#### Alfred D. Kerr v. James Cowen and Charles D. Conner.

Between creditors, whoso equities are equal, he who has the legal title pra-vails. But where he who has the legal title, bad notice, at the time he advanced his money, of an equity in the other, he is postponed. As where a note was endorsed to A by B as a security, and A made subse. quent advances to B, some before, and some after he had notice that the maker had an equitable set off to the note, it stands as a security to A„ enly for advances made before notice.

The facts in this case were, that on the 22(1 of January 1822, the plaintiff gave to the defendant Conner, two promissory notes for the sum of g l 1,15 each, payable on the first of January, 1825 and 1826. That in the year 1823, the defendant *Cowen,*in the State of Georgia, became the surety of *Conner,*for a debt due in that Slate, and that the latter, on the 12th of January 1824, endorsed to him the notes above mentioned to indemnify, him against his responsibility. On the 9th of August 1825, *Cowen*was compelled to pay the debt for which he had thus become *Conner's*surety, amounting to $1900 44. On the 26th of November following, lie received from *Conner,*$900, and on the 4th of May 1827, he collected from the plaintiff $1167 68, the nett amount of the first note after deducting the costs of collection. On the 12th of August, 1823, the plaintiff became the surety of *Conner,*in a replevy bond in this State, and afterwards was compelled to pay a large sum of money on that account, and also, other sums, as the surety of *Conner,*amounting to more than was due on the second note. From a letter of the defendant *Cowen,*dated in June 1825, which was produced by the defendant *Conner,*it distinctly appeared,that he then had notice of these payments of the plaintiff, and of the fact that he looked to the notes which he had given *Conner,*for reimbursement. On the 12th of January 1824, *Conner*sold to *Cowen*by deed of bargain and sale, with covenants of general warranty, a tract of land in Georgia. Upon this land.the taxes for the preceding year were *357due, amounting to *$9*18, which *Cowen*had been compelled to pay. He had also been compelled, March 4th 1824, to satisfy an execution against- *Conner,*which was a lien upon the land at the time lie purchased, and which ¡amounted to gl85. On the 2fth of August 1825, *Cowen*took an assignment of a note of *Conner’s*for §200 dated August 15th, 1824, payable to *Jackson Fitzpatrick*or bearer, and due December 25th 1825. He also held *,Conner’s*note for $5217", payable to himself, dated October 22d 1825, and payable 1st of January ensuing. On these two notes *Cowen*had obtained judgment in Alabama, where *Conner*had removed, executions upon which were returned *nulla bona.*

An action having been brought by *Cowen,*on the note of the 'plaintiff, duo 1st of January 1826, this bill was filed. The plaintiff insisted that ■ the defend-" ant *Cowen*had no right to collect that note, except in satisfaction of the debt for which it was pledged, to wit: that of $1900 44, which he alleged was paid. Ho prayed for an injunction, and that the money he fiad paid, as the surety of *Conner,*might be so arranged as to discharge the judgment; and for general relief.

The defendant *Conner*admitted all the allegations of the bill. *Cowen*insisted that he had a right to collect both notes, and apply the money received to all claims which he had against *Conner.*

*Badger,*for the plaintiff.

*Devereux,*for the defendant *Cowen.*

Easton, Judge.

After stating tiic facts as above, proceeded: — Neither *Kerr*or *Cowen,*has a lion upon the second note by virtue of any contract. *Cowen*by the terms of his contract, was to collect the money upon both notes, indemnify himself for his liability as *Conner’s*surety, and account to him for tbs surplus. As against *Conner,*he has however, the right upon principles of natural equity, to retain so much of this surplus as will satisfy his other just demands. Ami *Kerr*has against *Conner,*on the same principles,- tiie same right to be -relieved from the payment of so much of the notes *358us will reimburse his just claims against *Conner.*As the legal property in tlii-s second note lias been vested In *Cowen*by the assignment, so far as the *equities*of the contending parties arc equal, his leg'al advantage cannot be taken from him. In the opinion of the court, his equity with respect to the claims which accrued to. him before June 1825, is equal to that of the plaintiff, and lie ought to he allowed to collect so much of the second note as will satisfy these. But such is not the case with regard to the other claims founded on the notes whereon he has sued *Conner*and obtained judgments.— When these claims originated, *Cowen,*knew of *Kerr’s*equitable demands, and knew that *his*reliance for satisfaction, was upon the debt which he owed to *Conner.—*With this knowledge, *Coxoen*could not in good faith contract with *Comer,*or purchase a demand against him,to the prejudice of this known equity of the plaintiff. On such sums as *Cowen*has advanced for *Conner,*and which the court allows him to collect, and of the judgment against the plaintiff, he is entitled to interest at eight per cent, which is the rate established by the law of Georgia. It appears from a calculation made on these principles, that the balance due *Cowen*is $243 41 cents.

The court will decree, that the injunction heretofore granted shall be dissolved as to the aforesaid balance of $243 41 cents and interest thereon at eight per cent, from the 4th of May 1827, till paid, and the costs of the suit at law, and be made perpetual as to the residue of tho said judgment; and that the plaintiff and the defendant *Cowen,*respectively pay their own costs in this suit. — * And will also decree that the plaintiff,may at his option either, dismiss his bill against the other defendant *Conner,*without prejudice, or have an account taken against the said defendant, of what may be due from him to the plaintiff, by reason of the premises, this option to be declared on or before the 1st day of July next.

Bkr Curiam. — Decree accordingly.