Hill v. Shaw ( 1940 )

1. Subrogation is never applied for the benefit of a mere volunteer who pays the debt of another without any assignment or agreement for subrogation, and who is under no legal obligation to make the payment, and is not compelled to do so for the preservation of any right or property of his own.

2. There is no rule which authorizes a person having no beneficial interest to protect to sue in the name of another for his use.

3. In order to maintain a suit for the use of another, there must be a legal right of action in the party bringing the suit against the party against whom the suit is brought.

4. Accordingly, where the vendor and vendee enter into an executory contract for sale of a lot of land, the vendor placing a deed thereto in escrow to await examination of the title, and where thereafter with no interest to protect, a third person, who is a stranger to the transaction, pays or "advances" to the vendor the amount of the purchase money which is accepted, and obtains the deed from the escrow agent, such payment by the third person is purely voluntary; and where thereafter, upon tendering the deed to the vendee, the vendee refuses to accept it, a suit can not be maintained by the third person, in the name of the vendor suing for his use, against the vendee for the amount advanced to the vendor by such third person.

DECIDED JUNE 29, 1940. Eaton B. Hill, suing for the use of H. A. Etheridge Jr., brought suit against T. E. Shaw, alleging, that the defendant, on August 19, 1937, entered into a contract for the purchase of a certain cemetery lot from the plaintiff, "by and through his sales agent, H. A. Etheridge Sr.," which was dependent upon "the title being found to be good. legal, and unencumbered;" that the examination of the title to the lot showed it to be good, legal, and unencumbered; that the plaintiff, in listing the lot for sale with H. A. Etheridge Sr., put a time limit on the sale, naming August 21, 1937, as the last day, after which the lot would be withdrawn from sale or the price increased; that the plaintiff executed a warranty deed in favor of the defendant, and left it with his attorney, Noah J. Stone, to be delivered when the purchase-money was paid; that the interval being too short to allow for the examination of the title before August 21, H. A.Etheridge Jr., advanced the purchase-price of the lot, paid it to Noah J. Stone, and took up the deed which he now holds; that on September 4, 1937, the deed was tendered to the defendant and a request was made for payment of the $100 purchase-money in compliance with the contract; that the defendant refused to accept the deed and to pay the purchase-price, unless W. A. Ward, president of the College Park Cemetery Company, would "sign an agreement to open a grave on said lot when so requested to do," there being current in the community a rumor to the effect that Ward had stated that he would not open the grave, for the reason that Mrs. Mollie Eady Wells "said she had some claim against the said College Park Cemetery Company;" the fact being that the attorney for Mrs. Wells admits that whatever claim she may have has nothing to do with the title to the lot in question which was sold by the cemetery company on July 25, 1927, to the party under whom the plaintiff holds title; and that the plaintiff makes continuous tender of the deed to the defendant, and prays judgment for the $100 purchase-money, with interest at 7 per cent. since August 19, 1937.

The defendant demurred generally and specially to the petition. The judge sustained the demurrer and dismissed the action, reciting in his order as follows: "This is not a suit for specific performance of an alleged contract. Neither is it a suit for damages on account of an alleged breach of contract. It is a suit by the alleged seller against the alleged purchaser, to recover the alleged purchase-price of the lot for the use and benefit of one who advanced it to the plaintiff, without the consent, authority, or approval of the alleged purchaser. In making this advance he stood in the position of a volunteer, and can not recover from the defendant money advanced without authority in the name of the one to whom he paid it." The plaintiff excepted and sued out a writ of error to the Supreme Court, and that court transferred the case to this court. Hill v. Shaw, 189 Ga. 294 (5 S.E.2d 778). On August 19, 1937, Shaw entered into a contract with Hill, by which the former agreed to purchase from Hill a cemetery lot for $100, conditioned "upon the title being found to be good, legal, and unencumbered." This contract recited that it was made on the part of Hill acting through his sales agent, Etheridge Sr. Hill executed a warranty deed in favor of Shaw, to be delivered to Shaw when the purchase-money was paid, which deed was placed with his attorney. The title to the lot, upon examination, was found to be "good, legal, and unencumbered." It is alleged that Hill listed this lot for sale with Etheridge Sr., placing a time limit on the sale of August 21, 1937; that Etheridge Jr., on or before August 21, because the time between August 19, 1937, the date of the contract of sale, and August 21, 1937, was too short to allow for examination of the title, "advanced" the purchase-price of the lot to Hill's attorney and "took up the deed which he now holds." There does not appear to have been any relation of any sort between Etheridge Jr. and Shaw, necessitating or authorizing such action on the part of Etheridge Jr.

On September 4, 1937, the deed was "tendered" to Shaw, with a request for the purchase-money "in compliance with the contract," and Shaw refused to accept this deed and pay the purchase-money unless the president of the cemetery company, in whose cemetery the lot involved was situated, would "sign an agreement to open a grave on said lot when so requested to do." The present suit was instituted by Hill, for the use of Etheridge Jr., against Shaw, for the $100 purchase-money with interest. The judge sustained the demurrer of the defendant and dismissed the action. The Supreme Court, in transferring the case to this court, held that the action was not one for specific performance of an executory contract, but was a suit at law for the stipulated purchase-price of the land, by the vendor suing for the use of a "third person not appearing to have any interest to protect, or express contract for reimbursement," who "advanced the purchase-price to the attorney [for the vendor] and `took up' the deed." See Hill v. Shaw, supra. Hill, the vendor, had received the purchase-price asked by him for this lot, and the deed executed by him had been delivered to Etheridge Jr. There does not appear to have been any transfer or assignment of any rights in and to the contract between the vendor and the vendee, that is Hill and Shaw, from Hill to Etheridge Jr. Any rights which Hill the vendor might have had to enforce the payment of the purchase-money by Shaw, upon his failure to comply with the contract, remained in Hill. So far as appears from the allegations of the petition, Hill has received the purchase-price for his lot and has parted with the legal and equitable title. The executory contract has been fully performed so far as Hill is concerned. Hill no longer has any interest or rights to protect. As the transaction now appears, Hill is fully satisfied. He has no claim or legal right of action against Shaw or any one else relative to this transaction.

There are no circumstances creating any right to subrogation, legal or equitable, in Etheridge Jr., upon his advancing the purchase-money to Hill's attorney and taking the deed to Shaw which Hill had executed and left with his attorney. The action of Etheridge Jr. in "advancing" the purchase-price of the lot was purely voluntary, and for what reason does not appear, and does not cast any duty on Shaw to reimburse him. Under the contract Hill became the creditor of Shaw. Etheridge Jr. paid the money to Hill. He is now seeking, in effect, to recover such payment from Shaw. He had no authority from Shaw to make the payment. He had no interest in the subject-matter to protect. He was not requested by either Hill or Shaw to make the payment. He was not acting under any contract, express or implied, with Shaw to do this. Subrogation is the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor. The substitute is in all respects in the place of the party to whose rights he is subrogated. Subrogation is of two kinds. One is legal subrogation, which takes place as a matter of equity, without any agreement to that effect made with the person paying the debt. The other is conventional subrogation, which is applied where an agreement is made with the person paying the debt that he shall be subrogated to the rights and remedies of the original creditor. It is never applied for the benefit of a mere volunteer who pays the debt of another without any assignment or agreement for subrogation, and who is under no legal obligation to make the payment, and is not compelled to do so for the preservation of any rights or property of his own. See Cornelia Bank v. FirstNational Bank, 170 Ga. 747, 750 (154 S.E. 234).

There is no rule which authorizes a person having no beneficial interest to protect to sue, in the name of another, for his use. Thrift v. Baker, 144 Ga. 508, 510 (87 S.E. 676); American Surety Co. v. Bibb County, 162 Ga. 388, 391 (134 S.E. 100). In order to maintain a suit for the use of another, there must be a legal right of action in the party bringing the suit against the party against whom the suit is brought. See Rose v. Glover-Ball Co., 156 Ga. 109, 115 (118 S.E. 691). There is no such right in Hill.

The judge properly sustained the general demurrer to the petition.

Judgment affirmed. Sutton and Felton, JJ., concur.