1851: July Term. Duncan V. Helms & others. cause remanded for further pleadings and a new trial, and with directions to the judge of the Circuit court not to repeat, on such new trial, the instruction complained of, should it be again asked for by the deman dants. 1851. July Term. Lewisburg. JENNINGS . PALMER. (Absent Cabell, P. and Daniel, J.*) August 30th. A surety holds a security for the repayment to him of the amount of certain debts he has paid for his principal, and for his indemnity as to another large debt for which he is surety. He makes an arrangement with the creditor, whose debt is yet unpaid, by which he pays a part of it; he assigns with recourse to himself the debts he had paid for his principal; and he also transfers the security held by him, all of which is agreed to be taken in discharge of the debt for which he is bound. It is obvious that at the time of the transfer the surety is ignorant of the amount of the security which he transfers; and when the fund is finally ascertained, it proves to be much more than sufficient to discharge the debts assigned with recourse to the surety, and also the balance of the debt for which the surety had been bound. HELD: That under the circumstances equity will treat the assignment as a security for the benefit of the creditor for the payment of the whole amount due on his debt, but for nothing more. By deed bearing date the 9th day of July 1838, Thomas A. Fourquorean, an apothecary in the town of Lynchburg, conveyed to David R. Edley his whole *Judge Daniel had been counsel in a cause from which this case originated. stock of goods, and his interest in his mother's estate, for the purpose, as stated in the deed, of indemnifying Chancey Steen as his surety in a bond executed to James A. Meriweather, dated the same day with the deed, for the sum of 1753 dollars 85 cents, and payable six months after date, and as endorser of Fourquorean upon notes discounted at the banks in Lynchburg for 500 dollars more. This deed was duly admitted to record on the 12th of July. On the day of September 1838 Fourquorean executed another deed to Frederick Isbell, whereby he conveyed the same property in trust to pay, first, certain debts due and notes endorsed by P. & J. W. Dudley; second, a debt due to J. W. Dudley; thirdly, certain notes on which Robert Jennings was endorser, described in the deed as a note for 250 dollars, dated July 12th, 1838, payable sixty days after date, and endorsed by Robert Jennings and Joseph Marsh, another for 150 dollars, dated 5th of July 1838, on which Chancey Steen and Robert Jennings were endorsers, another for 300 dollars, dated the 31st of August 1838, endorsed by P. & J. W. Dudley and Robert Jennings, another for 150 dollars, dated July 5th, 1838, endorsed by Robert Jennings and Joseph Marsh, a like note for 150 dollars, dated 2d August 1838, with the same endorsers, and a note for 100 dollars, endorsed by Robert Jennings and held by Michael Hart, and also a bond due Reuben D. Palmer for 1460 dollars, on which Joseph Jennings and Tilden Reed were sureties; and fourth, to pay Marsh a debt due him of 689 dollars 7 cents. This deed was admitted to record on the 3d of September. The trustee Isbell being about to sell the property conveyed in the deeds, Steen filed his bill in the Circuit court of Lynchburg to enjoin the sale, on the ground of his prior lien under the deed of the 9th of July 1838 to Edley. The injunction was granted, and in the progress of that cause the trust property was sold 1851. July Term. Jennings V. Palmer. 1851. July Term. Jennings V. Palmer. and deposited in one of the savings banks in Lynchburg, subject to the order of the court. Whilst this suit of Steen's was pending, and previous to January 1844, Jennings had paid off the four notes above mentioned on which he was the first or only endorser; and Palmer had instituted an action against him in the Circuit court of Halifax county upon the bond for 1460 dollars, mentioned in the deed of trust to Isbell, on which Jennings and Reed were the sureties of Fourquorean; and Reed, as well as Fourquorean, was insolvent. On the 25th of January 1844 Palmer and Robert Jennings, the latter acting by his brother, William B. Jennings, entered into an agreement in writing whereby Robert Jennings was to execute his bond, with William B. Jennings as his surety, for 500 dollars, payable to Palmer on the 25th of January 1846, with interest from the date of the agreement; to assign to Palmer, with recourse to Jennings, the four notes of Fourquorean which Jennings had paid, which were then in the hands of his counsel in Lynchburg; and also to assign to Palmer all his other interest in and to all claims secured to him by the deed of trust executed by Fourquorean to Isbell in 1838: And Jennings further bound himself to pay all the costs which had accrued in the suit of Palmer against him upon the said bond, except so much as had arisen from the employment of more than one lawyer. And in consideration of this arrangement Palmer agreed to stop the suit as soon as the conditions were complied with; and that the arrangement, when complied with, should be in full of the bond of Fourquorean on which Jennings and Reed were sureties. From this paper it appears the bond was executed on the 9th of March 1838, and that 60 dollars had been paid upon it. On the 27th of February 1844 Robert Jennings executed another paper, by which, in conformity with the contract of the 25th of January, he assigned to Palm the four notes aforesaid, with recourse to him, and he also assigned to Palmer all his interest in the deed of trust to Isbell, which interest was first to be applied to the payment of the said four notes, and the residue he assigned without recourse. The case of Steen v. Fourquorean & others came on to be heard in November 1846, when the court held that the debt secured by the deed of the 9th day of July 1838 was usurious. A statement of the trust fund under the control of the court, and of the debts secured by the deed to Isbell, was then made, marked A A, from which it appeared that the fund to be divided among the beneficiaries in that deed amounted on the 12th November to The debts secured in the first and second class amounted at the same date to The amount of the four notes paid $5749 41 1851. July Term. Jennings V. Palmer. $1127 15 The court then made a decree, by which the bond claimed by Steen, and the deed of trust to secure it, were directed to be delivered up to be cancelled; and the trust fund was distributed among the beneficiaries in the deed to Isbell, according to and to the extent of 1851. July Term. Jennings V. Palmer. their respective interests; the decree being in favour of Palmer, as the assignee of Jennings, for the sum of 977 dollars 54 cents, the amount of the four notes paid by Jennings, and in favour of Jennings for 2174 dollars 68 cents, the amount of the bond of Palmer, and which Jennings had settled with him by the agreement of the 25th of January, and the assignment of the 27th of February 1844. After the decree had been entered, the counsel for Palmer suggested that under the agreement and assignment aforesaid, Palmer was entitled to the decree for the sum of 2174 dollars 68 cents, and that if there was any doubt of Palmer's right, on the construction of these papers, that Jennings would state that such was the intention of the parties to the agreement; and on his motion the court suspended the decree in favour of Jennings for thirty days, in order to give Palmer an opportunity to assert his claim, if any he had, in such mode as he might be advised to adopt. In December 1846 Palmer filed his bill in the Circuit court of Lynchburg, against Jennings and the officer of the court who had the proceeds of the trust property in his hands, to enjoin the payment by the officer to Jennings of the sum of 2174 dollars 68 cents, as directed by the decree in the case of Steen v. Fourquorean & als. In his bill he stated the execution of the bond to him by Fourquorean, Reed and Jennings, and that the whole thereof, except 60 dollars, was due in 1843, at which time the two first named were insolvent; his suit against Jennings, and the agreement and assignment of January and February 1844; the deeds of trust to Edley and Isbell, and the proceedings in the case of Steen v. Fourquorean & others; and he charged that by the agreement and assignment he was entitled to the whole of Jennings' interest in the trust deed to Isbell; that such was the intention of the parties to the said agreement and assignment, and, in pursuance |