Case Name: M'Mahon and Others v. Fawcett and Others
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1824-06-11
Citations: 2 Rand. 528
Docket Number: 
Parties: M’Mahon and Others v. Fawcett and Others.
Judges: 
Reporter: Virginia Reports
Volume: 23
Pages: 410–419

Head Matter:
M’Mahon and Others v. Fawcett and Others.
June, 1824.
[14 Am. Dec. 296.]
Principal and Surety — Several'Sureties—Some Indemnified — Rights of Others. — Where there are sev eral sureties to abond, and the princloal conveys property in trust to Indemnity some of them, and the rest are not provided for in the deed, the sureties who are so omitted shall, nevertheless, he protected hy the deed of trust.
Tliis was an appeal from an interlocutory decree oí the Superior Court oí Chancery oí Staunton.
The bill was exhibited by M’Mahon, Crummey, Rutherford, Effinger, Marlz, Bird, and I. Peale, administrator of B. Peale, deceased, setting forth, that they, together with G. W. Harrison, R. Harrison, Sites, Shipman, Smith, Gambill, Faw-cett, Fletcher, Waterman, Pence, and Reader, were the official sureties of Daniel *Ragan, deputy of Walter Davis, Sheriff of Rockingham; that the sureties had sustained heavy losses, and were likely to suffer more; and that Ragan had executed a deed of trust of 900 acres of land in Rockingham, and some personalty, to indemnity all his official sureties. That Ragan had becóme insolvent; and the plaintiffs, as his sureties, liad been compelled to pay large sums of money, and were liable for other large sums. That the personalty pledged for their indemnity was subject to prior in-cumbrances far beyond its value. That the land was also subject to prior incum-brances, viz: 1st. A deed of trust executed by Ragan to W. Herron, dated May 3 3, 1818, to indemnity R. Gray, as Ragan’s endorser at the Valley Bank. 3d. Another deed of trust executed to Herron, dated September 34, 3 819, to secure to Gray several debts of $000, $1,200, and $400, with interest. 3d. A deed of trust executed by Ragan to the same Gray, for the benefit of Gambill and Fawcett, dated January 24, 3 820, which, reciting, that Gambill had become Ragan’s surety to John Rush for $800, to Jacob Rush for $400, and to M. Doubt for about $200: that Fawcett was his surety to E. Nichol for 400 dollars, to B. Kite for 650 dollars, to D. Smith for 1,300 dollars, to 1V1. Sheeler for 1,300 or 1,800 dollars, to R. Gaines for 200 dollars, to T. Scott for 1,000 dollars, and to the Valley Bank for 3,700 dollars; that, possibly, Gambill and Fawcett might be sureties for Ragan for other debts, (exclusive of their suretyship for him as deputy Sheriff';) and that the intention of the deed was, to indemnify Gambill and Fawcett against all their private suretyships for Ragan, whether therein specified or not; provided, that if Gambill and Fawcett, or either, should be compelled to pay any monies by reason of such, their private surety-ships for Ragan; in that event Gray, the trustee, at the request of Gambill and Faw-cett, or of whichever should be so corn-pelled to pay such monies, should sell so much of the land as would suffice to satisfy such sums as they, or either, should have been compelled *to pay, and to defray expenses. The hill then proceeded to charge a fraudulent and collusive sale under the last mentioned deed of trust; a sale unauthorised by the terms of the deed; and designedly so conducted as to prevent all competition, and to enable Gambill and Fawcett to purchase the subject at less than its value, and to defeat the indemnity provided for Ragan’s official sureties; that, in the first place, the deed authorised a sale only in case Gambill and Fawcett should be compelled to pay monies by reason of their suretyships for Ragan: they had never been compelled to pay any thing. In many of the cases several other persons, in one, fifteen or sixteen others were bound as co-sureties with them: yet they voluntarily took on themselves the whole burthen. They procured suits to be brought against them by the creditors, to whom they were bound as sureties for Ragan; in several instances, they procured such suits to be brought against themselves alone, omitting their co-sureties, and even Ragan himself; in some cases, where Ra-gan was joined in the writ, they directed the process not to be served on him; and then they confessed judgments at the term to which the writs were returnable; but no executions were levied, nor any monies paid, though Gambill and Fawcett gave their own bonds to the creditors, with an understanding that they were to wait till the money could be raised out of the trust subject. In one instance, the bond was renewed to the creditor with exactly the same sureties bound in the original bond. One of these debts, (that to Gaines,) was usurious. Whether the others were justly due, or how much thereof was due, was unknown: the precipitate confession of judgments prevented all investigation. They pursued the same course in respect to three suretyships, not particularized in the deed, (for these, it was questioned whether the deed -creates any lien,) in all which, others were jointly bound as sureties with them. All this was done to afford a colourable pretext for selling the trust subject before they had suffered loss. Ra-gan was, at first, very much dissatisfied *with these preliminary proceedings, but they made arrangements with him, which kept him quiet.
That, in the next place, Gambill and Fawcett had notice inserted in the advertisement of the sale, that the purchasers should pay the money within two hours after the sale; but they did not insert in the advertisement, another condition, that ihe money should be paid in specie; that they reserved till the instant of the sale, and then they gave notice by their crier, that payment in specie was expected, and would be insisted on.
That, in the third place, the sale was made, not for the joint benefit of both, but for the several benefit of each; and they arranged between themselves and with the trustee, that Gambill should purchase part of the subject, and Fawcett the residue, at prices agreed on. Accordingly, 63 acres were first set up, and cried out to Gambill’s bid, for $1,873; and, then, the residue was set up and cried out to Fawcett’s bid, for $6,527 97; the crier, in each case, demanding, “who would give more for.less land?”
That, in the fourth place, though Faw-cett and Gray were jointly bound as Ragan’s endorsers to the Valley Bank, and though the sale was .made to indemnify Fawcett on account of that same surety-ship, and though a large part of that debt had been paid off; yet, it was proclaimed, that the sale was made subject to the in-cumbrances of both the deeds of trust for the benefit of Gray, the first of which provided for Gray’s indemnification on the very same account. That having, by these contrivances, completely excluded all competition, Gambill and Fawcett, between them, bought the whole land, worth between 25,000 and 30,000 dollars, for about $8,400. And these contrivances were made in concert with Gray, the trustee; whose object was, not only to favour Gambill and Fawcett, and to defeat the indemnity of the plaintiffs, but to preclude enquiry as to the consideration of the debts secured to himself by the deed of trust of September 24th, 1819, two of which debts (those of 1,200 and 600 dollars,) *were usurious; arid the debt of 400 dollars was a debt due by one Eli Harry to Gray, for whom Ragan was bound only as surety, and Harry was perfectly solvent. That after the purchase of the whole land had been thus fraudulently accomplished, Gambill conveyed the 63 acres he had bought, and Fawcett 137 acres of that which he had bought, to Richard Ragan, father of Daniel; and Gambill took a deed of trust of the 200 acres from Richard Ragan, to secure him the whole amount he claimed on account of his suretyship, for Daniel Ragan. The bill made Gambill and Fawcett, and Gray, (their - trustee,) Gray, (in his own right,) and Herron; the trustee for Gray,) Harry, (Gray’s debtor for the 400 dollars,) and G. W. Harrison, R. Harrison, Sites, Shipman, Abr. Smith, Waterman, Fletcher, Reader, Pence, (co-sureties for Ragan, in his official bond,) Ragan, the deputy Sheriff, and Richard Ragan, his father, defendants; and prayed, that the amounts for which Gambill and Fawcett were bound as sureties for Daniel Ragan, and which they had paid, might be ascertained; that the amount of the debts due Gray, and the consideration thereof, might be ascertained; that the land might be fairly sold for the benefit of Ragan’s official sureties; and general relief.
Richard Ragan’s answer states, that the '63 acres of land bought by Gambill, was purchased for him and at his request, and therefore conveyed to him by Gambill: that Fawcett also conveyed him 137 acres of the land he bought; but, in. truth, a much larger portion of the land bought by Fawcett, was the property of this defendant; for, though he had given his son Daniel possession of it, and intended to devise it to him, he had never conveyed the title to him: that he, therefore, agreed to relinquish his title to all the rest, and to procure the relinquishment of dower of his own and Daniel Ragan’s wives, in consideration that Fawcett would release and convey to him this 137 acres. It was the part of the land on which his son Daniel lived; and, he owned, that he meant it as a provision to keep that son from suffering.
*Gambill’s answer stated, that he was present when Gray lent Ragan $1,200, secured by the deed of trust of September 24, 1819, and saw the money advanced; and, as to the sale made under his and Fawcett’s deed of trust, denied that there were any unfair contrivances to prevent corripetition, to produce'a sacrifice of the property, and to secure undue advantages, as imputed in the bill. That Fawcett had offered to give the official sureties the benefit of the deed of trust executed for his and Gambill’s benefit, so far as he was concerned, if they would concur to relieve him from his private suretyships; and, they refused to accede to the proposal. That it was true, Gambill did give notice to the persons to whom he was bound as Ragan’s surety, to bring their suits, and he had promptly discharged their claims: prompt proceedings were necessary to his security. That he bought 63 acres of the land, for the amount to which he had been subjected as private surety of Ragan; and, it was a high price: this part of the land was sold exempt from prior incumbrances; and specie, in payment of the purchase money, was not required at the sale of this 63 acres. That the terms of sale were stated in writing, and publicly read at the sale. That Gambill bought the 63 acres of land for Richard Ragan, (that parcel was designated by Daniel Ragan, according to’ the privilege reserved to him in the deed of trust;) he conveyed that parcel to R. Ragan; Fawcett also conveyed him 136 acres of the land he bought, (that much being really R. Ra-gan’s property, though he had given his son Daniel possession of it, and devised it 1o him by his will,) in consideration that R. Ragan would release all claim to the residue of the land, and procure his own and his son’s wives to relinquish their dower; and then, R. Ragan gave Gambill a deed of trust of the whole 200 acres, to secure the payment of the sum he had given for the 63 acres.
• Fawcett’s answer, gave the same account of the conveyance of the 137 acres by him to Richard Ragan, as *that contained in R. Ragan’s and Gambill’s answers: denied all the charges of unfairness, collusion, contrivances to prevent competition, imputed by the bill to the sale under his and Gamb'ill’s deed of trust; and gave a minute detail of the whole transaction; that he had offered to give the official sureties all the benefit he was entitled to under that deed of trust, if they would relieve him from his private suretyships for Ragan, or join him therein; and, they rejected the proposal. That he and Gambill were bound for different debts. That he did require the persons to whom he was bound, to bring suits, but did not desire them to omit his co-sureties or Ra-gan himself. That he also confessed judgments, and discharged them by giving the creditors his own obligations; many of the debts, however, for which he was bound, were yet unsatisfied; some were still in suit; some had never been put in suit. That the judgments, thus discharged, amounted to 6,399 dollars 88 cts.; the land he bought at the sale, was sold to raise that sum: he was bound for much more: and he owned, that he wished to have the land sold in such a way, and to buy it at such a price as would enable him, by resales, to obtain full indemnity. That he did require that specie should be paid for the purchase money, as he had a right to do; not, however, to exclude fair competition; but, to prevent the interference of meddlers. That the land sold at its just value, considering the incumbrances on the title; which he detailed at large. That it was not sold to pay' any part of the debt due to the Valley Bank, for which he and Gray were jointly bound, as endorsers; and, that debt was still due. That there was no arrangement made with Daniel Ra-gan for his benefit. That there was no usury in any of the debts for which he was bound as surety; and, the allegation in the bill concerning the debt due to Gaines was founded in mistake.
Fletcher’s answer stated, that he was one of the private, as well as one of the official sureties of D. Ragan; *aud that Ragan had executed a deed of trust of the same land, to indemnify him from loss, by reason of his private suretyships, prior to the execution of the deed under which the official sureties claimed; and expressly acquitted Gambill and Fawcett of all blame, in every part of their proceedings.
Pence’s answer, acquitted Gambill and Fawcett of all blame; and added, that he was not Ragan’s surety to the same extent with the plaintiffs, not being surety in his bond for collection of taxes; and that, for most of the private debts of Ragan, for which Fawcett was bound as surety, this defendant was also bound.
.The answers of Sites, Reader and Ship-man, Waterman, R. Harrison, and Smith, were not materially variant: some expressly, and in strong terms, acquitted Gambill and Fawcett of all blame; others disclaim all knowledge, and all suspicion of the misconduct imputed to them.
Harry’s answer stated, that it was true that the $800 due to Gray, was originally his debt to Gray for rent, for which D. Ragan was bound as his surety; but, in the course of dealings, (particularly detailed,) Ragan became Harry’s debtor for $630; and, in consideration thereof, and that Ragan had never made any advancement to Harry’s wife, who was his daughter, Ragan assumed to pay Gray the $800.
Daniel Ragan’s answer stated, that the debts secured to Gray by the deed of trust of September 24, 1819, were fairly due, and none of them usurious; and confirmed the account given in Harry’s answer of the particular debt therein mentioned: that this defendant was, at first, dissatisfied with Gambill and Fawcett’s proceedings, but that dissatisfaction ceased, on an assurance being given him by Fawcett, that whatever part of the land he should purchase, should be again sold, on a credit, and the proceeds applied, as far as they would go, to the payment of Ragan’s debts: that there was no unfairness in the sale made ffimder Gambill and Faw-cett’s deed of trust; no arrangement was made with them for his (D. Ragan’s) benefit: his father purchased the parcel of 63 acres, and the 137 acres was conveyed, to him by Fawcett; and permitted him to keep possession of it, and he hoped would continue that kindness; but the property belonged to his father.
Answer of Herron, trustee for Gray, stated, that he was present when the $1200, secured by the deed of trust of September 34, 1819, was advanced by Gray to Ragan: that the sum was actually lent by Gray to Ragan.
Gray’s answer denied all unfairness, collusion, contrivances to prevent competition, in the sale made by him as trustee for Gambill and Fawcett; gave a history of that transaction, corresponding with that given by Gambill and Fawcett in their answers; and exhibited the written terms of sale, which were read and proclaimed at the time. It was true, the crier did make some such blunder in stating the terms of sale, as that mentioned in the bill; but it was immediately corrected, and no body was deceived by it. In the sale of that part which was sold for Fawcett’s benefit, specie payment was required at Fawcett’s instance: the trustee obeyed Fawcett’s instruction in that particular, with reluctance; but he conceived that Fawcett had a right to dictate that condition. It was not true, that Ragan’s debt to the Valley Bank, for which he and Fawcett were jointly bound as endorsers, had been paid. And, with regard to the deed of trust of September 34, 1819, the debts thereby secured to Gray, were justly due to him from Ragan, and in no wise tainted with usury.
General replication to all the answers.
In this stage of the proceedings, the plaintiffs exhibited a petition; in which, after briefly recapitulating the purport of their bill, they set forth, that Fawcett had, pending the suit, laid off the laud bought by him into lots, and sold several of them to the defendant Sites, who had sold parcels to G. Wertenbaker, J. Trick, P. Irick, and J. Peters: that Fawcett had also sold part of the land to John *Rader, another defendant; retaining the residue to himself: and that Fawcett, Ra-der, Sites, and the purchasers under Sites, were all committing great waste on the land. Wherefore, they prayed an injunction to stay waste, and general relief. The injunction was awarded.
Shortly afterwards,” the plaintiffs, with leave of Court, exhibited a supplemental bill, setting forth, that pending the suit, Gray had caused his trustee, Herron, to advertise the land for sale, under his deed of trust of September 24, 1819; a proceeding, calculated to perplex yet more the already confused state of the controversy, and designed to favour Gambill and Faw-cett, and to render illusory any relief the Court might decree the plaintiffs. That Fawcett too, had caused the land to be advertised for sale as Ragan’s property, under the deed of January 24, 1830, to satisfy the debt due the. Valley Bank; a proceeding, inconsistent with all his former pretensions, since he had heretofore insisted on the former sale, and claimed the land under it, as his own. That Fawcett had sold Gray a part of the land bought by him at the sale, which the bill sought to set aside; and, that a large portion of the debt to the Valley Bank had been paid. That Gray was an improper person to act as trustee, being counsel, party and partizan in the controversy. That the deed of trust, under which Gambill and Fawcett claim, was obtained of Ragan, by the exertion of an undue influence over his mind, and delusivd representations, and was contrary to his own declared sense of justice towards his official sureties. That among the debts which Fawcett had stated as a pretext to justify the former sale, was a debt due one Yancey, assignee of Price, which had been injoined as usurious, at Fawcett’s instance; and another debt, due to Nichols, who had expressly agreed to give indulgence, if the interest were paid him, which had been paid him accordingly. And the plaintiffs made these new allegations against Fawcett; that he was collector of the United States, recovered divers judgments in Rockingham * Court, against distillers, &g., and pu,t executions in Ragan’s hands, during the time for which the plaintiffs were his sureties; Ragan paid Fawcett monies, to be applied to the credit of those executions; but Fawcett applied them in discharge of private claims he had against Ragan; and then moved for, and recovered, the amount against Ragan’s official sureties, who were utterly ignorant that such payments had been made. _ And that Ragan had, since the sale of his land, placed in Fawcett’s hands, bonds and other evidences of debt, to a large amount, to be applied to Fawcett’s indemnification. This bill prayed a particular answer to the new allegations; an injunction to prevent the new sales advertised by Gray and Fawcett; and general relief.
The injunction was awarded.
Gambill’s answer denied the undue influence on Ragan’s mind, imputed to him and Fawcett, in obtaining the deed of trust under which they claimed; and stated, that Price’s debt was not one of those, which composed the amount due to Fawcett, on account of which the sale had been made, and that this was known to the plaintiffs, M’Mahon and Crummey. That, as to the executions on behalf of the United States, Ragan had stated that he had made deposits of money with Fawcett, on account of those executions; but, Fawcett denied the fact, and' explained the business to Gambill’s satisfaction.
Fawcett’s answer contained the same matters stated in Gambill’s; and, in addition thereto, denied that he had sold any part of the land to Gray, and insisted on having Gray to act as trustee. He stated, that a large portion of the debt due the Valley Bank, still remained to be paid, and the note for it had been protested; and that, to satisfy this debt, he had caused the property to be advertised under the deed of January 24th, 1820, not because he distrusted his title under the former sale, but because there could be no dispute about his right to have the subject sold to satisfy this debt. He denied the waste charged in the *petition; he denied the allegations of the supplemental bill, concerning the additional funds charged to have been put into his hands by Ragan for his farther indemnity; and concerning the executions on behalf of the United States, and the payments charged to have been made him by Ragan on that account, and otherwise applied. On this last subject, he gave long details, and exhibited numerous accounts and documents, which can only be rendered intelligible by an account taken before a commissioner.
Gray’s answer insisted on his right to enforce a sale of the trust subject, to pa,y the just debts due him, according to his deed of trust September, 1819; and denied all collusion or concert with the other defendants. He had bought no part of the land from the defendant Fawcett.
The answer of the executors of G. W. Harrison, to the original and supplemental bills, stated, that their testator was one of Ragan’s official sureties; that he had a lien on the land sold to Fawcett, for part of the purchase money due from Ragan therefor; that he had made known this claim to Fawcett at the time of the sale, _ and Fawcett had promised to settle it; but had since refused to do so.
Rader’s answer to the supplemental bill and the petition, denied the waste imputed to him; and declared, that the purchase he had made of Fawcett was made with the knowledge and approbation of most of the plaintiffs.
Sites’s answer stated, that he had bought 36 acres of the land, of Fawcett; and had sold about 15 acres, and been compelled to take it back again, in consequence qf the proceedings to stay waste: he denied the waste, and declared, that, instead of committing waste, he was making improve-' ments.
Daniel Ragan’s answer stated, that he had paid nothing towards the debt due the Valley Bank, since the sale under Gambill and Fawcett’s deed of trust: he had, thenceforth, regarded Fawcett as the principal; the balance then due was 2,348 dollars. He did pay Fawcett several large sums of money, which, according to his intention and understanding *were to be applied to the United States’ executions. He had not put in Fawcett’s hands any such funds as were mentioned in the supplemental bill. He executed the deed of trust for Gambill and Fawcett’s indemnity, freely and cheerfully. The debts secured by Gray’s deed of trust were just and fair; and that security was not extorted from him.
CHANCELLOR BROWN, held:
1. That G. W. Harrison’s executors had au undoubted prior lien on the land, for the balance of purchase money due for the same.
2. That the debts due Gray were fair, and entitled to priority; and Gray had a right to require a sale of the trust subject.
3. That the parties interested had a right to have the subject sold for cash, to satisfy the debt due to the Valley Bank; and the Court had no power to interfere.
4. That the charge of waste, was unfounded.
5. That Garnbill and Fawcett’s deed of trust, did not provide any security for their co-sureties for Ragan; so that, whatever monies were paid by Garnbill and Fawcett, in cases where co-sureties were bound with them, over and above their just proportions thereof, unless they were compelled to take such payments, or unless their co-sureties were unable to contribute their proportions, were not properly chargeable on the trust fund.
6. That the deed of trust under which Garnbill and Fawcett claimed, did protect them as well against suretyships for Ra-gan, not particularly specified, as those which were specified therein.
7. That the sale made under Garnbill and Fawcett’s deed of trust, was not au-thorised by that deed; because they had never, in any sense, been compelled to pay any money as sureties for Ragan; the suits having been instituted against them by their own procurement, and the judgments which they had satisfied, confessed. *8. That Richard Ragan had a just title to that part of the land, held by his son Daniel, which he claimed; and the compromise made with him by Fawcett, according to which, 137 acres of the land had been released and conveyed to him, was highly beneficial to all parties.
And because that compromise depended on the confirmation of the sale under Gam-bill’s and Fawcett’s deed of trust; and because a majority of the official sureties, did not concur in the wish to set that sale aside, but were satisfied with the terms proposed by the defendant Fawcett, which terms had been suggested by the Court, and were approved as reasonable and beneficial to all parties; therefore, the Court decreed:
That the injunction to stay waste, should be dissolved: That the sale made under Garnbill and Fawcett’e deed of trust should be confirmed: That the compromise with Richard Ragan, and the conveyance to him, should be confirmed: That the sales of parts of the land, since made by Fawcett, should be confirmed: That Fawcett should be regarded as trustee for the benefit of the incumbrancers, and should account for the proceeds of sales already made by him, and of those thereafter to be made: That he should be permitted to go on and sell the residue of the subject, on the best terms he could; always submitting his sales to the Court for its approbation, and the Court reserving the power to substitute another trustee: That the proceeds of sales, after reimbursing Fawcett his expenses, and compensation for his trouble, should be applied; 1st. To the discharge of prior incumbrances; 2d. To the indemnification of Fawcett to the extent to which the Court held him entitled to indemnification; and last, to the satisfaction of other incumbrances, in due order and proportion: That Fawcett should render accounts of the subject, from time to time: That accounts be taken, before a commissioner, of the monies already paid by Garnbill and Fawcett, and (hose for which they were yet bound, as Ragan’s sureties; shewing what portion thereof was justly due by Ragan, for *what debts they were sole sureties, and for what they were jointly bound with other sureties; and whether those other co-sureties were solvent — also, accounts of all debts charged on the trust subject; of all debts paid by Ragan’s official sureties; of the proceeds of all sales of the trust subject, made or to be made, by Fawcett; and of all monies paid by Ragan, as deputy Sheriff, to Fawcett, as United States’ Collector, and the appropriation of the same.
From which decree, the plaintiffs appealed to this Court.
Leigh, for the appellants.
Johnson, for the appellees.
June 11.
PrincipaI and Surety— Several Sureties — Some In- * demnified — Rights of Others. — It is a settled principle of equity that, if one of several co-sureties, subsequently take a security from the principal, for his own indemnity, it enures to the common benefit of all the sureties. If. therefore, the principal conveys property by deed of trust expressed for the benefit of one of the sureties only, tie others have an equity to come upon it, to the same extent that he can. Bougtmer v. Hall. 24 W. Va. 283. 284. citina principal case.
Same — Subrogation.--See principal case cited in Binders v. Bruñe. 4 Rand. 445; Hopewell v. Cumberland Bank, 10 Leigh 225; Powell v. White, 11 Leigh 333. See further, monograpliicraoig on “Subrogation’' appended lo Janney v. Stephen, 2 Pat. & H. 11.
Same-When Surety Damniiied. — A surety is damni-fied when a judgment is obtained against him, and this gives him a right to proceed against the pledged property of Ms principal ; and with the consent of the creditor it may be made answerable for the payment of the debt. McLean v. Lafayette, IPeü. Cas, No. 8,885. citing principal case.

Opinion:
JUDGE CARR,
delivered his opinion, in which the other Judges concurred.
This is au appeal from an interlocutory decree of the Staunton Chancellor. The suit was brought by seven out of seventeen of the sureties of D. Ragan, as deputy Sheriff of Rockingham, against Fawcett and others, the sureties of the same Ragan, in his private capacity. It is a scramble between these two classes of sureties for the wreck of an insolvent's estate. In canvassing the correctness of the Chancellor's decree, it may be best to treat the subject in the order he has pursued.
1st Question. Does the trust deed to Garnbill and Fawcett, afford protection to those who were bound 'as sureties with them? The Chancellor thinks not. He places it principally on the ground of contract and intention. The deed clearly on the face of it provides only for the payment by Garnbill or Fawcett; and indemnity to them is its sole object. It gives no lien to the other sureties. They are not even parties to it. And here the case differs in the Chancellor's opinion, from West v. Belches, 5 Munf. 187; where there was once a lien for the whole debt to both ^sureties, though that lien was after-wards abandoned, by the surety to whom this Court gave protection under it. The examination which I have given to this subject, has conducted my mind to a conclusion different from the Chancellor's. I think that, both upon principle and authority, the co-sureties have a right to throw the whole burthen of the debts upon the subject mortgaged to one of their body for his security. I do not consider this so much a question of intention or contract, as of the effect of the deed, under the influence those settled principles of equity, which bear upon it. All the obligations given, by Ragan and his sureties, are joint and several. Each is under a several obligation to pay the whole. The creditor may throw the whole burthen upon any one of them. The principal has given to two of the co-sureties, Fawcett and Gam-bill, a deed of trust on land, for their indemnity; and if the whole money be made out of either of them, the land must be bound for the whole, to indemnify them. Here, then, is the property of the common debtor, bound for the debt; and the question is, will not the established principles of equity throw the whole burthen upon that fund, in ease of all the sureties?
There are several rules on this subject, which seem to me connected with each other, and resting upon the same general •grounds. If B. and C. are bound to A. for a debt, B. as principal and C. _as surety, and B. gives C. a mortgage or other lien to secure him, A. can resort to this. 1 Equ. Cas. Abr. 93; 5 Bac. Abr. 168; 11 Ves. 12. Why? Not on the ground of contract, for there is none giving A. a lien; but because it is the property of the debtor, pledged (though not to his credit) for the debt. So it is with the contribution. Our act of Assembly, which gives the right to one surety to call on the others, only reduced to statute law, what had long been the law of equity. The whole doctrine of principal and surety, with all its consequences of contribution, &c., rests upon the established principles of a Court of Equity. There is no express *contract, between the sureties, for contribution. It results from, the maxim, that equality is equity. Again; a surety will be entitled to every remedy which the creditor has against the principal debtor; to enforce every security, and all means of payment; to stand in the place of the creditor, even as to securities entered into, without the knowledge of the surety; having a right to have these securities transferred to him, though there was no such stipulation, "and to avail himself of all those securities against the debtor. And the creditor can do' nothing to invalidate or discharge the security he has taken from the principal debtor, to the prejudice of the rights of the surety; and if he has done such act, and disabled himself from transferring these securities to the surety, he will (unless in so doing he acted without knowledge of the other's rights, and with good faith, and just intention) he precluded from so much of his demand against the surety, as this latter might have procured, if the transfer could have been made; and all this, not upon the ground of contract, but upon a principle of natural justice; the same which regulates the doctrine of contribution among sureties. The creditor may resort to either for the whole, or to each for his proportion; and as he has that right, if he, from partiality to one surety, will not'enforce it, the Court gives the same right to the other surety, and enables him to enforce it. For these principles, I refer generally to Poth. on Oblig. No. 437, 496, 519, 530; 3 Vern. 608; 2 Ves. 622; 3 Madd. Ch. Rep. 437; 10 Ves. 412; 11 do. 22; 14 do. 162; 1 Johns. Ch. Rep. 412; 2 do. 554; 4 do. 130; 2 Bos. & Pull. 270.
Let us apply these doctrines. If the creditor has a right to avail himself of any lien given by the debtor, to a surety, because it is the property of his debtor pledged to pay that debt; does not a surety stand upon quite as strong ground, when the common debtor has given to a co-surety a lien to secure him? If the surety is entitled to stand in the shoes of the creditor, and avail himself of securities given by the debtor to him, has he not the same right, the *same equity, where these securities have been given by the debtor to a co-surety? If equality be the rule, and the creditor shall not be permitted to throw the whole bur-then on one surety; is it more consonant to natural justice, that the debtor should have this power — that he, for whom all the sureties have become bound, on the understanding of community of burthen and risque, and on the" faith of the property he then held; — should have the power of selecting a favored co-surety, possibly (though the remark cannot apply to this case) the decoy-duck for the rest; and by a conveyance of the common fund, for his benefit, leave the others exposed to the payment of the debt, without a chance of indemnity? And, if it is not right, that the debtor should thus violate the law of equality, how shall we prevent it in a case like the present, where the property conveyed to two sureties, is sufficient to discharge the debts, for which the whole are bound? Plow, but by throwing the whole burthen upon that fund (the'.property of the common debtor,) which has been conveyed for the benefit of these favoured' sureties? I see no other way. Suppose, in the cases before us, the creditor had levied his executions -on the property of Fawcett and Gambill, and made the whole money out of them; would equity have permitted them to call on the co-sureties for contribution? No! because, they had in'their own hands, property of the debtor, sufficient to indemnify them. This is most evident, both from the reason of the case, and from the authority of M'Cormick's administrator v. Oban-non's executor, &c. 3 Munf. 484, where it is decided, that equity will not compel a surety to- contribute, unless it appear that due diligence had been used, without effect, to obtain re-imbursement from the principal debtor, or that he was insolvent. In one case, Fawcett and Gambill, without waiting to be compelled by an execution, have paid the whole. Does this change the equity of the case? Surely not. They have in their hands a full indemnity. But, I have dwelt longer, perhaps, on the subject, than I ought, without noticing-*what I consider a direct authority of this Court, on the very point; I mean the case of West v. Belches, 5 Munf. 187. I cannot perceive the distinction taken between that case and this. There, Belches and Willis were sureties for Grymes. To secure them, he gave them a lien on two negroes. Belches afterwards consented to cancel this lien, and that Grymes should execute another, on all his personal estate, for the payment of certain debts, and among them, this one; for which Willis and Belches were sureties. Grymes's personal estate proved insufficient to pay the debts, and an execution was levied on the property of Belches. Pie filed his bill to stay proceedings, and for general relief. The Court say, "admitting that Belches consented, that upon the execution of the deed to Hughes and Camp, (the second deed of trust,) his own lien on the negroes should be released, he did not release, nor was he competent to release it, as it relates to Willis, who was no party to the transaction. As to Willis, therefore, the said deed is still in full force. The Court is of opinion, that even if Willis had been no party to the judgment sought to be in-joined, nor to the execution, it would be competent to Belches, after paying off the same, to resort to him as a co-surety, for contribution of a moiety thereof; and, that for the purpose of preventing circuity, and getting payment out of the proper fund, it would be also competent to him, as standing in the place of Willis, to go for the said moiety against the negroes conveyed by the said deed. The Court is also further of opinion, that under that hypothesis, it would be competent for the appel-lee, (Belches,) to stand in the place of Willis, and charge the said negroes for the whole sum. Nothing is more consonant to natural justice, than that the proper debts of every man should be paid out of his own estate, in ease of innocent sureties, and that, that property of his in particular, should be subjected, which has been bound thereto by a specific existing liett. These principles will avail the appellee, (Belches) supposing him to have released for himself, his own proper lien, created by the first deed."
*The principles here laid down by this Court, seem to me to be the very principles which I have been laboring to shew, from other sources, are the established doctrines of equity. And this is still more clear, from the reference, in the same opinion, to the case of Eppes v. Randolph, 2 Call, 125, where a surety, discharging the debt of a bond creditor, is put in his place, and given access to the land; the Court declaring, that the doctrine of substitution, established in that case, fully supported the decision in West v. Belches. The Chancellor seemed to think, that however the Court might give the co-sureties indemnity out of the trust fund, if the question were between them and the debtor alone, it could not do so, when the debtor had parted with his interest to subsequent incumbrancers, who were also innocent sureties. I cannot think that this makes a difference. So soon as Ragan executed the deed for the benefit of Fawcett and Gambill, the principles of equity attached, and the rights of the co-sureties accrued. Nor could any subsequent act'of Ragan's detract from those rights, or affect the application of those principles. After the execution of the deed, nothing resided in Ragan, but an equity of redemption. He could convey no more to the subsequent incumbrancers; and they could only come in, upon the ground of redeeming all prior incumbrances to the full extent which these had, when their deed was executed. But, besides this reasoning, there is, in the same case of West and Belches, authority for this position. There, as well as here, was a second incumbrance, no way impeached; yet, it was not thought to limit or narrow at all the rights or equity of the co-surety. I conclude, therefore, that the deed of trust from Ragan to Fawcett and Gambill, rendered the land liable for the whole of the debts, in ease of their co-sureties.
There are several other important points raised in this cause; such as: 1st. Was the sale under Fawcett's and Gambill's deed, authorised by it? 2d. Was it fairly conducted? 3d. Ought the compromise with Richard Ragan *to be set aside? These, I say, are important points; but, really, I cannot see how the plaintiffs are more interested in this discussion and decision, than any other person in the community. The land is wholly swallojwed up by liens prior to theirs. Taking Ragan's tract as containing 900 acres, and the fair price as $19 50, (which is considerably more than the evidence justified,) the value would be $17,550 00
Or, say that the 63 acres, sold to Gambill, was worth $1,873 00
And the 837 acres sold to Faw-cett at $19 50 per acre, making $17,331 00
And, in the aggregate, equal to $19,204 00
This is the utmost, and more in truth, than can be claimed. Now, take the debts for which this land is bound, and which must be paid before the Official sureties can claim a cent.
Gambill's suretyships, $1,873 00
Fawcett's ditto, paid and bound for, 19,833 00
Fletcher bound for 4,504 00
-$20,210 00
Leaving a balance beyond the utmost value of the land, of $7,006 00
Suppose we throw in $5,000 of this for errors in the debts of Ragan, for which the sureties are bound. This is a liberal allowance; still there will be upwards of $2,000 attached upon this land, beyond its value, and claiming priority to the official sureties. What possible chance, then, can these plaintiffs have, of sharing in this fund? Even '¡'supposing the land bound only for the proportions of Fawcett and Gambill, in those cases where there are co-sureties, still the amount of the prior liens is beyond its value; especially when we add the interest which three years of litigation, useless and wanton litigation, have added. I say litigation useless and wanton, in every point of view. Useless, because the plaintiffs had no interest in the subject matter. Wanton, because from the first, Fawcett and Gambill made offers, which ought not for a moment to have been rejected, unless the official sureties had abandoned all expectation of relief from the land. "Embark with us," (said Fawcett and Gambill to them,) "in the private suretyships by which we are bound, and we will give up to your management this whole fund, for the common benefit of all the sureties. Nay, more, I (said Gam-bill) will add $100 to the stock; and I (said Fawcett,) will give you up my claims on Ragan for all I have paid, or may be compelled to pay as his public surety, if you will only release me from my private sure-tyships." Could better terms have been asked ? Were they not more favorable than equity offers to a subsequent incum-brancer, seeking to get possession of the mortgaged subject? Must he not redeem the prior incumbrancers? Yet, this proposition was rejected. Again; after the sale of the 5th of April, 1821, and the dissatisfaction expressed by a few of the official sureties at that sale, Fawcett offered, either to set aside all that had been done, give up the fund to the official sureties, and take a deed of trust from them for hi's indemnity for the private debts; or, to let everything stand, and he would convey to them the land he had bought, and take a deed from them, to indemnify him for the private debts unpaid. Could there be terms' offered, more liberal than these? Yet, they were rejected. Again; at the argument in the Court below, propositions equally fair were renewed. The plaintiffs rejected them. Thus, from the origin, they seem to have been most obstinately determined to litigate the matter to the utmost extremity; *and, on this principle alone, can I account for their appeal from a decree, in which all the errors that I can discover are in their favor. As to the other questions, I deem it only necessary to add, that I incline to think the trustee had power to sell; because, Gambill and Fawcett, being urged to speed by the strongest necessity, did nothing improper, either in directing suits, or confessing judgments. The payments, though not in money, were a discharge of the debts, and so good against Ragan; and having been made under judgments, may be considered compulsory.
With respect to the sale itself, I cannot say that I approve of the manner in which it was conducted. The requisition of specie within two hours, was certainly calculated to' discourage competition. Yet, when the question is, shall the sale be set aside? we must ask, was any sacrifice produced by this unusual proceeding? It seems, that it prevented no person present, from bidding. All agree, that the land sold to Gambill went at its value; and, though, that to Fawcett was nominally sold low, yet it was charged with the prior liens to Gray; and, these, together with the debts Fawcett is bound for, and which are liens on the land, will amount to more than its value; taking the highest estimate, and charging Fawcett with all that part, which, under the compromise with Richard Ragan, he conveyed to him. As to that compromise, I think with the Chancellor that it is advantageous to all parties, and ought not to be disturbed. This (it was objected in the argument) was trying a writ of right in a' Court of Equity. I do not think so exactly. I agree that Courts of Equity have no direct jurisdiction over legal titles; and, where the case depends on a simple legal title, and is brought up directly by the bill. I should consider such a bill de-murrable. But, equity does sometimes decide on the legal title, when it arises incidentally. 3 Johns. Ch. Rep. 519. It arose in that way here, and was brought up too, by the very persons who now object to the jurisdiction.
*1 have touched these questions so briefly, because (as I said) I cannot conceive the plaintiffs interested in their decision. Why should they seek to disturb the sale of the land, when under no circumstances can they profit by it? This is so evident, that Fletcher, a prior incumbrancer, states in his answer, that his prospect for indemnity was very small, and even that would be blasted, if this litigation should proceed. Nay, of the official sureties themselves, (17 in number) ten are well satisfied with the sale; and it will be recollected, that by the terms of the deed, a majority of them have a governing power in proceedings under it. These ten are made defendants. They state that they wish the sale to stand, and the only questions they make are, whether the co-sureties are protected by the deed to Faw-cett and Gambill, and whether the provisions of that deed extend to debts not specially named. The first point I have discussed. The second was very properly given up by the counsel for the appellants in the argument. In the supplemental bill, it is charged that Fawcett, as collector of the United States, recovered several judgments, and put the executions into Ragan's hands, during the time that the plaintiffs were sureties: that Ragan paid Fawcett monies to be applied to these executions, which Fawcett applied to private claims he had against Ragan, and then recovered the amount of the executions against the official sureties, who were ignorant that such -payments had been made. Fawcett, in his answer, asserts, that the subject of these allegations was well known to the plaintiffs, and much discussed, prior to the judgments at law: that the plaintiffs might have defended themselves there: that the accounts between himself and Ragan had been properly settled and ought not to be disturbed. The Chancellor has sent' this part of the cause to a commissioner. _ But, it seems to me, that this new allegation is so wholly distinct from, and unconnected with the topics of the original bill, as not properly to constitute matter for a supplemental bill; and, if it did, I rather *think the answer might have settled it, without the aid of a commissioner.
There is another point, on which I am compelled to differ with the Court below; that is, the order that each party pay his own costs. The plaintiffs, without any just ground, and in the teeth of the fairest propositions, have brought this suit; which, though it can do them no good, has probably injured, most essentially, some of the defendants. They have stuffed the record with innumerable depositions; forced the other party, in self-defence, to incur great expense; and, in my opinion, ought to pay all costs.
I am of opinion, that the decree be reversed: that the plaintiffs pay the costs of the Court below, as well as here; and that the bill be dismissed without prejudice to any suit, which the plaintiffs may be advised to bring, on the subject of the supplemental bill, relative to the collector-ship, and the accounts growing out of those transactions.
Decree reversed, and bill dismissed.
Judges Brooke and Greek, absent.