Case Name: Joseph E. Wilson v. Samuel Stewart
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1874-12
Citations: 24 Ohio St. 504
Docket Number: 
Parties: Joseph E. Wilson v. Samuel Stewart.
Judges: Day, O. J., White and Rex, JJ., concurring. Welch, J., not sitting.
Reporter: Ohio State Reports, New Service
Volume: 24
Pages: 504–525

Head Matter:
Joseph E. Wilson v. Samuel Stewart.
Plaintiff and defendant were co-sureties for M. on a note payable to K, Plaintiff and others were also co-sureties for M. on divers other notes. M. conveyed certain lands to plaintiff by deed of mortgage, the condition being that the deed should become void if the grantor should “ pay, or cause to be paid, all said several notes according to the tenor and effect thereof,” and should save the plaintiff Horn the payment of money on account of the same. M., being insolvent, failed to pay the notes or to cause them to be paid according to the condition of the deed. The mortgaged property was insufficient to pay all the notes mentioned in the mortgage. Por the purpose of paying the note of K. in full, the plaintiff afterward released the mortgage as to a part of the lands, and procured M. to convey the same in fee to K. The note of K. was thus fully satisfied, and the defendant discharged from liability thereon. The balance of the mortgaged property was subsequently subjected to -the payment, pro rata, of the other notes mentioned in the mortgage, leaving, however, a large deficit, for which the plaintiff and his co-sureties therein remained liable. These co-sureties afterward compelled the plaintiff to account and pay to them the value of so much of the lands which had been conveyed to K. as was in excess of the proportion of the property properly applicable to the payment of K.’s note. Thereupon the plaintiff brought his original action, in the court below, to compel the defendant to contribute a moiety of the amount which he had been thus compelled to pay to his other co-sureties. Held :
1. That, upon the above state of facts, the plaintiff is entitled to an account and contribution from the defendant.
2. The amount of such contribution should be a moiety of the value of so much of the lands conveyed to K. as was in excess of the amount which would have been applicable to the payment of K.’s note upon a pro rata distribution of the whole property among the several notes mentioned in the mortgage.
S. The plaintiff s right to contribution, upon the above state of facts, would not be defeated by the mere additional circumstance, that at the time K. accepted the conveyance in payment of his claim, and as part of the same transaction, M. procured from K. a contract, in relation to the lands conveyed, beneficial to himself alone.
4. If, however, the plaintiff released the mortgage for the sole benefit of the mortgagor, or for the purpose of obtaining his own discharge from liability on K.’s note, without exercising good faith toward his co-surety therein, he ought not to have contribution from him, though his conduct incidentally, but unintentionally, resulted also in discharging the co-surety from liability on the note.
Error to the Court of Common Pleas of Hardin county. Reserved in the District Court.
William Mills, as principal, and the plaintiff and the defendant, with Aaron Harlan, as his sureties, on the 28th day of June, 1855, made and delivered their joint and several promissory note, payable in three months after that date, to William H. Knott, or order, for six thousand dollars, with, interest at the rate of ten per cent.
The plaintiff and others also became sureties for Mill» upon eight other promissory notes, made to persons other than Knott; he likewise became surety for Mills upon, a bond executed by Mills as administrator of the estate of Elisha Mills, deceased. ■
On the 15th day of May, 1858, William Mills and his wife ■executed and delivered to the plaintiff five several mortgages upon large quantities of lands, situate in the States of Ohio, Illinois, Indiana, and Michigan. The condition contained in the mortgages respectively is the same. After de-seribing the notes by the amount and payee of each of them, .and the administration bond, and reciting the.facts that the plaintifi' is a party to the notes and bond with Mills as maker, and became such party as surety for Mills, it concludes thus :
“Now, therefore, if the said William Mills shall pay, or ■cause to be paid, all said several promissory notes, according to the tenor and effect thereof, with all interest accrued or that may accrue thereon, and shall save said Joseph E. Wil.son from the payment of all moneys, costs, and expenses on any and all thereof, apd as well also upon said administration bond, and free.from all damages in the premises, then these presents to be void, otherwise to be and remain in full force.”
On the 30th day of June, 1860, an agreement was' entered into by and between Mills, Knott, and the plaintifi-, whereby the parties agreed that the plaintiff should release his mortgage on certain parcels of the land therein described, and that Mills should convey the same to Knott, at the nominal' price of four dollars per acre, in satisfaction of said note for six thousand dollars, and also a note for nine hundred and twenty-eight dollars and forty-one cents, dated July 2, 1857, bearing ten per cent, interest from date, and due to the heirs of one Lydia Knott, deceased; and that Mills should have the privilege, at any time within five years, to sell any portion of the lands so to be conveyed to Knottby Mills, at such price as they might thereafter agree upon,, and the proceeds thereof be applied in such a manner that whenever the amount of the notes and interest should be “ fully met,” the surplus of money and lands should be refunded or restored to Mills. “Any taxes or legitimate expenses attending said lands to be charged up with said notes and interest, as accounted for by Mills out of the said lands to Knott.”
In pursuance of this agreement, Mills and his wife, on the said 80th day of June, 1860, executed and delivered toKnott a deed conveying to him in fee 2,402 acres of land,, part of the lands described in said mortgage, and Wilson released the mortgage on the lands so conveyed; and, at-the same time, Knott made and delivered to Mills a-written instrument, of which the following is a copy:
“In consideration of Wm. Mills having deeded to me-2,402 acres of land, of even date with this instrument, in full payment of two promissory notes — the one for $6,000,. dated June 28, 1855, with interest at ten per cent, from date, with one year’s interest paid, and signed by Wm. Mills, Jos. E, Wilson, A. Harlan, and Samuel Stewart, and the other for $928.41,- dated July 2, 1857, with ten per cent, interest from date (the said latter note given to Wm. H. Knott as the agent of the heirs of Lydia Knott, deceased) : Now, know ye that I, W. H. Knott, hereby agree with Wm. Mills that the said Mills shall have the privilege, at any time within five years, to sell any of the above-named quantity of acres of lands at such prices as may be mutually agreed upon, and the proceeds thereof to-be applied in such a manner that whenever the amount of the original notes and interests shall be fully met, them the-surplus of money and lands, as the case may be, shall be refunded or restored to the said ¥m. Mills. It is understood that any taxes or legitimate expenses attending said lands shall be charged up with said notes and interest, as accounted for by said Mills, out of the said lands, to- the said Knott.
“June 30, 1860. ¥m. H. Knott.”
And also executed and delivered to the plaintiff an instrument, of which the following is a copy:
“In consideration of ¥m. Mills having deeded to me (ffm. Knott) about 2,100 acres of land in payment of a note made to me by ¥m. Mills, Jo.seph E. Wilson, A-Harlan, and Samuel Stewart, for the sum of $6,000, dated June 28, 1855, and in consideration of Joseph E. Wilson releasing his mortgages on said lands so conveyed by the said Mills, I hereby agree to release the said Joseph E. Wilson from all liability as one of the signers of. said $6,000 note.
“ Witness my hand and seal, this 80th day of June, in the year 1860.
“ Wm. H. Knott, [seal.]”
The remainder of the mortgaged property turned out to-be insufficient to pay the balance of debts mentioned in the mortgages.
On the 4th day of October, 1861, the plaintiff in this case-commenced an action, in Greene Common Pleas, against said Mills and others, the object of which was to obtain a judgment against Mills upon certain notes he held against him, and an order for the sale of certain mortgaged premises, including a part of the lands described in said indemnity mortgages. Some of the co-sureties of the plaintiff’ upon the unpaid notes mentioned in the same mortgages were made defendants, and filed cross-petitions, charging in effect that the plaintiff, in violation of his trust under said mortgage, had allowed Mills to apply a part of the lands mortgaged to his use by conveying the same to the creditors named in said mortgage, in satisfaction of their notes •and otherwise. In the final decree, the plaintiff was re- . quired to account to said co-sureties for their pro rata shares of the value of the lands which said Mills applied as afore-said', and he accounted to them accordingly. Mills was insolvent.
The defendant Stewai’t was not a party to the action in which the above decree was rendered.
On the 9th day of February, 1866, the plaintiff in error •commenced the original action in this case, in the Court of Common Pleas of Hardin county, and afterwaz’d, on the 1st day of February, 1868, filed an amended petition, as follows:
“ The plaintiff says, by leave of the court, that on the 15th day of May, 1858, he and the defendant, together with Aaron Harlan, were sureties of one ¥m. Mills on a certain promissory note held by one Win. H. Knott, dated ■June 28, a. d. 1865, for the sum of $6,000, and payable to -tbe order of said Knott in thz’ee months after the date thereof, with interest at the rate of ten per cent.
[“ The plaintiff further says that on the day fiz’st aforesaid, he and others were sureties for said Wm. Mills on divers other obligations which amounted, piúncipal and interest, ■on the 20th day of April, a. d. 1865, to $31,705.46, including said Knott note, aud-that on the day first aforesaid, the said Wm. Mills, in order to indemnify the plaintiff against his liability, as such surety, on all of said obligations, did convey in fee simple, by deed of mortgage of that date, •certain real estate situate in the States of Ohio, Indiana, Illinois, and Michigan, all which have been sold by the plaintiff!, and from which he realized, including interest to •said April 20, 1865, the sum of $18,516.80.
“ The plaintiff further says that on the 30th day of June, A. d. 1860, he paid the said note held by said Knott, then amounting, principal and interest, to $8,400, with a poz'tion ■of the said land so mortgaged to him as aforesaid by said .Mills, and that he applied of said indemnity, in the payment of said Knott note, $3,473.40 more than its pro rata share-thereof, which said sum he was afterward compelled to pay, out of his own moneys, on the other of said obligations on which he was surety as aforesaid, by reason of the overpayment of said Knott note.] ' ,
“ The plaintiff further sáys that he paid of his own moneys, in manner aforesaid, on the said note held by said Knott, the sum of $3,473.40, as of the date of June 30,. 1860; that the said Knott note is fully paid; that neither the defendant nor said Harlan contributed anything to the payment thereof; that said Mills and Harlan are both insolvent and are both non-residents of the State of Ohio, and. that by reason of the premises the said defendant is indebted to him in the sum of $1,736.70, with interest from June 30, 1860, which he refuses to pay, although often requested so to do, and for which sum and interest the plaintiff prays judgment against the said defendant.”
The allegations embraced in brackets were stricken out. on the defendant’s motion.
The defendant, answering the amended petition, denied-that the plaintiff paid of his own money, or in any other way, on said Knott note, the sum of $3,473.40, or any other sum ; and denied the alleged indebtedness to the plaintiff. As to the insolvency of Mills and Harlan, he alleged he had no personal knowledge on the subject, and therefore denied the allegation that they are insolvent.
The issue so joined was tried by a jury. A verdict was rendered for the defendant. The plaintiff made a motion for a new trial; this motion was overruled; a final judgment was rendered for the defendant; a bill of exceptions was taken and made a part of the record. It contains all the evidence, the charge of the court, and the instructions which the plaintiff requested, but which the court refused to give to the jury.
The following is the charge of the court, to which exceptions were taken by the plaintiff:
“1. If the jury find, from the evidence, that Mills, the-principal, executed and delivered to the plaintiff the mort- - gages in evidence, and that the plaintiff was liable, as the security of Mills, on the notes and obligations described In said mortgages, and that said debts were equal in amount to the value of the lands' mortgaged by Mills to the plaintiff as indemnity (and that the plaintiff, Wilson, paid the said Knott note by the sale and transfer of his interest in said 2,400 acres of land, he, Wilson, procuring said Mills, in order to induce Knott to accept said 2,400 acres as such payment, to release or convey his Mills’ interest in the same); and, if afterward it was ascertained that the indemnity in the hands of Wilson was insufficient to pay in full the debts mentioned in said mortgages, upon which Wilson was security for Mills, then the co-sureties of Wilson, in the other debts of Mills described in said mortgages, had the rgiht to require Wilson to account to them for the amount at which said Knott received said lands on said $6,000 note, so as to distribute the whole amount equally upon the security debts described in said mortgages, and if he, Wilson, has so accounted and paid, he has the right to recover the one-half of the amount he has so paid by reason of having so paid the said $6,000 note to Knott in full with said lands, so that each of the co-sureties will bear an equal proportion of the deficit which the indemnity fund applied pro rata on all the debts named in the mortgages would not pay, which would be one-half, if the jury find Harlan was insolvent, or a non-resident of the State of Ohio, at the time of the bringing of this suit, otherwise only one-third.
“2. But if the jury are not satisfied, from the evidence, that Wilson did so pay said Knott note, but, on the contrary, Mills, the principal debtor, himself paid it by the sale of his interest in said 2,400’acres of land, although he, Mills, to induce Knott to accept such payment, procured said Wilson to release his mortgage on said 2,400 acres, or that Mills himself paid it in any other way, he, Wilson, can not recover in this action.
“ 3. So if the jury find that the plaintiff did pay the Knott note in the manner described in the first proposition in this •charge, yet if they also find, that at the same time, and as a part of the contract by which Knott accepted the land in payment, he, Mills, agreed that Knott might retain the note, and he, Mills, should have five years or any further time to pay it, and redeem the land, and that Wilson was a party thereto, such agreement would defeat the plaintiff’s right to recover; but to have the effect so to defeat the plaintiff', the jury must be satisfied, from the evidence, that the agreement for such extension and redemption was a part of the agreement by which Knott acquired the land, and that Wilson was a party to that as well ás to the agreement of sale to Knott.
' “ 4. So the plaintiff’s prima fade right to recover, as stated in the first instruction, would be defeated if the jury find, from the evidence, that after the acts described in the first instruction and before the commencement of this suit, he, Wilson, informed Stewart that the Knott debt was satisfied, and he, Stewart, released therefrom, provided Stewart was thereby induced to do, or omit to do, any act by the doing or omitting to do which he could have saved himself fi’om loss.
“5. The burden of proof to establish the affirmative of' the propositions necessary to entitle the plaintiff’ to recover' rests upon him, and he must satisfy you of their truth by a fair preponderance of evidence.”
A petition in error was filed in the District Court to reverse the judgment of the Common Pleas, which, by reservation, is now before us for decision.
Goode, Bowman § Scott, attorneys for plaintiff in error :
In considering the correctness of the propositions of law stated by the court to the jury, it must be remembered that it was an undisputed fact in the case that the debts, against which the mortgage was given to indemnify Wilson, were far greater in amouixt than the value of the mortgaged estate; that Wilson had no other indemnity; that Mills was insolvent, and hence that the entire beneficial estate in the land was vested in Wilson by the mortgage, and that there remained in Mills merely the naked legal title.
"We complain of the second, third, and fourth charges of the court to the jury. [For these charges, see statement supra. — Rep.]
First. The second proposition submitted by the court to the jury, made the liability of Stewart to Wilson depend,., not upon whether the Knott note was paid by Wilson, the surety, or by Mills, the principal, but upon which of the two made the arrangement for the payment of it.
. This charge of the court ignores the substance of the-transaction and lays stress only on its form. The entire-beneficial estate in the land being in Wilson, it was his release of the mortgage which vested that beneficial estate in Knott, and gave to him the 'substance of what he received in payment of his note. There was no evidence in any degree tending to show that the debt was paid in any other way than by the lands included in Wilson’s mortgage. Now, how is it material whether Mills, the principal, or Wilson, the surety, negotiated this arrangement with Knott ? It was not the negotiation that paid the debt, but it was the estate in the laud. This came from Wilson. This paid the debt. If it had been his own money which Mills induced Wilson to pay Knott in satisfaction of the debt, would it at all affect Wilson’s right to-contribution against Stewart, that Mills had made the arrangement in pursuance of which Wilson paid the money in satisfaction of the debt?
Now, “the doctrine of contribution among sureties is not founded upon contract, but is the result of general equity, on the ground of equality of burden and benefit.” Deering v. Earl of Winchelsea, 3 Lead. Cases in Eq. 131.
In this case the right of contribution arises from the fact, that Wilson — managing the trust indemnity in his hands to the best advantage, both for himself and his co-surety Stewart — used this trust indemnity to pay the Knott note in full; whereas, he and Stewart were entitled to have only the pro rata sharé of that note in the trust indemnity applied toward the payment of the Knott note. In thus, benefiting himself and Stewart, as sureties of Knott, he,. Wilson, incurred a liability to his other co-sureties to which' he has responded, and he is entitled to contribution from Stewart.
Second. The error of the third proposition submitted by the court to the jury, consists in treating a mere incident as if it alone constituted the entire transaction, and ascertaining the rights of the parties, not from the principal element of the transaction, but from a provision which is incidental’ merely.
The contract referred to in the. third charge, was signed by Knott alone. It recites that the land had been conveyed to Knott in full payment of the $6,000 note. Wilson is not a party to this written contract, and all the evidence shows that Wilson had nothing whatever to do with the-contract between Knott and Mills, and the utmost that can be claimed from it is that he knew of the arrangement and-made no objection to it. The statement, therefore, of the court to the jury, “and that Wilson was a. party thereto,”’ must be understood in the light of this testimony.
In making this arrangement with Knott, it was his duty to see that he and his co-sureties received the full price of the land. When he had done this, it was no concern of his what arrangement Mills and Knott made between themselves as to the future disposition of the lands. If he had acted in bad faith, and the arrangement was a device mei-ely to-secure some benefit to himself, in which his co-sureties-would not share, then there might be some foundation for the claim that this contract between Knott and Mills destroyed his right to contribution.
Third. The fourth proposition submitted to the jury must be read in the light of the fourth proposition of theplaintiffj which the court refused to give to the jury, and is as follows:
“ The fact that the plaintiff told the defendant that theKnott note had been paid with the lands mortgaged as indemnity to him, does not affect his right to contribution, because the defendant is as much bound to know the law as the plaintiff, and it was not the duty of the plaintiff to advise him that if the indemnity fund proved insufficient, he would be called upon to contribute his share toward the ■deficiency.”
Now there is not only no averment in the answer, which .justified the court in submitting to the jury whether Wil■son was estopped, by his statement to Stewart, from asserting a right of contribution which otherwise would exist, but there is also not. a scintilla of evidence that Stewart was led to omit to do anything, in the way of obtaining •security from Mills, by reason of the statement of Wilson, ■or that it would have been possible for. him to have obtained indemnity, either in whole or in part. The testimony of 'Stewart himself, giving it the most liberal construction possible in his favor, did not justify the submission of such ■a question, nor does Stewart in his evidence claim that he was led to omit to do anything by reason of the statement. The charge given by the court to the jury was clearly calculated to mislead the jury.
Harrison §• Olds, attorneys for defendant in error:
From the record it clearly appears that the plaintiff had no cause of action against the defendant. The judgment will not, therefore, be reversed, even though error may be found in some of the rulings of the Common Pleas. Oliver v. Moore, 23 Ohio St. 473; Kline & Berry v. Winne, Haynes & Co., 10 Ib. 226; Mowry v. Kirk & Cheever, 19 Ib. 375, 384.
I. The extinguishment and satisfaction of the promissory note giveu to Mills for six thousand dollars, did not create a right of action for contribution in favor of the plaintiff .against the defendant. This, we think, is plain, from the fact that the property which Enott accepted in extinguishment and satisfaction of the note, was not the property of ■the plaintiff, but was the property of Mills.' The mortgage ■held by the plaintiff upon the property was one of indemnity only. When the note was extinguished and satisfied, the plaintiff had not been damnified. He had not then paid any of the indebtedness of Mills described in the mortgage. Hence the plaintiff, at the time of the ex-tinguishment and satisfaction of the note, had merely a lien on the property mortgaged; and he held this lien, not to secure the payment of any indebtedness of Mills to him, but simply to indemnify him against any injury which he might sustain in case he should be compelled to actually pay, with his own money or property, any of the indebtedness of Mills to Knott and others described in said mortgage, for which he was liable only as the surety for Mills. Dntil such payment, the beneficial interest in the property was no moré in the plaintiff than in the defendant, or any ■of the creditors of Mills mentioned in the mortgage. The mortgage lien was held by the plaintiff' in trust for these ■sureties and creditors of Mills. Now, the fact that the plaintiff was one of the sureties of Mills, does not alter his legal relation to the property. The mortgage operated for the indemnity of his co-sureties to the same extent as for his indemnity.
The plaintiff did not, then, pay the Knott note. On the contrary, it was extinguished and satisfied with the property of Mills. The mortgage lien was not released at the defendant’s request, nor with his assent or knowledge. The plaintiff', therefore, voluntarily took the risk of any loss which might result to him from the execution of such release.
If, at the request of Mills, and for his accommodation, the plaintiff chose, without the knowledge or consent of the defendant, to release the mortgage in order to enable Mills to sell and convey the land, with the right in Mills of ’ repurchasing, and as a consequence he is afterward sued for so doing, how can he set up and enforce a demand against the defendant for compensation or contribution ? The defendant was not a party to the act which created the liability of the plaintiff; the plaintiff was moved to do the act in order to favor Mills and to benefit himself. The cLoctrine of “equality of burden and benefit” has never been applied to such a transaction, and, we think, it has no* application to it.
The plaintiff, by the transaction between Mills, Knotty and himself, enabled Mills to make a sale and conveyance of the lands upon conditions favorable to Mills, and procured his own discharge from his personal liability upon-the note for $6,000.
By thus contracting for and obtaining an advantage for Mills and himself, he violated his trust, and took the risk of being required to account therefor by any of the beneficiaries of the trust. If any of these beneficiaries were,, in fact, benefited instead of injured by such breach of trusty the plaintiff conferred the benefit upon them voluntarily, without their knowledge, and in breach of his trust, and, therefore, his action, which produced the result, can not-form the foundation of a claim, either at law or in equity, against them. He can no more compel them to reimburse him for money paid out by him to discharge his liability to the beneficiaries of the trust who were injured by its-breach, than the injured beneficiaries could have required the benefited beneficiaries to account to them for the-plaintiff’s breach of trust in which they in nowise participated. It was the plaintiff’s duty to foreclose the mortgages and have the proceeds of the sales of the mortgaged property applied according to the rights of all parties concerned; and if he chose, at the request of Mills, and to favor him, to disregard that duty, without the consent of the other parties in interest, he must himself bear any loss which may result to any of them.
No action for contribution in favor of a surety against, his co-surety can arise unless the debt is paid by him; so that the very instant he pays the same, a right of action, is created, and can be maintained by him against his co-surety. Now, it is conceded by the adverse counsel, that, a right of action for contribution in favor of Wilson did not arise immediately upon the execution of the release by him. The execution of the release was not, therefore,. .a payment by him of the note. If it had been, he could forthwith have maintained an action for contribution.
II. If the legal effect of the agreement between Mills and Knott is what its terms import, and the “ Knott note ” •was not, by such agreement, paid with Mills’ property, .then that agreement operated as an extension of the time .of payment of the note for five years, and Stewart was .thereby discharged.
If "Wilson released the mortgage in consideration that •he be discharged, and the time for the payment of the note be extended, and such time was extended accordingly, and this operated, incidentally, to release Stewart, Wilson has no claim for reimbursement against Stewart.
III. The-supposed cause of action was barred when the ■“ amended petition ” was filed. This amended petition was a substitute for the original petition. It, therefore, took its place for all purposes; it stated a somewhat different right of action. If, then, the plaintiff ever had a cause of action, it was barred when the petition on which he sought to recover a judgment was filed; and he had not then a cause of action. Commissioners of Delaware County v. Andrews, 18 Ohio St. 69.
17. H. West, of counsel for plaintiff in error, argued in reply:
I. The defendant insists that inasmuch as- the plaintiff •did not pay the Knott debt from his own private means, the condition of the indemnity mortgage was never broken. He impliedly concedes that if the.condition was broken .before the release to Knott, then the plaintiff is entitled to recovery. That the condition of the mortgage was so broken I shall now show.
The obligee in a bond of indemnity may sue thereon as soon as the condition thereof is broken, in order to secure himself, and is not bound to wait until he is compelled to fulfill the obligation he has incurred in behalf of the obligor. 1 U. S. Dig. 455, sec. 547; Ramsay v. Gervais, 2 Bay, 145; S. P., 16 Mass. 7; Negus’ case, 7 Wend. 499; Rockfelter v. Donnelly, 8 Cow. 689. See 4 N. Hamp. 497, 498; Jones v. Cooper, 2 Aik. 54.
The condition of Mills’ mortgage to plaintiff reads as follows:
“ Now, therefoi’e, if the said William Mills shall pay, or cause to be paid, all said several promissory notes according to the tenor and effect thereof, with all interest accrued, or that may accrue thereon,” etc. This was the first condition. There was also a further condition, that he “ shall save said Joseph E. Wilson from the payment of all moneys,” etc.
The said notes, according to the “tenor and effect-thereof,” were due and payable at the time said mortgage was given. The condition of the mortgage requiring him to pay according to the “ tenor and effect ” of said notes, was broken upon the instant of its execution, and the-mortgage became absolute. But the plaintiff had a right of action on another ground. By tbe statute, a surety is-authorized to maintain an action against his principal to compel payment of the debt before the same has been discharged by the surety.
But the real point in the case lies deeper down. Did the plaintiff, at the time of releasing such lands in payment of the Knott debt, have such an interest therein as to entitle him to relief in equity ? This is the material question.
The mortgagee of lands has a property interest therein to the extent of the security it is designed to give; and this is true as well before as after condition broken. The title-before condition broken, is in the mortgagee as against all the world except the mortgagor; after condition broken, it is in the mortgagee absolutely, subject only to the mortgagor’s equity of redemption. The interest of the mortgagor is the value of this equity; the intei’est of the mortgagee is the amount or value secured. Heighway v. Pendleton, 15 Ohio, 735. See also same 671, 676; 18 Ohio, 273-277.
The amount of Mills’ indebtedness upon which the-plaintiff was surety, exceeded thirty thousand dollars. The value of the mortgaged property was less than nineteen! thousand dollars. The entire beneficial interest in the property was therefore vested íd the plaintiff as mortgagee, Mills retaining only the naked title and barren equity of redemption.
The property interest in the said mortgaged lands so vested in the plaintiff, was held by him partly for his own individual benefit, and partly as trustee for his co-sureties in various proportions.
The plaintiff having parted with this land in payment of the common debt, his co-sureties, in all conscience and honesty, ought to make contribution.
The defendant’s counsel insists that Mills, the principal, paid the Knott debt. This can not be correct. Mills held nothing but a barren, worthless equity of redemption in the lands. The only thing of value which Kuott received, was obtained from the plaintiff, through and under whose release of his property interest, held for himself and bis co-sureties, the note was discharged and paid off.
II. Defendant’s counsel, however, insists that the plaintiff, in executing said release, violated his trust. This can not be. This fund he applied to the extinguishment of the common liability pro tanto, which was a legitimate and righteous application thereof.
But if the amount applied by him on the Knott note had exceeded the value of his own interest in the mortgaged property, it could not, under the circumstances, have been an intentional or fraudulent violation of his trust. He had no personal knowledge of the value of the mortgaged property. Relying on the information given him, and believing it far better to apply the property at a fair valuation on private contract than by forced judicial sale, he transferred to Knott, at such full valuation and more, such proportion of themortgage property as was sufficient to pay the Knott debt of $8,400, believing that he had still enough to meet the balance. Until the residue was sold and the matter wound up, he was ignorant of any deficiency. He acted in good faith, and what he did was far better for the sureties than to have sacrificed the property at judicial sale. It was, therefore, not any breach of trust, either in intention or in fact.
But suppose there had been a misapplication of the trust property in applying it to the full payment of the Knott note. It was applied for the benefit of the defendant, and certainly it does not lie iu his mouth to make complaint. He was not and could not be prejudiced. He could not have obtained another dollar of security, for Mills had no more to give. The defendant lost nothing, and was not and could not be prejudiced. Will not equity relieve the plaintiff? Will it allow the defendant to complaiD and object, he having received all and more than he was entitled to? Certainly a court of conscience will not confirm such hardship, but relieve against it.
III. The point raised by defendant on the statute of limitations can not be maintained. No new cause of action was set up by way of amendment.' It was simply an abbreviated statement of the same cause, omitting surplusage. But if it were a new cause, neither motion nor demurrer was interposed, nor plea of the statute made. It is too late now to raise the objection.

Opinion:
McIlvaine, J.
It is quite appai'ent, from the record before us, that the theory of the plaintiff's case adopted by thé court below, at the trial of the action, was essentially different from the view taken at the time the motion to strike irrelevant matter from the amended petition was. sustained.
The amended petition, after the motion to strike out had been sustained, contained the usual averments of an action for contribution by one surety against his co-surety, and nothing more. The gist of the action, as then stated, was, that the plaintiff', of 1ns own moneys, had paid the mutual debt of the parties, whereby a right had accrued to him to demand a judgment against the defendant to the extent that such payment had inured to his benefit.
If the plaintiff's cause of action had been this, and nothing more, we think the argument of defendant's counsel in •favor of the affirmance of the judgment below would he unanswerable.
But the case, as submitted, to the jury upon the proofs, •and as stated in the first proposition contained in the charge of the court, assumed that the debt of Mills to Knott, for which the plaintiff and defendant were liable as co-sureties, had been paid by the plaintiff'out of an indemnity or trust property placed in his hands by the principal debtor; in which, however, other persons who were liable for Mills as co-sureties with the plaintiff, on other indebtedness, had an interest. And that the plaintiff afterward had been compelled to account to such .other co-sureties for a part of the trust estate so used by him for his own and the defendant's benefit, in the payment of the Knott note.
If the state of facts constituting the plaintiff's cause of action, thus stated to the jury, was sufficient to entitle him to recover, then we think the judgment below should be reversed, for the reason that the case, upon the whole charge, was .not fairly submitted.
It is true that the cause of action thus brought .under consideration, consists of facts very different from- those stated in the petition. But it can not be regarded as fatally variant. Neither party can be heard to object. The defendant; because he was not misled, nor did he object to the introduction of the testimony; and also for the reason, that the allegations necessary to make the petition conform to the ease as it was stated to the jury, were stricken out on his own motion. And as to the plaintiff, if he were to ask the .reversal of the judgment below on the ground of error in sustaining the motion to strike out, it would be a sufficient answer to say that he was not prejudiced by the error, for the reason that, upon the trial, he had the benefit of all the allegations so stricken out.
In our opinion, the facts 'enumerated in the first proposition of the charge, constituted a good cause of action in the plaintiff. The mortgage executed by Mills to him, as indemnity against loss by reason of his suretyship, inured to the benefit of all his co-sureties. In equity, he became a trustee, and the mortgaged property a trust estate in him,, which he was bound to hold and manage for the protection of all those who were bound with him as sureties for Mills by the several notes mentioned in the mortgage. The mortgaged property being insufficient for the full payment of all the notes, it was his duty, upon the failure of Mills to pay, or to cause the notes to be paid, to administer the trust, by applying the property or its proceeds ratably upon all the debts against which it had been given as indemnity.
Instead of converting the whole of the mortgaged property into money, and applying it ratably upon the several notes, he transferred a part of it, through the agency of the mortgagor, to Knott, the holder of one of the notes, and in full payment of his claim. By this transaction, the defendant was benefited equally with the plaintiff, and both were discharged from further liability to Knott. It turned out, however, that by making full payment to Knott, a greater proportion of the property was applied for the benefit of these parties than should have been. And hence the plaintiff became liable to and did account to his other co-sureties for the deficit produced in their shares of the trust property. To the extent that the plaintiff thus became liable to and did account to his other co-sureties, we think the-plaintiff had a clear right in equity to call upon the defendant for contribution. As between these parties alone, it was the duty of the plaintiff to extinguish the whole of the debt to Knott out of the property which he had received from their principal. This he did, but by so doing he became liable to and did respond to the other sureties; yet, in the absence of actual fraud on his part, we think the defendant can not, in good conscience, be permitted to enjoy and share the benefits of the transaction, without also bearing a share of its burdens. This is equality. The case is not one for the application of the maxim, ex dolo malo non oritur actio.
As above stated, this view of the plaintiff's ease was not, by reason of subsequent instructions, fairly submitted to the jury. The mere form of the transaction between the plaintiff, Mills, and Knott, does not determine its true character. The claim of Knott was unquestionably discharged by Mills conveying the lands to him. In order to invest him with the complete title, it was necessary that the interests of both the mortgagor and the mortgagee should be transferred. The mode adopted was a release by the mortgagee and a conveyance by the mortgagor in fee. This mode was unobjectionable. The same end would have been accomplished, if the equity of redemption had been released to the mortgagee and the fee conveyed by him to Knott. The mode adopted no more indicates the real character of the transaction than the other mode would have done. The important question was: Did Wilson, by parting with his interest in the mortgaged property, procure the discharge of the note? That Mills conducted the negotiations,, and passed the title to Knott by his deed, are facts entirely consistent with the affirmative of this question. If the plaintiff parted with his interest in the land for the bona fide purpose of having it conveyed to Knott in payment of his claim, and would not otherwise have released the mortgage, then, as between him and the defendant, he is entitled to the credit of having paid the note. And if this-hypothesis be true, it can not affect the plaintiff's rights, that Mills, in the same transaction and in consideration of parting with his equity of redemption, procured from Knott a contract for the redemption or repurchase of the lands at a future day, or obtained any other right in relation thereto-valuable to himself. In this view of the case, we think the-second and third propositions contained in the charge were,, to say the least, misleading.
In reversing the judgment below upon this ground, we-do not desire to be understood as intimating that a case may not be made, or even that the testimony in this record does not tend to show a state of facts which would preclude-the plaintiff's right to recover in the action. Unquestionably,, if he released his mortgage for the sole benefit of the mortgagor, or his own personal discharge from liability on ác count of Knott's note, without exercising good faith toward the defendant as his co-surety, he ought not, in equity, to have contribution from him, although his conduct incidentally, but unintentionally, resulted in the discharge of the defendant also from liability on the note.
The fourth instruction ought not to have been given. If it be admitted that the matter stated therein could, in any event, become the predicate for an estoppel, there is nothing in the testimony, as we understand it, which tends to show that the defendant was induced thereby to do or to omit to do anything, without the doing or omitting of which he could have saved himself from loss.
If the plaintiff should eventually recover in this action, how should the amount be ascertained ? We doubt whether •the rule laid down by the court below is the true one. The defendant is not concluded by the amount of the recovery by the co-sureties in the Greene county case. He was not a party to that suit. Those co-sureties were entitled to recover their fro rata shares of so much of the mortgaged property conveyed to Knott as was in excess of the proportion properly applicable to the payment of his note for $6,000, with interest, and no more. We are inclined to think that, upon the facts appearing in this case, the actual value of the property at the time it was conveyed, constitutes the true basis for accounting. If Knott accepted, in full payment of his claim, property of less value than the amount of his claim, it would have been inequitable to charge Wilson, in accounting with his co-sureties in that case, with the full .amount of such indebtedness. If the value of the property conveyed to Knott by the plaintiff, or procured to be conveyed by him, was not in excess of the proportion of the whole mortgaged property properly applicable to the payment of his note, the co-sureties of the plaintiff on other notes had no right to complain; nor should the defendant in this action be compelled to account, if, in fact, the Knott note has received only its ratable share of the mortgaged property.
Judgment reversed, and cause remanded for new trial.
Day, O. J., White and Rex, JJ., concurring. Welch, J., not sitting.