Allison v. Sutherlin

• Decision Date: 31 July 1872
• Parties: NATHANIEL T. ALLISON, Plaintiff in Error, v. NATHANIEL SUTHERLIN et al., Defendants in Error.
• Court: Missouri Supreme Court

50 Mo. 274

NATHANIEL T. ALLISON, Plaintiff in Error,

v.NATHANIEL SUTHERLIN et al., Defendants in Error.

Supreme Court of Missouri.

July Term, 1872.

Error to Cooper Circuit Court.

E. B. Adams and Thomas B. Wright, for plaintiff in error.

Allison, having paid the entire debt for which he was surety, was, under the rules of equity, entitled to be subrogated to the rights of the creditors who held these debts, and to have the benfit of the lien, and the moneys arising therefrom, held by them for the payment of said debts so paid by him as surety. (See 8 Mo. 169, 413; 18 Mo. 136; 23 Mo. 447; 35 Mo. 99; 38 Mo. 281, and authorities in these cases cited.)

Draffin & Muir, for defendants in error.

A surety for a part of a debt is not entitled to the benefit of a security given by the debtor to the creditor at a different time, in a distinct transaction, for another part of the debt. (See Wade v. Coope, 2 Sim. 155; 1 Lead. Cas. Eq., 3d Am. ed., 143.) The right of the surety, on payment of the debt of his principal, to be subrogated to the place and rights of the creditor, is subordinate to the rights of the creditor and does not exist when the interests of the creditor would thereby be sacrificed; that is, the surety in such case, before he can equitably demand substitution, must discharge the whole debt secured by the liens sought to be made available to reimburse himself. (Dixon Subr. 106, 122-4; Mathews v. Switzler, 46 Mo. 301.) Subrogation is the creature of equity and will never be enforced against the superior equities of third persons, nor to the prejudice or injury of the creditor, and, therefore, not until the creditor is fully paid and satisfied. (1 Am. Lead. Cas. Eq. 161, and authorities cited.)

WAGNER, Judge, delivered the opinion of the court.

From the record in this case it is shown that the defendant Sutherlin was indebted to the banking house of Wm. H. Trigg & Co., by various, distinct and separate promissory notes, on three of which, amounting in the aggregate to about $1,800, the plaintiff Allison was surety. These three notes, together with the other notes, amounted to about the sum of $9,500. The banking house, for purposes of collection, transferred all these debts to William H. Trigg. The other defendants herein, together with Trigg, constituted the banking house. On each of the debts so held by Trigg separate judgments had been obtained in the Cooper Circuit Court. Some of the debts were for other parties, although standing in the name of the banking house. Executions were issued on all the judgments, returnable to the March term, 1864, of the Circuit Court, and these executions were levied on all of the real estate of the defendant Sutherlin, consisting of several thousand acres of land. One H. C. Levens also held a demand against Sutherlin, amounting to about $1,200, which was secured by deed of trust on some of Sutherlin's real estate; but the liens of the judgments in favor of Trigg had priority over the deed of trust.

Under the judgments the real estate of Sutherlin was advertised to be sold, and on the day of sale the defendant Sutherlin and his surety, Allison, the plaintiff here, and the creditors met at the sale; and as it was war times and there was great excitement in the country, it was agreed by all parties interested that it would not be best to sacrifice the lands by making the sale, but to let Trigg buy them in for a nominal sum, and hold them in trust to be sold at a more suitable time, and the proceeds of the sale to be applied ratably to each of the debts. Under this arrangement made at the time of the sale Trigg bought in the lands at a nominal price, and a few days afterwards executed a writing manifesting the trust, which reads as follows: “Articles of agreement witnesseth that, whereas, Wm. H. Trigg purchased at sheriff's sale, at March court, 1864, all the lands of Nathaniel Sutherlin, for description of which pieces, etc., reference is made to sheriff's report, sale and deed; and whereas, said Trigg purchased said lands in trust for the debts due the banking association of which he is a member, and others who had debts in his hands for collection, and for the debt due Henry C. Levens in the same proportion as the debt of said Levens bears to all said debts in the hands of said Trigg; now said Trigg, for himself and in behalf of all said beneficiaries and said Levens, hereby agrees...