Farmers' National Bank v. Snodgrass

Opinion by Mr. Chief Justice Bean. We think the claim of the appellant Palmer is well taken. The rule seems well settled that where one of several sureties, after all had signed, and before the debt has been paid, obtains from the principal a mortgage or other security for his indemnity, it will inure to the benefit of his cosurety: Brandt on Suretyship and Guaranty, § 268; Sheldon on Subrogation, § 143; Steele v. Mealing, 24 Ala. 285; Brown v. Bay, 18 N. H. 102. Under this rule the Proebstel mortgage inured to the benefit of Palmer, and, this being so, it necessarily follows that his equities are prior in time and superior in right to those of Predmore, who became a cosurety of the Proebstels for Snodgrass long after the mortgage was executed. As to Palmer, the mortgage took effect from its execution and delivery, but not as to Predmore until the note upon which he was a cosurety was made, some eighteen months thereafter: Van Winkle v. Johnson, 11 Or. 469 (5 Pac. 922); and hence the latter’s rights thereunder are subject to those of Palmer. The decree will therefore be modified accordingly. Modified.