West Huntsville Cotton M. Co. v. Alter

51 So. 338 | Ala. | 1910

DOWDELL, C. J.

Under the facts alleged in the bill, the complainant, as to his property which is held by the mortgagee, the Central'Trust Company, under the deed of trust to it to secure the bonds of the West Huntsville Cotton Mills Company, is a surety for the payment of such debt. “When property of any kind is pledged or mortgaged by the owner to secure the debt, default, or miscarriage of another person, such property occupies the position of a surety.” — 27 Am. & Eng. Ency. of Law, 433; Allen v. McDonald, (C. C.) 28 Fed. 346. As has been said, no principle in equity is more familiar, or more firmly established, than that a surety, after the debt for which he is liable has become due, without paying or being called upon to pay it, may file, a bill in equity to compel the principal debtor to exonerate him from liability by its payment, provided no rights of the creditor are prejudiced thereby. — Thomas v. St. Paul’s M. E. Church, 86 Ala. 138, 5 South. 508; Tillis v. Folmar, 145 Ala. 176, 39 South. 913, 117 Am. St. Rep. 31.

In Gresham v. Ware, 79 Ala. 192, the same principle being under consideration, it was said: “A like equity arises in the case of a mortgage, executed by the principal debtor and surety, on the separate and individual property of each. Should the mortgagee bring a bill for the foreclosure, and the property of the principal debtor, having first been sold, proves sufficient to' discharge the debt, the property of the surety will be released; or, if insufficient, and the property of both is sold, when the proceeds are brought into court for appropriation, the portion accruing from the property of the principal will be first applied, and the deficiency paid from the proceeds of the surety, to whom any surplus will he awarded. * *. * On a bill for redemption, the amount to be paid will be ascertained in like manner, and the equities adjusted on like principles. The rights of the mortgagee will not thereby be delayed, or obstructed, or impaired, and the surety is not put to circuity of action. The rights of the parties are ascertained and determined in one suit, the mortgagee and surety are both protected, and equity administered. In case of such mortgage, the surety need not wait the pleasure of the mortgaged as to the time of foreclosure, and suffer his property continued under the encumbrance. As, after the debt has become due, the surety may file a bill to compel the principal to pay it, so, after forfeiture, he may bring a bill for the redemption of his property from a mortgage covering the property of both the principal and himself, without first paying the entire mortgage debt, and in the same suit, as ancillary to redemption, compel the application of the principal’s property to its payment. It is sufficient if he pays, or offers to pay, the balance that may be due.”

Here the bill contains an offer to redeem and to pay the debt secured. Applying the doctrine above laid down to the facts averred in the bill before us, a clear case of equitable relief is presented. The demurrer to the bill was properly, overruled, and the decree appealed from will be affirmed.

Affirmed.

Anderson, Sayre, and Evans, JJ., concur.