Searcy v. Shows

• Decision Date: 22 April 1920
• Docket Number: 4 Div. 846
• Citation: 85 So. 444,204 Ala. 218
• Parties: SEARCY v. SHOWS et al.
• Court: Alabama Supreme Court

85 So. 444

204 Ala. 218

SEARCY v. SHOWS et al.

4 Div. 846

Supreme Court of Alabama

April 22, 1920

Appeal from Circuit Court, Crenshaw County; A.E. Gamble, Judge.

Bill by G.B. Searcy against Mary F. Shows and others to declare a mortgage a valid lien, to foreclose it, and to redeem from former mortgage. From decree sustaining demurrers to the bill, complainant appeals. Reversed and remanded.

F.B Bricken, of Luverne, and John R. Tyson, of Montgomery, for appellant.

Powell & Hamilton, of Greenville, for appellees.

GARDNER J.

The equity of the original bill may well be rested upon the principle found stated in the following quotation from Thomas v. St. Paul M.E. Church, 86 Ala. 138, 5 So 508:

"No principle of equity is more familiar, or more firmly established, than that a surety, after the debt for which he is liable has become due, without paying, or being called on to pay it, may file a bill in equity to compel the principal debtor to exonerate him from liability by its payment provided no rights of the creditor are prejudiced thereby. The principle has been extended to cases of pledged or mortgaged property. *** The right of the surety to be exonerated from liability is founded on equitable principles--the primary duty of the principal to pay the debt, and it being unreasonable that the surety should be burdened with the liability, a cloud hanging over him, at the will of the creditor, and the risk of ultimate loss. The doctrine has been expressed by Lord Redesdale as follows: 'A court of equity will also prevent injury in some cases, by interposing before any actual injury has been suffered, by a bill which has sometimes been a called a bill quia timet, in analogy to proceedings at the common law, where, in some cases, a writ may be maintained before any molestation, distress, or impleading.' "

This principle has found frequent reiteration in subsequent decisions of this court. West Huntsville Cotton M. Co. v. Alter, 164 Ala. 305, 51 So. 338; Tillis v. Folmer, 145 Ala. 176, 39 So. 913, 117 Am.St.Rep. 31, 8 Ann.Cas. 78; Hudson Trust Co. v. Elliott, 194 Ala. 441, 69 So. 631. And to like effect, see, also, 1 Story's Eq.Jur. (13th Ed.) § 327; 2 Story's Eq.Jur. (13th Ed.) § 730; Brandt on Suretyship & Guaranty, vol. 1, §§ 245, 246; West v. Chasten, 12 Fla. 315; De Cottes v. Jeffers Cothran & Co., 7 Fla. 284.

Counsel for appellees rely upon the well-recognized general rule as stated in Lane v. Westmoreland, 79 Ala. 372, and quoted in Cooper v. Parker, 176 Ala. 122, 57 So. 472, to the effect that a surety cannot recover indemnity from the principal or indemnitor until he has paid the debt. Upon the payment by the surety of the debt, for which he is bound, it being then due, a right of action for reimbursement arises in his favor against the principal, and in the absence of an express agreement the law implies a promise of indemnity on the part of the principal. Brandt on Suretyship & Guaranty, § 226. Yet, by express contract, such right of action for indemnity against the principal may be given before the payment of the debt. Id. §§ 242, 243. However, the general rule above referred to does not militate against the well-recognized principle found stated in the quotation from the Thomas Case, supra, to the effect that, if the debt for which the surety is liable has become due, he may, without paying the debt, file a bill in equity to compel its payment by the principal, and thereby be exonerated from liability thereon. He does not in such bill seek to recover indemnity from the principal, but merely to compel the principal to pay the debt for which he is primarily liable, and thus relieve the surety who is only secondarily liable therefor. In giving effect to this doctrine there need be no risk either to the principal or to the creditor, for a court of equity will protect the interests of both in the application of the funds. As pointed out in Cooper v. Parker, supra, it is "clear that the mortgagor-principal would have an equity to have the fund so realized applied to the principal debt, if he still remained liable thereon." See, also, De Cottes v. Jeffers Cothran & Co., supra. Many cases are cited in the note to ...