Court Opinion

ID: 3411107
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:28:53.258756+00
Date Added: 2024-06-11T13:51:07.797253
License: Public Domain

Petition for rehearing has been filed and we have given it a careful examination. While it states many of appellant's propositions in a somewhat different form, it is in substance to the same effect as urged in appellant's original and reply briefs. We are satisfied with the construction we have placed on the statutes involved and for that reason think it unnecessary to further advert to the statutes.
The contention that appellant was defrauded by reason of the failure of the guardian to require payment of the $2,000 bid for the property, and that respondent bank is chargeable with notice thereof, is perhaps correct as to the guardian and the purchaser at guardian's sale, but is not sound as to the Federal Land Bank. Of course it was a fraud for the guardian to represent that he had received the $2,000, whereas he had only taken an unsecured promissory note for the same. That was a fraud upon the court and the ward as well; but the ward had his remedy for collection of this $2,000 against the guardian and the guardian's surety, and the purchaser as well. In the face of this state of facts, the present action was instituted against the land bank and the guardian and the purchaser at guardian's sale; and yet no service was made on the guardian nor upon the purchaser, *Page 147 
although they were both present in court during the trial in this case and one of them testified on the trial. The guardian's surety was not brought in as a party defendant and apparently no action has been prosecuted against the surety. On the other hand, the land bank had no notice, either actual or constructive, of the foregoing facts.
At the time the bank made the loan, on which it subsequently foreclosed, the ward's property was covered by preexisting mortgages which, in the aggregate, amounted to more than the amount of the loan secured from the Federal Land Bank in payment for which such loan was used. In other words, the money obtained from respondent was used entirely for the payment of mortgages then existing against this same property. If the appellant were allowed to have the deed given on foreclosure sale set aside, the land bank would undoubtedly in equity be entitled to subrogation to the rights of the previous mortgagee, the Union Central Life Insurance Company, which held the mortgages on this same property. Under these circumstances, there is no law and no equity that would permit appellant to take the benefit of the payment of the pre-existing mortgage indebtedness without doing equity with the party that furnished the means with which to pay such indebtedness. In so far as respondent is concerned, this is clearly not a case where a ward is being swindled and cheated out of his property by a money lender overreaching him or his guardian.
Petition for rehearing is denied.