105 A. 344 | Conn. | 1918
The principal contention of the defendant, as shown by her reasons of appeal, is that the Superior Court erred in holding that the money which the plaintiff received from the sale of these collaterals should not be applied to the payment of the note which she had guaranteed. The terms of the note gave the Trust Company the right to apply the proceeds of this collateral to the payment of liabilities to it incurred by the defendant other than this immediate note, and such an agreement is recognized and supported by the case of Stamford Bank v. Benedict,
We cannot, under the facts here disclosed, extend the doctrine of subrogation to the defendant. She has done nothing to furnish a basis for such a right. Under the plain terms of the note, the plaintiff company had the right to sell the collateral and apply the proceeds as it did. In Sandford v. McLean, 3 Paige Ch. (N. Y.) 117, 122, 23 Amer. Dec. 773, 776, this statement is made of the controlling principle: "It is only in cases where the person advancing money, to pay the debt of a third party, stands in the situation of a surety, or is compelled to pay it to protect his own rights, that a court of equity substitutes him in the place of the creditor, as a matter of course, without any agreement to that effect. In other cases the demand of a creditor which is paid with money of a third person, and without any agreement that the security shall be assigned or kept on foot for the benefit of such third person, is absolutely extinguished."
If the principles of law to which we have just referred are correct, it necessarily follows that, upon the facts found in the present case, there is no error in the conclusion of the court below that "the plaintiff had the right to sell the collateral and apply said proceeds as it did, and the defendant, the guarantor, is not entitled to have the avails of such sale applied primarily to the payment of the note in question, nor is she entitled in equity to said collateral security or its equivalent until and unless she pays the whole of the indebtedness, viz: the $14,000 in addition to said note for which said collateral was given." *123
The conclusions of the court referred to in paragraphs one, two and three of the reasons of appeal were fully justified by the evidence now before us.
There is no error.
In this opinion the other judges concurred.