Court Opinion

ID: 3491081
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:59:31.869306+00
Date Added: 2024-06-11T14:14:21.123075
License: Public Domain

About three months prior to the expiration of the equity of redemption in the foreclosure proceedings brought by the Rockwood State Bank on its two mortgages, the mortgagor obtained the services of a friend to intercede with the agent of plaintiffs for the purpose of securing *Page 456 
a loan with which to pay the two mortgages. The $16,000 loan was obtained from plaintiffs who received a mortgage on the property in question together with an adjoining piece of property and an additional third parcel. When the new mortgage was executed, plaintiffs' agent went to the cashier's window of the bank in which plaintiffs had their funds, and checks made out to pay the parties in the transaction included one to the Rockwood State Bank for the amount required to redeem from the foreclosure of its mortgages. Nothing whatever was said at the time in reference to the mortgage to the State Savings Bank of Carleton. We thus have a case of funds being loaned, at the request of the mortgagor, for the express purpose of saving the equity of redemption and part of the money being actually used to redeem from the foreclosure. Under such circumstances, plaintiffs were not volunteers. We so held in Leser v. Smith,219 Mich. 509; Smith v. Sprague, 244 Mich. 577, and Walker v.Bates, 244 Mich. 582. In Smith v. Sprague, supra, we said:
"The purpose served by the evidence that plaintiff paid the money to satisfy the mortgage at the instance, promise, and request of Mr. Sprague, one of the tenants by the entireties, is that it shows that plaintiff was not a mere volunteer. 25 R. C. L. p. 1338. And it is a sufficient showing."
The rule as thus laid down in the Michigan cases is that also of a majority of States. See 70 A.L.R. 1396.
Had plaintiffs not furnished the money to pay off the mortgages to the Rockwood bank, the Carleton bank would either have been obliged to redeem from the foreclosure of the two mortgages or else lose its security. By making the loan, the plaintiffs greatly *Page 457 
improved the position of the Carleton bank and thus preserved its second mortgage security which otherwise would have been lost through the expiration of the equity of redemption on the foreclosure of the Rockwood bank mortgages.
It is claimed that because plaintiffs' mortgage for $16,000 incumbered not only the parcel covered by the Carleton bank mortgage, but also additional realty owned by Stoflet and wife, that the Carleton bank was therefore deprived of an opportunity to move against the additional realty to satisfy any deficiency judgment granted it against Stoflet and wife. We believe the contention is wholly unsound. The additional properties were not covered by the Carleton bank mortgage and Stoflet and wife had at all times the right to sell or incumber their other property and receive in exchange a substituted res. The fact that an amount in excess of that required to redeem the two Rockwood Bank mortgages was loaned on additional security can in no way harm the Carleton bank as plaintiffs are only entitled to be subrogated to the extent that the loan was used to pay off the mortgages to the Rockwood bank. As we held inWalker v. Bates, supra:
"It is immaterial to the plaintiff and wasn't wronging him any, to just simply change from the Highland Park Bank to the Commonwealth Bank."
This view has been adopted in numerous jurisdictions. See 70 A.L.R. 1405.
Notwithstanding subrogation is allowed, the decree should provide for marshalling the securities on the foreclosure sale of plaintiffs' mortgage. The two additional parcels in plaintiffs' mortgage should be sold first and recourse to the parcel covered by *Page 458 
the Carleton Bank mortgage should be had only to the extent that plaintiffs' obligation is not satisfied by the sale of the other parcels.
The decree of the trial court should be reversed and the case remanded for the purpose of ascertaining the correct amount due and entering a decree in accordance with this opinion. Appellants should recover costs against defendant-appellee German.