Court Opinion

ID: 7131033
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:18:48.559183+00
Date Added: 2024-06-11T16:14:28.270518
License: Public Domain

To a petition for rehearing—
CHIEF JUSTICE PRYOR
delivered the response of the court.
On a petition for a rehearing, counsel for the appellee accepts the doctrine recognized by the court in the original opinion as sound, but rejects the conclusion reached on the idea that the property having been conveyed in trust for the benefit of creditors, an equity arises in behalf of the surety that did not theretofore exist. He says: “The fund out of which the payment was made for the surety did not belong: to the surety but to a trustee to be administered for the equal benefit of all the surety’s creditors; and as the property belonged to the trustee, any payments made by him out of that property inure to the benefit of all equally — not solely to the joint creditor — and it is maintained that if the creditor in'this case had resorted to the estate of the surety in the *296first instance and obtained a pro rata distribution, he would not afterwards be allowed to prove' the whole debt against the estate of his principal.”
We are asked: “In what sense does the payment of the principal inure to the benefit of the surety or his creditors, if, notwithstanding the payment, the creditor can come on the trust estate for the whole of his debt?” In response to this inquiry, it is proper to suggest that no payment was •ever made by the principal. The assets of the estates of the principal and surety are both in the hands of the chancellor for distribution; no payment has been made by either; the trustee holds the property of both for no other purpose than to pay their debts. The claim of the creditor in this case is as much the debt of the surety as the principal, and for the purposes of distribution can be regarded in no other light than as the sole debt of each obligor. The surety owes the money, and the' fact that the settlement of his estate devolves on the chancellor does not lessen or increase his liability. The chancellor sees that the estate of the principal pays sixty cents to the dollar, and that of the surety eighty-five cents; that both are equally bound for the debt, and for that reason makes the whole amount claimed the basis of distribution. Every creditor’s claim is paid in the same manner, and to deny the appellant his pro rata, and thereby require him to lose a part of his debt, when the •estate of both the obligors is more than sufficient to pay it, would be contrary to the plainest principle of equity and justice. If you assume the basis adopted by counsel, that payments have been made by the principal, the propriety of the judgment below would not be questioned.
Petition overruled.