Brown v. Rouse

California Supreme Court Sep 6, 1899 No. S. F. No. 787Published

Before: Chipman

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Holding. The court held that the plaintiff was not entitled to recover the loan amount based on ratification, nor was the plaintiff entitled to subrogation to the prior mortgage, as the plaintiff acted as a volunteer in discharging the debt.

Issues

Whether the evidence supported the finding that the defendant ratified the unauthorized loan made by her husband.
Whether the plaintiff is entitled to be subrogated to the rights of a prior mortgagee whose debt was satisfied using the plaintiff's funds.

Disposition. reversed

Quotations verified verbatim against the opinion

“It will not arise in favor of a stranger, but only in favor of a party who, on some sort of compulsion, discharges a demand against a common debtor.”

“We think Guy v. Du Uprey, supra, correctly states the law of this case, and is in harmony with adjudications of the question in other states.”

Synopsis

Husband and Wife—Agency—Unauthorized Loan—Ratification —Findings Against Evidence—Decision upon Former Appeal. The findings in this case as to the ratification by a wife of the unauthorized act of her husband in borrowing money, which was obtained upon a note and mortgage executed by him without authority as her attorney-in-fact, held not sustained by evidence not differing in legal effect from that appearing upon a former appeal (104 Cal. 672), which was held insufficient to establish a ratification of the loan, for want of knowledge by the wife of her rights, and for want of reception by her of the benefit of the loan, except as to part thereof paid to release a mortgage upon her property.

■Id.—Release of Prior Mortgage of Wife’s Property—Unauthorized Second Mortgage—Voluntary Payment—Mistake of Law—Subrogation.—A stranger to a prior mortgage of the wife’s property who voluntarily advanced money upon an unauthorized second mortgage thereupon executed by the husband assuming to act under a power of attorney from the wife, which did not authorize the loan or the mortgage, and who voluntarily caused part of the money advanced to be paid to release and discharge the prior mortgage, for his own supposed security, acting under a mistake of law, with knowledge of all the facts, cannot, upon the declaring of the second mortgage invalid, be subrogated to the rights of the prior mortgagee as to the money so voluntarily paid.

Id.—Subrogation not Allowed in Favor of Volunteer.—Subrogation will not be decreed in favor of a mere volunteer who, without any duty, pays the debt of another. It will not arise in favor of a stranger; but only in favor of a party who on some sort of compulsion discharges a demand against a common debtor.

CHIPMAN, C. This is the third appeal of the case. Originally, the action was to foreclose a mortgage executed by one German M. Rouse, under power of attorney, in the name of defendant, who was then his wife. At the first trial the court below held the note and mortgage to have been given without authority, but entered a personal judgment against defendant for $1,271 and costs. On appeal, this judgment was reversed as outside the issues. (Brown v. Rouse, 93 Cal. 237.) At the second trial plaintiff amended his complaint, alleging a loan of $1,200 on November 18, 1887, and its nonpayment. Plaintiff had a personal judgment for $1,510.68 and costs, on the theory that defendant had ratified the loan. On the second appeal the judgment was reversed, on the ground that the evidence failed to establish ratification. (Brown v. Rouse, 104 Cal. 672.) De[648]fendant had previously given a mortgage on the land to one Davis, which had been overdue for three years and a half at the time of this alleged loan. In the opinion reversing the second judgment the court said: “As to the $481.65 which went to satisfy the Davis mortgage, it would certainly be proper and just for appellant to pay it; and it is stated in appellant’s brief that she is willing to pay it.....Perhaps, under appropriate pleadings and findings, plaintiff could recover for the amount of money that went to satisfy the said prior mortgage.” The third trial was upon an amendment of the complaint, by which it was alleged that defendant, through her husband, procured plaintiff, as agent, to pay, and he did pay and satisfy, the Davis mortgage, amounting to $580, in full discharge thereof, and that Davis released the same at defendant’s request, acting through her said agent; that she had full knowledge of these facts, and thereupon ratified and confirmed said release and discharge of said mortgage, and all the acts of her said agent, Rouse, and said sum of $580 forms a part of the consideration alleged to have been created by the said loan of $1,200 on November 18, 1887. The court found the facts substantially as alleged in the complaint, and that the amount paid to Davis was $481.65. The court also found that defendant had knowledge of all said facts, “and thereupon expressly ratified and confirmed said payment and release of said mortgage, and all of said acts of said agent, G. M. Rouse.”

As to the loan of $1,200, the court found that defendant’s husband, assuming to act as agent and attorney in fact, and in pursuance of said power of attorney, borrowed from plaintiff and said plaintiff loaned to defendant the sum of $1,198, and gave therefor to said plaintiff a promissory note executed by said German M. Rouse, in the name of said Charlotte D. Rouse, for $1,200, which remains unpaid except the said sum of $481.65, and that defendant “did receive by her said husband, and as her agent, the residue of said $1,198.....Subsequently to said eighteenth day of November, 1887, and from time to time, she ratified and confirmed the loan made by Brown by letters instructing the payment of interest on said loan after being fully informed and having specific and complete knowledge of said loan and all the circumstances thereof.” These interest

Brown v. Rouse

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