Kesler v. . Linker

Ashe, J., after stating the case. The only question presented for our consideration is, was there error in the instructions given by His Honor to the jury. His Honor committed no error in refusing the instructions, but we do think there was error in the instructions which he did give. Whether at the time of the execution of the note and the mortgage, (for they seem to have been simultaneous acts) there was an agreement between the plaintiff and the defendant, that the plaintiff would attend to the securing the property conveyed in the mortgage, was a question squarely raised by the pleadings. It was a material inquiry in the case and should have been submitted to the jury for their determination. The jury, it is true, found all issues in favor of the plaintiff, but the result of their finding might have been different if His Honor had charged them with that question. His Honor should have charged the jury, “that it was the duty of Linker to see that the property mortgaged should be sold to satisfy the mortgage, and as there was no evidence that he had ever tried to have *459 said property sold, that plaintiff was entitled to recover, unless there was an agreement or understanding between plaintiff and defendant at the time of taking the mortgage, that the plaintiff would look to securing the mortgaged property and apply it to the debt. Without some agreement or understanding between the parties to that effect, the plaintiff is not required to resort, in the first instance, to the property conveyed in the mortgage, before proceeding against the surety ; nor is there any positive duty incumbent on the creditor to prosecute measures of active diligence. Froener v. Yingline, 37 Md. Rep., 491; Brandt on Part., &c., § 204. The surety is the guarantor, and it is his business to see that the principal pays the debt, and when there is a collateral security taken by the creditor from the principal debtor, it is his duty to.see it is made available. The creditor can do no act with reference to the security which will prejudice the surety, but his quiescence will not discharge the surety, for he is not bound to active diligence. Pipkin v. Bond, 5 Ired. Eq., 91. The remedy of the surety is to pay the debt, and he will then be subrogated to, and may enforce all the liens held by the creditor for the payment of the debt. Brandt on Part., &c., § 204. And it has been held in England and in some of the American states, that a surety’may by a suit in chancery, after the debt becomes due and before he pays it, compel the creditor to proceed to collect the debt from the principal, provided he indemnify the creditor against loss, from a fruitless suit against the principal. Id., § 205, and the cases there referred to in note. Such is the law applicable to the case when there is no agreement or understanding between the creditor and the surety. When there is such an agreement or understanding, the creditor is bound to active diligence, and if by his neg *460 lect the property is lost, or destroyed, or surrendered, the ••surety will be exonerated to the extent of the value of the property conveyed in the mortgage or other security, which might-be secured by proper diligence; and the reason is, because by the understanding or agreement to look after the mortgage and see that the property conveyed therein shall be applied to the debt, it put to sleep the vigilance of the surety and produces a false confidence, but for which he might have taken security for his own indemnification. There is error. Let this be certified to the superior court of Rowan. Error. Reversed.