Bank of Manchester v. Bartlett

The opinion of the court was delivered by Redfield J. The present case brings in question a subject upon which there has been first, and last, very much discussion, and upon which the law of different countries has not been uniform. The civil law, founded as it was upon the most enlarged principles of abstract moral equity, extended to sureties some further protection than what has yet been adopted, even in the English chancery. I have not the leisure nor requisite aids, at hand, to enable me fully to state all the provisions of the Roman civil law in favor of sureties. They will be found very lucidly discussed, and very intelligibly digested, by Chancellor Kent, in the case of Hayes v. Ward and others, 4 Johns. Ch. R. 123. It is obvious that, by the civil law, the creditor might be required to first exhaust his remedies against the principal debtor, before calling upon the surety. The proceedings against the surety could,by a dilatory plea, be stayed until the suit against the principal debtor, which was carried forward at the expense of the surety, was terminated. The same rule has been adopted in most of the countries of continental Europe, whose jurisprudence is based upon that of the civil law. But, it is believed, no such general rule has yet obtained in the English chancery. It is certain that, in many cases, under special circumstances, this rule has been there enfor [319] ced. Wright v. Nutt, 1 H. Black. 136. 3 Bro. 326. In every case where the creditor could not assign the benefit of the fund to the surety, he has been compelled to resort to it himself in the first instance. The same rule was adopted in the case of Hayes v. Ward, where the authorities are fully collated. It is, too, a universal rule of English equity law, that the creditor holds all securities in trust for the ultimate benefit of the surety ; that upon the payment of the debt, the surety is entitled to be subrogated to all the rights of the principal, and that if, by any positive and wilful act, the creditor release, or render unavailing any of his securities against the principal debtor, to that extent he thereby relieves the surety. It was upon this ground that the case of McCollum v. Hinckley, 9 Vt R. 143, and the case of Clark v. Hill, there referred to, were decided by this court. But we do not perceive that the present case shows any such positive and wilful interference by the plaintiffs in the matter, as will justify the court in saying that, at the time judgment was rendered in the court below,theyhad released the surety. It does not appear, by the case, at what time the plaintiffs were requested to present this claim before the commissioners-onGreen’s estate, or whether in fact the commission had been closed at the time judgment was rendered against the defendant. If not, and we are not to presume any thing against the regularity of the proceedings of the court below, nothing had then occurred in the least tending to embarrass the matter. The surety might then proceed with the claim against the estate of Green, as well as the creditor. It is doubtless true, that the court of chancery would, at the instance of the surety, compel a creditor to take proceedings either against the principal debtor,or his estate, as has been frequently done in the English and New York chancery. King v. Baldwin, 2 Johns. Ch. R. 562, 3 Merrivale, 579, and the cases referred to. But it is not now necessary to consider that point- judgment affirmed.