Opinion
7 Div. 102.
March 10, 1932.
Appeal from Circuit Court, Calhoun County; R. B. Carr, Judge.
Rutherford Lapsley, of Anniston, for appellant.
When the bill asserts a recognized principle of equity, upon a state of facts showing relations of the parties as to such principle, and respondent does not test the equity of the bill by demurrer or otherwise, the trial and appellate courts will assume the admission of such alleged equity on the part of respondent, provided the evidence in fact supports the bill. Unless defects in the bill are pointed out by demurrer, they will not be considered. Whiteman v. Taber, 203 Ala. 496, 83 So. 595. Enforcement of equitable subrogation is not limited to cases where there was an express agreement of respondent that the subrogee should pay certain money or discharge a certain lien in his behalf. 6 Pomeroy's Eq. Jur. 1492, 1499. A state of facts, though unusual, will authorize the enforcement of this principle when the debt of one is paid with money which is the property of another, which is taken from the latter wrongfully and without his consent, or which being in the possession of the debtor is wrongfully applied in payment of his debt. Pom. Eq. Jur., supra. Cotton v. Dacey (C. C.) 61 F. 481. See Faulk v. Calloway, 123 Ala. 333, 26 So. 504; Stone v. Davenport, 200 Ala. 396, 76 So. 312; Shields v. Hightower, 214 Ala. 608, 108 So. 525, 47 A.L.R. 506; Woodruff v. Satterfield, 199 Ala. 477, 74 So. 948.
Bibb, Field Woolf, of Anniston, for appellee.
There are but two types of subrogation: One legal, and the other conventional. Appellant does not show himself entitled to either. He had no interest in lot 1, block 424, and there could be no legal subrogation. Conventional subrogation can arise only out of an agreement, and there was no agreement with respect to payment of the balance due on said lot. 26 R. C. L. 1312-1352; Chapman v. Abrahams, 61 Ala. 108; Pettus v. McKinney, 74 Ala. 108; Amer. Tr. Sav. Bank v. Turner, 16 Ala. App. 602, 80 So. 176; Shaddix v. Nat. Sur. Co., 221 Ala. 268, 128 So. 220. Where pleading and proof make no case for equitable relief, the bill should be dismissed, although the equity of the bill was not questioned by demurrer or answer. Cummings v. Vann, 215 Ala. 488, 111 So. 229; 21 C. J. 431, 472; Jackson v. Knox, 119 Ala. 320, 24 So. 724.
Complainant purchased from one Adair lot 13, block 14, in the city of Anniston for the sum of $1,600, which was paid. The lot was subject to a vendor's lien for the unpaid balance of $186.58, which Adair agreed to pay out of the $1,600 check which was by him deposited in the bank at Anniston on November 24, 1926. Adair had previously purchased another lot (lot 1, block 424), and assumed the payment of the balance due of $157.50, for security of which there was a vendor's lien. This latter lot (lot 1, block 424) was acquired by the defendant under circumstances to charge it with constructive notice of said lien.
On November 24, 1926, the day Adair deposited the $1,600 paid him by complainant as purchase price of lot 13, block 14, he paid out of said sum by checks an aggregate of $351.33, and among those sums was that of $157.50, the unpaid balance due on lot 1, block 424. Adair did not pay the balance due on complainant's lot 13 ($186.58), complainant having the same to pay, and the bill seeks to have complainant subrogated to the enforcement of the vendor's lien on lot 1, block 424, because the $157.50 paid by Adair was out of the $1,600 purchase price paid him by complainant on lot 13.
The cause was tried upon an agreed statement of facts, upon a consideration of which the chancellor denied relief, and we think correctly so. The $157.50 paid by Adair on lot 1 was without the knowledge or consent of complainant and without any agreement with the holder of the vendor's lien as to any transfer thereof to complainant.
Complainant's counsel argue upon the assumption that the $157.50 was paid with his money and as if paid by himself. But, when he paid Adair the $1,600, it became the property of Adair, and in a legal sense, though a part of the $1,600 check, it was not the money of complainant. There was no element of a resulting trust. Phillips v. Phillips, 223 Ala. 475, 136 So. 785; De Freese v. Vanderford, 220 Ala. 360, 125 So. 228; Rudulph v. Burgin, 219 Ala. 461, 122 So. 432; Tilford v. Torrey, 53 Ala. 120.
In Cotton v. Dacy (C. C.) 61 F. 481, cited by appellant, the money was that of complainant in the hands of his agents, which is quite a different case from that here presented.
There are known to the law two kinds of subrogation — legal and conventional. "Legal subrogation arises by operation of law where one having a liability or a right, or a fiduciary relation in the premises pays a debt due by another under such circumstances that he is in equity entitled to the security or obligation held by the creditor whom he has paid." 25 R. C. L. p. 1312. Complainant's case is not brought within the influence of this doctrine. He not only did not pay any debt or obligation, but he bore no relation whatever to lot 1, block 424, or the vendor's lien thereon, and was in no manner called upon to pay the same in protection of any of his rights. Shaddix v. National Surety Co., 221 Ala. 268; 128 So. 220; Faulk v. Calloway, 123 Ala. 325, 26 So. 504; Shields v. Hightower, 214 Ala. 608, 108 So. 525, 47 A.L.R. 506; Singleton v. U.S. F. G. Co., 195 Ala. 506, 70 So. 169.
"Conventional subrogation depends upon a lawful contract, and occurs where one having no interest in or relation to the matter pays the debt of another, and by agreement is entitled to the securities and rights of the creditors so paid." 25 R. C. L. p. 1312. No case of conventional subrogation is made out. There was no agreement of any character with any one, either express or implied, that Adair should pay the balance due on lot 1, block 424. Adair merely paid it of his own accord, without the knowledge of complainant, out of the purchase money he had received for lot 13, and breached his agreement with complainant in failing to pay the balance due on lot 13. This is the whole case. It falls far short of establishing a conventional subrogation, as we think the citation of some of our authorities will suffice to demonstrate. Shaddix v. National Surety Co., supra; Faulk v. Calloway, supra; Bell v. Bell, 174 Ala. 446, 56 So. 926, 37 L.R.A. (N.S.) 1203; Woodruff v. Satterfield, 199 Ala. 477, 74 So. 948; Pettus v. McKinney, 74 Ala. 108.
The bill alleged complainant's right of subrogation by way of conclusion, and was doubtless subject to demurrer.
The fact that no demurrer was interposed does not affect the correctness of the decree rendered. As stated in Cummings v. Vann, 15 Ala. 488, 111 So. 229, 230: "The rule is that, where pleading and proof make no case for equitable relief, the bill should be dismissed, although the equity of the bill was not questioned by demurrer."
The decree is correct, and will accordingly be here affirmed.
Affirmed.
ANDERSON, C. J., and BOULDIN and FOSTER, JJ., concur.