41 N.C. 28 | N.C. | 1849
In June, 1839, Thadeus Freshwater of Pasquotank, wrote, by Willis W. Wright, a letter to the plaintiffs in the following words:
Messrs. Hardy Brother, Norfolk, Va.:
My friend, Mr. W. W. Wright, goes to your city for goods on a short credit. I am satisfied you will be safe in selling him any amount he may see proper to purchase. From my long acquaintance with him, I do not hesitate to say that he is as punctual a man as any I know.
The plaintiffs supplied Wright with goods, for which they state a balance of $698.39 is still due, and they allege that they supplied them upon the faith of the foregoing letter, as a letter of credit. In October, 1839, Wright became embarrassed and executed an assignment to the defendant Pool for real and personal estate, in trust to secure sundry debts enumerated, among which were some to Freshwater. Among its provisions are the following: "And whereas Thadeus Freshwater has given the said Willis W. a letter of credit to Messrs. Hardy Brother of Norfolk, Virginia, on which said letter the said Willis W. purchased goods from the said Hardy Brother." And afterwards it directs the trustee, out of the proceeds of the property, "to discharge (29) the aforesaid debts and liabilities due and owing to the said Godfrey, Freshwater, and Davis." Freshwater afterwards died and Wright became a bankrupt, and the plaintiffs filed this bill against the trustee, Freshwater's executor, Wright, and the assignee in bankruptcy, and the other creditors mentioned in the deed for an account of the trust fund and satisfaction of their debts. The bill, we think, cannot be sustained. There is no trust to discharge this debt, or in favor of the plaintiffs nomination, and their counsel admit that they can only claim by subrogation to the rights of Freshwater, who, they say, was the surety for the plaintiffs' debts and *34 is secured in the deed from loss by his liability. It is true that between creditors and sureties there is the right that one of them shall communicate to the other the benefit of all collateral securities. But the misfortune of the plaintiffs is that here the instrument is not a security for his debt, but only provides an indemnity for Freshwater against loss upon his liability for Wright, which, in truth, amounts to nothing, as Freshwater was not under any liability of the kind. It is true, the assignment says he had given Wright a letter of credit to the plaintiffs, on which they had furnished goods to a certain amount; and if the letter had not been in existence, and the cause stood upon the contents of the deed alone, it would be a fair inference that a letter was really given upon which the plaintiffs might have held Freshwater liable, and therefore might have insisted on being substituted directly to his right to indemnity out of the property. But that is not the state of the case, and Wright was mistaken, for the letter of Freshwater, on which the (30) plaintiffs sold the goods, is produced, and it is plainly not a letter of credit, in which Freshwater undertakes anything for Wright, but a representation merely of his opinion of the other's solvency and punctuality. It is not an engagement at all; and, indeed, as there is no intimation of mala fides on his part, he must be taken to believe what he said, and, therefore, no recovery could have been made from Freshwater on it in any form. Of course, Freshwater could not have been damnified, and therefore he could not demand that the fund should be applied to the plaintiffs' debt for his relief, nor paid to him as an indemnity, if he had voluntarily paid the plaintiffs. Freshwater, then, had no interest in the fund in this respect to which the plaintiffs could be subrogated; and, consequently, the plaintiffs cannot rely on the deed as a specific security for his debt, but must come in as a general creditor in the court of bankruptcy.
PER CURIAM. Bill dismissed with costs.
(31)
