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Where a tenant for life of lands having a power to charge the same, by mortgage or otherwise, with a sum of money, raises it by way of mortgage, and afterwards on an assignment of the mortgage, the remainder man covenants to pay the mortgagemoney, the covenantor will be considered only as a surety for the land, the land being the original debtor, and the next remainder man will be compelled to take the land cum onere (k).
The assignees of the principal debtor, who has become bankrupt, are bound by the agreements of the bankrupt made before the principal's bankruptcy; thus, where S. became bound in a bond as surety for P., and P., in order to indemnify S., agreed that he should retain out of any money that should be due from him to P., in respect of any dealings between them in trade, so much as he, s., should pay on the bond, and P. afterwards sold goods to S. of a less value than the money secured by the bond, and then became bankrupt, and S. was obliged to satisfy the bond : it was held, that the payment of the money secured by the bond was a good defence to an action by the assignees of P. against S. for the price of the goods (1). So a factor, who becomes surety for his principal in the course of his dealings, and within his authority as factor, has a lien on the price of the goods sold by him for his principal, to the amount of the sum for which he has so become surety (m). But if a broker, purchasing goods for his principal, does, without his knowledge or authority, add to the terms of purchase which the principal had agreed to, a guarantee by himself of the principal's bills, and the goods are delivered to the broker, and the principal becomes bankrupt,
(k) Evelyn v. Evelyn, 2 P. Wms. 659.
(1) Dobson v. Lockhart, 5 T. R.
(m) Drinkwater v. Goodwin, Cowp. 251.
the broker can neither detain the goods as upon a stoppage in transitu, nor has he any lien on them for the money he has paid on his guarantee ; notwithstanding the bankrupt never could have obtained the goods purchased, unless such guarantee had been given (n).
Where the surety is appointed executor of his principal, and the testator's assets are legal assets, the surety (it would seem) has a right to retain any debt he is liable to pay as such surety, against any debt due from the testator's estate being of equal degree (0); but if the assets are equitable assets, he is not allowed to prefer bimself (p); all the creditors of the principal being equally entitled, are to be paid pari passu, as far as the assets will extend, whether the debts due to them are debts by specialty, or simple contract debts.
Where two became jointly bound in a bond, the one as principal, and the other as surety, and the principal having died, the surety administered, and the bond being forfeited, the surety agreed with the creditor and discharged the debt : in debt brought by another creditor of the intestate, it was adjudged that the surety could not retain, for by joining in the bond with the principal, it became his own debt (9). It is submitted, however, that in equity the debt would have been thrown on the principal's estate (2) (n) Gurney v. Sharp, 4 Taunt. (9) Anon. Godb. 149, p). 194 ;
4.Leon. 236, pl. 373; 11 Vin. (0) See Anon. 2 Ch. Ca. 54; Abr. 263, pl. 14; 265, pl. 9 & and Silk v. Prime, 1 Dick. 384.
pl. 10. (p) Last cases.
(2) In the 2nd vol. of Mr. Dickens' Reports, p. 460, there is a case of Bathurst v. De la Zouch, the report of which is as follows :“ Bill against an executor for an account. The defendant had become bound with the testator in a bond for another person. The only question was, whether he should be at liberty to retain it out of the testator's estate. Lord Chancellor on a subsequent day determined that the defendant was entitled to retain the whole of what was
A surety who has become responsible for the debt due to one of the creditors of a person who had entered into a composition deed with his creditors, is not, on being sued on his undertaking, entitled at law to the production of the composition deed, in the hands of a trustee on behalf of such debtor and his creditors; for the party holding the deed is not a trustee for the surety, but for the parties who executed the composition deed (r).
A surety for a receiver, who has advanced the latter money to enable him to make payments as receiver, is entitled as against the receiver's other creditors, to stand in the place of the receiver, and to be paid sums ordered to the receiver out of funds in court, in respect of disbursements made by him, the money for making such disbursements having been advanced by the surety ; for had it not been for the money advanced by the surety, the sum for the benefit of the other creditors would have been lessened to that extent, and it is but just, that upon the application of the surety, he should be indemnified for what he has paid for the receiver out of the balance due to him ($)(3).
Whether a surety, who has paid the specialty (n) Cocks v. Nash, 9 Bing. 723. & B. 134; S. C. Coop. 61. (s) Glossop v. Harrison, 3 Ves.
due on the bond.” So that it would appear, according to the report of this case (the law of which, however, seems to be rather questionable), that one surety who is the executor of his co-surety, may compel the estate of his co-surety to bear the whole debt, for the payment of which, both the testator and the executor were equally liable.
(3) But a surety for a receiver, whose recognizance has been estreated, and against the former of whom an action has been commenced to recover the money due from the defaulting receiver, will, upon an application made to the Court by the surety, that it may
be referred to the Master to see what was due from the receiver, and that upon payment by the surety into the bank by instalments of such sum as should be reported to be due from the receiver, all proceedings in the action at law may be stayed,--have to pay the costs of the motion, and of the subsequent proceedings in consequence of it.. (Walker v. Wild, i Madd. 528.)
debt of his principal, shall stand as a specialty creditor, or as a simple contract creditor, against the assets of the principal, depends upon the circumstance whether there is any continuing security under seal, which can be legally enforced by the surety. If P. and S. give a bond to C., the one as principal, and the other as surety, and no other assurance is executed at the time, and S. pays the
upon the bond, he thereby becomes a simple contract creditor only of the principal ; for the bond being paid off, all remedy upon it is at an end (t). But if a mortgage, or counter-bond, be given to the surety by the principal by way of indemnity, the surety will become a specialty creditor or incumbrancer, in respect of what he may pay (u); or, if a mortgage have been made by the principal to the creditor, the surety has a right upon payment to stand in the place of the mortgagee, and the mortgagor and those claiming under him, will not be allowed to get back the estate, until the surety has been indemnified (v). So where A. and B. as principals, executed a joint and several bond to secure a sum of money to C., and subsequently to the deaths of A. and C., the executors of C. obtained from B. as principal, and from S. as his surety, another bond to secure a part of the money then due on the original bond with interest, and S. dying, his representatives paid off the second bond, and procured the original bond to be assigned to them : it was held, in a suit to administer the estate of A., that S.'s representatives were entitled by virtue of the assignment to rank as
(t) Copis v. Middleton, T. &
supra ; Gayner v. Rayner, T. & Russ. 224; Gammon y. Stone, 1
cit. Ves. 339; Woffington v. Sparks, (v) See supra and Copis v. Mid2 Ves. 569.
dleton, supra ; Plumbe v. Sanday, (u) See Copis v. Middleton, i Madd. Ch. p. 236, 2nd ed.
specialty creditors of A.'s estate, in respect of the payments made by S. or his estate on the second bond, to the extent of the penalty in the assigned bond (w). So where a person, having been appointed a receiver of certain estates during the minority of an infant, joined with two other persons as his sureties in a recognizance for his duly accounting, and afterwards the receiver settled a part of his lands in jointure upon his wife before marriage, and without notice of the recognizance, and then by will devised away the rest of his lands; the recognizance having been put in suit against the sureties, after the receiver's death, it was held, that they were entitled to have the personal estate of the receiver first applied to satisfy the recognizance, then the lands devised, then the lands settled by the receiver as a jointure on his wife, and lastly the paraphernalia of the wife (r).
OF THE RIGHTS AND REMEDIES OF SURETIES, WITH
RELATION TO EACH OTHER; OR THE RIGHT TO CONTRIBUTION.
I. Of the principle of contribution ;
III. When the right to contribution is lost, or affected; and
IV. The remedies for enforcing contribution.
(W) Hodgson v. Shaw, 3 Myl. & K. 183.
(2) Tynt v. Tynt, 2 P. Wms. 542; S. C. 20 Vin. Abr. 105, pl. 1.