Court Opinion

ID: 5161563
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:52:15.819957+00
Date Added: 2024-06-11T08:25:38.625319
License: Public Domain

URBIGKIT, Justice,
dissenting.
In Lange v. Wyoming National Bank of Casper, Wyo., 706 P.2d 659 (1985) (Fireside Lounge I), this court by a split decision determined that a real estate contract seller would be ordered to refund a payment obtained from the buyer with funds obtained by the buyer in using a forged deed to mortgage the contracted premises. Another default and subsequent litigation later developed. Labeling the funds a windfall, in blithe disregard of the ingenuity of buyer, the court’s conclusion then made was at best judicial adventurism, as taking money owed to and received by the seller to pay an obligation of a title insurance company which had insured merchantable title for the loan as consequently liable for the bank’s loss sustained from the forged deed. The principal of the corporate buyer was in the title insurance business, and had written the title insurance as an agent for the present appellee, Lawyer’s Title Company.
I would perceive that any justification for the court in appellate first-time factual conclusion to apply the characterization of windfall to the installment contract as then in a delinquent state, lacked procedural merit and legal precedent. See Marcam Mortgage Corporation v. Black, Wyo., 686 P.2d 575 (1984).1 It cannot be denied that this court, in disregard of pleading and briefing status in Fireside Lounge I, required plaintiffs to pay a debt which, under the title insurance policy, was owed to the lender by appellee Lawyer’s Title Insurance as forgery coverage in title guarantee.
More to the point, whether Fireside Lounge I (as then determined by this court and denied upon petition for rehearing) was right, wrong, or indifferent, with the decision made, I now fail to conclude that this court needs to make a second mistake in denial of a classical subrogation right and repayment remedy in this case (Fireside Lounge II). When under the imperium of order by this court plaintiffs paid $290,000 to a lender, as a part of a debt owed by the buyer and guaranteed by the title insurance carrier, this court should have known then and should effectuate now what was *114created as a legal subrogation right for reimbursement.
Classical texts, cases, and this court have defined “subrogation” in its conventional station:
“The substitution of one person in the place of another with reference to a lawful claim, demand or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities. Home Owners’ Loan Corp. v. Baker, 299 Mass. 158, 12 N.E.2d 199, 201 [1938]; Gerken v. Davidson Grocery Co,, 57 Idaho 670, 69 P.2d 122, 126 [1937].” Black's Law Dictionary (5th ed.).
Commercial Union Insurance Company v. Postin, Wyo., 610 P.2d 984 (1980); Stearns Law of Suretyship, § 7.1 (5th ed.) at 200. See also Arant on Suretyship § 79, The Surety’s Right of Subrogation (1931). The Wyoming Supreme Court, having found in Fireside Lounge I that Lange should pay what constituted a contractual debt of Lawyer’s Title, should now reassess that first liability against Lawyer’s Title, in consonance with the theory of sub-rogation said to have first arisen under early Roman law.
In my opinion, two wrongs do not make the present result right.
I find the thoughtful analysis and informed persuasion of Wyoming Building & Loan Association v. Mills Construction Co., 38 Wyo. 515, 269 P. 45 (1928) to be applicable. Substituting title for lien, I find the rule there stated here specifically applies:
“The right of subrogation may arise and sometimes must arise from contract. This is conventional subrogation. The right is sometimes given in the absence of contract, is then a creation of the court of equity, and is given when otherwise there would be a manifest failure of justice. This is legal subrogation. It is a mode which equity adopts to compel the ultimate payment of a debt by one who in justice, equity, and good conscience ought to pay it, though it is not exercised in favor of a mere intermed-dler. This principle, adopted from the Roman law and at first sparingly exercised, has come to be one of the great principles of equity of our jurisprudence, and courts incline to extend it rather than restrict it. [Citations.] One instance in which legal subrogation is applied is in connection with the protection of a lien, and the rule is universal that one who has an interest in property by lien or otherwise, in making payment of prior liens, including taxes, is not a mere volunteer, and that he will be entitled, upon payment of a superior lien in order to protect his own lien, to be subrogated to the rights of the superior lienholder.” 269 P. at 48-49.
Obviously, in result, but for these separate reasons, I concur with the court on appeal by the title insurance company as a malicious-prosecution counterclaim proceeding. I do not, however, conclude that § 1-14-128, W.S.1977, 1987 Cum.Supp., or Rule 11, W.R.C.P., as rewritten by this court effective April 21, 1987, have served to supersede the procedural jurisdictional character of malicious prosecution as clearly established in Durante v. Consumers Filling Station Company of Cheyenne, 71 Wyo. 271, 257 P.2d 347 (1953), and since uniformly followed.
I would reverse and remand for decision on plaintiff’s right to legal subrogation on the claim that Wyoming National Bank had against Lawyer’s Title under the forged deed, for which a reduced obligation to Lawyer’s Title of $290,000 was created by order of this court.2 We should accord legal subrogation to Lange in resulting cir*115cumstance as standing in the shoes of the lender to enforce the mortgage insurance policy for repayment to them of the $290,-000 which they paid under order of this court to the Wyoming National Bank.

. The colloquial conclusion was derived from a reference in appellant Lange’s brief in that case, that if the forged deed was voided, they should refund the monies received to Fireside Partners, the buyer, and concurrently receive an offset for losses sustained which would generally occasion a retention damage when expedited default had not then been pursued. A review of all briefs in Fireside Lounge I reveals no consideration by any of the participants that Lange might be obligated to refund money to the lender who had made the loan to the defaulting buyer. The contested payment in the amount of $290,000 was only a part of the entire loan amount of $1,481,000 included by Fireside in the loan transaction provided by the lender in acceptance of the mortgage secured on the forged title as part security. Best characterized at the stage reached in Fireside Lounge I, the payment occurred at a “give me money or I retake the property" time, whereafter in provocative financing the buyer did pay and did retain, and then later this court assessed a price in voiding a forged deed, to require repayment of the previous payment upon subsequent delinquency.

. Obviously, if this court had not added the unsolicited last paragraph in the opinion in Fireside I, establishing the $290,000 payment requirement from contract-seller to buyer’s financing bank, then the title insurance company would have retained its accrued liability for the forged deed in total, and, if paid, then it would have reciprocally achieved a subrogation right against the borrower, Fireside Partners, and its title insurance representatives, Rocky Mountain Title and Milton M. Coffman, Jr. As it was, the title insurance company paid $192,660 rather than the ascertainable policy loss of $482,660, for which difference this court’s prior opinion shifted payment responsibility.