such instruction requires the grant of a new trial.
3. The charge dealt with in the fifth division of the opinion of the court is erroneous. In effect, the court told the jury that possession of the land in dispute by the plaintiffs was notice to Benenson of whatever claim they had to it, and that Benenson would not be entitled to be subrogated to the rights either of the Sessions Loan & Trust Company or of George M. Forman. In other words, the court instructed the jury that constructive notice of the claim of the plaintiffs would bar all rights of Benenson to subrogation. “Knowledge of the existence of an intervening encumbrance will not alone prevent the person advancing the money, under an agreement of the character above referred to, from claiming the right of subrogation, when the exercise of such right will not in any substantial way prejudice the rights of the intervening encumbrancer.” Wilkins v. Gibson, supra. The same principle is applicable under the facts of this case.
4. In the majority opinion Benenson is treated as a mere volunteer. One is never a mere volunteer who pays money at the request of the person whose liability he discharges. Home Savings Bank v. Bierstadt, 168 Ill. 618 (48 N. E. 161, 61 Am. St. R. 146); Ft. Jefferson Imp. Co. v. Dupoyster, 112 Ky. 792 (66 S. W. 1048, 2 L. R. A. (N. S.) 263); Union Mortgage etc. Co. v. Peters, 72 Miss. 1058 (18 So. 497, 30 L. R. A. 829); 25 R. C. L. Subrogation, § 12.
*5885. Upon broad principles of equity and justice the equitable right of Benenson to subrogation is superior to the plaintiffs’ equitable title. They took this land when it was encumbered by a security deed which put the absolute title in one Forman. It is true that under their contention their brother was to pay off this encumbrance, but this he failed to do. Before they could acquire the legal title to this land they would have to pay off this encumbrance. This was done by the Sessions Loan & Trust Company, under an agreement by which it was to have a first lien 'on this land. This company paid off the debt secured by the deed to Forman, and afterwards had this deed cancelled of record. By paying off this encumbrance under such an agreement, the For-man deed became a security for the payment of their loan. Equity will treat it as such. The cancellation of this deed on the supposition that they were getting the first lien upon the property will not destroy this security. In these circumstances equity will treat it as uncancelled and of full force. When Benenson advanced the money to pay off the debt secured by the deed which the Sessions Loan & Trust Company held on this land, under an agreement by which .he was to have the first lien thereon, the deed of the Sessions Loan & Trust Company became a security for his loan. Equity will so treat it, though cancelled afterwards. This does not defeat any just rights of the plaintiffs. They still have the equitable title which they acquired under the transactions with their brother. Under that transaction the Forman encumbrance had to be discharged either by their brother or themselves. This was not done. This encumbrance was lifted by the Sessions Loan & Trust Company under circumstances by which they acquired the security of the Forman deed. The encumbrance was finally lifted by Benenson under circumstances by which he acquired the security of Sessions Loan & Trust Company. Under these circumstances it would be inequitable and unjust to deny to Benenson the right of subrogation, to the extent of the encumbrance upon this land at the time when the plaintiffs took this land from their brother.
For the above reasons, I am compelled to dissent from the judgment of the majority. I am authorized by Presiding Justice Beck to say that he concurs in this dissent.