R. M. Walmsley & Co. v. Theus

Citations

• 107 La. 417

Syllabus

<p>Syllabus.</p> <p>1. A creditor who, by making a partial payment to another holding a prior special mortgage on certain property, has become legally subrogated pro tanto to the rights of the latter, is subrogated subordinately to the rights of that creditor to be paid the balance of his debt.</p> <p>2. A legal subrogation to rights by payment is derived from “the law” not from the consent of the party who receives payment. The fact that the creditor who has received the payment has written the words “paid” or “cancelled” upon the particular mortgage note for which he has received payment, does not prevent legal subrogation taking place in favor of the person making the payment, if he be otherwise entitled to it. Other creditors cannot urge such fact in their own favor when the mortgage remains uncancelled upon the record.</p> <p>3. The law does not take note of the origin of the moneys with which a payment is made which carries legal subrogation with it as its effect; legal subrogation takes place though the payment be made by money borrowed by the party making the payment or furnished to him by another person for that purpose.</p> <p>4. A third possessor who pays off special mortgages existing on property at the time ■ of its acquisition, becomes thereby legally subrogated to the rights of the mortgagee who has been paid and the subrogation is not lost because the third possessor may be subsequently evicted. The character and effect of the payment which attached to it when made remain unaffected.</p> <p>5. A prior mortgage creditor who intervenes by third opposition under a sale made by a junior creditor and claims the proceeds of sale by preference, consents thereby to a transfer of his mortgage rights from the property to the proceeds sale in the hands of the sheriff and he cannot claim that, under Art. 684 of the Code of Practice, the price bid was insufficient to carry the title and entitle the purchaser to a deed.</p> <p>On Rdheabing.</p> <p>1. The wife had