Court Opinion

ID: 7998223
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:46:30.60756+00
Date Added: 2024-06-11T16:35:37.448024
License: Public Domain

Chancellor.
The complainants, as the creditors of Leigh, Maddox, & Co., received from them a claim on James Hanna, to which Wm. Hanna was surety. To indemnify Wm. Hanna against his liability as surety, James Hanna made a deed conveying particular property in trust to John H. Truly. The complainants allege, that James and Wm. Hanna are both insolvent, and ask to have the deed of trust enforced for their benefit. The leading facts are admitted by the answer and pro confessos. It is urged by the defendants, that this claim should be credited by $1100, received by a member of the firm of Leigh, Maddox, & Co., through the medium of a transferred claim. I am clear, from the testimony, that the credit should be allowed. Although Ewing received it in depreciated money, yet by refusing to deliver it to Hanna, when called for, he thereby elected to make it his own, and the claim must be credited to that extent. I can have no doubt, that the complainants, as the assignees of the claim, are entitled to have the deed of trust enforced, for the satisfaction of their debt. Where the principal debtor pledges property to his surety, by way of indemnity, and the principal becomes insolvent, the creditor has a right in equity to have the property so pledged applied in payment of his debt. Wright v. Morley, 11 Ves. 22 ; 1 Story’s Eq. 592. The complainants have no right whatever to have the judgment rendered for the use of Wm. Hanna, in this State, or any part of it applied to the satisfaction of their claim. The judgment and return of nulla bona, in Tennessee, is not sufficient to lay the foundation for such a claim. Let the case be referred, for an account and report of the *560principal and interest due, after deducting the credit referred to. Upon the coming in of the report, a final decree, enforcing the deed of trust, in favor of the complainants, may be drawn.