$3,037.50, and interest at 9 per cent. per annum from October 1, 1894, and the costs and disbursements upon the appeal; and, the cause being remanded, judgment was accordingly entered, which was assigned to Jung Sam, who caused an execution to be issued thereon, by virtue of which the sheriff levied upon the property embraced in plaintiff's mortgage. This assignee could have caused the execution to be levied upon the property of either of the sureties on the undertaking on appeal and for a stay of proceedings, but he chose to apply the proceeds of a portion of the principal's real property, which had been attached, to the satisfaction of his judgment; and the sheriff, obeying his directions, levied upon the property so mortgaged to Dickson; but in doing so the latter was not injured, for, having taken his mortgage with notice of the lien of the attachment, which has ripened into a judgment, he should, in equity, if he desires to protect his rights, be compelled to take an assignment of the Hartman judgment, and thereby, being subrogated, put himself in a position to preserve and enforce the lien thereof. Any other conclusion must necessarily subject the sureties on an undertaking for an appeal and for a stay of proceedings to the mercy of the principal, unless they are indemnified for the liability assumed; for, if the mere levy on sufficient personal property to satisfy the creditor's demand relieves the real property of the judgment debtor from the lien of the judgment, he could, after perfecting an appeal and obtaining a stay of proceedings, transfer such real property, and thus defeat the lien of the sureties, which they might obtain by procuring an assignment of the judgment, should they, by reason of the misappropriation or destruction of the personal property, be compelled to satisfy the same, a result which, if tolerated, would tend to discourage persons from becoming sureties on appeal and for a stay of proceedings, and thereby deprive judgment debtors of a valuable statutory right. The surety's right to subrogation arises when he assumes that relation, by executing the obligation; and, if he is compelled to discharge the judgment rendered against his principal, his remedy to enforce the lien thereof is a part of the original contract. Eng. Enc. Law, 194; Peirce v. Higgins, 101 Ind. 178.

24 Am. &

Jung Sam having a judgment against Seid Back and William Dunbar and the sureties on the undertaking on appeal and for a stay of proceedings, and a lien on two tracts of real property as security therefor, and Dickson having a decree against Seid Back and a lien on one of said tracts only, will a court of equity marshal the securities, and compel Jung Sam to apply the proceeds of the real property upon which Dickson has no lien, and enjoin the judgment creditor from selling upon execution the premises so mortgaged to plaintiff, until such application is made? "The general principle," says Mr. Justice Story in his work on Equity Jurisprudence (section 633), "is that if one party has a lien on or

interest in two funds, for a debt, and another party has a lien on or interest in one only of the funds, for another debt, the latter has a right in equity to compel the former to resort to the other fund, in the first instance, for satisfaction, if that course is neeessary for the satisfaction of the claims of both parties, whenever it will not trench upon the rights, or operate to the prejudice, of the party entitled to the double fund." In Knott v. Shaw, 5 Or. 482, it was held that where the person against whom a judgment has been rendered conveys a part only of his real property which is affected thereby, the purchaser thereof has an equitable right to have the judgment discharged out of the residue of the debtor's property before a resort can be had to the real property so conveyed. It is very evident, however, that this rule can have no application to real property mortgaged after a judgment has become a lien thereon; for a mortgage, under our statute, is nothing but a lien which is discharged by payment of the debt secured thereby, and this satisfaction may be obtained as well by the sale of one tract of the debtor's real property as by another; and hence, if the premises mortgaged be discharged from the lien thereof by a sale on execution under a prior judgment, the mortgagee's lien in equity still subsists, and by marshaling the securities, or by subrogation, attaches to other real property of the common debtor. In Hall v. Stevenson, 19 Or. 153, 23 Pac. 887, the plaintiff sought to foreclose a mortgage which embraced several tracts of land; and it appeared that the defendants Christy & Wise had a judgment against one of the mortgagors, which constituted a subsequent lien on a part of said premises, in view of which it was held that the land not subject to the judgment lien should be first sold, and the proceeds thereof applied to the satisfaction of plaintiff's mortgage, and the residue of the proceeds of the judgment debtor's interest, if any, be applied to the payment of Christy & Wise. In that case the court was asked to foreclose the lien upon all the premises included in the mort gage, and this gave it jurisdiction of the double fund; and, the judgment creditors being parties, the securities were marshaled in the interest of, and to protect the lien of, the latter; but in doing so the court did not deprive the plaintiff of any of his substantial rights, and its decree, directing separate sales, made it possible for the subordinate lien creditors to redeem such portions of the mortgaged premises as they were interested in. "A court of equity," says Henderson, J., in Jones v. Zollicoffer, 11 Am. Dec. 795, "will restrain a person in the capricious exercise of his rights for benevolence becomes a duty enforced by courts of justice, when its exercise is in no wise prejudicial to the party, and a want of it is injurious to another. Thus, when a person may get satisfaction out of either of twe funds, and another can get satisfaction only out of one of them, and they are both equally

convenient and accessible to him who may get satisfaction out of either, and, nothing but mere caprice governs him in making the selection, there equity will restrain him to the fund not onerated by the claims of the other; but if convenience, and not caprice, is his motive, the most that equity does is to substitute the disappointed claimant to his rights. The first is rarely done, for it is a matter of extreme delicacy to restrain a person in the exercise of a legitimate right, in favor of one who has no claim upon him by contract, and whose only connection with him arises from being interested in the same common fund; yet where there is a fraud, moral or legal, or mere caprice, he will be restrained. The latter, to wit, substitution, is very frequently done, and is the foundation of marshaling assets in favor of legatees and simple-contract creditors, and applies in cases where there is neither fraud nor caprice. It is sufficient that his fund has been exhausted by one who had a double means of satisfaction." In Delaware & Hudson Canal Co.'s Appeal, 38 Pa. St. 512, four judgments having been rendered against, and become general liens upon the real property of, one Thomas, he thereafter mortgaged to the canal company a portion of the land affected by these judgments; and the premises so mortgaged having been sold on execution issued on these judgments, and the proceeds thereof brought into court, it was decreed that the lien of the canal company which had been discharged by such sale should extend to and embrace the other real property of the judgment debtor which had not been sold. Strong, J., in rendering the decision of the court, says: "It is an equally plain principle of equity that, if the paramount creditor resorts to the doubly-charged fund or property, the junior creditor will be substituted to his rights, and will be satisfied out of the other fund, to the extent to which his own may have been exhausted. This is an equity against the debtor himself,-that the accidental resort of the paramount creditor to the fund doubly incumbered shall not enable him to get back the other fund, discharged of both debts. And, being an equity against the debtor, it is, of course, such against his subsequent judgment creditors, who have no greater rights than their debtor had at the time their judgments were entered." The rule seems to be that a paramount judgment creditor will not be restrained from enforcing his strict legal right, and selling upon execution such tract of the debtor's real property as he may select for the satisfaction of his judgment, unless in doing so he is governed by caprice, or prompted by malice, to deprive the subsequent lien claimant of his security, but that in marshaling the securities of the common debtor the court will decree a subrogation, upon proper application therefor, unless both funds are directly before the court, or under its control, so that it may make a proper appropriation thereof to all the parties, in the order to

which they are entitled. 14 Am. & Eng. Enc. Law, 693; Aldrich v. Cooper, 2 White & T. Lead. Cas. Eq. 228, and notes at page 262; Gillian v. McCormack (Tenn.) 25 Cent. Law J. 225, and notes (s. c. 4 S. W. 521).

It does not appear that Jung Sam was actuated by any motive that would cause a court to enjoin him from enforcing the remedy given by statute for the collection of his judgment, nor that Seid Back furnished the means that enabled him to obtain from Hartman an assignment of the judgment; and for these reasons the injunction must be dissolved. The principle of marshaling securities can have no application to the remedy against a surety, so long as the principal has property out of which the judgment, for the payment of which the surety is liable, can be satisfied. Robinson, J., in Re Assignment of Hobson, 81 Iowa, 392, 46 N. W. 1095, in discussing this question, says: "In the absence of some special equity, it is not applicable to a case where one of the funds is the property of a surety. If a surety be compelled to pay the debt of his principal, he becomes his creditor, by virtue of the payment, with the right of subrogation. In this case, appellant's equities are not superior to the rights of the sureties, and the principal will not be required to exhaust their property before proceeding against the property of the principal debtor." In the case at bar, Jung Sam has a prior lien, and if Dickson would seek to protect his rights and avail himself of this security, so as to enforce the lien against the property of Seid Back, which is not embraced in his mortgage, it is incumbent upon plaintiff to obtain an assignment of the judgment, and thereby become subrogated to the rights of the paramount lien claimant. It does not appear that any effort has been made to procure such an assignment, or that Jung Sam refuses to make it, or that such relief is demanded in this suit; and, in the absence of these necessary allegations and prayer, this court is powerless to decree a subrogation. The decree will therefore be modified in so far as it compels Jung Sam to collect his judgment from other sources before he is permitted to sell upon execution the premises so mortgaged to plaintiff, but in all other respects it is affirmed.

3. Where the alteration of a note is prompted by honest motives, with a purpose of correcting the instrument to correspond with what the party in good faith believed to be the true engagement of the parties at the time of execution, the act does not destroy the legal efficacy of the note, and recovery may be had on it when restored.

4. A court of equity has jurisdiction of a suit to restore the original conditions of a note alleged to have been changed under misapprehension of the rights of the parties, and to recover thereon, when the suit involves a discovery, which is in some degree necessary to show the agreement and the mistake.

Appeal from circuit court, Multnomah county; Loyal B. Stearns, Judge.

Suit by Susan M. Wallace against Jonathan Tice and F. J. Alex Mayer, administrator of the estate of George Herrall, deceased. From a decree for plaintiff, the administrator appeals. Affirmed.

B. B. Beekman and E. Mendenhall, for appellant. G. W. Allen, for respondent.

WOLVERTON, J. This is a suit to restore the original conditions of a promissory note which it is alleged were changed by the payee, under mistake and misapprehension of the rights and agreements of the parties, and to recover thereon against the makers. It is also sought to subject certain property to the satisfaction thereof, which it is alleged was transferred by Tice to Herrall, in trust to indemnify him against the payment of such note and other demands. So far as it respects this latter branch of the case, it is sufficient to say that plaintiff's allegations in reference thereto are not supported by her proofs.

(1)

Three questions remain for solution: Has a court of equity jurisdiction of the cause, as it remains dismembered of the alleged trust relations? (2) Can a recovery be had upon the altered note? And (3) is the name "Geo. Herrall," appended to said note, his genuine signature?

As concerns the latter question, the evidence leaves scarcely a doubt in our minds that it should be answered in the affirmative. The fact appears palpable upon its face, by comparison with other signatures shown to be his, and the testimony of competent experts and Herrall's indirect admissions lead to the same conclusion, aside from the direct testimony of Tice that he saw him sign the note. Further comment can serve no good purpose. We will treat of the other questions in their inverse order.

The facts relative to the execution and alteration of the note, succinctly stated, are as follows: Early on the morning of the 11th of August, 1891, Tice called upon Mrs. Wallace, and arranged with her for a loan of $2,000, he agreeing to give Herrall as security. Mrs. Wallace wrote out the note, dating it "Aug. 11," and made it payable one year after date. Tice took it to Herrall the same day, and, after himself signing in the presence of Herrall, procured the lat

ter's signature thereto. On the following day, Tice returned with the note thus executed, but, before delivering her check for the money, Mrs. Wallace changed the date, in his presence, from "11" to "12." She testifies: "I gave the note on the 11th, aud he did not bring it back until the next day. and the note seems to be the 12th. Of course, I don't remember positively of making the change. * * If there was any change made, it was to correspond to the time it was given,-a year from the time. ' Answering the succeeding interrogation, she says, in substance, that the change, if any there was, was made to correspond with the agreement between the parties. On redirect examination she continues as follows: "Q. Was there any reason at all in your mind for changing the note, other than to make it agree, correspond with the agreement? A. Of course; I had no intention of anything wrong. I should not have done it had I known it was not right or lawful. Q. What reason was there, if any, why you should change the note? Did you gain anything by it or lose anything by it? A. There was nothing, unless it would be to make it from the date given,-a year from the date given. Q. That is, a year from the time the note was delivered to you, and a year from the time you gave the check to Mr. Tice? A. Yes, sir; I gave the check to him that date." Tice testifies that, when he received the note, it bore the date of August 11th. Continuing, he says: "On the 12th I went up to Mrs. Wallace's to get the money for the note, and she gave me the money. She changed the date of the note from the 11th to the 12th. I think she changed it before she passed the check. There was nothing said about it; only she changed the note. * I know no reason why the note should be changed, unless it was on our part that the note was to run one year, and she would collect interest for one more day than I had the money;" and, in substance, that Mrs. Wallace made the change without objections by him.

*

It may be conceded that the alteration made is material, and upon this premise we will determine the legal effect thereof. The rule may be said to be settled that a material alteration made fraudulently, and with vicious intent, by the party claiming a benefit under it, will avoid the note, and extinguish the liability, and henceforth no recovery can be had. Vogle v. Ripper, 34 Ill. 100. There is a strong current of authority. however, which holds to the doctrine that while an alteration, though material and unauthorized, which was innocently and honestly made, and without any fraudulent or improper motive. avoids the note, nevertheless an action will lie upon the original indebtedness if it is independent of the note, and has not been discharged by its execution. Booth v. Powers, 56 N. Y. 22, 30, 31; Lewis v. Schenck, 18 N. J. Eq. 459; Bank v. Shaffer (Neb.) 1 N.