Dunlap v. Clements

GOLDTHWAITE, J. — 1. Clements, in this case, is a mere formal party to the bill, if its allegations are true; but the facts upon which its equity is supposed to arise, must be in the knowledge of the other defendants, if they exist at all, and, therefore, when this equity is denied or avoided by their answer, the rule is, that the injunction may be dissolved, although the other party has not answered. [Long v. Brown, 4 Ala. Rep. 622; Depeyster v. Graves, 2 John. Chan. 148.] 2. The equity arising out of the facts stated in the bill, did not, in our judgment, warrant the injunction in the first instance. In order to see this clearly, it is only necessary to determine the relation of the several parties to Lee, the principal debtor and between themselves. Each of the indorsers was an independent surety for Lee, and all of them are bound to each other in the order their names appear on the bill, and there is [542] no contribution between them. [Brahan v. Atwood, 3 Stew. 247.] Each of them, upon paying the bill, will become the creditor of Lee, and of those whose names are before his own upon it. Now as between a debtor and creditor, where the latter, in addition to the formal obligation of his debtor, has also a security to which he may resort for payment, there is no ground upon which the creditor can be compelled to resort to that security before he asserts his claim by a personal suit against his debtor. [Wright v. Simpson, 6 Vesey, 713; 1 Story’s Equity, § 640.] Conceding that Battle and Foster have paid Clements the amount of the bill, they are entitled, as the creditors of Dunlap, to sue him upon it, or they may, with the consent of Clements, enforce his judgment for their benefit. [Chitty on Bills, 661.] It may be, that where a creditor has acted in such bad faith to a surety of his debtor, that the original security placed in his hands, by the act of bad faith, is lost, that equity will relieve ; but that is not this case, as the prayer is, that the subsequent indorsers may produce the property assigned by the principal debtor for their indemnity. If Dunlap has any right to be substituted to the indemnity which Lee executed for the benefit of Battle and Foster, it is to be derived from the .equitable rule by which Clements, as the original creditor, could compel them to use it for his benefit. That he could do so seems clear,from adjudged cases. [Wright v. Mosley, 11 Vesey, 22; L Story’s Equity, § 638.] Any security which Clements may resort to, he may be compelled to use for the benefit of any one standing to Lee in the place of a surety. [Craythorn v. Swinburn, 14 Vesey, 159 ; 1 Story Eq. 499, and cases there cited.] Conceding then, that Dunlap, upon paying this debt, may, in equity, require Battle and Foster to assign to him the benefit of the deed of trust, or to enforce it for him, yet there is no reason shown upon the bill why they should be delayed of their personal remedy. The result of this reasoning is, that the injunction should not have been awarded in the first instance, and therefore it was properly dissolved. It will be seen that we have said nothing in relation to Dun- • lap’s equities, as against Battle and Foster, in the event that [543] the security given to them by Lee is lost, by their bad faith or mismanagement. The reason is, that no such case is made by the bill, as that proceeds entirely upon the supposed right of Dunlap to have that security executed before the suit can be enforced against him. This view, we have shown, cannot be sustained. Decree affirmed. Collier, C. J., not sitting.