Virginian-pilot. (Norfolk, Va.) 1898-1911, 1900-08-14
COURT DECISIONS.
DIGESTED BY W. B. MARTIN
EXCLUSIVELY FOR
viRCINiAN-PILOT.
Notes Of Cases Recently Decided
Which Are of Interest to
Our People.
CARPER V. MARSHALL.

Supreme Court of Appeals of Virginia.
July ., 1900.
a CREDITOR HOLDING A ROND AS
COLLATERAL SECURITY MUST
USE DUE DILIGENCE TO COL
Ll;CT 1T. If HE FAILS TO DO so,
HE MUST SHOW THE BOND WAS
WORTHLESS AND THAT NO LOSS
HAS RESULTED FROM HIS LACK
OF DILIGENCE.
The court says:
The third assignment of error in
wolves a consideration of Nlarshall's
duty with respect to the bond of
HUMPHREYS and Hoge, transferred To
him by Carrer. That bond constituted
Il lien upon the land sold by Carper TO
liumphries and Hoge. 1t was the first
purchase money bond and Marshall
was entitled TO exhaust all the security
for its payment as between himself
ana Carper. In addition to the lien
securing its payment, Marshall could
look 10 both OF the obligors and to
Humphries who signed it as guarantor.
by accepting it of Carper he assumed
control ana dominion over it, and it
became his duty to exercise due dill
Sencc to make it out of those primarily
bound for it's payment.
y bond which is transferred as col
latcra! security is put under the domin-
ion of the creditor to make his claim
out Of it. His duties in respect to it
are active. He is to employ reasonable
diligence i'll collecting the money on
the security and applying it to the
principal debt. He alone is empowered
10 receive the money to be paid upon
it. and to control ii in order TO protect
his right under the assignment. Where
the collateral is lost by the insolvency
g.f l.l Ia In for. ih.l r.fi-
ment, through the supinc negligence of
the creditor, he must account for the
loss to his own debtor.
Carper having parted with all his
right of control over the bond which
he transferred. Marshall was bound to
employ reasonable diligence In IT'S col
lection.
The doctrine is fully stated in Will
sons administrator vs.. Barclays exc
cutor. - Graft, ut p. 81, by Judge
Staples as follows: 1T is clear, as
general rule. the assignee must sue the
maker or obigor before lie can resort
to the assignor. This rule is varied
where it is perfectly manifest IL suit
would be wholly unavailing. 1t is
equally clear that where the debt,
which has been assigned is secured by
n specific lien. it is the duty of the
assignee diligently to enforce such lien
before he can have any recourse
uEIIllSl inc dSSlSilpi II lie IttllS W
pursue this course. it is incumbent upon
him clearly to show that the security
was worthless. and that no loss or dam
age has resulted from his lack of dill
gcnce."
1t appears that this bond was as
signed by Carpcr to Marshall April.
1891. Suit was not instituted upon it
until the latter part OF October of that
year. a term of the Circuit Court hay
ing interviewed, and judgment was not
obtained upon it until October 1893.
Garner testified that if suit had been
brought promptly on that bond, the
whole of it would have been made out
Of the oblgors. 1t may be that no loss
was sustained ana that no injury was
occasioned by this delay; it may be
that the ohligors had no other prop
crty than that which was subjected in
the proceedings instituted against
them. but these facts do not appear in
this record. and Il decree should not go
against Carper until an enquiry has
been made upon this subject
The decree must be reversed with in
structions to direct the commissioner to
report what loss, if any. Carper sus-
tanned 10y reason of Marshalls failure
10 proceed promptly against those
liable uuon the bond assigned to him.
Reversed