d. Origin, Growth, and Expansion of the Doctrine.

1. In General.-Chancellor Kent says that the doctrine of subrogation is familiar to the civil law and the law of those countries in which that system essentially prevails but that it is equally well known in the English chancery: Cheesebrough v. Millard, 1 Johns. Ch. 409, 7 Am. Dec. 494. It is not improbable that the prevalence of the doctrine in the civil law suggested its adoption from that system of jurisprudence by the early English chancellors. Many authorities regard the Roman law as its source. But however this

may be, it has long been an established branch of equity jurisprudence, and its importance has gradually increased until the frequency of its application is surprising: See Wilkins v. Gibson, 113 Ga. 31, 84 Am. St. Rep. 204, 38 S. E. 374; Shinn v. Budd, 14 N. J. Eq. 234; Neely v. Jones, 16 W. Va. 625, 37 Am. Rep. 794; Prairie State Bank v. United States, 164 U. S. 227, 17 Sup. Ct. Rep. 142.

2. Present Status and Liberality.-Since the doctrine of subrogation was ingrafted on English equity jurisprudence, it "has been steadily expanding and growing in importance and extent in its application to various subjects and classes of persons': Home Sav. Bank v. Bierstadt, 168 Ill. 618, 61 Am. St. Rep. 146, 48 N. E. 161; Heuser v. Sharman, 89 Iowa, 355, 48 Am. St. Rep. 390, 56 N. W. 525; George v. Butler, 16 Utah, 111, 50 Pac. 1032; Emmert v. Thompson, 49 Minn. 386, 32 Am. St. Rep. 566, 52 N. W. 31; Dorrah v. Hill, 73 Miss. 787, 19 South. 961; Rachal v. Smith, 101 Fed. 159. "The doctrine of subrogation or substitution, at first applied in behalf of those who were bound by the original security with the principal debtor, has been greatly extended, and the principle, modified to meet the circumstances of cases as they have arisen, has been applied in favor of volunteers intervening subsequently to the original obligation, and as between different classes of sureties, and in the marshaling of assets, and prescribing the order in which property and funds shall be subjected to the discharge of different classes of obligations, and as between classes of creditors, so as to do substantial justice in each case': Barnes v. Mott, 64 N. Y. 397, 21 Am. Rep. 625. The remedy, then, is no longer confined to sureties and quasi sureties, but includes so wide a range of persons and subjects that it has been denominated the mode whereby equity compels the ultimate payment of an obligation by him who in justice, equity, and good conscience ought to pay it: Arnold v. Green, 116 N. Y. 566, 23 N. E. 1; "Definition,'' ante.

No doctrine of equity jurisprudence is more beneficent in its operation than is subrogation, and perhaps none stands in higher favor: Chaplin v. Sullivan, 128 Ind. 50, 27 N. E. 425; Sands v. Durham, 99 Va. 263, 86 Am. St. Rep. 884, 38 S. E. 145. No general rule can be laid down which will afford a test in all cases for its application; whether or not the doctrine is applicable in any par

ticular case depends upon its particular facts and circumstances, the principle not being enforced as a matter of legal right, but in order to subserve the ends of justice in the particular controversy under consideration: Boston Safe-Deposit etc. Co. v. Thomas, 59 Kan. 470, 53 Pac. 472; Aultman-Miller & Co. v. Bishop, 53 Neb. 545, 74 N. W. 55; Gordan v. Stewart (Neb.), 96 N. W. 624; In re Mosier, 56 Pa. St. 76, 93 Am. Dec. 783. Subrogation has been allowed, it is said, upon the broad principle that to deny it, under the facts and circumstances involved, would violate the plainest principles of justice: Arlington State Bank v. Paulsen, 57 Neb. 717, 78 N. W. 303. Of course, it is not a universal remedy for all who have lost their money in paying obligations for which others are primarily bound: Berry v. Bullock, 81 Miss. 463, 33 South. 410. The sphere of its application has many limitations, as will hereafter appear.

The remedy of subrogation is well calculated to effect justice as between those bound to perform the same duty or discharge the same obligation, whether or not they are bound in the same degree, and it has nothing of form nor of technicality about it. "He who, in administering it, would stick in the letter, forgets the end of its creation, and perverts the spirit which gave it birth. It is the creature of equity, and real essential justice is its object": Enders v. Brune, 4 Rand. (Va.) 447; Hawker v. Moore, 40 W. Va. 49, 20 S. E. 848; Schieb v. Moon, 50 W. Va. 47, 40 S. E. 329.

II. Circumstances Affecting and Controlling Subrogation. a. Principles of Equity Generally. The doctrine and practice of subrogation, being of equitable origin and nature, its operation is controlled and governed by the principles of equity: Springer v. Foster, 27 Ind. App. 15, 60 N. E. 720; Sheppard v. Messenger (Iowa), 77 N. W. 515. While subrogation exists solely for the purpose of accomplishing substantial justice, it is possible that in all cases where it is invoked there must, in addition to the inherent justice of the case, concur therewith some established principle of equity jurisprudence, as recognized and enforced by courts of chancery. This is the view taken by the Nebraska courts and apparently by the Wisconsin: Seiroe v. Homan, 50 Neb. 601, 70 N. W. 244; Meeker v. Larson (Neb.), 90 N. W. 958; Gordon v. Stewart (Neb.), 96 N. W. 624; Blodgett v. Hitt, 29 Wis. 169, 183.

b. Intervening Rights and Equities. Since subrogation is a creature of equity, it must be enforced with a due regard to the rights, legal or equitable, of others. It cannot be invoked so as work injustice, or defeat a legal right, or overthrow a superior or perhaps even an equal equity, or displace an intervening right or title: Makeel v. Hotchkiss, 190 Ill. 311, 83 Am. St. Rep. 131, 60 N. E. 524; Bartholomew v. First Nat. Bank, 57 Kan. 594, 47 Pac. 519; Gray v. Zellmer, 66 Kan. 514, 72 Pac. 228; Gaskell v. Huffaker, 20 Ky. Law Rep. 1555, 49 S. W. 770; Rand v. Cutler, 155 Mass. 451,

29 N. E. 1085; Dwight v. Scranton Lumber Co., 82 Mich. 624, 47 N. W. 102; Gerdine v. Menage, 41 Minn. 417, 43 N. W. 91; Rice v. Winters, 45 Neb. 517, 63 N. W. 830; Hayden v. Huff, 60 Neb. 625, 83 N. W. 920; Union Trust Co. v. Monticello etc. Ry. Co., 63 N. Y. 311, 20 Am. Rep. 541; Vaughan v. Jeffreys, 119 N. C. 135, 26 S. E. 94; Cutchin v. Johnston, 120 N. C. 51, 26 S. E. 698; Budd v. Oliver, 148 Pa. St. 194, 23 Atl. 1105; Musgrave v. Dickson, 172 Pa. St. 629, 51 Am. St. Rep. 765, 33 Atl. 705; Shimp's Assigned Estate, 197 Pa. St. 128, 46 Atl. 1037. If there should be any who, by any rule of strict law, or in equity and good conscience, stands on higher ground or for any reason has a better right, he will not be displaced or his right disturbed; for that is the essence of the doctrine": Hawker v. Moore, 40 W. Va. 49, 20 S. E. 848. Thus, the right of subrogation does not exist in favor of a second mortgagee to the prejudice of the paramount lien: Skinkle v. Huffman, 52 Neb. 20, 71 N. W. 1004. Nor can the right prevail against bona fide purchasers or those in a like position: Richards v. Griffith, 92 Cal. 493, 27 Am. St. Rep. 156, 28 Pac. 484; Ahern v. Freeman, 46 Minn. 156, 24 Am. St. Rep. 206, 48 N. W. 677; Amick v. Woodworth, 58 Ohio St. 86, 50 N. E. 437. A surety on a note secured by a trust deed, who has paid the debt secured, cannot enforce the lien for reimbursement in such a manner as to affect the right to redeem of one who purchases the land at execution sale: James v. Jaques, 26 Tex. 320, 82 Am. Dec. 613. And if money is loaned to a railway company in the ordinary course of business, without any agreement as to the use to be made of it, and is paid out to laborers and supplymen, after which the company goes into the hands of a receiver, the persons making the loans are not entitled to be subrogated to the claims paid with the money loaned, as against mortgagees of the railway: Fidelity Ins. etc. Co. v. Shenandoah Valley R. R. Co., 86 Va. 1, 19 Am. St. Rep. 858, 9 S. E. 759.

c. Solvency of Debtor.-The right to be subrogated to the securities of one who has been paid does not depend upon the solvency or insolvency of the debtor, but upon the circumstances attending the payment of the debt to which the security was incident: Spaulding v. Harvey, 129 Ind. 106, 28 Am. St. Rep. 176, 28 N. E. 323.

d. Usury.-Ordinarily, there is no basis for the application of equitable doctrine of subrogation, where the claim thereto grows out of an agreement which is void by reason of usury: Trible v. Nichols, 53 Ark. 271, 22 Am. St. Rep. 190, 13 S. W. 796; Roe v. Kiser, 62 Ark. 92, 54 Am. St. Rep. 288, 34 S. W. 534; Perkins v. Hall, 105 N. Y. 539, 12 N. E. 48. Still, the fact that one who has loaned money to discharge a prior encumbrance has charged usury will not deprive him of the right to subrogation to the rights of the prior encumbrancer, if he has an agreement to that effect, and is not seeking Am. St. Rep., Vol. 99-31

to collect more than the principal and legal interest of his debt. At least such is the conclusion reached in Wilkins v. Gibson, 113 Ga. 31, 84 Am. St. Rep. 204, 38 S. E. 374.

e. Laches and Negligence.-The right to subrogation, being one of equity merely, must ordinarily be exercised with due diligence. It may be lost through laches: Atkins v. Nordyke, 8 Kan. App. 855, 54 Pac. 328; Ocobock v. Baker, 52 Neb. 447, 66 Am. St. Rep. 519, 72 N. W. 582; Gring's Appeal, 89 Pa. St. 336; Coonrod v. Kelly, 119 Fed. 841. For example, it has been held that a vendee of land, satisfying a mortgage thereon and canceling it, will not be substituted in the place of the mortgagee where, through his gross neglect, he has failed to discover the existence of a prior encumbrance on the land under which it is sold: Garwood v. Eldridge, 2 N. J. Eq. 145, 34 Am. Dec. 195. And a person loaning money to pay off a mortgage with an agreement for a new one cannot be subrogated to the rights of the first mortgagee, as against a judgment rendered against the mortgagor before the execution of the mortgage, which an examination of the records would have disclosed: Mather v. Jenswold, 72 Iowa, 550, 13 N. W. 512, 34 N. W. 327; Fort Dodge Bldg. etc. Assn. v. Scott, 86 Iowa, 431, 53 N. W. 283. So, it has been decided that if a party otherwise entitled to be subrogated to the rights of a judgment creditor, delays until two hours before a sale under the judgment is to take place, and then makes application for subrogation, he must excuse his laches and make out a clear case, to warrant the court in arresting the proceedings and granting him relief: Forest Oil Company's Appeals, 118 Pa. St. 138, 4 Am. St. Rep. 584, 12 Atl. 442. However, subrogation is often allowed notwithstanding there is more or less negligence, and it may be said that negligence which does not increase the burdens of any lienholder does not prevent subrogation or bar the right thereto: Miller v. Stark, 61 Ohio St. 413, 56 N. E. 11. See, too, Caldwell v. Palmer, 74 Tenn. (6 Lea) 652.

III. Payment and Discharge of Obligation.

a. Necessity of Payment.-Payment of the debt is a prerequisite to the right of subrogation. Not liability to pay, but actual payment, renders the doctrine of substitution applicable. And ordinarily the whole debt must be paid, or at least tendered, before the right can be enforced. Until the creditor is wholly satisfied, there should and can be, as a rule, no interference with his rights or securities which might prejudice or embarrass him in any way in the collection of the residue: Carter v. Neal, 24 Ga. 346, 71 Am. Dec. 136; Fulton v. Harrington, 7 Houst. (Del.) 182, 30 Atl. 856; Bartholomew v. First Nat. Bank, 57 Kan. 594, 47 Pac. 519; Insurance Co. v. Fidelity Title etc. Co., 123 Pa. St. 523, 10 Am. St. Rep. 546, 16 Atl. 791; Nettleton v. Ramsey County Land etc. Co., 54 Minn. 395, 40 Am. St. Rep. 342, 56 N. W. 128; London etc. Mtg.

Co. v. Fitzgerald, 55 Minn. 71, 56 N. W. 464; New Jersey etc. Ry. Co. v. Wortendyke, 27 N. J. Eq. 658; Cason v. Connor, 83 Tex. 26, 18 S. W. 668; Featherstone v. Emerson, 14 Utah, 12, 45 Pac. 713; Columbia Finance etc. Co. v. Kentucky Union Ry. Co., 60 Fed. 794. Thus, one seeking to be subrogated to mortgage security must first pay the secured debt: Lumbermen's Ins. Co. v. Sprague, 59 Minn. 208, 60 N. W. 1101. It has been held that tender of payment accompanied with a demand for the assignment of the debt is not sufficient: Forest Oil Company's Appeal, 118 Pa. St. 138, 4 Am. St. Rep. 584, 12 Atl. 442. We think, however, that it would be unsafe to say that a tender of payment would not in any case give rise to the right to subrogation. In Keokuk v. Love, 31 Iowa, 119, it is held that when sureties are claiming the right of subrogation in a court of equity, but have not paid the claim of the creditor, the court may order that they shall be subrogated to the rights of the latter when they do pay the debt of their principal.

b. Sufficiency-Part Payment.-A part payment of a debt is not ordinarily sufficient to call forth the doctrine of subrogation. It can generally be invoked only upon the discharge of the entire debt or obligation: Good v. Golden, 73 Miss. 91, 55 Am. St. Rep. 486, 19 South. 100; Appeal of Allegheny Nat. Bank (Pa.), 7 Atl. 788; Musgrave v. Dickson, 172 Pa. St. 629, 51 Am. St. Rep. 765, 33 Atl. 705; Cases cited in the preceding paragraph. Accordingly, a second mortgagee, who pays only a part of the first mortgage, cannot, in the absence of an agreement, enforce subrogation to the rights of the latter: Stuckman v. Roose, 147 Ind. 402, 46 N. E. 680. And a vendee of encumbered property, paying only a part of the mortgage debt as a consideration for the sale of the property, will not be substituted in the place of the mortgagee: Hubbard v. Le Barron, 110 Iowa, 443, 81 N. W. 681. So, one is not entitled to subrogation for purposes of contribution, on the payment of an encumbrance in part secured on his land and in part on the property of another, unless he pays the whole debt secured: Springer v. Foster, 27 Ind. App. 15, 60 N. E. 720. If a debtor pledges life insurance policies to secure several debts, a surety paying one of the debts is held not entitled to any of the collateral security until all the debts are discharged: Willingham v. Ohio etc. Trust Co., 22 Ky. Law Rep. 158, 56 S. W. 706, 57 S. W. 467.

But the doctrine of the insufficiency of part payment to create the right of subrogation, says Chief Justice Post in Skinkle v. Huffman, 52 Neb. 20, 71 N. W. 1004, "has, in every instance, been invoked for the protection of the creditor, and never, so far as we are advised, to defeat contract obligations in the interest of the debtor alone. Thus understood, the exception requiring payment in full of the debt as a condition precedent to the right of subrogation is as firmly established as the rule itself. Cases are, how