Opinion
10811
January 25, 1922.
Before RICE, J., Williamsburg, 1921. Affirmed.
Suit by Middleton Co. against H.W. Cockfield and others, in which the named defendant filed a petition claiming to be subrogated against the plaintiff as to the proceeds of a sale of land under foreclosure. From an order dismissing the petition such defendant appeals. Affirmed.
See, also, 113 S.C. 282, 102 S.E., 328.
The order appealed from was as follows:
This matter comes before me on a petition of H.W. Cockfield for an order directing H.O. Britton, clerk of Court for said county, to pay over to the petitioner certain funds in the hands of said clerk heretofore to be paid to the plaintiffs, Middleton Co., upon the ground that said petitioner is entitled to be subrogated pro tanto to the said funds for certain reasons set out in the petition. The facts in the case are fully disclosed by the record, and I will not burden this order with them. The Supreme Court has passed upon the issues presented in the case of Middleton Co. v. Cockfield et al., and they determine that the default of the Farmers' Merchants' National Bank in assigning the mortgage from H.W. Cockfield, held by said bank, to S. R. Cockfield, enabled the latter to use said mortgage as collateral and obtain money or supplies from Middleton Co., and was the cause of petitioner having to pay said mortgage to Middleton Co. after said bank had also received payment for same. The payment to the bank was made with part cash and a note indorsed by said S.R. Cockfield.
It is true that, since the case referred to has been decided, the petitioner has been sued by said bank on the note mentioned, and has had that to pay also, although, from what was said on argument, I do not know as to whether the issues in that case ever went to the Supreme Court The Supreme Court has decided in effect that Middleton Co. are entitled to the money they claim. It seems to me that, if the petitioner had any remedy, it was against the bank whose carelessness made possible the fraud upon H.W. Cockfield, and if he has to pay the same debt twice it certainly is not the fault of Middleton Co. I know of no principle of equity which would take the money from Middleton Co. and give it to the petitioner. The remedy of the latter was clearly against the said bank, if he had any, and not against Middleton Co. To grant the petition would in effect be to reverse the judgment of the Supreme Court.
The petition must be dismissed; and it is so ordered.
Messrs. Arrowsmith Muldrow, for appellant.
Messrs. Stoll O'Bryan, for respondents. Subrogation may be invoked only where party claiming it has an equity to invoke: 25 R.C.L. 1314; 68 L.R.A. 513; 25 R.
January 25, 1922. The opinion of the Court was delivered by
The facts of this case are quite complicated, and the difficulty of readily comprehending them is increased by the number of parties of the same name connected with the transaction. J.A. Cockfield is the father of the petitioner, H.W. Cockfield, and also of S.R. Cockfield. To render the statement of facts more readily understood we will refer to them as the father, the petitioner, and the brother.
The father was the owner of a tract of land; on January 16, 1913, he mortgaged it to Farmers' Merchants' Bank to secure his note for $1,090.76. On November 3, 1914, the father conveyed the land to the petitioner, subject to the bank's mortgage, which the petitioner, assumed. On November 3, 1914, the petitioner mortgaged the land to the brother to secure his note for $2,500, which the brother assigned to Home Fertilizer Company before maturity. On February 2, 1915, the petitioner intrusted his brother with $223.03 in cash and his note for $901.03, indorsed by the brother and another, for the purpose of taking up the note and mortgage which the father had given to the bank and which the petitioner had assumed. Instead of satisfying the note and mortgage, the bank assigned them unconditionally to the brother for the purpose of securing him and the other indorser upon their obligations as such on the note for which the note and mortgage were surrendered.
On December 31, 1915, the petitioner mortgaged the land to the brother to secure his note for $1,831.84, which was assigned by him to the bank before maturity. On February 26, 1916, the brother, claiming to be the absolute owner of the note and mortgage given by the father to the bank, and by the bank assigned to the brother to secure his indorsement of the $901.03 note, assigned said note and mortgage to Middleton Co. as security for advances to be made him during the year 1916. Middleton Co. took the assignment in good faith, without notice of the agreement between the brother and the bank, relying upon the unconditional assignment to the brother and his statement that he was the absolute owner. On January 17, 1917, M.B. Joye (presumably the grantee of the petitioner) mortgaged the land to the brother to secure his note for $5,000, which was assigned at once to the bank.
Thereafter the brother died, and Middleton Co. instituted an action to foreclose the mortgage first referred to, that of the father to the bank, assigned by the bank to the brother, and by him to Middleton Co.
The defendants in this action were the father, the petitioner, the bank, and the Home Fertilizer Company. The father and the petitioner filed no answers. The other defendants answered, claiming that the mortgage upon which Middleton Co. were asking foreclosure had been paid by the transaction with the bank hereinbefore related. The special referee found in favor of their contention. The Circuit Judge overruled the report and ordered foreclosure, the proceeds to be applied in order to Middleton Co.'s mortgage, to the Home Fertilizer Company's mortgage, and to the bank's mortgage. The bank and the fertilizer company appealed from this decree, but the same was affirmed by this Court on January 27, 1920: 113 S.C. 282, 102 S.E., 328. It appears that, notwithstanding the appeal, we assume by agreement, the land was sold under the foreclosure decree and brought $3,750; the proceeds being held by the clerk pending the appeal.
While the appeal was pending from the decree of foreclosure, the bank brought suit against the petitioner upon the $901.03 note which he had given to the bank, as he had intended, in satisfaction of the original note and mortgage given by the father, and which were wrongfully obtained by the brother and assigned to Middleton Co. The petitioner defended this action upon the ground that his land had been sold and the proceeds applied to the payment of the debt for which the note had been given; that is, the original note and mortgage of the father to the bank. Upon the trial of that case Judge Townsend directed a verdict for the bank, and from that judgment there has been no appeal. Execution was issued upon this judgment, and the full amount collected from the petitioner.
After the remittitur in the case of Middleton Co. v. Cockfield et al., 113 S.C. 282, 102 S.E., 328, had been filed, the petitioner filed a petition in the said cause, claiming to be subrogated in the proceeds of sale in the hands of the clerk to the extent of the amount paid by him upon the judgment of the bank on the $901.03 note. Upon the hearing on the petition Judge Rice dismissed the petition, in an order which will be reported, and from that order the petitioner has appealed.
The petitioner claims to be subrogated to the rights of Middleton Co. in the proceeds of sale under foreclosure proceedings instituted by them, upon no other ground than that, if Middleton Co. be allowed to take this fund, the petitioner, having paid the bank judgment, will be compelled to pay the same debt twice. In order to entitle the petitioner to subrogation against the rights of Middleton Co. it must appear that he has discharged a debt which Middleton Co. were under an obligation to discharge. On the contrary, it appears that the petitioner discharged his own debt to the bank, the note which he gave to take up the mortgage, and that Middleton Co. were in no wise connected with that debt. It is unfortunate that the petitioner's misplaced confidence in his brother had brought about a condition in which he loses his land and has had to pay the bank's judgment, but that is a condition for which Middleton Co. are in no wise responsible.
Furthermore, the petitioner has had two opportunities to assert whatever rights he may have had in the matter. In the suit which Middleton Co. brought to foreclose the father's mortgage the petitioner made default. In that action the other defendants raised the question that the giving of the $901.03 note amounted to a satisfaction of the original mortgage, and the petitioner was a witness for them in support of that contention. The Court decided against it. In the latter case, of the bank against him, he raised the same question, and it was again decided against him. He is therefore estopped from again contesting the matter.
The judgment of this Court is that the judgment of the Circuit Court be affirmed.
MR. JUSTICE WATTS did not participate on account of sickness.