Case ID: sc-eq_19/html/0179-01.html
Source: Caselaw Access Project
Author: {"author": "Dunkin, Ch. Dunkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Bank of the State of South Carolina vs. James B. Campbell, James Rose and others; James Rose and others vs. The Bank of the State of South Carolina, James B. Campbell and others.
    
    By the terms of the Fire Loan Act, 7 Stat. 157, the Bank, before lending, must he satisfied that the property proposed to be mortgaged to secure the loan, “is free from incumbrances.” Application was made for a loan under this Act, on a pledge of property already incumbered by a mortgage to the Bank, and it was verbally stipulated between the parties, that the mortgage for the fire loan should have precedence of the prior mortgage, and be regarded as the first lien. Held, that the stipulation was binding on the mortgagors; and that a subsequent purchaser at sheriff’s sale of the equity of redemption took subject to both mortgages.
    Joint tenants, five in number, borrowed money on their joint note, and, to secure its payment, a mortgage, purporting to convey the whole estate in the joint property to secure the sum borrowed and any sums which might thereafter be borrowed, was drawn in the name of the five joint tenants, but was, in fact, executed by only four of them. The money borrowed was carried to their credit, on the account book kept by their clerk, as money borrowed “on mortgage of the premises.” The mortgage was recorded, and further sums were afterwards borrowed from the same lender on the joint notes of the mortgagors. Held, that the joint tenant who had not executed the mortgage, must beVpiesumcd to have known of it, and was bound by it as an equitable estoppel; and that a subsequent purchaser, at sheriíf’s sale, of the title of the mortgagors, was also bound by it.
    
      A judgment creditor is bound by all prior equities which bind his debtor,, and so is a purchaser at sheriff’s sale under the judgment.
    The trustees of a company borrowed money for the use of the company, and mortgaged property, which they held for the use of .the company, to secure the payment of the money borrowed, and afterwards, on the company being incorporated, conveyed the mortgaged premises to the corporation. The corporation also borrowed money from the same lender on mortgage of the premises, and it was agreed, between all the parties, that the mortgage by the corporation should take precedence of the mortgage by the trustees and be considered as the first lien. The lender sued the trustees for the money borrowed by them, recovered judgment and assigned it. Held, that the trustees stood as sureties for the corporation, and had the right as sureties to the security of the mortgage given by them. Held, further, that they might sustain a bill against the lender and his assignee, and a purchaser at sheriff’s sale of the corporation’s equity of redemption, to compel a resort, in the first instance, to the mortgaged premises before enforcing the judgment recovered against them.
    In order fully to understand these cases, reference should be made to the case of Robert Wotherspoon, James Rose, William A. Carson, Henry Gourdin and Richard W. ^Cogdell against The Bank of the State of South Carolina, reported in Speers’ Eq. 48S. Before that case was heard in the Court of Appeals, the bill in the case first above stated was filed. It alleges that Robert Wotherspoon, James Rose, William A. Carson, Henry Gourdin and Richard W. Cogdell, on the 24th May, 1837, being seized and possessed of a lot of land in Meeting street, on -which the New Theatre is erected, borrowed, on account of the company engaged in building said Theatre, six thousand dollars, and to secure the said loan, and any future loans which might be granted to them on the same account, mortgaged to the complainants the whole of the said lot, and all the buildings and erections, with the rights, members and appurtenances thereunto belonging, and that on the same account, other loans were made, and payments received from time to time, until the -said debt reached the sum of-which, with interest from -- is now justly due and owing to the complainants, and secured by the said mortgage. That by an Act passed on the 20th December* 1837, the company for whom the mortgagors had acted in the foregoing matters, were incorporated by the style and title of the Charleston New Theatre Company. That on the 16th September, 1839, the mortgagors conveyed the premises to the corporation, and the corporation obtained a further loan from the complainants, under the provisions of the Act for rebuilding the city of Charleston, to the amount of six thousand five hundred dollars, and by deed bearing date the 19th November, 1839, mortgaged the premises to secure the payment of the same according to the provisions of the Fire Loan ; and it was then and there stipulated in behalf of the complainants, that as between the complainants and the said Robert Wotherspoon, James Rose, Henry Gourdin, W. A. Carson and R. W. Cogdell, the said mortgage for the Fire Loan should be regarded as the first mortgage, and have priority to the mortgage of the 24th May, 1837. But the complainants did not agree to release the mortgage of the 24th May, nor to give up any security which they held for the payment of the whole of the money which they had thus lent and advanced on account of the Theatre.
    That on the 7th March, 1842, under a judicial sale by the sheriff of Charleston District, by virtue of an execution of Cornelius & Co. against the Charleston New Theatre Company, the house belonging to the corporation was sold, and conveyed by Alex. H. Brown, sheriff of Charleston District, to James B. Campbell, Esq. for the sum of twenty dollars, who entered upon his title so acquired, and has taken the rents and profits of the same to his own use. That Robert Wotherspoon, one of the mortgagors before mentioned, has become bankrupt, and his estate assigned to Richard Yeadon, Esq. and the incorporated company, called the Charleston New Theatre Company, is insolvent, and has ceased to do any corporate act.
    The bill prayed that the mortgaged premises be sold to satisfy, 1st. the mortgage of 1839, and 2dly. the mortgage of 1837.
    The answer of the Charleston New Theatre Company admitted the allegations of the bill, and that the complainants were justly entitled to a sale of 'the mortgaged. premises. The answer of James Rose, Henry Gourdin, William A. Carson and Richard W. Cogdell, was to the same effect.
    The defendant, James B. Campbell, in his answer, neither admitted or denied the existence of the mortgage deed of May 24th, 1837, in manner and form as set forth in the bill; but for the terms of the same, referred to the original deed itself, when it should be produced for inspection. But he altogether denied that it was then, or had been since his purchase, a valid subsisting security, and claimed that, if it ever did exist, it had been long since in law cancelled and annulled, and ought to be formally satisfied and discharged ; and insisted, that the debt claimed to be secured by the mortgage, was a new and subsequent debt, for which the mortgage never was a security. And he relied upon the law of the land, prescribing the only order and manner in which mortgages shall be paid, and upon the circumstances and transactions between the parties, to show that the prior mortgage of May 24th, 1837, ought to be deemed to have been satisfied at the time of the Fire Loan mortgage. And especially did he rely upon the judicial opinion of his Honor Chancellor Dunkin, delivered at the instance of the complainants in the case of Wotherspoon and others against the Bank.
    The case was heard before JohNstoN, Ch. at Charleston, February, 1844. At the hearing, the allegations of the bill were substantially proved. It appeared, however, that the mortgage of the 24th May, 1837, was not signed by W.‘ A. Carson, one of the defendants, as alleged in the bill.
    His Honor took time to consider of his decree; and on the 23d November, 1844, the complainants recovered judgment in the Common Pleas, and issued execution thereon, against the defendants, James Rose, William A. Carson, Henry Gourdin and R. W. Cogdell, for the debt alleged to be secured by the mortgage of 1837, and on the same day assigned the judgment to Martin, Starr and Walter.
    On the same day, the defendants, James Rose, W. A. Carson, Henry Gouidin and R. W. Cogdell, filed their cross bill against the Bank of the State of South Carolina, James B. Campbell, Martin, Starr & Walter and the Charleston New Theatre Company, in which, after alleging the proceedings in the original suit and the assignment to Martin, Starr and Walter, they pray for a sale of the premises to satisfy the mortgages, for an account of the rents and profits, <fec. and for an injunction to restrain proceedings under the judgment recovered against them.
    On the 25th November, the complainants, The Bank, having no further interest in the cause, moved the court to dismiss their bill on payment of costs. This motion was refused; see the case as reported, 1 Rich. Eq. 292.
    On the 29th November, his Honor, Chancellor JohnstoN, filed his circuit decree, as follows:
    Johnston, Ch. The pleadings and the evidence indicated by my notes taken at the hearing, sufficiently state the case.
    In the suit brought by the trustees against the Bank, a point was decided which .may -assist, to some extent, in the determination of this case. It was there established, as a matter of fact, that, at the execution of the mortgage of 1839, a binding stipulation was made between the Bank and the trustees that that mortgage should take precedence of the mortgage of 1837 ; and upon that ground the trustees’ bill was dismissed. That decree is binding on the trustees, and estops them from contesting here the rights of the Bank to observe that order in the application of the fruits of their two mortgages which conforms to the stipulations ; and which will throw the burden upon the trustees, of satisfying any thing that may' remain due on the senior mortgage, after the avails of the mortgaged premises shall have been applied, first, to the junior, and then, as far as they may extend, to the senior mortgage.
    The only question left open as between the parties mentioned, is, whether the mortgages are unsatisfied and forfeited : and the answer of the trustees in this suit solves that question against •them.
    There is, therefore, no difficulty in this case, so far as the trustees are concerned ; the only difficulties arise out of the defence of Mr. Campbell.
    How stands the case as regards this defendant?
    It has been established here that the mortgage of 1837, was a pledge of land held by the trustees in trust for the company ; that it secured notes, discounted and to be discounted, for the benefit of the company, and of which they reeeived the benefit $ that the title of the land was then released and conveyed by the trustees to the company, to enable them by further mortgage to raise further sums of money; which they did by the fire loan and mortgage of 1839.
    If we pause at this stage of the proceedings, will it admit of a doubt that, as between the company and the trustees, the company was bound to assume the debt of the trustees, and exonerate them from ail personal responsibility under the mortgage of 1837 7 To all intents, the trustees were the sureties of the company: being bound for a debt, the benefits of which were received by the company, and the company having received property from them which was bound for the same demand.
    In this condition of affairs the judgment was obtained, under which Mr. Campbell bought the company’s equity of redemption. Mr. Campbell claims the rights of the judgment creditor ; and he is entitled to them — -but what complaint could this creditor make?
    
      It is said, that by the terms of the fire loan act, the Bank was inhibited from making loans on property already incumbered: and that the loan of 1839, was equivalent to a certificate from the Bank to the creditor that the lien of 1837 was satisfied. The Bauk is an institution of the State ; and the statute must be considered as the direction of the State to its agent in the dispensation of a great public charity, extended to the sufferers by the fire of 1838. The object and meaning of the Act cannot be mistaken. The directions were given with a view to the safety of the loan to be effected, and to secure a return of the money.
    If a money lender were instructing his attorney in relation to monies put into his hands to be let out, be would give just such directions as the Legislature gave to its fiscal agent here; but if the attorney should, through oversight or an enterprising temper, take a new security while an older one still subsisted against the person accommodated; is it conceivable that his wrong amounted to more than a mere disobedience of orders'! He might be responsible to his principal for any consequent loss, but the instructions of the principal could never be construed to represent an intention on his part that a disobedience of orders in making new contracts, should operate as a release of pre-existing contracts. This parallel is of service in the inquiry which now occupies us ; — what was the intention of the Act ? For if in the case I have supposed, we could not ascribe to a prudent man the intention to release all his debts, are we at liberty, under circumstances precisely similar, to attribute such a degree of folly to the State? The Bank may have acted unwisely in making the loan of 1839 ; but if so, she is answerable to the State, who has suffered the wrong.
    It is surmised, that the judgment creditor may have been betrayed by the conduct of the Bank into a wrong impression with regard to his debtor. But how ? The mortgage of 1837 was on record, and informed him that the debt of 1837 existed. Here was due notice. Why, then, should he, in a question whether the debt was satisfied or not, draw his conclusions, by mere implication, from the acts of the mortgagee, instead of going and putting the question plainly to him ? Why should he conclude that the prior debt was either released or satisfied, when the statute does not declare it so ?
    Then it is argued that the note given by the trustees in 1840, must operate as a payment of the debt, and extinguish the mortgage of 1837. It is not absolutely certain that this note, which was executed in precisely the form described in the mortgage, might not be passed as one of the after discounts covered by the terms of the mortgage. But suppose it operated as a payment. As I have said, the trustees were substantially sureties on the mortgage debt of 1837; and if a surety pays a debt, he is entitled to the benefit of the security thereby extinguished; and upon the principle of Finch vs. Winchelsea, 1 P. Wms. 277, he who extinguishes a specific lien, has a right to set it up, though he thereby disappoint a general creditor, such as the holder of a judgment.
    If Mr. Campbell, therefore, measures his rights by those of the creditor, under whose judgment he purchased, his defence cannot avail him.
    If he resorts to another position, and presents himself in the light of a subsequent purchaser, that will not vary the conclusion. For, as a purchaser, he was as little liable to be imposed on by the acts of the Bank, and had as little right to infer the satisfaction of the old mortgage, as the judgment creditor. In-1 deed, as a purchaser, unless under peculiar circumstances, he can stand but in two relations, and occupy but two positions. His relations are to the creditor under whose judgment he bought, and to the debtor whose property was sold to him. He can have no rights which the one or the other of these cannot uphold. We have seen that the former could have no just objections to urge. -Still less could the latter complain : the acts out of which the complaint must arise being all traceable to the company themselves, the debtors in this case.
    In stating the rights of a purchaser under judicial process, as I have, I accommodated my expressions rather to the general opinions, than to my own opinion : which is more briefly this ; that the purchaser’s rights are measured by those of the creditor: and the creditor’s rights extend only to those which the debtor had when the lien or credit commenced; together with the privilege of setting aside any rights of which the debtor was subse-1 quently deprived by fraud or collusion.
    The plain fact, after all that can be said, is, that this defendant bought the company’s equity of redemption, and is bound to redeem to the same extent as the company. The company was bound by the liens. He has bought the property at a certain sum, subject to the incumbrances ; which is the same thing as if he had agreed to give the amount of the incumbrances and that sum for the property : so that although not personally bound for the debts, he would have no right even as between himself and the company, to call on them to reimburse him for, or assist him to pay, what he may be obliged to expend in satisfying the incumbrances. In other words, he could not obtain property at a diminished sum, in consequence of its burdens, and then call on him whose property has been thus sacrificed, to make it valuable to him. I have said' this, not with reference to this case, or to any pretension of the sort set up here, but because I believe a very general error of opinion exists upon the subject.
    A single remark will close this judgment: and it is, that to this defendant, whose property is liable to the extent of both the mortgages, it can make no sort of difference in what order these liens are to be satisfied : nor can it have been any injury to him that the loan of 1839 was applied in part satisfaction of the first mortgage : he was, on the contrary, benefited by 'the application, since it diminished a debt for which his property was responsible.
    It is decreed and adjudged, that the plaintiffs are entitled to have a foreclosure of both mortgages, which will be ordered as soon as it shall be ascertained what is due on them respectively; and that in case of sale, the proceeds be applied, in the first instance, to the junior mortgage. That the plaintiffs are also entitled to an account of the rents and profits of the mortgaged premises from the defendant, Mr. Campbell, from the time of his purchase; to be applied in the same order of payment. And they are entitled to a decree against the defendants, the trustees, for any balance that may remain of the mortgage of 1837, unsatisfied by the said foreclosure, sale, and the said rents and profits.
    It is ordered, that the masters of the court take and state the accounts.
    On the 13th and 14th days of February, 1845, the cross bill was heard, on evidence and argument, before his Honor, Chancellor Dunkikt, at Charleston, who, in May following, filed an interlocutory order, enjoining Martin, Starr & Walter from enforcing the judgment assigned to them by the Bank.
    The defendant, J. B. Campbell, appealed from the decree of Chancellor Johwston, and the order overruling the motion to dismiss, on the following grounds :
    1. Because before decree or decretal order of any sort, pronounced or filed, the complainants having moved to dismiss their bill on payment of eosts, the same should have been allowed, and this defendant is entitled to the benefit of said motion, and no decree should thereafter have been pronounced.
    2. Because so far as this defendant is concerned, and had or could have notice, his co-defendants, James Rose and others, trustees, were not sureties, but principal debtors, to complainants, and this defendant cannot be aifected by secret subsisting equities between the trustees and other parties, to which he was in no wise privy, and without notice.
    3. Because if it is true that the trustees are sureties, and defendant’s title in fee at law is subject to equities binding upon him, of which he could have no notice, then at least the trustees, having a double security, which equity will marshal, cannot be aided by the mortgage of May 24th, 1837, until they shall have first exhausted the capital of the New Theatre Company, which capital is within the reach of the trustees, and not within the reach of this defendant, and is a full and perfect indemnity for their liabilities as sureties for the corporation, and it is only by the laches of the trustees that said capital has not been long since applied in full discharge of all debts and liabilities of the corporation.
    4. Because, if the senior mortgage is in fact still subsisting, it is entitled by express provision of law to be paid in the order of date of its record, " and in no other order.” But it having been already adjudged, that the mortgage junior in date of record is entitled to precedence of payment, this appellant insists it is thereby established that said mortgage of May 24th, 1837, is extinguished, and no longer a subsisting lien upon the premises.
    5. Because the corporation having executed the fire loan mortgage with a warranty of title therein, are estopped from setting up for their benefit, through their trustees, a prior incumbrance, to defeat said mortgage, in open breach of their covenant of warranty. •
    6. Because the mortgage of May 24, 1837, never was executed, as alledged in the bill, inasmuch as William A. Carson, one of the co-tenants in fee, never did execute the same, but all the co-tenants did join in the execution of the conveyance in fee to the corporation under which' this appellant holds, and thereby the interest of William A. Carson, at least, passed to appellant unincumbered by said mortgage.
    7. Because the verbal agreement (if.any such were ever made,) to postpone one mortgage to the other, while both were preserved as existing liens, is clearly within the Statute of Frauds and void, and the plea in that respect should have been sustained.
    8. Because the evidence is positive as against the defendants, James Rose and others, trustees, that there never was any such agreement as the pretensive agreement merely to postpone. The affidavit produced at the hearing of James Rose, who was the agent of all parties in the transaction, is positive, that he and his co-trustees “ were strangers to any such agreement,” and it is against equity and good conscience to aid them in claiming the benefit of an agreement, which they boldly deny ever to have had existence.
    9. Because the Act of Assembly, known as the “ Fire Loan Act,” having provided and required that the Bank of the State (the complainants) “shall be satisfied with the titles, and that it, the land, is free from incumbrances, prior to making any loan under said Act,” it will, in the absence of proof to the contrary, be assumed that the Bank did in good faith discharge their trust, and that the prior incumbrance is properly extinguished. And least of all, it cannot be permitted in this court, that James Rose, the President and Agent of the Bank in this transaction, Wm. A. Carson, a director, and R. W, Cogdell, an officer of the Bank, with full notice, should, as parties, now claim relief and personal benefit from a neglect of duty on the part of the Bank, produced by their own acts, and the greater part of the benefits of which they had.
    10. Because a certain, cheap and expeditious form of foreclosure is provided by the fire loan Act, and in this case, by the fire loan bond and mortgage, the benefit of which this defendant is entitled to, and the requisites of which have in no wise been complied with on the part of the complainants.
    11. Because this defendant is not liable to account for rents and profits from the time of his purchase.
    12. Because the decree is in other respects against law and equity.
    The defendants, Martin, Starr & Walter, appealed from the prder for an injunction made on the cross bill, on the following grounds :
    1. Because the said defendants, Martin, Starr & Walter, are creditors having a judgment execution at law, and have a complete legal right to levy the same, without hinderances on thp part qf their debtors,
    
      2. Because all the equities set up in the bill for an injunction are denied in the answer, and no proof whatever having been offered by the complainants to sustain their allegations, the case presents the aspect of a creditor, having a bond of his debtor secured by mortgage, and the fact of having such mortgage is made to prevent his recovering his money at law upon the bond; thus making it worse for the creditor to have a security, than to be without one.
    3. Because the court has twice decided that the Bank of the State, the original creditor, could not be stayed from enforcing their legal remedy, even before judgment recovered; but now after judgment duly recovered their assignee is restrained, when no change in the case has occurred, other than a change of parties.
    4.' Because the orders worked a prejudice to the defendants, Martin, Starr & Walter, in withholding a large amount of interest, and principal now absolutely due them, without any sufficient protection to their, interests in case the court shall see fit to reverse them.
    5. Because the order is in other respects contrary to law and the principles of equity.
    
      Torre, Hunt and Bailey, for Mr. Campbell.
    
      Petigru, for Mr. Rose and the other trustees,
    
      Memminger, for Martin, Starr & Walter.
   In the case of the Bank against Campbell and others, the opinion of the court was delivered by Dunkin, Ch., as follows :

Dunkin, Ch.

On the points discussed by the Chancellor, this court is satisfied with his conclusions, and do not deem it necessary to add any thing to the reasoning of the decree.

The question involved in the sixth ground of appeal, was not considered by him, because, from the slight or imperfect manner in which it was presented at\the hearing, it had escaped his further notice. It might well be so. The point is not presented by the pleadings, either in the answer of the trustees or of the appellant. The answers of the trustees and of the Theatre Company admit the execution of the mortgage of May, 1837. “The only question left open,” says the Chancellor, “ as between the parties mentioned,” (i. e. the Bank of the State and the trustees,) “ is, whether the mortgages are unsatisfied and forfeited ; and the answer of the trustees in this suit solves that question against ¡them.” But it is justly insisted on the part of the appellant, that he is not bound by the answer of the trustees — that he stands on his own rights, unaffected by the questions raised or admissions made by the trustees.

It is proper, then, first, to inquire whether, as between the Bank and W. A. Carson, the decree for foreclosure can be sustained, independent of his admissions. The mortgage bears date the 24th May, 1837. It is in the name of all the five trustees ; recites a note of six thousand dollars made by the trustees, and purports to convey the entire premises to the Bank by way of mortgage, to secure the payment of this note and its renewals, and of any other note or notes which the trustees might thereafter have discounted by that institution. The mortgage bears the signature of only four out of the five trustees. But in the account book of the trustees, kept by their clerk and treasurer, the nett proceeds of the first note is carried to their credit on the 25th May, 1837, as “ discounted by the Bank of the State, and on mortgage of the premises.” The mortgage was recorded on the 5th June, 1837, and notes were subsequently made and signed by all the trustees, and discounted by the Bank of the State, amounting, at one period, to the sum of eighteen thousand dollars. “There is no principle,” says Chancellor Kent, in Wendell vs. Van Rensselaer, 1 J. C. R. 354, better established in this court, nor one founded on more solid considerations of equity and public utility, than that which declares that if one man knowingly, though he does it passively, by looking on, suffers another to purchase, and expend money on land under an erroneous opinion of title, without making known his claim, he should not af-terwards be permitted to exercise his legal right against such person. It would be an act of fraud and injustice, and his conscience is bound by this equitable estoppel. Qui tacet, consen-tiré videtur. Qui-potest et debet vetare, jubet.” If Mr. Carson, or any one representing him, had relied on the defence now assumed, his conscience would be bound by the equitable estoppel. His signature is proved to the notes, to secure which the mortgage was executed. On the next day, an entry is made in a book kept by their own clerk, open to the inspection of all, and to which all the trustees must be presumed to be privy, that the discount of the note was made by the Bank of the State on mortgage of the premises,” and the mortgage was placed on the records of the country in ten days afterwards. Did he not then know of the mortgage ? But if a mere bystander is estopped, who, from fraud or folly, permits injury to be done, how much more strongly should the principle be enforced against one who has participated in the advantages of the sale, and received his proportion of the consideration money. Certainly under such circumstances, very slight evidence of acquiescence would preclude a defendant from insisting on his legal title. If Mr. Carson had made the defence, the court is of opinion, that on the evidence submitted, it would not have availed him. The inquiry then remains whether the purchaser at sheriff’s sales is in any better condition.

The rights of a purchaser at-sheriffs’ sales are very fully considered in the decree, and it is proposed only to apply the principle to the case presented by the appeal. The rule is well settled, that a person having a particular equity is preferred to a general incumbrancer on-the-estate. In Ashe vs. Livingston, 2 Bay, 80, even an unrecorded mortgage was declared to have precedence over a junior judgment, and the rights of an equitable mortgagee are fully recognized in Read vs. Simons, 2 Dess. R. 552, and Dow vs. Ker, Sp. Eq. 414. The purchaser at sheriffs’ sales is invested with all the rights of the creditor, and no more, and these are shown to be subordinate to the equitable rights of the Bank.

The decree declares the defendant liable to account for the rents and profits from the date of his purchase, in March, 1842, and this is the foundation of the eleventh ground of appeal. All the court are of opinion that the account for rents and profits cannot be carried beyond the period when the demand was made, to wit: the 31st October, 1843. In this respect, the decree is modified. In all other matters, the decree of the circuit court is affirmed, and the appeal dismissed.

Johnson, Oh. concurred.

In the case of Rose and others against Martin, Starr & Walter and others, Dunkin, Ch. delivered the opinion of the court, as follows:

Dunkin, Ch.

It was not doubted at the hearing, nor is it susceptible of reasonable doubt, that Martin, Starr <£ Walter occupy; precisely, the position of the Bank of the State, from whom they purchased the judgment against the complainants.

In addition to what is said in the decree, it may be observed that, by the rules of law, mortgages should be paid according to their priority. The complainants were not liable for the fire loan ; and on general principles, they might well insist that the proceeds of the mortgaged premises should be first applied to the extinguishment of that debt to secure which the mortgage of May, 1837, was given, and for which only they are sureties. But the action of the Bank has changed the order of payment, has established a particular equity, as between themselves and the complainants, to have the payment of the first mortgage postponed to that of the fire loan. They have properly obtained a decree in derogation of the ordinary rights of the sureties ; and which rights might, probably, be insisted on against all others except the Bank of the State. Having, by their previous action, thus varied the position of the complainants, they cannot be now permitted to enforce their judgment at law, and leave the complainants to litigate their ulterior rights under these disadvantages.

It is ordered, that the decree of the circuit court be affirmed.

Johjsson and Johnston, CC. concurred. 
      
       It is believed, that after the order for an injunction was made in this case, his Honor, Chancellor Dunkin, filed a circuit decree, of which, however, no copy has ever come to the hands of the Reporter,