Case Name: Kent v. Matthews and Jackson
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1841-08
Citations: 12 Leigh 573
Docket Number: 
Parties: Kent v. Matthews and Jackson.
Judges: (Absent Cabell and Brooke, J.)
Reporter: Virginia Reports
Volume: 39
Pages: 981–987

Head Matter:
Kent v. Matthews and Jackson.
August, 1841,
Lewisburg.
(Absent Cabell and Brooke, J.)
Principal and Surety — Case at Bar. — M. and J. are bound as sureties for E. who conveys slaves to a trustee to indemnify them, and to secure divers other debts : and judgment against E. the principal and M. and J. the sureties, and judgments against E. for all other debts so secured, are recovered at the same time ; after which the trustee appoints J. one of the cestuis que trust, his agent to carry the trust slaves to a southwestern market, and E. the mortgagor accompanies him, carrying out three other slaves ; J. and E. co-operate in selling the trust slaves, and E. sells the other three slaves, for a gross sum of 12,325 dollars for both parcels of slaves, and bring back a bill of exchange for 2000 dollars, and 10,325 dollars in money : the trustee receives the bill of exchange from E. and makes eil'orts to getit cashed, but, the acceptors having failed, without success, and sends it to an attorney for collection ; of the 10,325 dollars, he, with the acquiescence of M. and J. permits E. to retain 1000 dollars, and receives 9325 dollars, out of which, with the acquiescence of M. and J. he pays no dividend to them or to the creditor to whom they are sureties, but applies the whole to the other debts secured by the mortgage ; and after all these transactions, E. by deed of trust conveys his land to indemnify K. «another surety for him, and the trustee sells the land under this deed, and K. becomes the purchaser : Hurí),
i. Same -Lien of Contemporaneous Judgments on Land of Debtor- Subrogation of Sureties Subsequent flortgagee. — That the judgment against E. andM. and ,1. his sureties, gave the judgment creditor a lien on E.’s land, prior to the lien which K. acquired by his subsequent mortgage, and M. and J. are entitled to the benefit of that prior lien ; that the other judgments of the same date against E. gave those judgment creditors prior liens on E.’s land, and their judgments being satisfied out of a fund in which M. and J. had a right to participate, they are entitled, by subrogation, to the benefit of these liens also; anfl as these liens together hound the -whole of E.’s land, therefore, not a moiety only, but the whole of the proceeds of the land sold under the subsequent deed of trust to K. is liable to be applied to the satisfaction of M. and J,’s claim.
2. Same — Same—Same—Same—Marshalling Securities.- — That M. and J. being entitled to indemnity under a mortgage of slaves and to a lien by judgment on E.’s land, andK. having only a mortgage on the land, equity would compel the former to take satisfaction out of the mortgage pf slaves, if that fund were equally certain and available, and leave the land for lx.’s indemnification ; but as it was uncertain when the bill of exchange for 2000 dollars would be collected, or whether it could be collected at all, the court will give M. and J. the benefit of their lien on the land, leaving K. to be subrogated to the benefit of the bill of exchange.
3. Same — Same—Same.—That, as to the 1000 dollars which was retained by E. out of the proceeds of sales of the trust slaves, and as to the application of the whole money received by the trustee, to the payment of other debts, without paying any dividend to M. and J. or to the creditor to whom they were sureties ; as K. had no lien on E.’s land at that time, if the parties claiming under the mortgage of the slaves had wasted the whole fund, or released the mortgage, that would not have prevented them from resorting to the lien on the land for satisfaction, K. having then no lien with which their proceedings interfered.
4. Same — Compelling Creditor to Resort to Principal - — Subrogation.—That a surety, before payment of the debt, has a right to resort to equity against the creditor and the principal debtor, to compel the creditor to collect, and the principal debtor to pay, the debt, out of any fund the debtor has subject to the debt ; and when the surety pays it, he has a right to be subrogated to all the rights and securities of the creditor.
Robert English, with Robert Jackson, Stephen Catron and John P. Matthews, his sureties, executed a bond to John Roster administrator of David Pierce, dated *the 13th November 1833, for 1325 dollars, payable with interest from the date on the 10th March following; and on this bond Roster recovered judgment, in September 1835, against English, Jackson and Matthews, Catron being then dead.
English, b3’ deed dated the 20th July 1835, and duly recorded the same day, reciting the liability of Jackson, Catron and, Matthews, as his sureties to Pierce’s administrator, and divers other debts by him owing, conveyed thirteen valuable slaves to Andrew Rulton, upon trust, that he, or such person as he should select, should make sale of the slaves, at such times or places as he, or the agent he should select, should think best for the interest of the creditors, and should apply the proceeds of sales to the payment of all the recited debts rateably, and pay the surplus if any to English. In the autumn of 1835, Rulton sent the trust slaves to the southwestern states, under care of the above named Robert Jackson (one of English’s sureties) whom he selected as agent to effect the sales; and English accompanied Jackson, carrying with him three other slaves, not part of the trust subject, which he sold, and he co-operated with Jackson in effecting sales of the trust slaves. They returned in March 1836, bringing with them the proceeds of the trust slaves, and (mixed with them) the proceeds of the three slaves carried out by English, with Rulton’s consent, and with the knowledge, if not the consent, of Matthews and Jackson, retained 1000 dollars, which was less than the amount his three slaves sold for; and English himself paid Rulton 9325 dollars in cash, and delivered to him a bill of exchange for 2000 dollars, payable twelve months after its date which was the 20th January 1836, drawn by one Noble on Ingersol & Co. of New Orleans, in favour of one Trefoe, accepted by Ingersol & Co. and endorsed by the payee Trefoe and two-others; which bill had been taken in exchange for money received from the sales of the ^slaves. Efforts were made by Rul-ton, and then by English, to get the bill cashed, but, the acceptors having failed, without success; and the bill was sent to an attorney at Natches for collection, and nothing more had been afterwards heard of it; but English, in July 1837, transferred the bill, then in the hands of the attorney at Natches, to Alexander Pierce, Alfred Moore, and John Rulton. The 9325 dollars which Andrew Rulton received of English, was paid to creditors secured by the deed of trust of July 1835, before the deed of trust of the 7th November 1836, hereafter mentioned, was executed. All the creditors to whom Fulton paid the money, had recovered judgments for their debts in September 1835. No dividend was paid to Pierce’s administrator, in part of the debt for which Jackson, Catron and Matthews were bound as sureties, though judgment for this debt also had been recovered in September 1835. And Matthews and Jackson were apprised of and consented to this application of the fund.
The three slaves which English carried with him to the southwest in the autumn of 1835, had been purchased by him of James Kent and of Wygall’s administrator, and he had contracted a debt of 700 dollars to James Kent and a debt of 1195 dollars to Wygall’s administrator for that purchase, for which debts David Kent was the surety.
By deed, dated the 7th November 1836 and recorded the same day, reciting that English was indebted to Alexander Pierce 273 dollars, that David Kent was his surety in two notes, one to James Kent for 700 dollars, and the other to Wygall’s administrator for 1195 dollars, that English was also indebted to Tate, Hanson & Fulton 143 dollars, to Richard Johnston 91 dollars, and to M’Gavock & Co. 117 dollars, English, to secure these debts, conveyed to Thomas Boyd a parcel of land in Wythe county and three slaves, upon trust, that he should make sale of the trust subject, and, out of the ‘^proceeds of sale, pay first the debt of 273 dollars due to Alexander Pierce, and the two debts of 700 dollars due to James Kent and 1195 dollars due to Wygall’s administrator for which David Kent was surety, and then apply the surplus towards the other recited debts, ratea-bly. After this deed was executed, Foster the administrator of David Pierce died, and Boyd, the trustee in this deed of November 1836, took administration de bonis non of David Pierce’s estate. Boyd, as trustee, made sale of the land mortgaged by the deed, and David Kent became the purchaser for the price of 3000 dollars; out of which he insisted on retaining enough to satisfy the two debts he had paid as English’s surety to James Kent and Wygall’s administrator ; and Boyd retained the legal title until the debt due him as administrator of David Pierce, should be satisfied. For the debts secured by this deed of November 1836, no judgments were ever recovered.
Matthews and Jackson, against whom, as sureties for English, judgment had been recovered by Pierce's administrator for 1325 dollars in September 1835, exhibited their bill in the circuit superior court of Wythe, against English, Boyd, David Kent, and all the creditors secured by the deed of November 1836; setting forth the facts above stated, and insisting, that the judgment recovered by Pierce’s administrator gave him a lien on English’s land prior to the debts secured by the deed of November 1836, and was therefore entitled to satisfaction, in preference to any of those debts, out of the proceeds of the land; and that they were entitled to be subrogated to the benefit of the judgment and its lien. They said that Boyd, the administrator of David Pierce, would, perhaps, compel them to pay the amount of the judgment recovered against them, though they believed he would not press the collection unless the exigencies of Pierce’s estate should require it, but would *await the termination of this suit. And they prayed, that David Kent might be compelled to pay Boyd the money he owed for the land, or to pay it into court; that so much thereof as was necessary should be applied to the satisfaction of Pierce’s judgment; that Boyd might be injoined from paying away any money he might receive for the purchase of the land until further order of the court, and general relief.
The injunction was awarded.
English, in his answer, referring to the deed of trust of July 1835, said, that the slaves thereby mortgaged were put into the hands of Fulton the trustee, and of the plaintiff Jackson whom he appointed his agent, to be disposed of according to the trust provided by that deed; that Jackson carried the trust slaves to the southwest, and there sold them for 12,325 dollars, of which he received 10,325 dollars in cash, and Noble’s bill of exchange on Ingersol & Co. for 2000 dollars payable twelve months after its date; that Fulton permitted English to retain 1000 dollars of the money, and received 9325 dollars, and the bill of exchange for 2000 dollars, and these together were amply sufficient to pay all the debts secured by the deed of July 1835; that the collection of the amount due on the bill of exchange, or the getting it cashed, failed by reason of Fulton’s negligence; and that he misapplied the cash (9325 dollars) received by him: for that he was bound by his trust to apply it, rateably, to and among all the debts secured by the deed, and that the rateable proportion which ought to have been, but was not, paid towards the debt of Pirece’s administrator, ought to be credited against his claim upon English’s land subsequently mortgaged to other creditors. And he denied the right of the plaintiffs to be subrogated to the lien of Pierce’s administrator.
David Kent referred to English’s answer, and adopted it as his own. He claimed, that the trust fund which went into Fulton’s hands should be rateably distributed, x’and the dividend due to Pierce’s administrator credited against the judgment; and that that trust fund should be exhausted, before the plaintiffs could resort to English’s land for satisfaction.
Boyd, trustee in the deed of November 1836, and administrator de bonis non of Pierce, answered, that he retained the legal title of the land he had sold to Kent under the deed of trust, until the debt due to Pierce’s estate, the judgment for which gave a prior lien on the land, should be paid; and insisted on his right to do so.
Matthews and Jackson amended their bill, and made Fulton, the trustee in the deed of July 1835, party defendant, and called upon him to render an account of the trust fund.
Fulton, in his answer, stated the facts in relation to the bill of exchange for 2000 dollars ; the efforts he made to get it cashed, and English’s efforts for the same purpose ; the insolvency of Ingersol & Co. the acceptors ; the disposition that had been made of the bill, namely, the sending it to an attorney for collection; and English’s subsequent transfer of it to Alexander Pierce, Alfred Moore and John Pulton. And he exhibited an account of the actual disposition he had made of the 9325 dollars which he had received.
As to the other defendants, the bill was taken for confessed.
It was admitted, that David Kent had paid the two debts of 700 dollars to James Kent and of 1195 dollars to Wygall’s administrator, with interest upon them.
The court ordered David Kent to pay the 3000 dollars (the price for which he had purchased English’s land from Boyd, the trustee in the deed of November 1836), into court, and directed the money to be lent out till the final decision of the cause. It also ordered Pulton to render an account of the trust fund under the deed of July 1835, and of his disposition thereof; and directed the commissioner to report how much was due upon the judgment of Pierce’s administrator.
*The money was paid by Kent into court.
The report of the commissioner shewed that Pulton had paid to creditors (other than Pierce’s administrator) secured by the deed of July 1835, the whole of the amount of 9325 dollars he had received in cash of the trust fund; and stated, that Pulton had also received the bill of exchange drawn by E. B. Noble on Ingersol & Co. in favour of W. J1 Trefoe, dated January 20, 1836, for 2000 dollars payable twelve months after date, accepted by Ingersol & Co. and endorsed by Trefoe, Meday Bolzeman, and H. E. Douglass; and that, in consequence of the failure of Ingersol & Co. no money had been received' by Pulton on the bill. The report also stated, that there was due on the 24th February 1840, on the judgment of Pierce’s administrator, the sum of 1753 dollars 53 cents, principal and interest.
After this report was made, namely, in March 1840,'Matthews and Jackson paid the administrator de bonis non of Pierce, 1757 dollars and 8 cents, in full of the judgment against them, principal and interest.
In April 1840, the court decreed, that as Pulton had not collected, or ' been able to collect any thing upon the bill of exchange, and as the claim of Matthews and Jackson was prior and preferable to that of Kent, there should be paid, out of the money, proceeds of the sale *of the land which Kent had paid into court, to Matthews and Jackson, the sum of 1753 dollars 53 cents with interest thereon from the 24 th February 1840.
Prom this decree the defendant Kent, by petition to this court, prayed an appeal; which was allowed.
Preston and Johnston, for the appellant,
argued, 1. That this was not a proper case for subrogation; for the sureties, when they exhibited the bill, had not paid the debt due on the judgment of Pierce’s administrator; and he could not be required to cede to the sureties his rights and remedies against the principal debtor, until they paid the debt. Enders v. Bruñe, 4 Rand. 438. It might be true, that the sureties paid the debt pending the suit; but they did not allege in their bill, that they had, but, on the contrarj’, they stated that they had not paid it. But there was no proof of the payment, unless Boyd’s receipt for it, without proof of its execution, was sufficient to establish the fact; and, indeed, as the fact was not in issue, there could not regularly be any such proof. 2. They said, the lien of the judgment was a legal lien on English’s land, depending on the right of the creditor to sue out an elegit, and that would have entitled him to extend a moiety of the land. The elegit would have given the creditor all that he was entitled to: there was no circumstance in the case, which could furnish a ground for the interference of equity; and if the circumstances did furnish ground for equitable relief, the relief could not be extended beyond a moiety of the proceeds of sale of the land. Stuart v. Hamilton’s ex’ors, 8 Eeigh 503. The decree gave the sureties full payment of the debt, which exceeded a moiety of the proceeds of the sale. 3. The bill of exchange for 2000 dollars, was taken for part of the proceeds of the trust subject sold under the deed of July 1835, and was delivered to Pulton ; and that sum would have sufficed to discharge -the debt for which Matthews *and Jackson were bound. They had an undoubted lien on that fund; and Pierce’s administrator had a lien on English’s land by the judgment; but Kent had only a lien on the land by the deed of November 1836. Now, where one creditor had two securities, and another had only one of those securities, the first must exhaust the security which the other has not, before he could be allowed to resort to the security which the other has in common with him. They cited Wright v. Nutt, 3 Bro. C. C. 326; Wright v. Simpson, 6 Vess. 714; Hayes v. Ward, 4 Johns. Ch. Rep. 123. It could not be pretended, that the fund mortgaged by the deed of July 1835, for the indemnification of Matthews and Jackson, was exhausted, until the 2000 dollars due by the bill of exchange should be applied, or proved unavailing. If Kent were to pay off this judgment, he would be entitled, by subrogation, to the bill of exchange. • It is supposed to be worthless-; be it so; yet Pulton received it as part of the proceeds of Ihe trust subject; and if he, or his cestuis que trust, had impaired or lost their security, either he or they must abide the loss. Jackson, one of the plaintiffs, was the agent of Fulton for the sale of the trust slaves: it was he who received the bill of exchange instead of money, or purchased it with part of the trust fund; though it was delivered by English to Fulton. 4. They said, there was 1000 dollars paid by Fulton to English, or retained by English with Fulton’s consent, and with the knowledge, and of course acquiescence, of the plaintiffs; and this sum of 1000 dollars ought, at all events, in favour of Kent, to be credited against the judgment of (Pierce’s administrator against the plaintiffs. If that 1000 dollars was part of the proceeds of the three slaves, which English carried to the southwest, and sold, along with the trust subject, it ought to have been deducted out of the 2000 dollars due by the bill of exchange, which English brought back and delivered to Fulton, instead of being deducted, as it was, out *of the cash received for the trust subject. 5. The trust fund that came into Fulton’s hands, ought, by the terms, of his trust, to have been divided, rateably, among the creditors secured by the mortgage; but, with the consent of Matthews and Jackson, the whole of it was paid to the other creditors; no dividend was paid to them; and, as between them and Kent, their just dividend ought to be credited upon the judgment of Pierce’s administrator. They voluntarily gave up so much which they were entitled to receive, and could have no right to claim the same amount out of the proceeds of the sale of land mortgaged to Kent. Lastly, they said, the decree was plainly wrong in its details: it gave interest upon interest.
M’Cotnas, for the appellees,
said, 1. That a surety had an undoubted right to resort to equity against the principal debtor and the creditor, to compel the creditor to collect the debt of the principal, and the principal to pay the debt, out of the lands he held subject to it, or out of any other means he had. Ranelagh v. Hayes, 1 Vern. 189; Nisbet v. Smith, 2 Bro. C. C. 579; Story’s Eq. 327, 730. The very case of Hayes v. Ward, cited for the appellant, proved the proposition. Now this, he said, was the precise object of the bill in this case. The money had not been then paid, and therefore the plaintiffs asked that it might be paid out of the proceeds of the land; but they foresaw that they might be compelled to pajr it before the termination of the suit; and, in that case, under their praj'er for general relief, they were entitled to subrogation. 2. Equity had jurisdiction to give relief, and to decree the payment of the whole amount of the judgment recovered against Matthews and Jackson out of the proceeds of sale of the land bound by the judgment; for which he cited Mut. Ass. Society v. Stanard, 5 Munf. 539; Blow v. Maynard, 2 Leigh 29, and Haleys v. Williams, 1 Leigh 140. Then, 3. as to the bill of exchange, neither Matthews xand Jackson, nor Fulton the trustee, were in any default in failing to collect the bill of exchange, or to get it cashed ; every effort to get it cashed had been made by Fulton; and then by English; and English afterwards undertook to transfer the bill of exchange to other parties. Certainly, if this fund was available, it ought to be applied, in the first instance, to the discharge of the judgment of Pierce’s administrator; but it had not yet been collected, and probably never might be; and the judgment creditor was not bound to wait till its fate could be ascertained, before he resorted to the lien of the judgment on English’s land for satisfaction ; for which he referred to Wright v. Simpson, cited for the appellant. 4. As to the 1000 dollars which Fulton allowed English to retain; that, he argued, was part of the proceeds of the three slaves which English carried out along with the trust subject, and sold. 5. The trust fund that came into Fulton’s hands was applied to the payment of other creditors, and no dividend was paid to Pierce’s administrator; but it was paid to creditors who had acquired a lien on English’s land by judgments of the same date with that of Pierce’s administrator, and who, if they had not been paid, would have had the same right to have recourse against English’s land, which Matthews and Jackson now had, and they therefore stood in the shoes of those other creditors. If the money had been distributed pro rata, the other creditors would have been party plaintiffs here; and it was immaterial, whether the whole of the judgment of Pierce’s administrator remained to be satisfied, or whether the other creditors were entitled to satisfaction to the same amount. And he prayed the court to consider, as to the objections founded on the bill of exchange, the 1000 dollars which English was allowed to retain, and the payment of the whole trust money to other creditors than Matthews and Jackson--that all these transactions occurred months before Kent got *his lien ; and if they had released the whole trust subject in Fulton’s hands, they would still have retained their lien on the land, and Kent’s lien must have been subordinate to it. He acknowledged that the decree was erroneous in the details; that it ought to have been for 1753 dollars 53 cents, with interest on 1325 dollars part thereof, being the principal debt, from the 24th February 1840; but this was a mere inadvertence, which nowise affected the principles in controversy between the parties, and might be corrected without disturbing the principles of the decree.
Marshalling Securities — Subrogation.—The doctrine is well settled that where a creditor has two funds, to which he may resort for the satisfaction of his debt, one of which is primarily liable, and the other only secondarily liable for the payment thereof, the person having the right to resort to the latter fund for the payment of his demand stands in the situation of a surety to the owner of the primary fund in the application of the equita-" ble principle of substitution in behalf of sureties, and if the funds secondarily liable be applied by the creditor to the satisfaction of his demand the person who stands in the situation of such surety is entitled tobe subrogated to all the rights and remedies held by such creditor for his indemnity. Nuzum v. Morris, 25 W. Va. 569, citing Story’s Eq. Juris., sec. 633 ; Bart. Ch’y Pr., sec. 328; White & Tudor’s L. C. in Eq. 149-151; 2 Tuck. Com. 492; Morrill v. Morrill, 53 Vt. 74; 2 Min. Inst. 173 ; McClung v. Beirne, 10 Leigh 394 ; Kent v. Matthews, 12 Leigh 574; Eddy v. Traver, 6 Paige 521; Hase v. ward, 4 Johns. Chy 130 ; Neely v. Jones, 16 W. Va. 625. See monographic note on “Marshalling Assets” appended to Carrington v. Didier, 8 Gratt. 260 ; monographic note on “Subrogation” appended to Janney v. Stephen, 2 Pat. & H. 11.
PrincIpal and Surety — Compelling Creditor to Resort to Principal. — As to the right of the surety to the aid of a court of equity to compel the creditor to exhaust his remedies against the principal debtor, before resorting to the surety, see the principal case cited in Southall v. Farish, 85 Va. 409, 7 S. E. Rep. 534.
In that case it was left undecided, whether or not a creditor with the surety’s money or its equivalent in his hands will be compelled, without resorting- thereto, first to exhaust his remedies against the principal. The court, however, seemed to think that he would not he so compelled.
The foftowing was the state of the account— “Principal of judgment, 1325 00 Interest on same, from November 13,1833 to
February 24,1840, 499 29
Costs, 11 17
1835 46
Deduct amountpaid July 11,1837,. 25 20
amount paid September 6,1837, 44 53 amount paid May 18,1838, 12 20
- 81 93
Due, $1753 53"
It is plain, that of the balance of 1753 dollars 53 cents, only 1325 was principal, and that the residue was interest and costs.

Opinion:
STANARD, J.
The right of a surety to the aid of a court of equity, to compel the principal to pay the debt, and thereby exonerate him, is sustained by numerous decisions (some of which were cited at the bar) and rests on the soundest principles of natural justice. This is so free from doubt, that Lord Thurlow, in the case of Nisbet v. Smith, said it had never been disputed. And the surety is entitled to resort for his indemnity to all the securities which the creditor holds. These rights combined, manifestly sustain the claim of the surety, seeking the aid of equity for his exoneration by compelling payment from the principal, to make the existing liens and securities of the creditor subservient to that end. Such is the nature of the claim set up bjr the bill in this case. It is true, the right of subrogation is asserted in the body of the bill, but the prayer is, in effect, that the lien of the creditor shall be upheld and dedicated to the protection and exoneration of the sureties, and for general relief. I do not doubt that the bill presents a fit case for relief in equity.
The title to this relief is encountered by various objections, founded on the facts developed by the pleadings and proofs, which have been urged by the appellant's counsel with earnestness and ability.
. *It is objected, that an amount sufficient for the indemnification of the sureties, part of the subject mortgaged for that purpose by the deed of trust of July 1835, remains unadministered, and that that subject should be exhausted, before the lien of the judgment on the land should be enforced, to the disappointment of the appellant, who is the subsequent in-cumbrancer of the land: in effect, that as the appellees, who claim under the elder incumbrance, have two funds for their indemnity, and the appellant is the' junior incumbrancer on one of them, the appellees should not have that one charged with their, claim, till the other shall be applied and exhausted. If both funds were equally accessible and available, or could be made so by the court, the equity to apply the fund not directly charged by the junior incum-brancer, would be plain and incontestable. But that is not the case here. The productiveness of the unadministered subject of the trust of July 1835, is, in all probability, precarious as to the amount, and the time when it may be realized is indefinite. If the objection were sustained, it would leave the claimant under the junior and subordinate title, predominant over the elder and superior: it would give the junior and subordinate incumbrancer possession of a certain and adequate fund, while the elder .and superior would be put upon the tedious and perhaps fruitless pursuit of satisfaction from a doubtful and discredited security. This is forbidden by the general principles of equity: the general rule entitles the elder and superior claim to satisfaction out of the fund most certainly productive and most accessible, whenever the junior can, by subrogation or otherwise, have the benefit of the fund liberated by such satisfaction. Here, if any thing shall in future be realized from the remaining subject of the trust of July 1835, Kent, the junior incumbrancer, having the subject embraced by his incumbrance withdrawn from him to satisfy the elder and superior claim of Matthews and Jackson, will be entitled to indemnification from it.
*It is further objected, that the sales of the trust slaves mortgaged by the deed of July 1835, produced enough for the full indemnification of the appellees, and that, as between the parties to this controversy, the claim of the appellees rests on the ground they would have occupied, if the whole amount produced had been duly applied; because, it is said, by their consent or acquiescence, 1000 dollars, part of the proceeds of sale, was retained by English, and by the improvidence of one of them, acting as agent to make the sale of the slaves, and the subsequent assent or acquiescence of them both, the bill of exchange was received, instead of money, as part of the proceeds of sale. To the first member of the objection, a ready and effectual answer is furnished by adverting to the position of the parties at the time when the proceeds of the sale of the slaves were accounted for, and the rights and obligations of the parties to that transaction. The settlement between Eulton the trustee, Jackson the agent of sale, and English who accompanied the agent and co-operated with him in making the sale, was made in March 1836. At that time, judgments had been rendered for the debt for which Matthews and Jackson were sureties, and for the other debts secured by the same deed of trust; and the security furnished by the deed of trust was reinforced by the liens of those judgments on English's land. And at that time, Kent had no lien on the land; the deed of trust under which he claims was not executed till November following. Kent, consequently, had no rights to be affected by any arrangement between English and the creditors claiming under the mortgag'e of the slaves, whereby a part of the proceeds of the trust slaves was permitted to be applied to the use or to other responsibilities of English. The utmost effect of the permission, was a surrender of the lien of the creditors on so much of the fund thus diverted from the purposes of the trust, and nowise impaired the lien of the creditors on the residue of the *trust subject, or on English's land. Nay, a total release of the security of the deed of trust of the slaves, would not, in any degree, have impaired the lien of the judgments, in favour, of Kent, who had then no lien with which that of the judgments interfered. These remarks supply an answer to the other part of the objection, founded on the receipt of the bill of exchange. That was a transaction of English, or, at least, one in which he participated, and of which he could not complain: the receipt of the trustee for it was given to English. At the time it was received, the creditors might have consented to substitute the bill of exchange in place of money for their security, and to permit English to apply the money to other uses or responsibilities, even though it had distinctly appeared that the whole proceeds of sales of the slaves had been received in money, without impairing the liens of their judgments, so far as the appellant, who had then no lien, was concerned.
Another objection is, that the lien of the judgment, in its utmost extent, covered only a moiety of English's land, and that the utmost that ought to have been decreed by the court to the exoneration or indemnity of Matthews and Jackson, was a moiety of the net proceeds of sale. My impression is that the appellant's counsel were right in the principle on which they founded this objection; but though this be so, it is my distinct opinion, that this case does not present a fit occasion for the application of the principle. If the judgment under which the appellees claim, had been the only one of the claims secured by the mortgage of the slaves for which there was a lien on the land, the case would be one for the application of the principle, or for a judicial ascertainment of its soundness. But, in this case, all the other claims secured by the mortgage of the slaves, were liens on the land, and many, if not all, the judgments for them which gave those liens, were ^rendered at the same court (September 1835) at which the judgment was recovered against Matthews and Jackson ; and by those liens the whole land was chargeable and liable to extent. Those claims charged the entirety of the proceeds of sales of the mortgaged slaves. The application of the proceeds of either subject to satisfy one or more of the claims, with or without the consent of the creditors holding the other claims, left the unsatisfied claimants incumbrancers on the residue of both the subjects, and clothed with all the rights of the satisfied claimants, necessary to secure the application of that residue to the other claims. The moment that a part of the proceeds of the slaves, which might have been applied to the partial indemnity of the appellees, was applied to the satisfaction of other claims which equally bound and might have been satisfied out of the land, a title vested in the appellees, sustained by plain equity, to have the unap-plied .lien on the land appropriated to supply the deficiency caused by withdrawing from their indemnity the proceeds of the slaves. And the lien, which the appellant subsequently acquired by the deed of November 1836, cannot control or impair this elder and superior equity.
The balance due on the judgment of Pierce's administrator was 1753 dollars 53 cents, with interest on 1325 dollars, principal, from the 24th February 1840, and such is the balance shewn by the commissioner's report. That was the measure of the lien on the land, whether the proceeds of the land were applied by the decree to the exoneration of the sureties Matthews ard Jackson by decreeing payment to the creditor, or to their indemnity by decreeing payment to them in reimbursement of the money they paid in satisfaction of the judgment. The court, however, by mistake, assumed that the report shewed that 1753 dollars 53 cents, with interest on the whole sum from the 24th February 1840, was due on the judgment, and charged the proceeds of the land *accordingly. This mistake, I doubt not, might and would have been corrected by application to the court below; and if the appellees had caused such correction to be made, they would, under the statute 1 Rev. Code, ch. 128, § 108, p. 512, have been entitled to an affirmance of the decree. My impression is, that as that has not been done, this court should correct the error, by reversing- the decree pro tanto, giving costs to the appellant, or at least, not giving them to the appellees. But my brethren thinking that the decree should be affirmed, with the correction, and with costs to the appellees as the parties substantially prevailing, such must be the decree.
Decree corrected, and affirmed, with costs to the appellees as the parties substantially prevailing.