Opinion of the Court.

Chancellor Walworth, in the case of Sanford v. McLean, 3 Paige, 122, said: "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 the money of a third person, and without any agreement that the security shall be assigned or kept on foot for the benefit of such third person, is absolutely extinguished."

In Memphis & Little Rock Railroad v. Dow, 120 U. S. 287, this court said: "The right of subrogation is not founded on contract. It is a creation of equity; is enforced solely for the purpose of accomplishing the ends of substantial justice, and is independent of any contractual relations between the parties."

In the case of Shinn v. Budd, 14 N. J. Eq. (1 McCarter) 234, the New Jersey Chancellor said (pp. 236-237):

"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 in aid of a mere volunteer. Legal substitution 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 encumbrances upon his estate, or of a coöbligor or surety who discharges the debt, or of an heir who pays the debts of the succession. Code Napoleon, book 3, tit. 3, art. 1251; Civil Code of Louisiana, art. 2157; 1 Pothier on Oblig., part 3, c. 1, art. 6, § 2. 'We are ignorant,' say the Supreme Court of Louisiana, 'of any law which gives to the party who furnishes money for the payment of a debt the rights 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, 9 Martin, 602; Curtis v. Kitchen, 8 Martin, 706; Cox v. Baldwin, 1 Miller's Louis. R. 147. The principle of legal substitution, as adopted and applied in our

Opinion of the Court.

system of equity, has, it is believed, been rigidly restrained within these limits."

The cases here referred to as having been decided in the Supreme Court of Louisiana are especially applicable, as the code of that State is in the main founded on the civil law from which this right of subrogation has been adopted by the chancery courts of this country. The latest case upon this subject is one from the appellate court of the State of Illinois-Suppiger v. Garrels, 20 Bradwell App. Ill. 625-the substance of which is thus stated in the syllabus:

"Subrogation in equity is confined to the relation of principal and surety and guarantors, to cases where a person to protect his own junior lien is compelled to remove one which is superior, and to cases of insurance. Any one who is under no legal obligation or liability to pay the debt is a stranger, and, if he pays the debt, a mere volunteer."

No case to the contrary has been shown by the researches of plaintiff in error, nor have we been able to find anything contravening these principles in our investigation of the subject. They are conclusive against the claim of the complainant here, who in this instance is a mere volunteer, who paid nobody's debt, who bought negotiable bonds in open market without anybody's indorsement, and as a matter of business. The complainant company has, therefore, no right to the subrogation which it sets up in the present action.

Without considering the other questions, which is unnecessary, the decree of the Circuit Court is

Affirmed.

These principles require also the affirmance of the decrees in the cases of Etna Life Insurance Co. v. Belmont, No. 1135, and Etna Life Insurance Co. v. Milford, No. 1136.

It is so ordered.

Opinion of the Court.

KNIGHT v. PAXTON.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS.

Submitted January 4, 1888. - Decided February 6, 1888.

An ante-nuptial settlement was excuted prior to 1867, by which J. M. conveyed to his brother T. M., land in Illinois, in trust for his intended wife, for her life, and in case of her death leaving a child or children, to such child or children, and in case of her death without a child, then to S. M. and O. L. for life, with remainder to J. M. and his heirs. In May, 1867, J. M., S. M., and O. L. joined in conveying the premises to the wife for the purpose of determining the trust and vesting their respective rights under the settlement in her absolutely. In 1872 J. M. and the wife joined in a trust deed of the premises, in the nature of a mortgage, to secure the payment of a debt of the husband. The trust deed purported to be acknowledged by the husband and wife; but after foreclosure and sale, the husband and wife, being in possession of the premises, set up as against the purchaser, that the wife had never acknowledged it, and that by reason thereof she had never parted with the homestead right in the premises secured to her by the law of Illinois. The purchaser filed this bill in equity, to have the wife's homestead right set off to her on a division, or, if the property was incapable of division, to have it discharged of it on the payment into court of $1000. Held: (1) That, without deciding the effect of the birth of a child, after the deed of May, 1867, as a restraint upon the alienation of the fee, the trust deed of 1872, under the Illinois statute of March 27, 1869, respecting deeds of femes covert, operated to convey the life estate of the wife to the grantee, and that no acknowledgment was necessary to its validity.

(2) Tha, the master having reported that the property could not be divided, the complainant was entitled to the possession of the whole premises, under the laws of Illinois, upon payment into court of $1000.

BILL in EQUITY. The case is stated in the opinion of the

court.

Mr. George L. Paddock for appellant.

Mr. L. H. Boutell for appellee.

MR. JUSTICE FIELD delivered the opinion of the court.

This suit was brought by James W. Paxton, the complainant below, in the Circuit Court of the United States for the

Opinion of the Court.

Northern District of Illinois, to obtain a decree that so much of certain described real property, situated in Chicago, as was of the value of one thousand dollars, be set off to the defendants for their homestead, and that the possession of the residue be delivered to him; or, if the premises could not be divided, that the possession of the whole be delivered to him on his paying into court for the use of the defendants the sum of one thousand dollars. The facts, as set forth in the bill, are in substance as follows: On the 13th of February, 1872, James M. Marshall, of Chicago, being indebted to the complainant in the sum of $10,000, executed and delivered to one Francis Bradley his bond of that date, in the penal sum of $20,000, conditioned to pay the amount of that indebtedness on the 13th of February, 1877, with semiannual interest; and also ten coupon notes, each for $450, payable to the order of the said Francis Bradley. The bond and coupon notes were on the same day assigned to the complainant, and Marshall and his wife at once executed a deed of the real property mentioned to one Lyman Baird, in trust for the security of the principal and interest of the bond and the coupon notes, and subject to a condition of defeasance on their payment according to their terms, and the performance of the covenants mentioned therein. This deed purported to be acknowledged by Marshall and his wife, and was on the following day recorded in the recorder's office of the county. Default having been made in the payment of the principal sum, the trustee, Baird, at the request of the complainant, and by virtue of the power contained in the trust deed, on the 8th of March, 1879, sold the premises and the title and equity of redemption of the grantors therein, for the sum of $10,000, to the complainant, he being the highest bidder therefor. A deed thereof was executed to him by the trustee. Immediately afterwards he demanded possession of the premises from Marshall and his wife, who were, when the trust deed was executed, in the occupation of the premises as a residence. But they refused to surrender them, and about a year afterwards set up that Susan Marshall, the wife, had never acknowledged the deed of trust, and by reason of this fact her homestead right in the

Opinion of the Court.

premises had never been released. The bill alleged that this was the first knowledge the complainant ever had of any such claim, and that he always believed the trust deed was properly acknowledged by both Marshall and his wife, and that thereby they had released all their right in the premises under the homestead laws of Illinois.

The bill also alleged that the value of the premises was greatly in excess of the value of the homestead rights therein, and that the complainant was entitled to the possession of so much thereof as might not be set off to the defendants for a homestead, or, in case the premises were incapable of division, he was entitled to the whole of them on payment into court of the sum of one thousand dollars for the use of the defendants, which payment he offered to make. The bill concluded with a prayer for a decree in accordance with these averments, as stated above, and for such other and further relief as the nature of the case might require.

Soon after the bill was filed, James M. Marshall died, and his widow filed a separate answer, setting up four defences: first, that the premises in question were conveyed on the 21st of November, 1860, by James M. Marshall, prior to her marriage with him, and in consideration thereof, to his brother, Thomas E. Marshall, in trust, as an ante- ptial settlement, and therefore she was incapable of executing the trust deed of February 13, 1872; second, that at the time this latter deed was signed she was confined to her bed by sickness, and by reason thereof, and the effect of narcotics prescribed by her physician to relieve her pain, she had not sufficient mental capacity to read and understand it; third, that when she signed it, her husband falsely stated to her that it related to other property which was situated in a different part of the city of Chicago; and, fourth, that after the bond secured by that deed became due, the time for payment was extended by the complainant in consideration of a rate of interest greater than that originally stipulated.

Of these objections, the first is the only one which requires consideration by this court. The other three are not sustained by the evidence in the case. That which bears upon them is