Steele v. Mealing

GIBBONS, J. From the best examination that we have been able to give the record before us, we can perceive no error in the decree of the Chancellor below. The position is undeniable, that where a mortgage, or other security, is given to one of several sureties for his indemnity on any particular debt, it enures to the benefit of all the sureties to that debt. —1 Story’s Eq. §499; Steele v. Brown, 18 Ala. R. 700; Pinkston v. Taliafero, 9 Ala. 547; Bell v. Lamkin, 1 Stew. & P. 460. It is also equally clear, that where a mortgage is given to one of several sureties, for his indemnity against certain debts therein specified, such mortgagee cannot apply the mortgage funds to other debts than those specified in the mortgage, to the prejudice of the other sureties, to whose benefit the mortgage security enures.— Vide authorities above cited. It is by no means so clear, that the defendant, Steele, is liable to bo charged in the account for the fourteen slaves sold by the sheriff, Cole, on the ground that they were sold through the carelessness or gross negligence of the defendant. It is a fact somewhat singular, that we are unable to gather from the present record the time when the note, on which both the com [291] plainant and defendant were sureties to the Branch Bank, matured. This fact appears in neither the bill, answers, nor proofs in the cause ; and yet we consider it a fact material to the solution of the question, as to whether the defendant was guilty of negligence or not. If the sheriff had seized upon the mortgage property before the law day, the defendant could not have prevented a sale by the sheriff, unless he could have made out a ease for equitable relief. In the absence of such an equitable case, the sale would necessarily have to be submitted to, subject, however, to the rights of the mortgagee. But it must be recollected, that the mortgage to the defendant contains a very ample power of sale, authorizing him to sell without any application whatever to any court for leave, upon short notice, on any default in the payment of any of the mortgage debts. If, therefore, after such default, or, in other words, if after the law day of the mortgage the defendant has slept upon his rights, and permitted the property to pass from his possession and control, when he had the power to realize from it by simply putting it up for sale, we could not hesitate to pronounce it such an act of negligence, as, between him and his co-surety, would charge him with the value of these slaves. But we are precluded, in the present state of the record, from prosecuting our inquiries upon this branch of the master’s report, as we find, on a careful examination of the bill and answer, that it is entirely outside of the pleadings in the case. Wo find no allegation whatever in the bill of gross negligence, nor any charge of want of diligence in managing the mortgage property; and in the absence of such an allegation, it was erroneous in the Chancellor to have allowed this item in the account. —Vide Ansley v. Robinson, 16 Ala. 793; Graham v. Tankersley, 15 Ala. 634. But the defendant contends, that, even supposing that he is liable to account to the plaintiff, he is entitled to have allowed the sum of $1400, which he paid on the judgment under which the cotton of Borland was levied on, and afterwards sold in Mobile by Rives, Battle & Co., and applied towards the payment of the note of $3,100, which they held against Borland, and on which said Steele was surety. In the master’s report, the $2000 for which the cotton was sold was considered by the master as a payment on the note by Borland, and consequently, that note was credited with that amount, and [292] the balance only allowed to Steele as a charge against the mortgage fund ; whereas, Steele contends, that notwithstanding this was paid by Borland, or by his cotton, yet, as he was the means of sending the cotton to that house, by means of his replevy bond on taking the same from the hands of the sheriff, and inasmuch as, in consequence of such interference on his part and such replevy bond, he had the sum of $1400 more to pay, therefore ho ought to be allowed this $1400, as a credit to him, or a charge in his favor upon the mortgage funds. This proposition, however plausible in its statement, we do not thm'k'sótfncív >;-The proposition would be much more tenable, if the facts' had' 'shown1'that the liability on the replevy bond was incurred for the purpose of sending the cotton to Rives, Battle &‘Co., tobe applied as they afterwards applied it, Whether or not, in that case, the position of the defendant could be maintained, we do not now decide. But the facts tend to show, that the liability incurred on the replevy bond for the cotton was a mere friendly act on the part of Steele, to prevent a sacrifice of the cotton, and he permitted Borland to take the same to Mobile, with a view of converting it into money, with which to pay off the very debt which Steele was afterwards compelled to pay; but the death of Borland, and the application of the funds by Rives, battle & Co., without the direction of any body, to the payment of the note which they held against Borland and Steele, show that the liability incurred by Steele was one in addition to the former liabilities already existing on account of the said Borland without any reference whatever to the mortgage security; and on no principle of equity, ought he, in our opinion, to be permitted to bring in this additional liability, thus created, to share fro rata in the mortgage fund, to the prejudice of the complainant. Nor do we think the court below erred in refusing to the defendant commissions for selling the property. He certainly was entitled to be reimbursed for all of the expenses which he had incurred in executing the trust, or in realizing from the mortgage; but, where, as in the present case, the very character of trustee is denied by the defendant, and the complainant is compelled to bring him into court to fix that character upon him, even if under other circumstances he would have been entitled to commissions, the had faith on his part would work a for [293] feiture of such compensation. As to whether a trustee, such as the mortgage security rendered the defendant, would, in any case, be entitled to commissions by way of a per centage allowance, acting in good faith, we decide nothing, as that question is not presented. For the error above noted, in charging the defendant with the slaves lost by his gross negligence, the decree of the Chancellor is reversed, and the cause remanded; with leave to the complainant so to amend his bill, as to enable him to embrace the question of care and diligence on the part of-the defendant in managing the mortgage property, if and the defendant in error must pay the cos^ro&tfefs court.