[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 455
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 456 It is claimed, on the part of the appellants, that the court erred at the circuit, in not holding that the funds realized *Page 457 by the plaintiff out of the property transferred to it should have been applied pro rata upon the two notes. It is a sufficient answer to this claim that it was not made in the answer, nor upon the trial, and that there is no exception that brings it properly before us. The main point in this case, therefore, is, whether the defendants established any defence from the manner in which the plaintiff conducted in reference to the property transferred to it as security by William Frazell.
I will assume, as claimed on the part of the appellants, that the defendants hold the position and have all the rights of sureties for both the maker and the prior indorser; and, upon this assumption, they are still without any defence. They did not request the plaintiff to prosecute the Frazells personally. If they had, it would have made no difference, as there is no proof that either of them was solvent at the time, or became insolvent afterward.
The plaintiff was requested by one of the defendants to enforce and realize upon the securities held by it. This did not impose the absolute duty upon the plaintiff to proceed at once. It held these securities for two notes, upon one of which the defendants were not indorsers. It was to judge, acting in good faith, when it was best to convert them. If it delayed unreasonably, or was guilty of bad faith or gross negligence, in the care and management of the property mortgaged to it, and the securities were thus damaged, they would undoubtedly, to the extent of such damage, have a defence to the note. (Hayes v. Ward, 4 Johns. Ch., 123; 1 Story's Eq. Jur., 501; Herrick v. Borst, 4 Hill, 650.) Here the court found that the plaintiff acted in good faith, and was not guilty of culpable neglect.
The delay was less than a year. Instead of foreclosing its mortgage upon the real estate, the plaintiff suffered the Emerson mortgage to be foreclosed. The property was sold at a fair public sale, and effort appears to have been made to obtain the highest price. There is no proof that the mortgage could have been, or ought to have been foreclosed sooner; that the property would have sold for more at an earlier day; or that *Page 458 any one was damaged by the delay. There was some proof that the property was worth more than it sold for at the mortgage sale; but this circumstance cannot affect the plaintiff. It was not bound to bid the property up, or to procure bidders, all the notice having been given which the law required. I do not see upon what ground the plaintiff can be made liable for the value of this property at the time of the sale, or for the amount for which Paddock's son was afterward able to sell it. The sale was public, open to all bidders; Paddock bid off the property for himself, and gave it to his son, having paid the amount of his bid. Emerson paid over the surplus, after satisfying the amount of his mortgage and costs, to the plaintiff; and for this surplus the plaintiff became accountable. Hence I see no complaint which the defendants can make as to the real estate. It is sufficient, as to that, that they have shown no damage by the delay, or the manner in which it was treated or managed by the plaintiff.
As to the personal property, there was no proof or finding that it had deteriorated materially by the delay. The mortgage was legally foreclosed by a public sale, after posting notices. It is true that the mortgagor, or some one else, had removed the best of the furniture and substituted other furniture in its place. But this was done without the knowledge or fault of the plaintiff. It does not appear when this was done, or that it was in any way the result of, or caused by the delay, or by the act or conduct of the plaintiff or its agents. The mortgagor had the right to claim, out of the property named in the mortgage, all that was exempt from execution; and there is no evidence that, if the plaintiff had at once foreclosed this mortgage, it would have realized any more than it finally did.
I know of no rule of law that required the plaintiff to notify the defendants of the sales. They had not requested to be notified, and took no measures to procure notice. It may be that the plaintiff was, as claimed by the counsel for the appellants, in some sense a trustee for all the persons interested in the securities it had taken from Frazell. But if we *Page 459 assume this to be so, I do not see how it will aid the appellants, as there is no proof or finding that there was any breach of the supposed trust, or that the defendants were in any way damnified by the conduct of the plaintiff.
Upon the case, therefore, as presented to us upon the evidence and findings of the judge, I can see no reason for disturbing the judgment, and favor its affirmance, with costs.
All concur for affirmance.
Judgment affirmed, with costs.