Court Opinion

ID: 6592596
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:59:06.636417+00
Date Added: 2024-06-11T09:13:23.977196
License: Public Domain

Haymond, Judge,
announced the opinion of the Court:
From the pleadings and evidence in this cause it must be taken and considered, as against defendant Morohead and his assignors of the judgments, that the judgments in the bill and amended bills mentioned, the collection of which by executions was enjoined by the injunction awarded in *649the cause, were liens upon the tract of land situated in "Wood county in the State of West Virginia, sold by the defendant, John W. Ilorner, to his father, James Y. Ilorner, at the time of such sale and also at the time of the conveyance of the same to James Y. Ilorner, and that they con-' tinned to be liens on said land in favor of said judgment-creditors after the said sale and conveyance thereof to said James Y. Ilorner and at the time of and after both the sale and conveyance of said land by said James Y. Horner to the defendant, Morehead, and still continue to be liens on said land unless such liens have in some way been released or extinguished in whole or in part. The sale of the said land was made by said James Y. Iiorner to said Morehead on' the 3d day of January, 1860, and the deed of conveyance for. the land so sold was made by said James Y. Horner and wife granting the land to said Morehead on the 7th day of September, 1865, was acknowledged on the 25th of the same month and year, and was admitted to record on the 18th day of October, 1865. This deed states the consideration thereof to be nine thousand six hundred and sixty dollars, and that of the consideration there remains yet to be paid the sum .of two thousand four hundred dollars, for which said Morehead on that day executed to said James Y. Horner his eight single bills for three hundred dollars each, bearing interest from the 1st day of March, 1860, until paid, they being payable semi-annually, on the 1st days of March and September, 1866, 1867, 1868 and 1869; that also in satisfaction of two thousand dollars more of said nine thousand six hundred and sixty dollars of purchase-money there remains to be performed the covenant of said Morehead to ..convey with covenants of general warranty to said James Y. Horner a house and lot in Parkersburg in the county aforesaid on Market street purchased by said Morehead of Rev. Samuel Smith. For the payment or the said two thousand four hundred dollars of purchase-money and the performance of the said covenant of said Morehead to convey,as aforesaid a lien is retained on the face of the deed. The said deed from James Y. Honicr to said Morehead contains a covenant of general warranty. As seen in the statement on the 7th day of September, 1865, the day of the date of said deed from *650said James Y. Homer to the said Morehead' the said James Y. Horner and Morehead made an agreement in writing with each other in relation to said land and a part of the purchase-money therefor, &c. In this agreement it is stated and agreed as follows :
“A portion of the’purchase-money'of said land remaining unpaid, shall be now paid by the said Morehead to the said Horner, and that of the residue the sum of two thousand dollars shall- be retained in the hands of the'said Morehead. by way of indemnity against the claims of the said'three heirs of the said Mrs. Jackson, whose shares have never been released; and whereas it has been, since said sale, ascertained that there are judgments upon the records of the court of Wood county against John W. Horner, of whom the said James Y. Ilorner purchased said land, and against the firm of Ilorner & Johnson, of which the said John W. Horner was a member which as far as the records disclose, .remain unsatisfied, and the said Morehead desires some .indemnity to be given against the same. Now, therefore, this agreement witnesseth, that the said Morehead pays in hand to the said Ilorner, the sum of seven hundred and sixty-five dollars and thirty-three cents the receipt whereof is hereby acknowledged, and executes to the said Ilorner his single bills eight in number, each for the sum of three hundred dollars bearing interest from the 1st of March, 1860, till paid, payable on the 1st days of March and September, in the years 1866, 18C7, 1868 and 1869, and all dated on this 7th day of September, 1865, the receipt of which said eight single .bills is'hereby acknowledged by the said Horner. It is further agreed that of the principal of the said eight single bills, the said Morehead shall retain and hold in his hands th.e sum of two thousand dollars byway of indemnity against the claims of the three heirs of the said Mrs. E. Gr. Jacksón, in whom the title to the said three-sevenths of said sixty acres of land remains outstanding, until it can be determined ■whether the said Morehead shall be subjected to the loss of any portion of said land, and in case of such loss to make compensation to said Morehead for such loss according to law and the right of the parties, but in the meantime the said Morehead agrees to pay the interest on said single bills as *651follows, to-wit, the interest on e.ach of said single bills, as the same, would fall clue up to the time of its- maturity, from the said 1st of March, 1860, at the time when the same falls due respectively. ”
This, agreement then provides that said James, Y. Horner may retain a vendor’» lien in the deed on the.land for the security of said two thousand four hundred dollars with interest as aforesaid and that,the deed shall be executed and delivered to said Morehead within, twenty clays., And, the said agreement then provides as follows:;
“And whereas the said Morehead, is bound by said contract to convey to said Horner a certain lot of ground in Parkersburg, known as lot Ho. 43 in Stephenson’s addition to the town ot Parkersburg, fronting thirty-six feet on Market street, being the same property on which John W. Horner now resides, the said property having been agreed to be taken and accepted by the said Horner in part payment of the price of said land, it is further agreed that in said deed for said lot, which the said Morehead is to execute and deliver for record 'within ten days from the elate hereof the said Morehead may retain a lien upon the face of said deed to indemnify him against any loss or damage by reason of the judgments aforesaid against the said John W. Horner and Horner & Johnson. And by way oi further- indemnity the said J. Y. Horner agrees and hinds himself to reserve a similar lien in a, deed from him to J. W. Horner, in trust fpr the wife and children of the said J. W, Horner, for' forty acres of land situated in the county of Wood adjoining the land sold to the said Morehead, which said deed reserving said lien the said Horner hinds himself to execute and deliver for record within twenty days from the date hereof.”
. By an agreement in writing made by and between the said James Y. Horner and said Morehead dated the 6tli clay of September, 1866, and set put in statement of the case, it was agreed and stipulated, that the said James Y. Horner, in consideration of the sum- of one thousand four hundred and forty-nine dollars and fifty cents to him in-hand paid by said Morehead, released to said Morehead the lien retained in the said contract between them for the payment of the said eight single bills for three hundred dollars each dated *652tlie 7th day of September, 1865 ; and the said Morehead released said James Y. Horner from all liability that may rest upon him, Horner, by reason of judgments docketed against John W. Horner in said Wood county except a lien retained on the house and lot on Market street conveyed by James Y. Horner to John W. Horner trustee, which said lien was and is retained for the benefit and protection of said MÍorehead; the said Morehead also released the said Horner from all obligation except the warranty from Jackson to Horner as it regards the price paid by said Horner to Jackson — forty-eight dollars and sixty-six cents per acre, and it is expressly provided further in said last named agreement that it .was understood to be a settlement of the matter between said Horner and Morehead in full as to the land in every shape. And the last clause of this agreement states that “one of the single bills above mentioned is alreadjr paid, and the residue, seven single bills, are hereby canceled and returned to said Morehead.”
•Shortly after the date of the last named agreement between the said John Y. Horner and said Morehead, in the fall of 1866, the said Morehead purchased the judgments in the bills mentioned and took assignments thereof to himseli from their respective owners for a valuable consideration, and as he says in his answer to the original bill to protect himself from a qhaneery suit or suits, &c., and from that time the said Morehead became the owner of said judgments he being at. that time and since the owner of said one hundred and. thirty-eight acres of land on which said judgments were liens. The deed from said James Y. Horner of date the 25th Jay of April, 1865, ,to John W. Horner as trustee for his wife and .children as we have seen retains a lien thereon to indemnify said Morehead against judgment-liens or any liability that, may be against said land. The deed from said More-head and wife to the said James Y. Horner for the said house;and lot dated the 8th day of September, 1865, saves, and reserves a lien on said house and lot to indemnify him against “said judgments and against any loss or damage that may be occasioned to him (Morehead), his heirs or assigns by .reason of any prior liens upon said land so -purchased by him from said J. Y. Horner, founded upon the said judgments *653against tlie said J. W. Horner or the said Horner & Johnson, and to compensate the said Morehead, so far as may be necessary and so far as said house and lot should avail for the purpose.
It appears that sometime prior to the 3d day of September 1857 the said John "WV Horner and the plaintiff, J. B. Johnson entered into partnership in the business of merchandising in the town of Parkersburg under the firm name of Hor-ner & Johnson, and that on the day and year last aforesaid the said John W. Horner and the plaintiff by an agreement in writing signed and sealed by each ot them dissolved the said partnership in the following terms: “The said Horner to take the entire stock of goods of every kind and description, and in consideration thereof, he (Horner) to pay all the debts and liabilities of every character and description that might be against the firm of Ilorner & Johnson ; and the said Hor-ner to give to said Johnson one thousand dollars to cover the amount of money said Johnson paid into the firm, and also his interest in and to tlie profits of the firm.” The said one thousand dollars was to be paid to said Johnson as a payment on a piece of land sold on the day and year last aforesaid to said Johnson by said Horner. It further appears that said John W. Horner from and after said dissolution took exclusive possession of the effects of said firm as his own and proceeded to dispose of part of them under and by virtue of said contract of dissolution of partnership, and that under and by virtue of said contract of dissolution of partnership 'the said firm of Horner & Johnson became and was from the date thereof dissolved and ceased to do business in the purchase and sale of goods, &c. It further appears that the said dissolution of said firm, and partnership of ITornef & Johnson took place in the year prior to the rendition of any of the judgments in the said bills mentioned and that in the summer of 1858, most probably in the month of July, the sheriff of Wood county by virtue of certain executions against Horner & Johnson and John W. Horner alone in his hands levied upon the store-goods unsold by Horner which formerly belonged to said firm of Horner & Johnson, but which then belonged to said John W. Horner, and sold the same; 'and at that time it may well be inferred from what appears that the said John W. Horner ceased merchandising. It may be in*654ferred from what appears that the plaintiffs in said judgments before they assigned them to said Morehead knew that the firm of Horner & Johnson had ceased to carry on the mercantile business, and I think it sufficiently appears-that -they had knowledge of the dissolution of said partnership of Homer & 'Johnson and the same may he said as to said Morehead as to said firm of Horner & Johnson having ceased to do business before he purchased said land and at the time the said judgments were assigned to him.
' Morehead in his answer to the amended bill denies that he had any notice of the agreement of dissolution between Horñér & Johnson and the pleadings and evidence in the cause as before us it seems to me fail to show satisfactorily that he had actual notice of said agreement of dissolution when said judgments were assigned to him. It appears that said judgments were assigned to said Morehead by the owners thereof for a valuable consideration, but each for a consideration less than the amount thereof, but how much less does not appear. Ho execution upon any of the judgments in said bills mentioned appear to have been levied upon the store-goods of- the said J. W. Homer as alleged in the said bills or either of them and the said Homer & Johnson from the evidence seem to have received credits for all payments on said judgments to which they are entitled except the credit of thirty-two dollars and thirty-seven cents consented to by the parties in the decree appealed from, and except also any credits they may be entitled to on the judgment of Fisher, Boyd & Co. arising from collections made by Loomis & Amiss or Amiss attorneys upon the claims placed in their 'hands by J. W. Homer to bo applied to the claims of Fisher, Boyd & Bro. or otherwise in the bills in this-cause mentioned, but that matter is in progress of settlement and adjudication if not already adjudicated in another cause of Fisher, Boyd & Bro. against Horner & Johnson which was pending in the circuit court of Wood county before and at the time Fisher, Boyd & Bro. were made parties to this suit, and for this reason I do not see now from anything appearing that it is proper to consider them in this cause, and they must be left to be determined in the said- cause of- Fisher, Boyd & Co; against said Horner & Johnson.
*655The record and proceedings of that cause are not made a part of the original or amended bills in this cause and this canse was not heard in the court below upon or with the bill and proceedings in the said cause of Fisher, Boyd & Bro. in the court below; nor is a copy of the bill and proceedings in said last named cause a part of the record of the case as far .as it has been submitted to us.
jSTo sufficient reason now appears to this Court why the last named cause should be consolidated with this cause as prayed in plaintiff’s amended bill, though perhaps it maybe proper to hear them together hereafter.
So far as appears in this cause .all the executions _ ever issued upon any of the judgments in the original bill in this cause mentioned were returned by the officer “JSTo propei’ty found” except the last executions issued shortly before the plaintiff's said injunction was obtained hr this cause upon his original bill, and which was levied upon the plaintiff’s cattle as in the bills.mentioned, and which levy was the immediate cause of the obtaining of said injunction and the filing of said original bill. From the pleadings and evidence it must also be taken that the defendant, Morehead after the judgments in the original bill mentioned were assigned to him caused the executions which were levied upon the plaintiff’s cattle as alleged in said original bill to be issued on said judgments against the said Horner & J ohnson and to be levied upon the plaintiff’s said cattle and that said Morehead is seeking to make the amount of said last, named judgments out of the individual property of the plaintiff..
The first error assigned by the appellant is that, “ it was error to docket. the cause in the circuit court of ~Wqod county on the 22d day of January, 1879, there not appearing to have been an order made by the circuit court of Harrison county, transferring the cause to -the former court.” This assignment of error is not well taken as it now appears that there was such an order of transfer made in the cause by the . circuit court of Harrison county on the 2d day of December, 1878.
The appellant’s second assignment of error is that “ it was error to entertain the defendants’ exceptions to commissioner’s report. The exceptions should have been deemed waived, *656not .having heen filed until eight years and more after the report had heen filed.” It does not appear that the appellant made any objection in the court below to the filing of said exceptions or to the consideration of said exceptions by the court for any cause and for this reason obviously, if for no other, the objection in this Court to the filing of said exceptions or the consideration thereof cannot now be entertained by this Court.
The appellant’s third assignment of error is that “it was error to dismiss the bill and amended bill, thereby denying any relief to the petitioner.” In support of this assignment ot error the appellant’s counsel maintain as a proposition of law, that the said contract by which appellant sold out his interest in the partnership to his co-partner and in which his said co-partner John W. Horner in consideration of said interest agreed to pay all the firm debts and liabilities established as between them the relation of principal and surety in a court of equity making said John W. Ilorner the principal debtor for the payment of the firm debts and appellant merely his surety for the payment thereof.
In the case of Oakley v. Pasheller, Clark & Finnelly’s R. 206, the syllabus as reported is: “R. and S. partners in trade, executed in the year 1811, four joint and several bonds to 0., to secure repayment of ten thousand pounds sterling, advanced to them by his acceptance and payment of four bills of exchange, amounting together to that sum. Two ot the bonds were made payable in 1817 and two in 1818. S. died early in 1815, and his executors agreed with R. and with K., who was then in partnership with R., in place of S., that R. and 3L,in consideration of the outstanding debts and effects of the former partnership, would pay certain sums to the executors, and would also indemnify S.’s estate against certain schedule debts including these bonds. Ho notice of that agreement was given to 0. lie continued to receive interest on the bonds from the now firm as well after as before they became due; and the annual accounts which they furnished him contained an account of the dividends due to him on seventeen thousand pounds sterling stock, which he lent to the new firm. From O.’s correspondence with that firm in 1820, it appeared that he had, in 1817, given them *657three years further time for payment of the bonds, and that in 1820, he gave twelve months further time. These indulgences were granted without consent of S-.’s executors. In 1828 0. took from II. and EL a collateral security for .payment of the debt expressly reserving his right against S.’s estate in respect of the bonds, but concealing that arrangement from S.’s executors. In 1829, O.’s executors to whom he had assigned the bonds before his death, applied for payment of them to S.’s executors, who thereupon filed their bill, praying that it might be declared that their testator’s estate was discharged from the bonds. Held, that the indulgence granted by 0. for payment of the bonds in 1817, without consent of S.’s executors, had the effect of discharging his estate.”
In the case of Eldad Smith v. Allen Shelden et als. 35 Michigan 42, the 2d and 3d section of the syllabus as reported is as follows:
“2. "When on the dissolution of a co-partnership one partner purchases the interest of his co-partners, agreeing to pay all the partnership liabilities, the partner thus retiring may still be held liable by the creditors, but if he is compelled to pay lie is entitled to indemnity from the other partner and is therefore as to such other partner a surety merely upon the partnership obligation.
“3. A surety is defined as a person who being liable to pay a debt or perform an obligation, is entitled, if it is enforced' against him, to be indemnified by some other person who ought himself to have made payment or performance before the surety was compelled to do so ; and the relation is fixed entirely by the arrangement and equities between the debtors or obligors and may or may not be known to the creditors.”
In the case of George Colgrove v. Charles Tallman, 67 N. Y. 95, the syllabus as reported is as follows : “Where one of two co-partners purchases the interest of the other in the partnership property, and assumes and agrees to pay the partnership debts, as to such debts the foimer becomes in equity the principal debtor and the latter a surety; and this relationship a firm creditor having notice of the agreement is bound to observe. When a creditor having such notice, is *658requested by the partner, who thus became surety, to collect his claim, aud he. refuses or neglects ’ so to do, if at the time of the request, the principal was solvent and able to pay, but thereafter becomes insolvent the surety is discharged.”
See also upon this subject and as supporting the principle decided in the above cited cases: Frow, Jacobs & Co.’s estate, 78 Pa. State R. by R. Smith 459, 466; Millerd et al. v. Thorn, 56 N. Y. by Sickles 402; Saxage et al. v. Putnam et al. 32 N. Y. 501; Stuyvesant v. Hall et als. 2 Barbour’s Chy. R. 151; Wilkes et als. v. Harper et als. Id. 338, Eng. Com. Law Reports; Aflalo Fourdrinier, &c. p. 90; Ætna Insurance Company v. Wires et al., 2 Williams (Vermont) 98; Wilson v. Lloyd, 16 Equity Cases, Law Reports 1873, vol. 2d, 1st part; White and Tudor’s Lea. Cases in Eq. 4th Ed. 277, 281, 282; same vol. 2d part’ 2d 1345; same Vol. I. part 1, 147.
In the case of Hupp v. Hupp, 6 Gratt. 310, the syllabus is: “H. & E. are merchants and partners. II. sells out to M.; and the new firm undertakes to pay the" debts of the first. PI. becomes indebted to the new firm, for which he executes his bond with two sureties; aud this bond is assigned for value to A. The new firm afterwards fails and the partners are insolvent, leaving debts of the old firm unpaid to a larger amount than the bond of IT. and II. pays them. Held : II. is entitled in equitjq to set-off against his bond in .the 'hands of the assignee, the debts of the old concern of II. & hi., which M: & hi. were bound to pay and which II.- paid.”
In the case of Buchanan v. Clark et als., 10 Gratt. 164 the 1st section of the syllabus is: -“1. G.,'B. and IT. -were principal obligors in a bond. B. and IT. put money in the hands of G. to pay the bond; and he bound himself to pay it, but failed to do so, and became insolvent. A judgment was recovered'on the bond against the three, and B. paid it. After the judgment G. conveyed land to S. to secure a debt due to him and another debt due to C. Upon a bill by B. and IT. against S. and C. to subject the land conveyed in the deed to S. to satisfy the debt B. had paid, S. stated in his answer that prior to the judgment he held the bond of G., B. and IT. and that he had delivered it up upon receiving the bond of G. with the deed to secure it; but there was no proof of this. C. in his answer, stated that he had before the *659judgment bought one-half of the land from Gr. and made payments upon it; and had afterwards given it up and taken the bond of Gr. for the amount, and taken the deed of trust to secure it. Held: 1. It was competent for Gr., B. and K. to contend, that as between themselves, Gr. should bo principal and B. and K. his securities; and that this had been done. 2. That as between B. and K. and G., the former were entitled to be subrogated to the lien of the judgment-creditor upon the land; and that they were equally entitled against purchasers from G. who did not show .a better equity. 3. That the equity set up by S.-was not final; and that the equity oí 0., if he had any, was merged in the deed of trust.” In this case Grant, Keys and Buchanan entered into partnership for the purchase of cattle for the eastern market and amongst other purchases they bought the cattle of James Oox, for which they executed to him their bond for. one thousand three hundred dollars. That the cattle purchased by them were sold; and thereafter Grant was supplied with money arising from the sales, for the purpose of paying the bond to Cox, as well as- all other partnership debts; being thus supplied with funds, he made an agreement in writing with Keys and Buchanan, by which he bound himself to pay the unpaid partnership debts. Grant not paying the debt to Cox an action was brought by Cox in the circuit court of Washington county against him and Keys and Buchanan on said boiid; and judgment was recovered thereon by Cox in the spring of ■1840, against all the parties. Grant became insolvent; and Keys and Buchanan executed a forthcoming bond, on which execution was awarded at the fall term.'of,the court.. At the time the judgment was rendered in the spring of 1840 Grant owned several tracts of land. In September, 1840, Grant executed a deed by which he conveyed a large portion of his said land owned by him at the date of the judgment to Francis Smith in trust to secure a debt of five hundred dollars due to Smith, and to secure David C. Clark the payment of a debt of one thousand six hundred and six dollars, for which John B. Clark was surety. It appears that a fieri facias was issued upon the judgment awarding.execution on the forthcoming bond, upon which Buchanan paid seven hundred and forty-six dollars and eight cents, on the 28th *660day of December, 1840. That in March, 1841, a ca. sa. was issued upon which Keys and Buchanan were taken in custody, and that Buchanan made an 'arrangement with Gibson which satisfied the balance due on the j udgment, amounting to seven hundred and fifty-seven dollars and twenty-five cents. In December, 1840, Keys and Buchanan filed their bill in the circuit court of Washington county against Grant and others including the trustee in said trust-deed for the purpose of subjecting all of the said lands, which the bill alleged had’been conveyed in trust as aforesaid, to satisfy said judgment of Cox v. Grant, Keys & Buchanan. Brora what appears it would seem. that at the filing of the bill Keys & Buchanan had not paid the judgment, but in their bill they alleged that they would be compelled to pay it. In the bill among other things they alleged that said judgment was a lien upon said lands, and that they were entitled to be substituted to the rights of the judgment-creditor Cox, and to subject the lands for the amount they shall be compelled .to pay, &c. The case was carried to the court of, appeals of Virginia and Judge Allen in delivering the opinion of the court at pp. 172-3 says: “Conceding the judgment to be prior in point of time to the deed of trust, it is contended that the debt was the individual debt of each of the partners; that in paying it the complainants have merely paid their own debt,and such payment gave them no right to the application of the principle of subrogation as against a subsequent incumbrance. As between the partners and the creditor they were all equally bound; and no understanding and agreement as between themselves, could change that relation so as 'to impair his rights. But there was nothing in that relation which would prevent the parties as between themselves, from assuming the relation of principal and securities. Grant agreed to pay the debt upon being furnished with the means; the funds were supplied, but he failed to apply them as he agreed to do. He admitted that he owed the debt himself, and by the memorandum signed by him, dated the 16th of May, 1840, he bound himself to settle the unpaid debts of the firm contracted for cattle during the year 1839, and the costs incurred in collecting them. As between themselves, he stood in the position of *661principal primarily liable for 'the debt, and bis co-partners as his sureties. After they had complied with their engagement by supplying Grant with the funds to pay off the debts, upon his undertaking to discharge them, the debts became his, and they should have been discharged by him; for in substance though not in form the money was due from him alone. If the property had remained the property of Grant, there can be no doubt that a court ot equity, in view of his express undertaking to treat the debt as his own and .discharge his co-partners therefrom, would have held him liable as principal debtor, and substituted them, if compelled to piay his debt, to the lien of the creditors judgment on his property. And this equity of the complainants could not be impaired by a subsequent transaction of Grant with third persons, to which the complainants were strangers. Although the judgment is in fact extinguished by payment, yet it is kept alive in contemplation of equity for the benefit of the surety. Bank United States v. Winston executor, 2 Brock R. 254; Enders v. Brune, 4 Randolph 438; Lowell v. White, 11 Leigh 309: McClung v. Beirne, 10 Leigh 394; Robinson v. Sherman, 2 Gratt. 179; Leake v. Ferguson, 2 Gratt. 420; Watts v. Kinney, 3 Leigh 272. I do not think, therefore, that there is anything in the objection that the debt when contracted was a partnership debt, and that with respect to the creditor it retained its original character. As between themselves they occupied the relation of principal and securities; and the judgment being prior to the deed of trust, they are entitled to priority over it, unless the creditors secured by the deed can show a superior equity.”
Under the authorities and upon principle it is clear that the said proposition of the counsel for the appellant is correct. A.s regards the rights of the surety agaiiist his principal, he is plainly entitled to expect, not only that the principal shall save him from harm, by exempting him from payment of the debt, or if that has not been done, by reimbursing him when he has paid it; but moreover that the principal shall allow him the benefit of the means of payment which the latter has placed in the hands or within the power of the creditor. The surety has therefore a right to enforce against his principal all securities which the latter has given his creditor; for the *662purpose of reimbursement to th<5 surety, if payment lias been made; and it is not in tire mouth of the creditor to object in the one case or the other to the surety’s standing precisely in his shoes, on the contrary the creditor, in relation to such securities maybe said with truth to be trustee of the surety, and if he acts unfaithfully, lie not only fails in his'duty as such, but violates the rights of the surety as against his principal. If therefore, he releases or perverts; or defeats such securities, he exempts the'surety to the extent of the loss thereby sustained. Humphrey v. Hitt, 6 Gratt. 525, 526, opin. of Judge Baldwin. ' '
In 2d vol. White & Tudor’s Lea. Ca. in Equity, part 1, 279 this is laid clown: “It is accordingly well settled throughout the greater part of the United States, that payment by a surety is prima facie a purchase, entitling him to stand in the place of the'creditor as it regards the debt and every means or remedy .by which it is secured; Hayes v. Ward, 4 Johnson Ch. 123.”
In McCormick v. Irwin, 11 Casey 117 Judge Strong said, “ The familiar doctrine of subrogation is, that where one has been ’compelled to pay a'debt which ought to have been paid by another, he is entitled to a cession of all the remedies which the creditor possessed against that other. To' the creditor, both may have been equally liable; but if, as between themselves, there is a superior obligation resting on the one to pay the'debt the other after paying it, may use the creditor’s secririty to obtain reimbursement; *' * * The doctrine does not depend upon priority, nor is it confined to cases of strict suretyship. It is a mode which equity adopts to compel the ultimate discharge of the debt by him who in good conscience ought to pay it, and to relieve him where none but the creditor could ask to pay. To effect this the latter is allowed to take the place of the creditor, and make use of all the creditor’s securities as 'if they were his own.
In White & Tudor’s Lea. Ca. vol. 2 part'2 p. 1345, it is said: “Hence, when land,' subject to a judgment, is-conveyed with a covenant of warranty or against incumbrances, the grantee may not only require that the judgment should be deducted from the purchase-money, but may file a bill to have the amount set off in a suit for a distinct cause of ac*663tion. Terry v. Wooding, 2 Patton & Heath 178. See Ragsdale v. Hagg, 9 Gratt. 419.”
In Irick v. Black, 2 C. E. Green N. J. Eq. 189, it was bold: “ 1. A surety wlio lias paid tlie debt of the principal, is at 'once subrogated to all the rights, remedies and securities of tlie creditor. 2. Wliore tlie debt lias become payable a surety may tile a bill to compel payment of the principal, in order that lie may be relieved from responsibility.”
In tlie case .at bar it is manifest that tlie appellant after said judgments were rendered against the said firm as security for tlie .payment of said judgment-debts .had a right to file his bill in equity, to subject said one hundred and tliirty-eiglit acres of land to the payment of said judgment-debts and to his relief .as such surety from the payment thereof in the hands of said John W. Horner., said James Y. Horner or said Mordicad at any time prior to tlie purchase and assignment of said judgments to the said Mordicad because said John W. Horner was in fáct’-tlie principal debtor quoad said judgment-debts and said judgments were liens upon said land in the hands of said John W. Horner, and also in the hands of said J. Y. Horner and also in the hands of said Mordicad, and .said judgment-liens upon said .land, so far as appears by the record before us, could at .any time have been inforced by the judgment-creditors. It is clear from Morehead’s answers and from what otherwise appears that Mordicad before he received liis deed for said land from said J. Y. Ilorner, not onty had constructive notice that said judgments were liens upon said lands but in fact had actual notice thereof.
The surety’s right to subrogation does not grow out of the contract with the creditor, but from his relation with the principal which renders it incumbent .on the latter to exonerate the surety. Whenever one is liable in person or estate to a charge which ought to be borne primarily by another person or his estate, tlie person first named will have the equity of the surety, and be entitled to the securities and remedies of a creditor as a means of carrying that equity into effect; Wilkes v. Harper, 2 Barb. Chy. 338; White & Tudor’s Lea. Ca. in Eq. vol. 2 part 1 pp. 282, 283.
It does not appear in this case that said John W. Horner *664at the dates of the rendition of said judgments or afterwards was the owner of any lands other than said one hundred and thirty-eight acres. Before and at the time said John W. Horner sold said one hundred and thirty-eight acres of land, as between said John W. Horner and the appellant as his surety, the said John W. Horner was the principal debtor and as such primarily liable for the.payment of the said judgments and the said one hundred and thirty-eight acres of land was also primarily liable for the satisfaction thereof. Cherry v. Monro et als., 2 Barb. Chy. Prac. 618; Buchanan v. Clark et als., 10 Gratt. 164 & 173. And the said one hundred and thirty-eight acres of land continued so primarily liable in the hands of said J. Y. Horner and said Morehead whether they or either of them had actual notice that the appellant was in fact only a surety or not, for in such a case, however it may be in some other cases, the purchaser is held to be put on enquiry and to have at least constructive notice of the surety’s equity. If this were not so the principal judgment-debtor upon whose land a judgment is a lien could by a sale and conveyance of his land in many cases, at his will throw the entire burthen of payment of the debt upon his surety without remedy for his reimbursement. With reference to this equity Judge Allen in the case last cited says: “And this equity of the complainants could not be impaired by a subsequent transaction of Grant (the principal debtor) with third persons, to which the complainants (the sureties) were strangers.” See also the case of Wright, use of Ensley v. Knepper, Sahl Sg Leckey, 1 Pa. State R. by Barr 361.
In the case of Koons v. Hartman, 7 Watts. Pa. P. 20, it was held that: “If the plaintiff in a judgment became the owner of the land upon which that judgment is a lien, the lien thereby becomes extinct by operation of law; and no subsequent sale of the land by the sheriff, will vest a title in the purchaser.” In this case Judge Kennedy delivered the opinion of the court and at page twenty-four he says : “Besides he must be viewed as having held the land, from the moment he became the owner of it, entirely free from all lien on account of the judgment; because, being the owner (as it most clearly appears from the evidence) of the judg*665ment, when he bought the land from Siiell, the defendant in the judgment, the lien of the judgment thereby became extinct through operation of law; there being no agreement made or intention manifested at the time, to continue it for'' any purpose. And, indeed, having become the absolute owner of the land, and being so also of the judgment, at the same time, it is not very easy to conceive why the lien should have continued to exist longer; because it would be idle, if not perfectly absurd and ridiculous, for a creditor to'wish that his own property should be bound for the payment of a debt owing to himself; it is even difficult, if not impossible, to conceive how this could be. The lien of the judgment, then having thus become extinct, it cannot be imagined that the subsequent transfer of either the judgment or the land should revive it again, so as to affect the purchase of the latter.” -
In the case of Wright v. Knepper, Sahl & Leckey, 1 Penn. State R. by Barr page 361, the syllabus of this case as reported is: “The purchaser of a lot of ground on which there is the lien of a judgment against two or more persons, one of whom is surety, by purchasing and taking an assignment of the judgment discharges the surety pro tanto.” In the court below this was a scire facias to revive judgment, &c., in which Enoch Wright, for the use of Michael Ensley, the plaintiff, in error, was the plaintiff, and William W. Knepper, Leopold Sahl and William Leckey were defendants. All the facts of the case as reported were these: Enoch Wright obtained an amicable judgment by confession against the defendants for six hundred and eighteen dollars and eighty-four cents, which on the 7th of July, 1841, wras entered of record, in Allegheny county, and became a lien on a lot of ground situate in Allegheny city, and owned by Leopold Sahl. On the 16th day of December, 1842, Leopold Sahl for the consideration of four hundred and sixty dollars conveyed this lot to Michael Ensley.. On the 17th of June, 1844, Enoch Wright- for a bona fide consideration assigned the judgment to Michael Ensley, without recourse and subject to a credit of two hundred dollars, paid 26th of July, 1841, and a further credit of interest on the whole amount to April 1, 1841. It was found on the part of Wil*666liam Léckey (who alone made defense to the scire facias) that.he was only a surety and Leopold Sahl the ■principal.” Judge Rogers in delivering the opinion of the court said: “The judgment on which suit was brought was alien on a lot íiów owned by Michael Ensley. Ensley became the purchaser of the judgment subsequently, and now seeks to enforce payment by means of a scire facias against "William Leckey, the surety. This raises the question, whether the purchaser of á 'lot bound by a judgment against these persons, in'which one' of the debtors is a surety, by purchasing and taking an assignment of the judgment, discharges the surety pro tanto. We shall but arrive at a correct conclusion, by considering the situation of the surety before the assignment. If the creditor levies his debt by sale of the premises on which the judgment is a lien, the surety is discharged from the debt, and this so far as the surety' is concerned, would be the duty of the creditor, a duty, which would bo enforced by a court of equity, who would compel him in the first instance to go against the land. But although we have no such power in this State, yet we have adopted to the fullest extent the principle, that equity considers that done which ought to be done. Again if the creditor levies the debt from the surety, the latter has a right to be substituted to all the securities of the principal, and by this means to an indemnity against the sale of real property bound by the judgment. Wor has the purchaser any just right to complain as he had constructive, if not actual notice of the lien, and of course purchased subject to it. He takes the property encumbered, with the same equities as the original owner, and as regards him it is settled; the surety upon payment of the debt is entitled to substitution against the principal.
' “In Koons v. Hartman, 7 Watts 20, the general principle is ruled, that if the plaintiffs in the judgment become the owners of the land upon which the judgment is a lien, the lien becomes extinct by operation of law. Of the benefit of this principié to the extent of the value of the land, the surety cannot be deprived. But by purchasing the judgment and obtaining control of it, the plaintiff seeks to buy the debt from the surety, and thereby exempts the lot, of which *667lie has reluctantly become the owner, from the hen of the judgment. The writ was issued against all the defendants, but issue is joined, and the trial had with the surety alone; and as the jury have found the value of the lot to be equal to the amount of the judgment, we are of opinion the assignee is not entitled,” &c.
While I do not concur fully with all that is said by the judge who delivered the opinion of the court in the last named case still I concur and agree with the most that is said in it which is applicable to the question under consideration and to that extent I construe it to be in accordance with the principles decided in the case of Buchanan v. Clark et als., 10 Gratt. 170, 172, 173. I am therefore of opinion that as Morehead before and at the time ho purchased and took assignments of said judgments from the owners thereof held and owned said one hundred and thirty-eight acres of land, and as said judgments were liens on said land in his hands for the payment and satisfaction of the amounts of said judgments quoad the appellant before and at the time he purchased and received said assignments of said several judgments and in relief and discharge of the appellant therefrom who was in fact a surety only, for the payment of said judgments while said John W. Horner was the principal debtor therein, that when the said Morehead purchased and took assignments of said several judgments from the owners thereof tfre appellant became and was discharged from said judgments and the amounts due thereon and the payment thereof pro tanto, that is to say to the extent of the value of said one hundred and thirty-eight acres of land on the 30th day of October, 1866, when he purchased and received the last of said assignments of said several judgments from the owners thereof, the first purchase being made on the 16th day of September, 1866, as stated by Morehead. The usual time is the time of the assignment of the judgment, but as there were several judgments assigned in this case I have fixed the date of the last assignment for convenience, as I don’t see any party can be prejudiced thereby. And if the value of said one hundred and thirty-eight acres of land at said time is found to be equal to or in excess of the aggregate amount due on said several judgments including all *668proper interest and costs after deducting the proper credits, at the time last aforesaid, then the appellant is entitled to be discharged from said several judgments and from the payment of each and every of said judgments and every part thereof.
But the discharge of appellant in whole or part as the case may be from liability upon the said judgments for the reasons aforesaid does not discharge the said judgments and their several liens as to the real estate of-said John W. Hor-ner, deceased, other than the said one hundred and thirty-eight acres of land if any there be in so far as the same remains unpaid after deducting all proper credits.
The injunction as prayed for in the original bill is against the judgment in favor of said firm of E. B. Long & Co. against the said firm of Horner & Johnson confessed at the ■August term of the county court of-Wood county for two hundred and seventy-eight dollars and fifty-three cents with interest on one hundred and thirty-nine dollars and twenty-six cents from May 12, 1858, and on one hundred and thirty-nine dollars and twenty-six cents from June 12, 1858, and costs of suit and the said judgment of said firm of Straus, Hartman, Hoffiin & Co. rendered at the October term 1858 of said county court for three hundred and thirty-six dollars and sixty-three cents and costs of suit against said firm of Horner & Johnson and the said judgment of the said firm of Young, Carson & Bryant against said firm of Horner & Johnson tendered by said county court at the November term 1858 for sixty-five dollars with interest thereon from November 12, 1858, and costs of suit.
The commissioner credits the first named judgment with cash paid by J. W. Horner, September 11,1865, one hundred and twenty-five dollars, which credit I think is correct, and also credits the same “ by overpaying another execution, September 12,1865.” I see no evidence to authorize this credit, but as the defendants in the final decree rendered by the circuit court in this cause consented to the same it is doubtless correct. The second judgment above named the commissioner credits with cash, September 12, 1865, by J. W. Hor-ner one hundred and fifty dollars. This credit is I think correct. The commissioner is I think mistaken when he *669says in Ms report that “a credit of forty-eight dollars' and seventy-four cents appears on the judgment of E. B. Long & Co., &c.” . There appears to have been another judgment of said E. B. Long & Co., rendered in the circuit court of Wood county at the Juno term 1858 for one hundred and thirty-seven dollars and eighty-nine cents' with interest from tlie 12th day of April, 1858, which is subject to a credit'of forty-eight dollars and thirty-six cents and thirty-six dollars and seventy-six cents which is the balance after deducting sheriff’s fees and commissions of the forty dollars and seventy cents which Sheriff Harwood speaks of in his evidence at page 5, printed record. But Sheriff Harwood in his evidence does not speak of having applied, or paid any part of the proceeds of the sale of J. W. Horner’s store-goods on the said judgment of E. B. Long& Co. against said firm of ITorner & Johnson in the county court of Wood county at'the August term 1858, for two hundred and seventy-eight dollars and fifty-three cents with interest, &c. The said judgment of E. B. Long & Co. against said Horner & Johnson rendered in the circuit court of'Wood county for oiie hundred and thirty-seven dollars and eighty-nine cents with interest, &c., is not embraced in this suit. I do not concur in the conclusion of the commissioner stated in his said report “that under all the circumstances the executions against Horner & Johnson in favor of the defendants in this bill should in equity be returned satisfied.” I don’t think the evidence before the commission er justified him in his said conclusion. There was then no error in the circuit court in not confirming said report as a whole and sustaining exceptions to it, as to the erroneous conclusions of the commissioner in the respects I have indicated.
As to the questions made and discussed by counsel in the cause touching the matter of indemnity mentioned in the plaintiff’s bill it is unnecessary to intimate any opinion, now first because all the parties interested in the questions directly arising upon said alleged indemnity to Morehead for loss, &c., on account of judgments are not before the Court, and I think it would perhaps be improper,to unnecessarily pass upon said alleged indemnity or its effects in their absence. Second. Erom what appears in the cause I think the value *670of the said one hundred and thirty-eight acres of land is greater in amount by several thousand dollars than the amount of said judgments after deducting all proper credits and indeed of all the judgments mentioned in the cause and if that is so the consideration of said indemnity in this cause is wholly immaterial and unnecessary. It is true that there is a possibility of my being mistaken in this respect, hut from what appears in the cause it does not seem to he in any wise probable. Taylor, Foster & Co. are not parties to the original bill but they are made parties by the amended bill. The judgment of Taylor, Foster & Co. Morehead in his answer says is not against the said firm of Ilorner & Johnson, but is against John W. Ilorner alone. .There is no official copy of the judgment in the record as before us but from what does appear in the record I think it most probable that this judgment is against John W. Ilorner alone and not against the appellant and if this should not he made to appear otherwise after this cause is remanded to the circuit court, the cause should be dismissed as to that judgment, but if it should be made to appear that Taylor, Foster & Co.'s judgment for their debt is against the'appellautas well as John W. Horner then the appellant is entitled to the same relief against it as I have before ascertained he is entitled to against the judgments enjoined in the injunction allowed upon the original bill.
As before stated the record of the suit of Fisher, Boyd & Bro. against Ilorner & Johnson in the amended bill in this cause mentioned is not before us and this cause was not heard upon or with that case and I therefore cannot now see and determine that it would be proper for the Court to consolidate that cause with this, but however that may be I think it would be proper to hear that cause with this after this cause is remanded to the circuit court.
The injunction prayed for in the original bill is, “ that in the meantime the sheriff of Wood county and the said afore-named defendants and all others interested, their agents and attorneys, be enjoined and restrained from all further proceedings on the last mentioned judgments; and that the injunction may be perpetuated.” The order of injunction is not contained in the record as before us, but if the order of in*671junction is as prayed for it should he modified at the final hearing before the circuit court substantially so as to enjoin and prohibit the sale of the appellant’s property levied upon as in the bill mentioned, and the collection of said judgments or either of them in whole or in part, as may be proper, from the appellant, his executors, administrators, heirs or assigns by any legal process or suit or proceeding whatever issued upon or founded upon said judgments or either of them. And said injunction thus modified may be extended to any other judgment or judgments mentioned in the amended bill filed in this cause if at the hearing it shall appear proper to do so.
There were some other questions discussed by counsel in this cause, which under the views I have taken have become immaterial and unnecessary to be determined in this cause and I therefore express no opinion upon them.
Tor the foregoing reasons I am of opinion that there is no error in the decree rendered in this cause by the circuit court of Wood county on the 22d day of January, 1879, and the same must therefore be affirmed but that there is error in the decree rendered in this cause by the circuit court of the county of "Wood on the 16th day of April, 1879, and that the same must be reversed in so far as the said circuit court in .its said decree declared it to be its “opinion that the complainant is not entitled to the relief prayed for in said bill and amended bill,” and also in so far as the said circuit court in and by.its said decree ordered that the said bill and amended bill be dismissed and that defendants except R, E. Horner recover of the complainants their costs about their defense in this suit expended, and that appellee James L. Morehead must pay to the appellant John B. Johnson his costs in this Court about the prosecution of his appeal and supersedeas expended. And this Court proceeding to render such decree as the said circuit court should have rendered it is adjudged, ordered and decreed that this cause be remanded to the said circuit court with instructions to cause the same to be referred to a commissioner to ascertain and report the amount of each of the judgments in the original bill mentioned, further proceedings on which were enjoined by injunction heretofore allowed in this cause, .including interest *672and proper costs, after deducting all proper payments and credits on the 30th day of October, 1866, and also to ascertain and report as of October 80, 1866, the value of the' tract of one hundred and thirty-eight acres of land in the amended bill in this cause mentioned, and conveyed to said James L. Morehead by James Y. Horner and wife by deed dated the 7th day of September, 1865, which deed or a copy thereof is filed with the answer of said Morehead to the plaintiff’s amended bill as an exhibit marked No. 3. And the said circuit court may extend and enlarge such order of reference so as to include therein any other judgments in the plaintiff’s amended bill filed in this cause, if it shall seem to it proper so to do. And for such other and further proceedings to be had in this cause in said circuit court as are in accordance with the principles settled in this opinion and further according to the rules and principles governing courts of equity.
Judges Johnson and Green Concurred.
DECREES AeEIRMED IN PART AND REVERSED IN PART.
Cause Remanded.