Mosher v. Conway
In Mosher v. Conway, 45 Ariz. 463, 468, 46 P.2d 110, 112 (1935), three people each purchased a lien on the same parcel of real property; each lien arose out of the property owner's failure to pay street assessment bonds for a different year. 45 Ariz. at 465-67, 46 P.2d at 111-12.
Although not stated explicitly by the court, the liens were not, under the statutes applicable to the bonds, in parity. This is a significant point, as the Court subsequently explain.
The purchaser of the second assessment lien ("B") redeemed the lien held by the purchaser of the first assessment lien ("A").
Subsequently, the property owner redeemed the second assessment lien purchased by B, and after that, B redeemed the third assessment lien held by "C." B's assignor then sued the property owner to foreclose the first and third assessment liens, even though they had been redeemed.
The issue before the supreme court was whether the first and third assessment liens could be foreclosed even though they had been redeemed. Id. at 468, 46 P.2d at 112.
After analyzing the purpose and requirements of equitable subrogation, the court held B had become subrogated to the rights of A when B redeemed the first lien because B had done so to protect his second assessment lien position: B became "subrogated to the rights which A had acquired by his purchase against the land involved." Id. at 469, 46 P.2d at 112.
Accordingly, although, like Sun Valley here, B had redeemed the first assessment lien, the court held the property "was still subject to the lien acquired by A under the first sale, and that such lien had passed to B by reason of his redemption." Id. at 470, 46 P.2d at 113.
The supreme court then determined what rights, if any, B had obtained when he redeemed the third assessment lien from C. Id.
The court found this to be a "more difficult" question because when B redeemed the third lien, his own lien - the second assessment lien - had been extinguished by the owner's redemption. Id.
The court recognized that because B held A's interest as a redemptioner and not as a purchaser it was questionable whether B's rights were superior to those of C. Id. "Such being the case," B was "justified in redeeming from C for the protection of his rights under A's lien, even though it might ultimately be determined as a matter of law that such redemption was not necessary." Id. at 470-71, 46 P.2d at 113.
Thus, the court held B had also become subrogated to the rights of C insofar as B had redeemed C's lien. Id. at 471, 46 P.2d at 113.
In Mosher v. Conway, Hughes purchased a lien for a street improvement assessment on certain lots. 45 Ariz. at 466, 46 P.2d at 111. Fox purchased a subsequent lien on the same property, and to protect that interest, redeemed the lien held by Hughes. Id.
The lot owner, Mosher, redeemed the second lien, purchased by Fox, but failed to pay the amount paid by Fox to redeem the first lien held by Hughes. Id. at 466-67, 46 P.2d at 111.
Skousen purchased a third improvement lien. Id. at 467, 46 P.2d at 112. "Fox was in doubt as to the effect of the purchase by Skousen under the third sale upon his interest, and paid to the superintendant of streets the proper amount to redeem from the sale to Skousen, which money was accepted by the latter." Id.
The Arizona Supreme Court found that Fox was subrogated to the rights Hughes had acquired in purchasing the first lien because Fox had redeemed that first lien to protect his interest in the second lien. Id. at 469, 46 P.2d at 112.
Although our supreme court found a closer question in determining what rights Fox gained from redeeming the third lien from Skousen, the court determined that, because there might be a question whether Fox's rights were superior to Skousen's (because Fox was a redemptioner rather than a purchaser), Fox was justified in redeeming the Skousen lien to protect his rights even if it was later found to be unnecessary, and so was subrogated to Skousen's rights. Id. at 470-71, 46 P.2d at 113.
In Mosher, Fox had a preexisting interest - protecting his rights regarding the second lien and then protecting his interest in the redeemed Hughes lien - for both of the transactions in which the court found subrogation.