Fowler v. Fowler , 78 Mo. App. 330 ( 1899 )

BOND, J.

Plaintiff asks to' be subrogated to the rights of a mortgagee of one hundred and sixty aeres of land conveyed by herself and husband, now deceased, to secure a debt of $2,000. About two years after the execution of the mortgage the husband insured his life for $2,000 in plaintiff’s name. Upon the death of her husband a check for that amount was sent to her by the insurance company, which she indorsed and delivered to the administrator of her husband’s estate to be paid on the debt secured by said mortgage. This was done and an additional $120 of accrued interest was also paid by plaintiff. The property mortgaged comprised the homestead of plaintiff and four minor children, who survived the husband; two of these were children of plaintiff, the other being the fruits of a former marriage of the husband. After hearing the evidence (hereinafter referred to) as to the transaction of payment by plaintiff of the mortgage debt, the court decreed her entitled to subrogation to that security. Defendants appealed.

The only question for review is whether under the principles of equity giving rise to the right of subrogation the preponderance of the evidence supports the decree. The right of subrogation or equitable assignment may arise in two ways. Eirst, where the party claiming it has paid the debt of another for his own security. Secondly, where such payment was in pursuance of a contract, express or implied, with the debtor or creditor. Bissett v. Grantham, 67 Mo. App. 23; Fievel v. Zuber, 67 Texas 275; New Jersey Railway v. Wortendyke, 27 N. J. Equity, 658; Sandford v. McLean, 3 Paige, 117; Shinn v. Budd, 14 N. J. Equity, 234; Aga v. Hotchkiss, 97 N. Y. 395; Brown v. Rodgers, 126 Mo. 393. Bishop Eq. [4 Ed.] 396; Pom. Eq. Jur., section 1419, note. In the case at bar if nothing had appeared beyond the status of the parties, the payment of the mortgage debt by plaintiff, whose homestead right was conveyed in the instrument, would have entitled her to subrogation as for a payment made to protect her own interest; bnt the evidence given by plaintiff clearly shows that she did not make the payment for this purpose, but paid the debt in pursuance of an agreement with her husband made when the insurance was effected in her favor, that the fund arising therefrom should be applied to discharge this particular mortgage, in the event he died before paying it off himself. On this point the plaintiff testified as follows:

“Q. I will ask you if Mr. Eowler didn’t at the time 'he took out this life insurance, give you as his reasons for taking it out, that he wanted it to go toward paying off the debt on the place? A. Yes, sir, if he should die before he had paid it, I was to take it and pay it off.

“Q. That was the understanding with you — it was talked about when the policy was taken out? A. Yes, sir.

“Q. Was it not understood at the time, that Mr. Eowler wanted this money, in case of his death, to go to pay off this debt? A. Yes, sir, that was the way of it.

“Q. Then in case he paid off the debt before he died, then at the time of his death, the money was to go to you and be yours? A. Yes, sir, it was to be mine in case he paid it off before he died.

“Q. At that time you were made beneficiary? A. Yes, sir.”

The evidence further showed that she indorsed the draft upon the policy in her favor to the administrator of her husband’s estate to apply the proceeds to this mortgage; that she admitted to the agent of the insurance company, the cashier of the bank and the administrator of her husband, that it was to go to pay this debt under an agreement with her husband; that she never asked the mortgagee to assign his security to her, and had no contract express or implied with him or his agent to be substituted to his rights. The only other evidence as to her purpose in the matter was her further statement in general terms that she intended by the payment of the mortgage debt to prevent a sale of her homestead. It is not shown in the record that she so expressed herself at any time before the trial of this case. She expressly says that when she gave the draft to the administrator to be applied to this mortgage, she “gave no reasons.” In view of her own admissions, clear, full and explicit, as to the reasons and purposes which actuated her in paying of the mortgage, I hold that the preponderance of the evidence is against the theory that such payment was' made in order to secure an equitable assignment in her favor of the mortgage debt. As it is not pretended that there was any contract, express or implied, at the time of the payment of the debt between plaintiff and any one representing the mortgagee, and as the mortgagor was then dead so that no such contract could then have been made with him, she was also not entitled to a subrogation by convention nor agreement. Being not entitled to this remedy in either of the cases provided by law, it necessarily follows that the decree of the lower court was erroneous. My associates, however, think the decree should be affirmed upon the theory that the evidence shows the wife paid her own money for the protection of a vested interest (homestead) in the land. It is therefore affirmed.

SEPARATE OPINION OF JUDGE BIGGS.

I do not think that the plaintiffs case is fairly presented in the opinion written by Judge Bond, hence 1 have concluded to briefly state my views.

The defense to the action rests on two propositions of fact. First, that under an agreement with the assured the plaintiff held the insurance money in trust to pay the mortgage debt. Second, that the plaintiff made a gift of the insurance money to be used in removing the incumbrance.

Tn support of these propositions the defendants rely on the testimony of the agent who solicited the insurance and the subsequent declarations and testimony of the plaintiff. The agent testified that at the time the policy was written the deceased told him that his purpose in procuring the insurance was to secure the means of paying the debt on his homestead in case he should die without paying it, and he further testified that he was under the impression that the plaintiff was present and heard the conversation. In this he is contradicted by the plaintiff, who testified that she had no conversation with her husband concerning the policy until the next day after it was written, and that prior to that time she did not know that he intended to insure his life. When her entire testimony and her admissions as proved by other witnesses are considered, the real understanding with or promise to her husband was that if circumstances required it she would use the insurance money to prevent the farm from being sold under the mortgage so that the children might be secure in a home during their minority. In support of my conclusions I submit the following extracts from her testimony:

“Q. I will ask you Mrs. Eowler if you intended to make a gift of this money to your husband’s estate? A. No, sir. I meant to save the place from being sold. yy

“Q. What was your purpose in paying that $2,000 ? A. To keep our home from being sold so we could all have a home.” * * *

“Q. I will ask you if you did not turn it (the insurance money) over to Mr. James Eowler (administrator) and tell him that you understood from Mr. Eowler (deceased) that it was to go to pay off the mortgage ? A. Yes, sir, but not to go to the heirs; nothing was said about a released deed. I did not know anything about it.”

“Q. I will ask you if you did not turn it over to Mr. James Eowler to be used to pay the debt? A. Yes, sir, but not to go to the heirs. I did it to save the place from being sold. * * *”

“Q. I will ask you if there had been any talk between your husband and yourself, and if you knew he was going to have his life insured? A. No, sir, I did not.”

“Q. The conversation you told Mr. Allison was after the policy was written, was it not ? A. Yes, sir. * * *”

“Q. "When you paid the money did you expect to receive its worth in the farm? A. Yes, sir, I did.”

The foregoing testimony when supplemented by the policy, which made the plaintiff the unconditional beneficiary, creates a preponderance of evidence against the idea of a trust.

At the time the mortgage debt was paid the administrator of the estate induced the beneficiazy and trustee in the deed of trust to execute a deed of release to the children of George Eowler, deceased, thereby vesting the legal title in them, subject only to the dower interest of plaintiff. This was in violation of plaintiff’s equitable rights, and it made the present action necessary. I am, therefore, in favor of affirming the judgment.