J. D. PRICE, APPELLANT,
v.
E. R. SCHARPS, APPELLEE
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Price paid a stud fee owed by Scharps to Farnsworth Farms and sued to recover the $5,000 from Scharps. The court reversed the dismissal of Price's complaint, holding that Price was entitled to equitable subrogation because he paid an obligation primarily owed by Scharps and was not a mere volunteer, having a direct interest in discharging the lien on property he owned.
Price stated a valid cause of action for equitable subrogation. Price was not a mere volunteer because Farnsworth held a lien on the mare and foal under Florida law, giving Price a direct interest in discharging the encumbrance. As a non-volunteer discharging an obligation primarily owed by Scharps, who benefited from the transaction, Price was entitled to equitable subrogation.
[1] Equitable subrogation applies when a non-volunteer pays a debt or discharges an obligation that another should have satisfied, and it would be unjust for the payor to bea…
[2] A purchaser of property subject to an encumbrance is not a volunteer when discharging that encumbrance and may be subrogated to the rights of the encumbrance holder if no…
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Equitable subrogation affords relief in essentially every situation in which a non-volunteer pays a debt or discharges an obligation which in good conscience should have been met by another.”
Establishes the broad principle governing equitable subrogation applicable to this case.
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Join FLexlaw to unlock all legal intelligenceScharps agreed to pay a $5,000 stud fee to Farnsworth Farms upon the birth of a live foal from his mare, Miss Vertex. Scharps sold the mare to Breezy-…
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[*1044] SCHWARTZ, Judge.
The appellee Scharps, the owner of a thoroughbred mare named Miss Vertex, agreed to pay a $5000 stud fee to Farns-worth Farms for the services of its stallion, Diplomat Way. The sum was payable upon the birth of a live foal. After Miss Vertex became in foal, Scharps sold her to Breezy-hill Farms, with the agreement that he would remain liable for the $5000. Breezy-hill then conveyed the mare to the appellant Price. Although Miss Vertex in fact subsequently delivered a foal, Scharps did not pay the stud fee to Farnsworth. Price, however, did and thereafter brought this action to recover the $5000 from Scharps. His second amended complaint was dismissed with prejudice and he appeals.
We reverse because the complaint stated a cause of action on the theory that Price was subrogated to Farnsworth’s claim against Scharps.1 Equitable subrogation affords relief in essentially every situation in which a non-volunteer pays a debt or discharges an obligation which in good conscience should have been met by another. Trueman Fertilizer Co. v. Allison, 81 So. 2d 734 (Fla.1955); Rebozo v. Royal Indemnity Co., 369 So. 2d 644 (Fla. 3d DCA 1979), cert. denied, 379 So. 2d 209 (Fla.1979), and cases cited. The principle has clear application to this situation. Scharps had the primary, indeed the exclusive obligation for the stud fee, and gained personal benefit from those services in the form of a presumably increased price for the sale of Miss Vertex while in foal. It is therefore obviously fair and equitable that he should remain responsible for the $5000 fee.
On the other hand, Price was plainly not a “mere volunteer” in making the payment himself. By virtue of Section 713.70, Florida Statutes (1979), Farnsworth held a lien for the stud fee on both Miss Vertex and the foal, which Price, as their owner, had a direct interest in discharging.2 It is well settled that
[a] purchaser of property on which there is an encumbrance is not a volunteer in discharging the encumbrance, and, where he is not primarily obligated to pay the encumbrance, and justice and equity require it, he may be subrogated to the rights of the holder of the encumbrance.
83 C.J.S. Subrogation § 32 (1953). This principle applies both to realty, McDermott v. Steck Co., 138 S.W. 2d 1106 (Tex.Civ.App. 1940) and, as here, to chattels. Hunter v. Jennings, 216 Ark. 886, 227 S.W. 2d 946 (1950) (purchaser of truck subrogated to bank’s rights after payment of prior owner’s note); Ellis-Jones Drug Co. v. Coker, 156 Miss. 775, 125 So. 826 (1930) (purchaser of stock of goods not a volunteer and entitled to subrogation for payment of mortgage). It requires reversal of the order below.
Reversed.
. We agree that the counts based on assignment, amount stated, and open account were properly dismissed.
. Scharps relies on the possibility that Price may have paid Farnsworth before the foal was actually bom and therefore before the appellee was obliged to make payment. Since the foal was in fact born, however, this circumstance, even if true, would have no effect upon Scharps’ liability to Price, as the one who paid a debt for which he was primarily liable.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Trueman Fertilizer Co. v. Allison, 81 So. 2d 734 (Fla. 1955)
- Charles "Bebe" Rebozo v. Royal Indem. Co. & Baldwin Ins. Agency, Inc., 369 So. 2d 644 (Fla. 3d DCA 1979)