Court Opinion

ID: 4893642
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:53:55.297814+00
Date Added: 2024-06-11T08:11:32.844087
License: Public Domain

Stayton, Associate Justice.
The appellant has no legal ground to claim that he was released from his liability as indorser of the promissory note sued upon by the failure of the appellees to enforce the vendor’s lien -which arose upon the sale of the “mill property ” by J. S. Kelly and himself to Y. M. Kelly, as a superior lien to that held by the holders of the promissory notes executed by Y. M. Kelly to Graham and Taylor for the purchase money of said property.
*6Notwithstanding Graham and Taylor took other security than the “mill property ” for the payment of the purchase money therefor, the title to said property did not pass out of them by the execution of the bond to make title upon payment of the purchase money.
Until the purchase money was paid, or the property sold under some proceeding to be instituted by them, or some person to whom they transferred the notes, the title continued in them; and in default of payment they might have repossessed the property, or have sold it to some other person.
It may be held that Graham and Taylor cut off their right to rescind the executory contract made between them and Y. M. Kelly, by transferring to third persons the promissory notes given to secure the balance of the purchase money; but if so, the lien upon the land passed with the notes to secure their payment, and this lien was not impaired by the fact that the notes were secured by other security than the hen upon the property for which they were given, but continued until the purchase money is paid or foreclosure is had upon the purchase money notes, and sale is made thereunder.
In cases of sales of land by executory contract, as in this case, the same rule as to presumption of release of lien by taking other security for the purchase money does not exist as it does in cases where the title passes by executed contract.
The lien held by the holders of the promissory notes executed to Graham and Taylor, being the older, is superior to the lien arising upon the sale of the same land after-wards made by J S. Kelly and the appellant to Y. M. Kelly, and must prevail.
No injury resulted to appellant by the agreement made between the appellees and the holders of the notes made to Graham and Taylor; for the judgments rendered thereunder were the same as should have been rendered if no *7agreement had been made, except that the judgments should have subjected one-half of the proceeds of the sale under foreclosure, after paying the judgments rendered in favor of the holders of the notes executed to Graham and Taylor, to the satisfaction of the judgment rendered in favor of appellees, instead of one-third of such excess; but this error did not operate to the injury of the appellant; for the property when sold did not sell for enough to satisfy the judgments rendered on the notes executed to Graham and Taylor.
It is claimed that the appellant was injured by the failure of the appellees to compel the holders of the notes executed to Graham and Taylor to cause the same to be satisfied out of the lands upon which V. M. Kelly and Mrs. Fuller executed mortgages before resorting to the property sold by Graham and Taylor, to V. M. Kelly, and that for that reason the appellant’s liability as indorser ceased.
This position we believe untenable. While it is true that Graham and Taylor executed a title bond to Y. M. Kelly, by which they bound themselves to make title to him to the “mill property ” upon payment of the purchase money, yet it clearly appears from the record that that purchase was made by V. M. Kelly in trust for the firm of J. 8. Kelly & Co., which was composed of J. S. Kelly and the appellant. The appellant in his own testimony stated that J. S. Kelly & Go. made the cash payment of §1,000 made to Graham and Taylor at the time they executed the bond for title to Y. M. Kelly, and that “the property was purchased by J. S. Kelly & Co., but for sufficient reasons to ourselves the property was taken in the name of Y. M. Kelly, and the bond for title executed by Graham and Taylor to him; but Y. M. Kelly had no interest in the property until afterwards, when J. S. Kelly & Co. sold to him, about the time J. S. Kelly & Co. dissolved.”
*8The note sued upon in this cause was executed to the appellant for his share.of the “mill property” conveyed to VI M. Kelly by J. S. Kelly and the appellant by conveyance last referred to in his testimony above.
Under these facts the appellant was not in a position to call upon a court of equity to marshal the securities given to secure the notes made to Graham and Taylor, neither against V. M. Kelly, Mrs. Fuller, nor the appellees.
To authorize the marshaling of securities held by one creditor for the protection of another, it must appear that the securities belong to a common debtor. Story’s Equity, 634, 642, 643.
In this cause, under the facts, J. S. Kelly and the appellant must be held in equity, for the purposes now under consideration, to be the real debtors to those persons who hold the notes executed b.y V. M. Kelly to Graham and Taylor, in the original purchase of the “mill property; ” and that V. M. Kelly and Mrs. Fuller, to the extent of the mortgages executed by them to Graham and Taylor, must be held, for the purposes of this inquiry, to bo simply sureties for J. S. Kelly and appellant.
In the note sued upon in this cause V. M. Kelly is the original debtor, and he became so by executing the note sued upon to the appellant for the same property formerly bought by J. S. Kelly and the appellant from Graham and Taylor, and for which neither J. S. Kelly, nor the appellant, had ever paid.
From this it follows that, as between the appellant and the holders of the notes executed to Graham and Taylor, no equitable ground can be found to subject the property of V. M. Kelly or Mrs. Fuller first to the payment of debts which the appellant is equitably and morally bound himself to pay.
The proposition contended for by the appellant becomes the more glaringly unsound when we consider the rights of Y. M. Kelly and Mrs. Fuller, who, under the facts, can *9only be considered as sureties for the appellant to the extent of the mortgages executed by them respectively. It was the right of those persons to have the property purchased from Graham and Taylor first subjected to the payment of the purchase money therefor, before resort could be had to the property mortgaged by them.
[Opinion delivered November 22, 1881.]
The judgment of the district court is affirmed.
Affirmed.