inquiry. He had notice of the mortgage from the record; for, in searching for mortgages by Semon from the date of his deed, September 30th 1880, he would have found the mortgage. The doctrine of the cases of Losey v. Simpson, 11 N. J. Eq. 246, and Speilman v. Kleist, 36 Id. 199, is not at variance with that now enunciated. The doctrine of those cases is that one who proposed to purchase land, or to take a mortgage upon it, is not bound to take notice of the record of a conveyance or mortgage made by one whose title deed has not been recorded, and the reason is that he has no clue to guide him in searching the record. But here the record showed the searcher the deed to Semon, and his mortgage to his grantor. The mortgage was indeed dated before the date of the deed, but it was recorded after the latter date, and the deed itself was on record. It is urged that, according to the record, it appears that after Semon gave the mortgage to Johnson, the latter conveyed the property to him by deed of a subsequent date, and so extinguished the mortgage; for, according to the dates of the instruments, Semon had no title when he mortgaged to Johnson, and, having no title, he mortgaged the property to the person who owned it. The inference from the condition of the record would be that there was some mistake in the dates, and that in fact Johnson conveyed to Semon and then Semon mortgaged to him; or that Semon mortgaged to Johnson before he acquired title, and, having acquired title, afterwards might be estopped from denying that the mortgage was valid. The record was notice of the mortgage, But it is urged that if Terhune is chargeable with notice, Semon is entitled to no relief, because, according to the answer which is to be taken as true upon this hearing, he himself paid off the bond, the payment of which the mortgage was given to secure, and the bond was his own. But if the land had, as between him and the purchaser at the foreclosure sale, become the primary fund for the payment of that mortgage, he is entitled to subrogation on paying it off (as he was compelled to do), because of his personal liability thereon. The value of the premises beyond what was necessary to pay the first mortgage was the primary fund to pay the second mortgage (Vanderkemp v. Shelton, ubi supra), and, under the circumstances, he is entitled to subrogation Stillman's Ex'rs. v. Stillman, 21 N. J. Eq. 126; Faulks v. Dimock, 27 Id. 65; Tice v. Annin, 2 Johns. Ch. 125; Jumel v. Jumel, 7 Paige 591; Russell v. Allen, 10 Id. 249. There will be a decree for an account by Terhune of the rents and profits from the time of the delivery of the sheriff's deed to him, in which account he is to be allowed for lawful taxes and assessments paid by him, and for moneys paid for necessary repairs. Should there be a balance against him on such accounting, it is to be credited on the amount due upon the first mortgage. Should the balance be in his favor, he is to have it as well as the amount due to him in respect to the first mortgage raised and paid to him out of the proceeds of the sale of the mortgaged premises before paying the second mortgage therefrom. There will also be an account of what is due upon the first and second mortgages, and the property will be sold to raise and pay in the first place to Terhune, the amount found to be due upon the first mortgage, after crediting any balance of rents and profits which may be found against him; and if any balance is found in his favor, he is to have the amount of it paid to him, as before stated, out of the proceeds of sale before payment of the second mortgage. He is not to have the costs of the foreclosure proceedings upon the first mortgage, nor the execution costs in that case; Van Duyne v. Shann, 39 N. J. Eq. 6. There will then be paid to the complainant the amount found due upon the second mortgage, with the cost of this suit, and the surplus if any, will be paid to Terhune. The right of subrogation is a creation of equity, and has no application to an action at law, as in ejectment: Meyer v. Mintonye, 106 Ill. 414. It is not formal or technical, but its object is essentially to promote justice. It cannot be invoked if inequitable to do so, or if there is unreasonable delay: Gerrish v. Bragg, 55 Vt. 329. In its early history it was applied only in favor of those who were bound by the original security with the principal debtor. As equitable rights developed, its application has been greatly extended, and, it may be stated generally, that it is now applied in favor of all persons who are required to pay the debt of another, for the protection of their own interests. The most common instance, where the doctrine of subrogation is applied, is in the case of purchasers of the equity of redemption, with or without notice of existing liens. Thus, when a purchaser of land pays off a debt of his grantor VOL. XXXIV.—59 secured by a deed of trust upon the 357. A party who advances money to another that is used to discharge a valid pre-existing lien on real estate, if not a mere volunteer, is entitled, by subrogation, to all remedies which the original lienholder possessed as against the property: Edwards v. Davenport, 20 Fed. Rep. 756, 726. In Cottrell's Appeal, 23 Penn. St. 294, 295, A. obtained judgment against B. To prevent sale upon execution, B. gave A. his note, with C. as security; C. paid the note and obtained an assignment of the judgment from A., and claimed payment out of proceeds of sale of B.'s real estate upon judgment obtained by D. against B. subsequently to A.'s judgment: Held, that he was entitled to subrogation. The court stated the doctrine thus: "When one not a mere volunteer discharges the debt of another, he is entitled to all the remedies which the creditor possessed against the debtor. Actual payment discharges a judgment or other encumbrance at law, but where justice requires it we keep it afoot in equity for the safety of the paying securities." In Mosier's Appeal, 56 Penn. St. 76, 80, numerous judgments were entered against two debtors, some joint and some several; executions were issued and the land held jointly levied on. The court ordered the undivided interest of one of the debtors to be sold separately. A junior judgment creditor, believing that the land would be sacrificed, after the execution plaintiffs had refused to assign their judgments to him on payment, paid the executions to the sheriff and satisfaction was entered. No other liens having intervened, he was subrogated to the rights of the execution plaintiffs, and the satisfaction cancelled. The court very clearly states the rule that subrogation "will not arise in favor of a stranger, but only in favor of a party who on some sort of compulsion discharges a demand against a common debtor. For instance, a surety who pays the debt of his principal, will be entitled to the security of the * * * creditor; so, where one of several joint sureties has paid the whole debt, he will be entitled to the judgment to enforce contribution by his co-sureties. * * The principles of subrogation do not apply in favor of a volunteer. * They can obtain the right of substitution only by contract. *** I regard the doctrine as applicable in all cases where payment has been made under a legitimate and fair effort to protect the ascertained interests of the party paying, and when intervening rights are not legally jeopardized or defeated." 105. Stranger cannot invoke the doctrine of subrogation.-Courts uniformly recognise the rule that a mere stranger or volunteer, who, in the absence of agreement, pays a debt for which another is bound, and which he was under no obligations to pay, cannot invoke the doctrine of subrogation: Hough v. Aetna Life Ins. Co., 57 Ill. 319; Conrad v. Buck, 21 W. Va. 396, 408; Dixon on Subrogation 163, 164, et seq. Thus, where one advances money to another to enable him therewith to make a loan to a third party on the security of an equitable mortgage, he is not entitled to subrogation, merely on the ground that he so advanced the money: Van Winkle v. Williams, 38 N. J. Eq. Or where a third party, under no legal obligations, furnishes money to another to redeem from a judicial sale, where the advancement was not made under the belief or expectation that he would succeed to the rights of the party to whom it was so advanced, but under a belief that a mortgage would be executed to secure him, and contracted to that effect, the principles of subrogation will not apply. The party is simply considered as an intermeddler: Wormer v. Waterloo Agr. Works, 62 Iowa 699, 702. In Kitchell v. Mudgett, 37 Mich. 81, 85, 86, a third party paid off and discharged the first two of three mortgages on certain real estate, and took a new mortgage for the amount paid. He was under no obligations to pay the mortgage debt. It was held that his mortgage was subsequent to the one left unpaid, and that he was not entitled to be subrogated to the rights of the first two mortgagees. Conventional subrogution arises by contract in favor of third persons, not parties to the original obligation; as where one furnishes money with an agreement that it shall be used in discharging a debt due for the purchase of land, and it is so used, with an understanding that he who advances it shall have the same remedies to recover the money thus loaned that the original vendor was entitled to for the enforcement of his demand, and the lender is subrogated to the rights of the vendor of the land: Warhmund v. Merritt, 60 Tex. 24, 27; see Baldwin v. Moffett, 94 N. Y. 82; Seward v. Huntington, 94 Id. 104. In Shinn v. Budd, 14 N. J. Eq. 234, a third party paid off a mortgage on certain real estate and claimed subrogation. He was under no obligations to make payment, and it was made without agreement or understanding that he was to be substituted. His bill was denied. GREEN, Chancellor, observed (p. 236), "Subrogation as a matter of right as it exists in the civil law, from which the term has been borrowed and adopted in our own, is never applied to aid a mere volunteer. Legal subrogation into the rights of a creditor for the benefit of a third person, takes place only for his benefit, who being himself a creditor, satisfies the lien of a prior creditor, or for the benefit of a purchaser who extinguishes the incumbrance upon the estate, or of a co-obligor or security who discharges the debt or of an heir who pays the debts of the succession," citing Code Napoleon, book 3, lit. 3, art. 1251; Civil Code of La., art. 2157; 1 Pothier on Oblig., part 3, ch. 1, art. 6, 6. "We are ignorant, says the Supreme Court of Louisiana, of any law which gives to the party who furnishes money for the payment of a debt the right of the creditor who is thus paid; the legal claim alone belongs not to all who pay a debt, but only to him, who, being bound for it, discharges it: Nolte & Co. v. Their Creditors, 7 Mar. (N. S.) 602; Curtis v. Kitchen, 8 Id. 706; Cox v. Baldwin, 1 Miller, St. Louis R. 147. The principles of legal subrogation as adapted to and applied in our system of equity, has, it is believed, been rigidly restrained within these limits." In The Bank of the U. S. v. Winston's Executors, 2 Brocken. Rep. 254, C. J. MARSHALL said: "If a security not assignable be discharged by a surety, whom it binds, equity keeps it in force in his favor and puts such surety in place of the original creditor. But I think there is no case in which this has been done in favor of a person, not bound by the original security, who discharges the debt as a volunteer." In Gadsden v. Brown, 1 Speer's Eq. 37 (S. C.), JOHNSON, Chancellor, said: "The doctrine of subrogation is a pure unmixed equity, and from its very nature could not have been intended for the relief of those who were in a condition and at liberty to elect whether they would or would not be bound, and so far as I have been able to learn its history, it never has been so applied. It has been directed exclusively to the relief of those who were already bound, and who could not but choose to abide the penalty. I have seen no case in which a stranger who was in a condition to make terms for himself, and demand any security he might require, has been protected by the principle." In Sanford v. McLean, 3 Paige Ch. (N. Y.) 122, Chancellor WALWORTH states the principle with great clearness : "It is only in cases where the person advancing money to pay the debt of a third party stands in the situation of a surety, or is compelled to pay it to protect his own rights, that a court of equity substitutes him in the place of the creditor as a matter of course without any agreement to that effect. In other cases the demand of a creditor, which is paid with Bed 62. the money of a third person, and without 262. In Childress v. Allen, 3 La. R. 477, it is held that the purchaser of land seized and exposed to sale on an execution issued upon a judgment by which the debt is discharged, is not entitled to be subrogated to the rights of the judgment creditor. Such an act, said the court, cannot be distinguished from payment made to the creditors without a sale of the debtor's property, by a person not having an interest to discharge the debt. Subrogation does not arise in favor of a purchaser on a forced sale. In the recent case of Nash v. Taylor, 83 Ind. 347, 351, an assessment was levied upon certain land for street improvements in favor of the contractor, who did the work on the street. The owner of the land borrowed the money from Nash with which to discharge the lien, which attached to his land by virtue of the levy. The money was used for this purpose; Nash sought to be subrogated to the rights of the contractor, which was denied. The court remarked, "Here there is nothing more than the loan of money by one neither in privity of blood nor of contract or estate, with the person who claims the lien which is sought to be displaced by the lender. There was no colorable obligation on the part of Nash to pay the street assessment, nor did he do so; neither did he intend to pay it. The case is, therefore, easily discriminated from one in which a party discharges a lien under a colorable obligation, or pays it, expecting to derive some benefit from it." See further, Railroad v. Facney, 78 Ill. 116; Kelly v. Receiver of Green Bay, &c., Rd., 10 Biss. C. C. R. 151; Duncan et al. v. Railroad, 2 Wood C. C. 542; Blair v. St. Louis H. & K. Rd., 23 Fed. Rep. 521; Binford v. Adams, 3 N. E. Rep. (S. C. Ind.) 753. San Francisco, Cal. B. E. BLACK. Court of Errors and Appeals of Maryland. PROVIDENCE WASHINGTON INS. CO. v. ADLER. In marine insurance, if an article is injured by reason of its own inherent tendencies; as, for example, by spontaneous combustion, and these tendencies are not called into activity by any perils insured against, the insurer is not liable. Whether the same rule applies in an ordinary contract of fire insurance, quære. APPEAL from Superior Court, Baltimore city. John R. Kenly, for appellant. F. P. Clark, for appellee. The opinion of the court was delivered by STONE, J.-The plaintiffs shipped, by a line of steamers running from New York to the south, a quantity of oil-cloth clothing to Louisiana and Texas. They insured this clothing, before shipment, in the office of the defendant company. The clothing was packed in boxes, and on its arrival at its destination it was found injured and comparatively worthless, either by spontaneous combustion, or |