Court Opinion

ID: 6227357
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:14:20.086337+00
Date Added: 2024-06-11T08:57:43.367459
License: Public Domain

Gibson, C. J.
The consideration of the bonds whose produce is in court for distribution, did not move from the lien creditors, and they consequently derive no equity from it. The bonds were not given for their protection ; and the stipulation, in the condition of each, that the purchase money secured by it should be applied to the encumbrances, was inserted, not to provide against the omission of the obligee as to them, but to defend the obligor against their liens. Their interest in the bonds was secondary and accidental; and when the purchaser’s right to call for an application of the purchase money ceased uith the liens, which had been the object of it, the indirect advantage they derived 'f#om the stipulation ceased also. Their interest in it was incidental and dependent, like the interest of partnership creditors to have the joint effects applied to the joint debts, which is sustained by no equity of their own, but by the mutual equities of the partners' themselves, which arise from the peculiar nature of the contract of partnership, and which cease with *144the joint ownership of the stock. It is settled by Ex parte Ruffin, 6 Ves. 119, and Ex parte Williams, 11 Ves. 3, as well as many cases since, that if the'joint effects become the exclusive property of one of the partners, the priority of the joint creditors is gone. In like manner the clause in the condition • of these bonds, which was designed to protect the obligor against the liens, became obsolete at the extinction of them ,• and the advantage it would otherwise have given the lien creditors, was gone. At no time had they colour of right, legal or equitable, to the purchase money for which the bonds were given, or to any particular application of it. Their hold was on the-land, and when they suffered it to he relaxed by the expiration of their liens without revival, they parted with the incidental means of stimulating the obligor to insist on an application for his own, and consequently for their benefit.' But he might have waived his right to do so, without consulting them, even while the liens were in life ; and as he does not call for any particular application of the purchase money now, they cannot do it for him.
Judgment reversed, and venwe de novo.