Court Opinion

ID: 7987761
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:27:32.247793+00
Date Added: 2024-06-11T16:35:14.918497
License: Public Domain

Whitfield, J.,
dissenting:
I dissent from the judgment of the court. First, the case, as to subrogation, may be condensed thus: Peace, the common debtor of the Freehold Company and Allen & Co., owed the former, say, $26,000, and the latter $25,000, the Freehold Company having the senior and Allen & Company the junior mortgage. Peace wanted more money to pay off the Freehold Company and to farm on. He applied to the Union Company, through its agent, the Corbin Banking Company, for a loan of $38,000, the Corbin Banking Company intentionally and fraudulently keeping off the application the Freehold mortgage and all the Allen & Co. mortgages, the Corbin Banking-Company being the agent of the Union Company. The Union Company, through its said agent, and Dr. Peace, agreed expressly that the Freehold Company’s mortgage should be paid *1073off, satisfied and forever extinguished — not kept alive. It was so paid off; the said mortgage was actually sent by the Corbin Banking Company from New York to Martin, at Memphis, to be delivered up to Peace, and, in the eye of the law, was as effectually in his hands as if actually delivered. Allen & Co. were entirely ignorant of all this — never knew or supposed there was any new creditor, but understood that the Freehold Company's debt was being renewed and continued. The Freehold Company’s debt being thus paid off and satisfied by express agreement of the Union Company, through its agent, the Cor-bin Banking Company, and Peace, and in exact accordance with their actual intention, the Allen & Co. trust-deed stood first in legal priority, Allen & Co. having had nothing whatever to do with the dealings between Peace and the Union Company. My brethren do not differ from me as to Allen & Co. not knowing. They are driven from the ground of estoppel by the clear shining of manifest truth from the face of this record.
The reason why the Corbin Banking Company did, as the agent of the Union Company, so agree that the Freehold Company’s mortgage should be paid and satisfied, and not kept alive, is obvious. That company wanted to shift a bad debt from its shoulders to those of its principal, and secure, besides, to itself the $8,000 it was already out in the purchase of the Hopson decree, and $8,700 it charged as commissions for negotiating, as it puts it, the loan of $38,000; and it purposely concealed from its principal the fact of the existence of the Freehold mortgage, by paying it and discharging it and sending it actually to Martin to be delivered to Peace. The Union Company, through its agent, the Corbin Banking Company, finding out that Allen & Co. stood. upon their legal rights (the Union Company's mortgage not having been executed for some months after the payment of the Freehold mortgage and the execution and recording the Allen & Co. mortgage), that company asks this court, not to apply the principles of subrogation *1074to the facts as they were at the time of the occurrences, not to the real case as thus made by the actual agreement and intent of the parties at the time, but to a state of facts which it alleges but signally fails to prove, to a case conjured up to meet the desperate exigency of its genuine situation. In short, it is an effort to work out subrogation by ax pout facto intention — precisely that; nothing more, 'nothing else. I have not so learned the law of subrogation. So to hold, on the facts of this record, is plainly to hold that in no case, where intervening rights do not appear; under any circumstances, where a prior mortgage is paid off by a new lender, a junior mortgagee can maintain his accruing legal priority, but. that in all cases payment — and payment merely, payment only, payment without any qualification — entitles the lender to subrogation. This may be something else; it is not the creature of equity known as subrogation. Sheldon on Subrogation (2d ed.), p. 364, notes 8 and 9; 240-1, 247; p. 9, note 9; p. 12, note 4; p. 369, notes 2 and 3; p. 371, note 3, with the authorities therein cited, especially Gardenville Association v. Walker, 52 Md., 452.
I refer .especially, also, to Howell v. Bush, 54 Miss., 437, within the principle of which case this case, in my judgment, falls precisely. With all deference, I think the opinion of the court overrules that case. It is impossible for me to distinguish it in principle from the case at bar, and, in my judgment, it is controlling and decisive here.
But, secondly, the Union Company elected its remedy. It repudiated the “Freehold” mortgage as a basis of its claim. Tt allowed it actually, as to Peace, to run past maturity, perhaps the full statutory period, without selling under it. It did sue under its own mortgage, bought under it, is in possession under it, and is sued in ejectment as.so in possession. It is estopped now to change its election.