law had never been changed. Hodgson v. Shaw, 3 Mylne & Keen, 183, 192. It is one thing for a surety to be a specialty creditor, and another thing for him to have the benefit of securities to enforce payment by the principal debtor, or contribution from a cosurety. He may have the benefit of securities which are specialties, and yet not be a specialty creditor. Anon. M. R. December, 1827. Consider what was said by Mr. Baron Pennefather in The King v. Dennis, 1 Hayes & Jones, 194-that the party paying a crown bond is to be considered as the specialty creditor of his co-surety for the amount of his contribution. In the reign of James the First it was said that one surety, The security who had himself in a sort satisfied the debt might, not impro- subsisting, the surety is entitled perly, sue his fellow surety for contribution, in the name and by to the benefit of the consent of the creditor, because it was a just ground of it against his equity that the sureties should be equally charged, and that it order to enforce co.surety, in was so commonly used in the like cases. Waterhouse v. Salt- contribution. marsh, Hobart, 263. Where there is a principal and surety, and surety pays off the debt, he is entitled to have an assignment of the security, in order to enable him to obtain satisfaction of what he has paid over and above his own share. Ex parte Crisp, 1 Atkyns, 133, 135. If several persons are indebted, and one makes the payment, the creditor is bound in conscience, if not by contract, to give to the party paying the debt all his remedies against the other debtors. He is bound seldom by contract, but always in conscience, as far as he is able, to put the party paying the debt upon the same footing with those, who are equally bound. Stirling v. Forrester, 3 Bligh, O. S. 575, 590. The Court laid it down as a broad proposition that a surety paying off the debt of his principal is entitled against his cosurety to the benefit of all securities, which have not at law been discharged. Salkeld v. Abbott, Hayes, 576, 584. William Russell and John William Russell were the sureties of the receiver in the cause; J. W. Russell was dead, and W. Russell, who had been obliged to pay a large sum of money in consequence of the default of the receiver, applied for leave to put Recognizance of receiver in the Irish Chancery. Case of recognizance of tenant of a minor's estate, in the Irish Chancery, where execution having issued, the surety paid the debt, and the sheriff con sequently made no levy or return. the recognizance in suit against the administratrix of J. W. Russell for the purpose of recovering contribution. Sir William M'Mahon said, he should be very unwilling to deprive W. Russell of an opportunity of trying whether the recognizance, which was joint and several in its form, had been satisfied by the payment he had made, or still remained in force as a joint security; that the application was merely to the discretion of the Court whether it would allow a recognizance which had been taken in the name of the king (a) to be put in suit for the benefit of the subject; that the Court was not to decide whether the recognizance still existed for W. Russell's benefit; that question remained to be tried at law; and he (Sir W. M'Mahon) thought he ought to allow W. Russell an opportunity of trying it, unless it was quite clear he could not succeed. Woods v. Creaghe, 2 Hogan, 50, 53. Salkeld v. Abbott, Hayes, 576, was a suit in the Irish Equity Exchequer for the administration of the estate of Abbott. One Dennis and the said Abbott were sureties in a recognizance in the Court of Chancery, that Hodgson should pay the rent of premises in his occupation, belonging to some minors (6). Hodgson not paying his rent, the recognizance was put in suit, and execution sued upon it against Dennis. It was a levari facias (c), dated the 10th February, 1819, marked for the sum of 8401., and returnable in three weeks from Easter then next ensuing. This writ was delivered to the sheriffs; but they did not levy any sum of money by virtue thereof, nor did they make any return upon such writ. After the writ had been delivered to the sheriff 850l. was paid by Dennis to the receiver in the matter of the minors. Dennis now claimed, as against the estate of Abbott, to have the benefit of the aforesaid recognizance for one moiety of the sum due on the foot thereof, and to be paid such moiety according to the priority of such recognizance. On behalf of Dennis it was represented that no vacate had been entered, nor was the levari returned: that the recognizance therefore appeared still unsatisfied of record; that Dennis was entitled to the benefit of the security by recognizance which the crown had taken; (a) See the additions and corrections. (b) See additions and corrections. (c) It is said that this execution resembles our extent rather than the execution known here by the same name, and now seldom resorted to, that the money had been paid by Dennis under terror of an execution and not by virtue of it, and the recognizance was not satisfied either by entry of a vacate or of a levy under execution; that if a scire facias should issue in such a case, the only plea would be a satifaction upon the record; that that could be effectually answered by replication of nul tiel record; that the plea of payment could not be open to the defendant, the crown not being bound by the statute of Anne (a). Chief Baron Joy said that that was not a case in which justice was to be entangled with forms; which ought to be used rather for its promotion than its hinderance. Security had been given to the crown as well by sureties as principal. Each of those parties was liable to the crown for the whole debt; and each of the sureties, having paid the debt, might come on the other parties for reimbursement; for the enforcing of which he was entitled to the very security that had been taken, provided it were not already extinguished. Such was the law as to private individuals. And was not the case stronger when the crown is concerned? Could it be said that the Court were acting contrary to natural justice if they should decide upon giving to Dennis the benefit of that security into which Abbott entered with him as a co-surety? and even in that event Abbott's estate would suffer less than if he had been obliged to pay the whole. At law the security was still subsisting. The case would have been very different, if it had appeared to have been satisfied upon record. Mr. Baron Pennefather subsequently delivered the judgment of the Court. He said the Court were all of opinion that the recognizance not having been discharged at law, the surety, who had paid the amount, was entitled to stand, as to one moiety, in the place of the crown, and to be allowed that priority in payment to which a creditor by matter of record is entitled that the general rule is, that a surety, paying off the debt of the principal, is entitled to the benefit of all securities which the creditor may hold, that can be made available at law, but if those securities shall have been extinguished by the payment, there is an end of them, and the surety can have no benefit from them, either as against his co-surety, or his principal: he is then only a simple contract creditor; that if the principal and surety join in a bond, and that bond be paid by the surety, the payment may be pleaded in bar to an action at law. So if a judgment had (a) See ante, p. 638. Recognizance Creditor en been entered on the bond and the amount of the judgment had been paid off by the surety, so that the judgment is thereby satisfied, then since the statute of 6 Anne, c. 10 (a), that payment may be pleaded by the principal in bar of an action brought against him upon that judgment by any person whatsoever. In both these instances the surety is but a simple contract creditor of his principal. Again, in the case of a recognizance:-if the money secured by that recognizance has been levied under a writ of execution against the surety, so that by the levy the recognizance was discharged at law, then the surety cannot stand in the place of the crown, in order to reimburse himself. That it appeared in the case before the Court that a levari issued; and that the money, though paid in after such issue, was nevertheless paid independently of it. The levari therefore was never acted upon, and it remained unreturned to that day. The consequence was that the recognizance remained subsisting at law, inasmuch as the statute, which allowed payment to be pleaded to a judg ment, does not extend to a recognizance, which can only be discharged by a satisfaction on record. The recognizance, therefore, still subsisting, the surety having paid the crown debt was entitled to stand in the place of the crown, upon the general principle that a surety, paying the debt of his principal, is entitled to the benefit of all subsisting securities against his principal. In the Irish Equity Exchequer one of the sureties of a receiver in several causes moved that he might be at liberty to pay into Court the amount of the recognizance, and that upon lodging the same he might be at liberty to proceed as he might be advised, on foot of such recognizance against his co-surety for the recovery of a moiety of the recognizance. The Court made the order; but it appearing that, at the time of entering into the recognizance, the surety in whose behalf the application was made had taken a counter security from the receiver, he was compelled to undertake to assign such counter security to a trustee for the benefit of himself and co-surety. Latouche v. Pallas, Hayes, 450. A bond creditor shall have the benefit of all counterbonds, or titled to benefit collateral securities, given by the principal to the surety; as if A. owes B. money, and he (A.) and C. are bound for it, and A. gives C. a mortgage or bond to indemnify him, B. shall have the of surety's counter securities. (a) See ante, p. 638. benefit of it to recover his debt. Maure v. Harrison, 1 Equity Cases Abridged, 93. Wright v. Morley, 11 Vesey, 12, 22. The representatives of a surety came to an arrangement with Surety comthe representatives of the creditor, by which the debt was got pounding the rid of and discharged; and the question was whether the repre- creditor can sentatives of the surety were entitled to demand, as against the claim from prinestate of the principal debtor, more than they had actually paid actually paid. cipal only what to the representatives of the creditor. The Lord Chancellor said that if there had been no authority upon this subject, he should have found very little difficulty in making a precedent, for deciding that under these circumstances the surety is not entitled to demand more than he has actually paid. That take the case of an agent. Why is an agent precluded from taking the benefit of purchasing a debt, which his principal was liable to discharge? Because it is his duty, on behalf of his employer, to settle the debt upon the best terms he can obtain; and if he is employed for that purpose, and is enabled to procure a settlement of the debt for any thing less than the whole amount, it would be a violation of his duty to his employer, or at least would hold out a temptation to violate that duty, if he might take an assignment of the debt, and so make himself a creditor of his employer to the full amount of the debt, which he was employed to settle. Does not the same duty devolve on a surety? He enters into an obligation and becomes subject to a liability upon a contract of indemnity. The contract between him and his principal is, that the principal shall indemnify him from whatever loss he may sustain, by reason of incurring an obligation together with the principal. It is on a contract for indemnity that the surety becomes liable for the debt. It is by virtue of that situation, and because he is under an obligation as between himself and the creditor of his principal, that he is enabled to make the arrangement with that creditor. It is his duty to make the best terms he can for the person in whose behalf he is acting. His contract with the principal is indemnity. Can the surety then settle with the obligee, and instead of treating that settlement as payment of the debt, treat it as an assignment of the whole debt to himself, and claim the benefit of it as such to the full amount? — thus relieving himself from the situation in which he stands with his principal, and keeping alive the whole debt. That as he had said, he would make a precedent if there were none; but it was very satisfactory to find that the question came before Lord UU |