Appeal from Second Judicial District Court, Washoe County; R. C. Stoddard, Judge.
H. W. Huskey, for Appellant.
James B. Jones, for Respondents.
By the Court, Coleman, J.:
This is an action to foreclose a mortgage. From a judgment for costs in favor of the defendants, following an order sustaining a demurrer to plaintiff's complaint, an appeal is taken to this court.
The complaint alleges that in May, 1907, William James executed his certain promissory note to one John Schmitt in the sum of $4,000, bearing interest at 8 per cent per annum, payable May 27, 1908, to secure which he executed to Schmitt a mortgage upon lot 4, block C, of Reno; that on January 10, 1908, said James conveyed, subject to said mortgage, the lot mentioned to his wife, who is now Emily Clark, one of the defendants, and his daughter, Mary Berryman James, each receiving an undivided one-half interest; that said William James died January 15, 1908; that on April 14, 1908, defendant Emily James, now Emily Clark, was appointed guardian of her co-defendant, Mary Berryman James, thereafter qualified as such guardian, and ever since has been, and now is, such guardian; that when the said note fell due on May 27, 1908, the said John Schmitt, the owner thereof, demanded payment, and threatened that, if payment was not forthwith made he would foreclose his said mortgage; that the interest of said minor was in great danger of being lost unless said note was paid; that the said Emily James (now Emily Clark), the guardian of Mary Berryman James, petitioned the district court of Washoe County for authority to
borrow a sum not to exceed $6,000 with which to pay off said indebtedness and satisfy some other outstanding liens against the property; and that, notice having been given of the hearing upon said petition, the court entered an order authorizing the said guardian to secure a new loan in a sum not to exceed $6,000, to execute the joint note of herself individually and as guardian, and to secure the payment of the same by a like joint mortgage upon the property in question; that in pursuance of said order plaintiff loaned defendants the sum of $5,000, and took their note, dated June 13, 1908, payable one year after date, with interest at 12 per cent per annum, and that a mortgage to secure the same was executed by said Emily James (now Emily Clark), individually and as guardian of Mary Berryman James, upon the property; that on June 14, 1911, all of the interest then due on said note was paid, and by mutual agreement the rate of interest was reduced to 8 per cent per annum.
It is the contention of appellant: (1) That the mortgage to appellant is a valid instrument; and (2) that, if not valid as a mortgage, appellant should be subrogated to the rights of John Schmitt under the mortgage held by him, and which was paid off by the money advanced by appellant.
1. As to the first contention, we are clearly of the opinion that it cannot be sustained. At the time the court ordered the guardian to borrow money and to secure the payment thereof on the part of the ward by giving a mortgage, there was no statute, as there is now (Stats. 1911, p. 71; Rev. Laws, 6165) authorizing the court to empower the guardian to execute a mortgage. The general rule covering this situation is stated by Cyc. as follows:
The guardian has no power to mortgage his ward's real estate unless authorized by order of court in pursuance of a statute empowering the court to make such order. (21 Cyc. 84.)
See, also, 15 Am. & Eng. Ency. Law (2d ed.) 69; Woerner, Amer. Law of Guardianship, p. 177.
Appellant cites Northwestern G. L. Co. v. Smith, 15 Mont. 101, 38 Pac. 224, 48 Am. St. Rep. 662, in support of the contention that the mortgage is valid. Suffice it to say that if we approved of the ruling in that case (as to which we express no opinion), the facts of this case are not the same as in that one; consequently it is no authority to support the contention here.
2. Should the appellant be subrogated to the rights of John Schmitt? By the demurrer it is admitted that the money advanced by appellant paid off the indebtedness of Schmitt. This money was advanced at the request of respondent Emily Clark, both in her individual and in her representative capacity. While the mortgage is void what is there to prevent the subrogation of appellant to the rights of John Schmitt, who was paid with appellant's money? It is urged on the part of respondents that appellant was a mere volunteer, a stranger and an intermeddler, and therefore that he should not be substituted. We concede that a volunteer and intermeddler has no rights. The question then is, Was appellant a volunteer, a stranger, and an intermeddler? It was said by the Supreme Court of Utah, in George v. Butler, 16 Utah, 111, 50 Pac. 1032, that:
Tested alone by the earlier cases, Sutherland might be regarded as a volunteer, but latterly the doctrine of subrogation has been developed and expanded, and given a wider application to business matters. By analogy, it has been applied to transactions similar to the one under consideration, to one having no previous interest to protect, who pays off a mortgage, or advances money for its payment, at the instance of the mortgagor, and for his benefit, when no innocent person can be injured, believing he is getting security equal to that of the person whose debt he pays. We cannot hold Sutherland to be a mere volunteer or stranger, officiously intermeddling by paying the debts due the Pacific Investment Company. (Emmert v. Thompson, 49 Minn. 386, 52 N. W. 31, 32 Am. St. Rep. 566; 3 Pom. Eq. Jur., sec. 1212; Cobb v. Dyer, 69 Me. 494; Bruse v. Nelson, 35 Iowa, 157; Whitesalle v.
Loan Agency, 27 S. W. 309; Harris, Subr. sec. 811.) Our conclusion is that the decree of the court below, subrogating the cross complainant to the lien of the Pacific Investment Company by virtue of the assignment and delivery of the lease as a pledge to secure the $2,500 loaned on November 1, 1890, and directing it to be paid before ...