Orden v. Durham

Citations

• 35 Cal. 136

Syllabus

<p>Creditor’s Eights in Debtor’s Property in Hands of Sureties.—If a surety has a counterbond, or security from the principal debtor, the creditor will be entitled to the benefit of it, and may in equity subject such security to the satisfaction of his debt, so far as it can be done without trenching upon the rights of the surety himself.</p> <p>Eight of Surety by Mortgage, Without Personal Liability, to Indemnify Himself.—Where D., as surety for H., executed a mortgage on his lands to secure the payment of notes executed by H. alone, the mortgage containing no covenant on the part of D. to pay said notes, but on the contrary expressly providing that D. should not incur any personal cost or liability, and afterwards took a mortgage or conveyance of other property from H., the principal, to indemnify himself against any loss he might sustain by reason of his mortgage to secure said notes of H : Held, firstly, that the holders of the notes might subject the premises mortgaged by D. to the payment of the notes; or, secondly, that they might abandon the mortgage and subject the said property of the principal in the hands of D. to the payment of the notes ; or, thirdly, that they might have the property mortgaged to secure the notes sold, the proceeds applied to their satisfaction, and if any balance remained, subject the surplus of any property of H., the principal, in the hands of D., that might remain after fully compensating D. for any loss or damage resulting to him by reason of the appropriation of the property mortgaged by him, to the satisfaction of the notes of H.; but, fourthly, that the holders of the notes are not entitled to appropriate both the property mortgaged to secure the notes, and that conveyed or mortgaged by the principal, H, to the surety, D.,for the indemnity of the latter.</p> <p>Idem.—The limit of • the liability of D., in the case stated, is his own property mortgaged, together with any surplus remaining in his hands from the securities receiv