22 N.C. 390 | N.C. | 1839
There is no dispute in the pleadings as to any fact material to the equity urged on the part of the plaintiffs, and on which the decree is based; and upon the facts admitted and found, the decree is, in our judgment, certainly right in substance.
It is a rule which has ripened into a maxim of equity that sureties are entitled to the benefit of every security which the credit or gets against the principal. So clear and strong is this title of sureties that if the creditor gives up a security which if preserved would have produced payment to the creditor, or indemnity to the surety, it has been held in many cases that the creditor can no longer look to the surety, but the latter is discharged altogether, or pro tanto according to the value of the surrendered security. Not to look further back, the recent cases of Cooper v. Wilcox, ante, 90, and Nelson v. Williams, ante, 118, before ourselves, are instances of the application of this principle, and illustrate it. If this rule is not to be abrogated, the plaintiffs must be relieved, as asked by them. This, it was admitted in the argument at the bar, is correct if *320 the creditor take a mortgage by way of further security. But the present was not deemed a security of that sort; but was likened to that security of a vendor for the purchase money which has received the distinctive name of the vendor's equitable lien, which is personal to the vendor, and of which the benefit cannot be imparted to any other person. The Court thinks otherwise entirely. The doctrine of the vendor's equitable (393) lien arises only in a case in which the estate has been conveyed by the vendor. If he retain the legal title, or, after conveying it, if he receive it back by way of mortgage, he them has not a lien on the estate, but the estate itself; and the title thus withheld by the vendor is precisely analogous to a mortgage made to him. In each case the legal title is in him; and in the view of a court of equity he has it as a security for the sum due to him, which he is required, in good faith, to make to enure to the benefit of a surety for his debt, as well as for his own benefit. The decree is, therefore, deemed by us right in its principle.
As the principal debtor had become insolvent, the sureties, in respect of their liability, had a right, before paying the debt, to file their bill to restrain the conveyance of the land, and to have it applied to their relief. Williams v. Helme,
This decree was also objected to as giving costs against the defendants, and particularly against Farley, the trustee for the other defendants. In the first place, the Court is not disposed to review a decree upon the question of costs alone. But, besides, we think this decree proper (394) in that respect. The question is not respecting costs in a suit between the cestui que trust and his own trustee, acting in good faith, in which case the trustee ought to be nothing out of pocket. But these costs are given to one claiming against both the trustee and the cestui que trust, who all deny the plaintiff's right altogether. It is but *321 the common case for costs to the party prevailing; and the decree is in effect that the cestui que trust shall pay the costs, because the trustee will no doubt reimburse himself for those paid by him, by charging them in the accounts of the trust.
The decree is, therefore, affirmed in all respects, unless one of the parties shall choose to vary it in the manner indicated; and the defendants must pay the costs in this Court, also.
PER CURIAM. Affirmed.
Cited: Polk v. Gallant, post, 397; Arnold v. Hicks,
(395)
