Guy v. Dü Uprey

Cope, J. delivered the opinion of the Court Field, C. J. concurring.

This is an action to subject the property of an infant to the payment of a debt contracted by his guardian. The suit is based upon a mortgage, which was executed by the guardian without authority, and is therefore invalid. The plaintiff claims, however, that, conceding the invalidity of the mortgage, there are certain equities in the case which entitle him to recover.

The infant derived his right to the property through a conveyance from his mother, who was subsequently appointed his guardian, and in that capacity executed the mortgage referred to. The mother acquired the property by purchase, and had given a mortgage upon it to secure the payment of eight hundred dollars of the purchase money. A portion of the amount included in the present mortgage was advanced for the purpose of paying off this incumbrance, which was thereupon satisfied and discharged. The plaintiff, who is the assignee of the mortgage, claims that he is entitled to be subrogated to the rights of the first mortgagee, and to have the incumbrance, thus paid off and discharged, enforced for his benefit.

There are, says Bouvier, three kinds- of subrogation. The first, is where the owner of a thing voluntarily assigns it. The second, is where a man pays a debt which cannot properly be called his own, but which it is his interest to pay, or which he might be compelled to pay for another. The third, is where the debtor borrows money expressly to pay off his debts, and with the intention of substituting the lender in the place of the original creditor. (2 Bouv. Law Dic. 554.)

In the present case there was no assignment of the mortgage, but the debt was paid off, and the mortgage itself canceled and released. The person who advanced the money, had no interest either in the payment of the debt or the release of the mortgage. He supposed, no doubt, that he was obtaining a valid lien upon the property, and was acting for his own advantage in relieving it of a prior incumbrance. In this, however, he was mistaken, but his mistake originated in a misapprehension of the legal effect of his own mortgage. He was fully advised of the facts, and we have already stated that this mortgage was invalid, and did not bind the property. Ho had therefore no interest to be pro[199]moted by the removal of the incumbrance, and the claim to relief on that ground necessarily fails. In regard to the intention of the parties, there can be but one conclusion. Satisfaction was acknowledged upon the record, and the intention clearly was to extinguish the incumbrance and release the property. If we should hold that the incumbrance was not extinguished, it would certainly be in violation of the intention of the parties. Their acts amounted to an extinguishment, and they are presumed to have intended the legal consequences of these acts. In Garwood v. Eldridge (1 Green. Ch. R. 145) it was held that the intention of the parties must always control, and that the cancellation of a mortgage and a discharge of record, unless effected through fraud, accident or mistake, is an absolute bar and discharge of the mortgage.