Case Name: Comegys and Others v. The State Bank of Indiana and Others
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1855-06-07
Citations: 6 Ind. 357
Docket Number: 
Parties: Comegys and Others v. The State Bank of Indiana and Others.
Judges: 
Reporter: Indiana Reports
Volume: 6
Pages: 357–363

Head Matter:
Comegys and Others v. The State Bank of Indiana and Others.
Sureties avo not only entitled to contribution from each other for moneys paid in discharge of their joint liabilities for the principal, but they are also entitled, as a general rale, to the benefit of all securities which have been taken by any one of them to indemnify him against such liabilities.
Where one of several accommodation parties to a bill who have taken a mortgage from their principal by way of indemnity, discharges a prior mortgage upon the land, he is 'entitled, upon the foreclosure of the mortgage executed to him and his co-sureties, to be allowed for the amount actually paid by him to discharge the prior lien.
Thursday, June 7.
Where one of several accommodation parties to a bill has procured a mortgage from the principal to indemnify them, he is entitled upon the foreclosure thereof to be allowed a reasonable sum for his trouble and expense in procuring it; but nothing for attorneys' fees in defending suits against him as a party to the bill.
ERROR to the Marion Circuit Court.

Opinion:
Perkins, J.
Bill in chancery to foreclose mortgages. Decree of foreclosure.
The bill was filed by the state bank and Isaac Dunn against Cornelius G. W. Comegys, Enoch D. John, Noah Noble John, and others. The record of the case is voluminous, and presents several questions. Brevity will be consulted by stating and deciding them separately. The controversy in the case is between Isaac Dunn and Comegys, the only solvent parties liable upon two bills of exchange, which are set out in the record, in these words:
" Exchange for $4,500. Lawrenceburgh, December 2, 1841. Four months after the date of this first of exchange, second unpaid, pay to the order of Wymond and Ferris, at the Merchmts' BcmJe of New- Orlecms, forty-five hundred dollars, value received, and charge the same to account. Isaac Dunn. To N. N. John, New- Orleans." This bill was accepted by N. N. John, and was indorsed by Wymond and Ferris, E. D. John, A. P. Hubbs, John and Comegys, a firm composed of E. D. John and Cornelius G. W. Comegys. The indorsement was to Beverly Chew, esq., cashier, or order.
" Exchange for $4,000. Cincinnati, November 23,1841. Four months after date of this first of exchange of this tenor and date, second unpaid, pay to the order of E. D. John, at the Citizens'1 Bank of New- Orleans, four thousand dollars, for value received, and place to account of yours, &c., John and Comegys. To N. N. John, esq., New- Orleans."
This bill was accepted by N N. John, and indorsed by E. D. John, Isaac Dunn and A. J. Wheeler. The indorsement is to J B. Perrault, cashier, or order.
A question is made as to the relation existing between the several parties upon these bills. This question is to be resolved by the evidence in the cause; and we think it satisfactorily establishes that they were drawn for the benefit of Noah Noble John, and that all the others were accommodation parties.
As to the bill for 4,500 dollars, B. F. Morris, the president of the Indianapolis branch bank, says: " At the date of the bill, I was in Cincinnati, Ohio, and was applied to by Enoch D. John, one of the firm of John and Comegys, to purchase the above-described bill.. He stated that the money was for the use of Noah N. John, who had purchased a quantity of flour of John and Comegys, to ship to New- Orleans. The bill, when first presented to me, was indorsed only by Wymond and Ferris and Enoch D. John. Having under my control, and in my possession, some funds belonging to the branch at Indianapolis of the state bank of Indiana, I agreed to negotiate the bill for and on account of said branch, if the indorsement of A. P. Hubbs and John and Comegys were added. Enoch D. John agreed to add their indorsements, and left Cincinnati to go to Lawrenceburgh, as he said, for the purpose of procuring the indorsements; and it was agreed between us that if Noah N. John brought the bill to me the next morning, with the additional indorsements, I would purchase it and pay him the money. The next morning Noah N. John called on me in Cincinnati, with the bill indorsed as I desired, and I paid him the money and received the bill."
As to the bill for 4,000 dollars, it is conceded by Isaac Dunn, one of the indorsers and a plaintiff in this bill, now seeking to exclude Comegys from the benefit of the mortgages in question, in a letter written by him to the Franklin bank of Cincinnati, the then holder of the bill, that Comegys was but an accommodation party; and N N. John, in his deposition, says: " The bill for 4,000 dollars, in the bill in chancery mentioned, was drawn by C. G. W. Comegys, in the name of the firm, for my accommodation. The bill for 4,500 dollars was indorsed by Enoch D. John, in the name of the firm of John and Comegys, for my accommodation."
Other evidence confirms the truth of this statement. It is true, that N. N. John wished to use the proceeds of the bills in the purchase of flour from John and Comegys, millers, and that he was the son of E. D. John, one of said firm; but it appears that it was no object for John and Comegys to sell to him; that they had other offers for their flour at the same price that N. N. John was to pay; and that he had the preference simply on account of his relationship to one of the firm.
We are satisfied from the whole case that the proceeds of the bills went to N N John, and that, as between the parties to them, he was the real debtor, and should have paid them. This disposes of the first question.
Said N. N John did not pay the bills. He sold the flour purchased with them in New- Orleans, where his father, E. D. John, then was, received the proceeds of the sale, and, instead of applying them, as was expected, in payment of said bills, he placed a part of them in the hands of his father, said E. D. John, who immediately left for Texas, talcing the money with him. N. N. John expressly asserts that he left the money with his father, as his individual agent, and not in his character as a member of the firm of John and Comegys, and that Comegys received no benefit from the act. The remaining portion did not pay the bills.
Afterwards the complainant, Isaac Durm, procured said E. D. John, then in Texas, to execute two mortgages to Noah N. John, whose money said E. D. John had fled with, dated March 11,1842, upon certain parcels of land in Hendricks and Marion counties, Indiana, conditioned that said Enoch should cause to be paid to said Noah N John the two bills of exchange herein before copied, or should exonerate said Noah and all others on the bills from liability, or that, on his failure to do so, the mortgaged premises should be sold for the benefit of all the parties concerned.
Said Noah, the real debtor, as we have seen, in those bills, having subsequently become a certified bankrupt, assigned said mortgages severally in the following words:
" I having been released from my liability for the payment of said bills of exchange which the within mortgage was given to secure (by the operation of the bankrupt 'law,) I therefore hereby transfer all my right, title, interest, and demand of and to the within mentioned premises, to Isaac Dvmn, and the other indorsers, drawers, &c., therein named, and for the purpose therein expressed and contained, which is the application of the proceeds of said lands, as far as it will go, to the payment of said bills of exchange. Given," &c., "this 31st day of Inly, 1843. N. N. John, [seal.] Attest: W. C. Layton."
These are the mortgages being foreclosed; and a question is made as to who has the beneficial interest in them.
The mortgages, assigned as above, were delivered to complainant Dunn, as he says, to secure him, in the first place, and, in the next place, to secure others concerned; but the assertion is in direct conflict with the terms of the mortgages and assignments, and with what is laid down by Story in the first volume of his Equity Jurisprudence, p. 555, as a general principle of equity, viz., that " sureties are not only entitled to contribution from each other for moneys paid in discharge of their joint liabilities for the principal; but they are also entitled to the benefit of all securities which have been taken by any one of them to indemnify himself against such liabilities." The application of this principle may be, in some cases, controlled and limited by special circumstances, but in the case before us, the very provisions of the mortgages and assignments require its adoption in its broadest extent.
Gomegys had a right to share equally with Dunn in the benefit of the mortgage securities. So far upon the second question.
The lands embraced in the mortgages in question were covered by a previous mortgage to the state, which was payable in state bonds at par, though the bonds were purchasable in market at a great discount. The mortgage to the state was paid off, as complainant Dvmn claims, by him, and he seeks to be subrogated to the rights of the state and reimbursed the full amount. He is entitled to be allowed the amount actually paid by him in cash for the bonds, with interest, and no more.
A question of fact is made as to certain of the bonds used in paying off the mortgage to the state, whether they were purchased by jDimn or Comegys for that purpose. Comegys famished the disputed bonds to Dunn to hand over to the state, Comegys says, as a payment on his part upon the mortgage, but Dimn says as a payment to him of notes he held on Comegys, whereby the bonds became his, and should go to his credit in the account as to the payment of the state's claim. These notes, it appears, were not given up, though the bonds amounted to more than the notes; nor was the overplus paid to Comegys. We see no facts in the case tending to prove that the bonds were given by Comegys to Dunn in payment of notes held by the latter.
We proceed to the fourth question.
Among the claims insisted on by Dunn as having priority of payment out of the mortgaged premises, is one for trouble and expense in procuring the mortgages from E. D. John, which, so far as was reasonable, would be properly allowed; and also one for a large amount for attorneys' fees in, we suppose, defending a suit against him as surety on one of the bills of exchange in question, though the specification is vague. We see nothing else for which the fees could have been paid. He would not be entitled to be allowed such fees.
Having now considered most of the questions raised, and stated facts sufficient to make them understood, we proceed to notice the institution and particular objects of, and decree in, this suit.
The two bills of exchange mentioned, were not, as we have stated, paid by N. N. John. The bill for 4,000 dollars was paid by Comegys and Dumi in equal proportions— 2,000 dollars each. The bill for 4,500 dollars has not been paid, but is held by the Indianapolis branch of the state bank of Indiana, which, under an arrangement with Durni, is, jointly with him, foreclosing the mortgages given by E. D. to N. N. John, and by the latter assigned to Dimn for the benefit of the parties to the bills of exchange; and the struggle is between Dunn and Comegys, as we have seen, in regard to the application of the proceeds of the sale of the mortgaged premises. The bank, it is manifest, should be first paid, as such payment will accrue to the benefit of both Comegys and Dunn, as indorsers of the bill held by the bank. But the overplus—is Dwm to be preferred in the distribution of that? It will appear, from what we have said, that he is not, except as to expenses paid, &c., in obtaining the mortgages for the benefit of both himself and Comegys, and the amount, if any, he may have paid beyond the amount paid by Comegys upon the mortgage to the state.
I Morrison, S. Major and P. L. Spooner, for the plaintiffs.
O. H. Smith and S. Ymdes, for the defendants.
In rendering the decree in the cause the Court below has not given the data upon which it proceeded; but it has, apparently, allowed Durm for counsel fees, and excluded Comegys from reimbursement for money paid for state bonds to be applied on the state's mortgage, and for the 2,000 dollars paid on the 4,000 dollar bill of exchange. This was wrong as to the fees and the money paid for the bonds, and wrong as to that paid on the bill of exchange, unless, as is contended, Comegys had previously been refunded that sum. We are far from being satisfied by the evidence that such is the fact; and as the cause must be reversed, at all events, we add no more on this latter point, but direct that the parties have leave to amend pleadings or adduce further evidence in the cause, if they, or either of them, desire to do so, touching the question of distribution, but not to disturb sales of real estate made.
Per Curiam.
The decree is reversed with costs. Cause remanded for further proceedings not inconsistent with this opinion.