Court Opinion

ID: 7041006
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:50:14.014408+00
Date Added: 2024-06-11T16:11:21.174983
License: Public Domain

Biddle, C. J.
The complaint in this case avers the following facts:
James Radley, in 1839, being seized of the land in question, mortgaged it to Jesse L. Holman, school commissioner, to secure the payment of one hundred dollars, borrowed from the school fund, with interest. In default of payment, the school commissioner, in 1842, sold the land at public-sale, to pay the debt. James Muir became the purchaser of the land at this sale. In 1848, Muir sold and conveyed the land to John Mullen, with covenants of warranty. Mullen took possession of the land and made lasting and valuable improvements thereon. In 1862, the heirs of James Radley, who had died in the meantime, brought suit against Mullen to obtain possession of the land. In this suit the sale made by Holman to James Muir was declared void for want of proper notice, and, in 1864, the Radley heirs recovered judgment and obtained possession of the land against Mullen, who then sued the appellants as heirs at law of James Muir on the covenants of warranty in the deed of James Muir to him, and recovered judgment against them, which they paid. The Radley heirs then conveyed the land to John G. Berkshire, and Berkshire to George W. Hunter, who now claims to be the owner; of all of which proceedings Berkshire and Hunter had notice. Prayer for the sale of the land to pay the amount of the mortgage.
To the alleged insufficiency of this complaint for want of averred facts, Berkshire and Hunter filed separate demurrers, which were sustained. Exceptions and appeal were taken. The sufficiency of the complaint is the sole question in the record.
It is insisted by the appellants that they should be subrogated to the rights of the mortgagee, or held as the equitable assignees of the mortgage.
The appellees insist that subrogation can only take place between sureties, or persons in some way bound to pay the *151■debt to protect themselves, and should not be allowed to persons disconnected with the transaction, or mere volunteer purchasers.
The sale under the mortgage having judicially been held void, the relation of the land to the mortgage remains the same as if no sale had been made. The question, then, in the case is, who stands in the place of the mortgagee ? It ■cannot be Holman or his representatives, because as to them the mortgage was paid by the sale of the premises.
Subrogation generally takes place between co-creditors, where the junior pays the debt due to the senior, to secure Ris own claim; or it arises from the transactions of principals and sureties, and sometimes between co-sureties or co-guarantors. It is not allowed to voluntary purchasers or strangers, unless there is some peculiar equitable relation in the transaction, and never to mere meddlers. But while this is the rule generally, we think that a person who has paid a debt under a colorable obligation to do so, that he may protect his own claim, should be subrogated to the rights of the creditor. It is also allowed “ for the benefit of the purchaser of an immovable, who uses the price which he paid in paying the creditors to whom the inheritance was mortgaged.” Bouv. Law Diet., tit. Subrogation. In the ■case before us, doubtless James Muir supposed he was getting a good title to the land by the deed from Holman, and thus extinguishing the mortgage debt; and, although a voluntary purchaser, he is not a stranger to the transaction. "We think, also, that the property purchased being real estate, and the purchase-money having been used “ in paying a creditor to whom the inheritance was mortgaged,” the purchaser should be subrogated to the rights o'f the ■original creditor. In Johnson v. Robertson, 34 Maryland, 165, it was held that:
“Where, under a decree of foreclosure, the mortgaged property is sold, and subsequently, on appeal, the decree is vacated, and the mortgaged property decreed to be sold hgain for the payment of the mortgage debt, the original *152purchaser, if he has paid the purchase-money, and it has been applied to the payment of the mortgage debt, is entitled to be subrogated to the mortgagee, and have the mortgage treated as assigned to him.” The same doctrine is held in the following cases:
Stackpole v. Robbins, 47 Barb. 212; Brobst v. Brock, 10 Wallace, 519; and Jackson v. Bowen, 7 Cowen, 13.
Although the deed of Holman did not convey a good title to James Muir, yet it conveyed all the interest Holman had in the land at the time; and that interest was the right to foreclose the mortgage against it and have the mortgage debt paid out of the proceeds. We think, therefore, that the deed operated as an equitable assignment of the mortgage to James Muir. Robinson v. Ryan, 25 N. Y. 320.
We are aware that there are some dicta in the case of Richmond v. Marston, 15 Ind. 134, which would seem to take a narrower view of the right of subrogation than we have expressed in this opinion; but that case differed in its premises from this; besides, it was decided upon another ground. Subsequent decisions of this court, however, fully support, as we think, the principles governing us in this opinion. In Seller v. Lingerman, 24 Ind. 264, it was held that where a sheriff’s sale was set aside for irregularity, the purchaser was entitled to recover the purchase-money paid by him at the sheriff’s sale, and to have a lien declared upon the land. The following cases are also in harmony with this view: Peet v. Beers, 4 Ind. 46; Hawkins v. Miller, 26 Ind. 173; Troost v. Davis, 31 Ind. 34; Spray v. Rodman, 43 Ind. 225.
If, under such circumstances, the persons ' making the claim would have the right to recover back the purchase-money paid under the void sale made by Holman, as we think they would, it becomes immaterial whether they are regarded as being subrogated to the rights of the mortgagee, as the assignees of the mortgage, or merely as purchasers, or persons who have legally paid off the lien created by the-mortgage.
*153The statute of limitations is mooted, rather than insisted upon, by the appellees. As, by the averments in the complaint, it is not clear when the statute would begin to run, and as the case is one which might fall within some of the exceptions of the statute, perhaps the question could not be raised by demurrer to the complaint. See Atherton v. Williams, 19 Ind. 105; Matlock v. Todd, 25 Ind. 128; Hanna v. The Jeffersonville R. R. Co., 32 Ind. 113; and Perkins v. Rogers, 35 Ind. 124.
The judgment is reversed; cause remanded, with instructions to overrule the demuri'er, and for further proceedings.