Welsch v. Werschem

Citations

• 92 Ill. 115

Syllabus

<p>1. Fravd—indemnifying surety—preferred, creditors. Although a person be indebted to various creditors, he may give preference to a surety upon his obligation by executing to him a mortgage upon property which will be amply sufficient to indemnify the surety against loss. But an essential element in such a transaction is good faith on the part of the person receiving the indemnity, as the law will not permit him, under the guise of protecting himself, to wilfully throw impediments in the way of other creditors when not necessary to his own safety.</p> <p>2. Evidence—to show value of indemnity to a surety, as against other creditors of the principal. Upon the trial of the right of property between a surety to whom his principal had executed a mortgage upon real and personal property for his indemnity, and a creditor of the principal who had levied an execution upon the personal property embraced in the mortgage, the material question involved is, the good faith of such surety in receiving the indemnity, and for the elucidation of that question it is competent for the surety to prove the amount of prior incumbrances upon the real estate embraced in his mortgage, and this notwithstanding the real estate is not immediately involved in the proceeding, as it is the actual value of the indemnity, as a whole, which is to be considered, as compared with the extent of the liability of the surety.</p>