Benton v. Bailey

The opinion of the court was delivered by Eedfjeld, J. This is a petition for partition. The defendant Boyce and one Augustus Drew bought of Mr. Green the land in question, took a deed jointly to themselves, paid a part of the purchase money, and executed' their joint note and mortgage, to secure the balance of the price. The petitioner, as the creditor of Drew, sued him, obtained judgment, and set off the undivided half of the land as the property of Drew. At the time the land was attached it was subject to the mortgage to Green ; but before the levy and set-off, the mortgage had been paid, and, it is claimed, by Boyce. No reference is made in the levy and set-off to the mortgage. Before the levy, Drew had conveyed all his interest in the land to Boyce, and Boyce had conveyed to Bailey. I. The defendants claim that the levy is void for setting off the land in fee instead of the equity of redemption. The mortgage had been paid at the time of the levy,- and there was no equity of redeeming said premises that could be the subject of appraisal and set-off. The officer had no other way than to set off the premises as they were at the time. [141] II. The defendants further claim that Boyce should stand, in equity, as the purchaser and assignee of a moiety of the mortgage ; and that he may keep it on foot until reimbursed the portion which was incumbent on Drew to pay. But one joint debtor cannot become the owner of the claim by purchase and assignment so that an action would thereafter lie upon it; but such payment or purchase extinguishes the debt as to all. Porter v. Gile, 44 Vt. 520; Allen v. Ogden, 12 Vt. 9. Yet it is well settled that a surety paying the debt, will, in equity, be subrogated to the securities which the creditor holds. In the case of McDaniels v. Flower Brook Manuf. Co., which we have been referred to by the defendants’ counsel, the great question in the case was, whether Clark, who had indemnified his co-sureties, could be treated as still a surety for the corporation, so that, having paid the mortgage given by the corporation, he could keep it on foot as the assignee in equity as against a creditor of the corporation ; and it was conceded by the counsel, and adjudged by the court, that he could not do so if he stood as a principal. In this case Boyce was a joint principal, and when he paid the debt it was extinguished. The mortgage notes had no vitality, and, in law, were cancelled. And the mortgage is a mere incident of the debt, and falls with it. But Boyce and Drew were tenants in common ; and each were owners of the estate mortgaged per my et per tout, and each pledged his interest in the land, as security for his moiety of the debt, and each were, as between themselves, surety for the other for his half of the debt, although they were joint principals in their note to the creditor. . And we think that Boyce, having paid the whole debt, might claim to stand as surety for Drew, with the right to keep the mortgage on foot until reimbursed the moiety of the mortgage which he has paid as surety for Drew. 1 Washb. Real Prop. 627; Sargent v. McFarland, 8 Pick. 502. Or he might insist, in equity, that the land, as company assets, must first be appropriated to pay the company debts. But these are matters of special equity jurisdiction. The officer, having the execution to collect, had not the right nor the power to undertake to determine the latent equitable rights as between the partners to this land. He found by the record that the debtor in [142] the execution was the legal owner of an equal undivided half, and upon that it was his duty to levy his execution. But in this case Drew had conveyed all his interest in the land to Boyce before the levy, and assigned to him his share of the partnership assets; and in consideration therefor Boyce had agreed to pay the partnership debts so far as the partnership property would go, and pay to Drew whatever balance, in equity, might be his due. By this agreement Boyce became the principal and Drew the surety in the payment of the partnership debts, as between themselves, and could no longer have any equitable right growing out of his suretyship for Drew. And if he claims the superior right of partnership creditors to this land as assets of the company, that right can only be maintained in a court of equity, and has never been asserted. See Bardwell v. Perry, 19 Vt. 292; 29 Vt. 887. The objections to the form of the levy we think are not well founded. Judgment affirmed.