120 Iowa 310 | Iowa | 1903
The defendant Moore signed the two notes in suit as surety fo.r his son-in-law, Wm. M. Evans, and admits his liability thereon, unless released by proceedings in the courts of Nebraska against Evans. Plaintiff
The appellant insists that, by the levy upon and sale of the real estate, plaintiff acquired security for the satisfaction of the notes, that this Avas lost by his failure to
This sale was confirmed in the district court March'15, 1899, and at that time the plaintiff was entitled to a
That a creditor acquiring a sheriff’s deed in pursuance of a lawfully conducted sale on a valid judgment is a good-faith purchaser for value and entitled to protection is not
Was the omission to do so such negligence as will relieve defendant from laibility to the extent of the consequent loss? The plaintiff could not have been deceived by
This is on the theory that the creditor thereupon becomes invested with the obligations of a trustee in respect to the lien, and any neglect which results in depriving the surety of the benefits of the security thus acquired and of the advantage of subrogation thereto will,, to the extent of the loss, relieve him from liability. For the surety is en-. titled, upon the payment of the debt, to be subrogated to the rights of the creditor in all securities acquired by him at any time for the satisfaction thereof, and, if this right is rendered unavailing by the negligent omission or commission of some act of the creditor which was essential to the protection of such securities, he, rather than the surety, should suffer the loss. The law doubtless permits the creditor to remain passive when his inaction does not impair the security, or when the circumstances are such that the surety may protect himself; but, when something is essential to be done by him in order to save or preserve the security, the better opinion is that diligence should be exacted. The distinction is illustrated by the rule holding the creditor to the duty of preserving the priority of a mortgage or other lien by filing it for record. Burr v. Boyer, 2 Neb. 265; State Bank v. Bartle, 114 Mo. 276 (21 S. W. Rep. 816); Sullivan v. State, 59 Ark. 47 (26 S. W. Rep. 194). This is on the ground that the instrument evidencing the lien is within the creditor’s sole custody and control, and no opportunity open to the surety for his protection. But, after recording, the creditor is under no obligation to foreclose, for the surety may pay the debt,
We have not deemed it necessary to set out all the statutes referred to and conceded to have been .in force in Nebraska, as their proper construction does not seem to