#### JAMES SMITH AND AL. *v.s*JAMES C. TURRENTINE AND AL.

If a deed of trust provides for the payment of ene creditor, in the first place, and then provides for the payment of other creditors as a *second class,*the first creditor may call on the trustee for an account and for payment, to the extent of the trust fund, without making the creditors of the *second class*parties.

But when the deed provides, that any payment, made by the bargainor, is to he credited, in extinguishment of the debt, on which it is ¡oaid, the creditors of the second class are interested in the amount of such payment, and are, therefore, necessary parties, in order that they may be bound, and the trustees protected.

Where an objection, for the want of parties, is taken in the Supreme Court for the first time, it is almost “a matter of course,” to remand the case at ttie costs of the plaintiff. But where the defendant is a trustee, answers fully, states the conflicting claims of the plaintiffs and others to the trust fund, and asks that, for his protection, these others may he made parties, *186but the plaintiffs urge the case to a hearing, without making such parties, this Court will not remand for that purpose.

Creditors, secured by a deed of trust, accepted by the trustee,'may require, the execution of the trusts, though not privy to the execution of the deed.

The case of *Ingram r Kirkpatrick,*6 Ire. Eq. 463, cited and approved.

Cause removed from the Court, of Equity of Orange County, at the Fall Term, 1851.

Haughion, for the plaintiff.

*W II. Haywood,*for the defendant.

Pearson, J.

James Smith, one of the plaintiffs, being indebted to Turner, one of the defendants, and being under obligation to save him harmless as his surety to sundry persons for a large amount, and being also indebted to divers other persons, in January, 1846, executed to Turren-tine, the other defendant, a deed in trust, conveying and assigning to him eighteen quarter sections of land in the State of Illinois, and sundry evidences of debts, in trust, first, to pay to said Turner, out of the proceeds of the sale of the land and out of the money to be collected upon the evidences of debt, all of his debt against the said James Smith, and to indemnify him against all of his liabilities as. the surety of said James Smith ; and in the second place, to apply the surplus, if any, to the payment of the debts due to the other persons named in the deed. The deed further provided, and contains this clause: •' Any and all sums of money that the said James Smith shall pay to any one of the persons herein secured shall be duly credited on the respective claims of the parties herein secured and shall be credited on first sums secured to each one, and not to the last and general ciass.” This deed was signed and sealed by the plaintiff, James Smith, and the defendant, Turrentine. Afterwards, the defendant, Turner, brought *187suit for the debt due him, recovered judgment, and caused execution to be issued and levied upon several tracts of land and other property, as the property of James Smith, and, at the sale by the sheriff', became the purchaser for very low prices, the sale being forbid by the plaintiffs.

The defendant, Turner, then instituted suits to recover several portions of the property thus purchased by him, which was in possession of and claimed by the other plaintiffs. Whereupon, in March, 1847, the defendant, Turner, and all of the plaintiffs, made a compromise and executed a covenant, by which Turner agreed' to convey (without warranty of title) the land on Price’s Creek, which he had bought as the property of James Smith, to the plaintiff Mary Smith, in fee, and to convey in fee to the plaintiffs, Francis and Sidney Smith, or to either, with the consent of the other, all of the other property which he had purchased as belonging to the plaintiff, James Smith, and furr ther to assign and release to them, or to either, with the consent of the other, all of his claim and interest, under the deed in trust, executed by James Smith to the defendant^ Turrentine. In consideration whereof, the plaintiffs, James Smith, Sidney, Francis, and Mary Smith, agreed to pay to Turner the amount then due to him by James Smith, and to indemnify him against all such amounts as he was bound for, as the surety of James Smith ; and in order to secure the due performance of this covenant, it was agreed, ,that one or the other of the said James, Sidney, Francis, or Mary Smith, should execute to Turner a note with approved security, within three months after the execution of said covenant. The note with approved security was not executed by the plaintiffs or any one of them in pursuance of the covenant; and thereupon, Turner recovered, in an action on the covenant, a large -sum to the amount of the debt due him by, and his liabilities for,'the plaintiff,'James *188Smith, which sum was paid to him by the plaintiffs or some of them.

In April, 1849, the defendant, Turrentine, at the instance of the plaintiffs, sold the eighteen quarter sections of land, and the plaintiffs, Francis and Sidney, became the purchasers at the aggregate sum of $1000, for which they executed their note with surety, payable to said Turrentine. The amount due upon the debts set .out in the deed in trust has also been collected, with the exception of a note on Francis Smith, which the plaintiffs aver was inserted in the deed by inadvertence. The proceeds of the trust fund are less than the amount paid to'Turner upon his judgment.

The plaintiffs allege, that the defendant, Turner, has not performed the stipulations on his part, contained in the covenant of compromise, and, in the words of the bill, “Indeed the only portion of performance on his part, consists in dismissing the suits.pending at the time of the adjustment, and in executing an informal assignment to one Doctor Francis Smith, of his claim against .Tames Smith, by reason of money paid as his surety, &c., and a judgment in his favor against the administrator of Thomas Faddis.” The plaintiffs insist, that they are entitled to a specific performance of the covenant on the part of Turner; and pray that he may be decreed to execute deeds, according to his covenant to the plaintiffs, Mary, Francis and Sidney. The plaintiffs, Mary, Francis and Sidney, further allege, that they have satisfied the judgment recovered by Turner upon the covenant of compromise ; and they insist, that they have an equity to be substituted to the rights of Turner, under the deed of trust; and pray, that Turrentine be decreed to account for the trust fund, and to pay the whole of if including tiie note of $1,000, over to them, inasmuch as the amount paid to Turner exceeds the said fund. The. plaintiff, James Smith, does not pray for any relief.

*189The defendant, Turner, alleges, that he has performed the covenant of compromise, by dismissing the suits which were pending, in his name, tor the property purchased by him, and by executing deeds for the property, and for his interest under the deed of trust; and if the deeds already executed are not sufficient, he submits now to execute such as may be approved of by the Court; and avers, that he has, at all times, been ready and willing to do so. — Copies of these deeds are filed as exhibits. — They refer to the covenant of compromise, and acknowledge as a consideration, the due performance of said covenant on the part of the plaintiffs.

The defendant, Turrentine, alleges, that he has, at all times, been ready to account and to pay over the trust fund to the parties entitled to it; but he avers, that he has been notified by the defendant, Turner, as the agent of one Wood, who is a creditor secured in the second class, that Wood, and, as he is informed by Turner, the other creditors in that class, insist, that the debt of Turner was paid by the plaintiff, James Smith, and not by the other plaintiffs, Mary, Francis and Sidney Smith: and that, by the terms of the deed in trust, this payment by the plaintiff; James Smith, of the debt due to Turner, has the effect of extinguishing that debt, so as to inure to their benefit, and entitle them to the whole of the trust fund. He further ave.rs, that in support of the allegation, that the debt to Turner was, in fact, paid by James Smith, the said Turner exhibited to him copies of the judgments taken by the plaintiffs, Mary, Francis and Sidney, respectively, against James Smith, for the sum of $2500 each, upon notes executed to them by James Smith, which notes express upon their face the fact, that the said Mary, Francis, and Sidney, respectively, had advanced in cash,/or *James Smithf*the sum of $2,500 *to Josiah Turner;*copies of these judgments and notes *190-are annexed as pait of the answer. The defendant insists, that he ought not to be required to take upon himself the ■■responsibility of deciding, whether the payment to Turner was made by the plaintiff, James Smith, or by the other plaintiffs; and he insists, that to relieve him. from this responsibility, the creditors of the second class ought to be ■made parties, so as to be bound *by*the decree.

As to the defendant, Turner, the bill must be dismissed with costs. He avers, that he has performed his part of *the*-■covenant, and exhibits copies of the deeds executed by him. The plaintiffs have taken no exception to them, and they -are in conformity with the stipulations of his covenant.

The objection, for the want of parties, taken by the defendant, Turpentine, is well founded. If a deed of trust .provides for the payment of one creditor in the first place, and then provides for the payment of other creditors as a *-second class,*there can be no doubt, that the first creditor may call on the trustee lor an account and for payment, to -the extent of the trust fund, without making the creditors of the second class .parties ; for there is no question, in respect to -which they are directly concerned, except the amount of the debt of the first creditor, and as to that, the trustee can protect their rights. But the clause, in the deed of trust above recited, by which any payment made by James Smith, is to be credited in extinguishment of the debt, upon which it is paid, presents a question entirely ■different-. The mere suggestion of the fact, that the creditors in the second class insist, that the debt of Turner was paid by James Smith, and not by the other plaintiffs, shows -at once, that the question, by whom was Turner paid? is one in which they are directly concerned, and as to which this Court should make no declaration, without giving them an opportunity of being heard, so as to bind them and protect -the -trustee. ' But, when this suggestion is supported *191by the exhibit of the- judgments, rendered upon the -notes for $2500 each,, executed by James Smith to the other plaintiffs respectively, the consideration- of which is *for cash advanced by them- to enable him to.pay the debt of*Turner, the bare statement, without argument or authority, proves that the creditors of the second class are necessary parties, and ought *to*be heard. It was-contended by Mr. Haughton, that as the creditors, of the second class were not parties to the deed of trust, and had no privity or connection with its execution, they acquired no-right under it» and for that reason, were not necessary parties. This question is fully discussed and settled by the case of *Ingram v*Kirkpatrick, 6 Ired. Eq. 463.

The day after the- case was argued, and left with the Court, Mr. Haughton moved, that if the Court should decide that the creditors of the second class were necessary parties, the plaintiffs should have permission to remand'the case for the purpose of obtaining leave to amend in the Court below, by making parties. When the objection for the want of parties is taken in this Court, for the first time, it is almost “a matter of course” to remand the case,.at the costs of the plaintiffs. But in the present case, the defendant, without attempting to- evade an answer by a plea for the want of parties, has answered fully, submitting to account with the party entitled to the trust fund. In his-answer, he sets out clearly the difficulty in whicn he is likely to be involved, by the conflicting pretensions of the plaintiffs, who claim- to be substituted to the rights of Turner, and the pretensions of the creditors of the second class, and he asks, most reasonably, as we think, not to be required to take the side of either, but to be protected, by having the creditors of the second class made parties, so as to bind them by the decree. The plaintiffs reject this reasonable request,, and urge the case to a hearing: thus showing eith*192er that they care not for the protection of the defendant, who is a mere stake-holder, or are unwilling to meet the creditors of the second class upon .the issue, who paid the debt of Turner ?

Under these circumstances, we are forced, according to the course of this Court, to refuse the motion to remand. The bill must be dismissed as to the defendant Turrentine, for want of parties, with costs.

Per Curiam. Decree accordingly.