Court Opinion

ID: 7987173
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:26:56.461354+00
Date Added: 2024-06-11T16:35:14.048442
License: Public Domain

Campbell, C. J.,
delivered the opinion of the court.
An unbroken line of adjudged cases and text-books sustains the proposition that a mortgage for indemnity of sureties is valid, the liability of the surety being a sufficient consideration for such a mortgage; and such a conveyance will be held to have precedence of any subsequent lien on the-property incumbered. This is the undoubted rule as between *504individuals, and we are not aware of any distinction between the rights of parties to obligations to the state and others, and fail to perceive why a principal debtor to the state may not indemnify the sureties on his bond to the state in the same manner as if the obligation was to an individual. Indeed, there is greater reason for sustaining an indemnity by a principal of his sureties, as against the state, than in ease of private persons, for the state takes no account of the property of its official That is not looked to by the state. It makes no distinction between a millionaire and a pauper in this matter. The same bond ,is required of all incumbents alike, without regard to what they may possess, or what may be their character or habits. The prescribed bond is the security the state exacts in all cases alike. Individuals, in their dealings, may be largely influenced by the solvency and wealth of a principal debtor, and his character and business capachy and habits, and may be less exacting as to the sureties required because of the large property of the principal. Not so with the state, as already stated. If, then, it is the unquestioned right of the sureties of a principal debtor to a private creditor to receive indemnity, a fortiori should the right of sureties of a public debtor to have indemnity be recognized and upheld. The state did not look to the individual means of its officer, in approving the bond he gave for each term, as the condition of being qualified for the office, but the persons who became his sureties on the bonds may have been largely influenced to become such because of his possessions and prospects. Therefore, there was nothing in the situation to preclude the valid execution by Hemingway of a conveyance of his effects for the indemnity of the sureties on his several official bonds.
Nor do we think the conveyance he made w^s subject to legal exception because of the contingency expressed in it on which it was to be made available to the payment of ascertained liability in exoneration of the sureties. It is true that, being for the indemnity of sureties on several bonds, it nec*505essarily contemplated ascertainment of liability or non-liability, as to each of tbe bonds, before it could be known how to apply the property conveyed, but there is nothing in that to condemn the conveyance. The mere fact that delay may occur in settlement of rights growing out of a conveyance of property as security, is not a valid objection to it. The delay here contemplated is only that incident to legal proceedings necessary to adjust the rights of the several beneficiaries of the conveyance. The state has no right to complain of this delay as an objection to the conveyance by Hemingway, for, as we have seen, its security, prescribed by itself, was the bond, and the conveyance for indemnity being valid, created a lien entitled to precedence over any lien the state could acquire by judgment against Hemingw'ay; and, besides, the conveyance being for the payment of his liability to the state in exoneration of his sureties, was enforceable by the state for that purpose, and has actually been so enforced by the decree made. On all of these grounds, we conclude that the conveyance was not invalid.
Nor do we find any ground to condemn it upon the facts attending and following its execution, all of which are explained in such manner as to uphold the conveyance. It is not an assignment, and subject to the strict rules in such cases, but a mortgage, enforceable on a contingency consisting of future developments; and the failure of the trustee to take complete and exclusive possession and control of the property immediately after the conveyance, and the dealing with the property for some mouths after, are not sufficient to cause it to be declared .fraudulent in fact. We concur with the chancellor in upholding the conveyance.
It was error to allow the dismissal, against the objection of the defendants, of the bill, in the several matters wherein it was dismissed. The cause had reached a stage where it was too late to dismiss without the consent of the defendants. The bill sought to have the conveyance declared invalid, on several views of it, or, if held valid, to enforce it directly in *506favor of the state, and to take possession of the property conveyed by it, and administer the trust, if valid, and, if invalid, to apply the property to satisfy a decree against Hemingway ; and to compel an accounting with all the sureties on the two bonds, so as to fix liability where it might belong, and relieve the state from uncertainty as to this; and also to vacate some conveyances of land embraced in Hemingway’s conveyance, which he and Waite had made since it was made.
• Testimony had been taken in the cause, and a stipulation had been entered into between the solicitors on both sides as to certain matters of fact to be considered as proved, and certain letters and official reports were agreed to be received in evidence. Much of this agreed testimony relates to the inquiry on which bond liability is chargeable. The case had •been heard by the chancellor, who, on the 14th of March, 1891, made a decree adjudicating that the conveyance is valid and enforceable in behalf of the state, but primarily for the exoneration of tjie sureties on the two bonds; that Hemingway was entitled to homestead exemption, and that sale should ■be made of the property embraced in the conveyance on certain terms (included in which was the consent of the attorney-general), and the net proceeds should be paid into the state treasury, with certain other matters relating to the administration of the trust-property not necessary to be mentioned. The attack made by the bill on the conveyance 'had failed. Its prayer to enforce the conveyance as a security for the state was granted.
The question where the liability, as between the two sets of sureties, should fall, was left open, with a reservation to the court of the right to do justice between them by final apportionment of the proceeds of the trust-property according to their rights upon adjustment of the respective liabilities. The decree made March 14, 1881, was based on, and could be justified ouly on the assumption of a final decree, ascertaining where among the sureties liability is. The requisite pai’ties *507were before the court; the- trust-property was in its possession; a decree had been made adjudicating the chief matter of. controversy, and directing payment of money into the state treasury; testimon}' by depositions and agreements had been taken and filed; the cause had been set for final hearing, after the expiration of the time allowed for taking testimony, and it was too late to dismiss the parts of the bill proposed and allowed. The defendants had acquired rights by what had occurred which entitled them to object successfully, at that stage of the suit, to a dismissal.
The decree already made in the cause, required, as its complement, a further decree on the very matters as to which the bill was dismissed, without which that decree could not stand. It had been made, and the defendants were interested in its maintenance. In such a condition of things, it is not allowable for the complainant to dismiss against the' objection of the other parties. The cases to this effect are numerous— Seymour v. Jerome, Walker’s Ch. (Mich.), 356; Watt v. Crawford, 11 Paige’s Ch. (N. Y.), 470; Cozzens v. Sisson, 5 Rhode I. Rep., 489; Bank v. Rose, 1 Rich. Eq. (So. Ca.), 292; C. & A. R. R. Co. v. Union R. M., 109 U. S., 702 — which last case contains an extensive review of authorities on the subject, English and American. All seem to agree that, in the stage at which this case was when the dismissal occurred, it was not allowable to dismiss without the consent of all concerned.
After laborious investigation and protracted consideration, we have reached the conclusion that the dismissal of the bill should not have been allowed.

We affirm the decree on the appeal of the state; hut, on the cross-appeal, the decree dismissing parts of the hill is reversed, and the cause remanded for further proceedings in the chancery court, in accordance with the vieios expressed in this opinion.