Townsend v. Whitney

Learned, P. J.:

The decree of the surrogate was neither paid nor discharged by the judgments subsequently recovered, nor was it merged therein.

The recovery of the judgments against the administrator and his surety, though joint in form, did not take away from the surety his peculiar privileges. He did not become thereby merely a jointdebior. He still remained entitled, on payment, to subrogation, and to all the rights which the creditor had against the principal. (Meech v. Benedict, May Term, 1878.) The creditor has admitted this right of subrogation, and has assigned to the surety (or to another person at his request), as he was bound to do, all the securities or claims which he had against the principal. That is, he has assigned the judgment and the decree. The assignee then holds these with all the rights and powers which the creditor had in respect to the principal debtor. Nothing has been done in any way to release the principal from his debt, or to take away from *96the holder of the debt any means of enforcing- and collecting it. The principal has not paid it, and he has no reason to object to any process which the law gives to compel him to do his duty, and to pay over these trust funds.

Something was said, in his behalf, to the effect that process against the person was a remedy personal to the creditor. There is no force in this. Attachments against administrators and such parties for not paying money issue because the moneys which they have are held in trust. If they have used them except for trust purposes, they are not mere debtors. They are guilty of a quasi criminal act, for which they ought to be punished. And' it is of no consequence to them whether the result of their wrong-doing falls- on- their creditor or on some innocent, surety. In either ease they are equally culpable; and in either case liable to any authorized process- which may compel them to give up the property which they unjustly hold.

Sureties- are, and should be, ¡favored in law. And this assignment was undoubtedly made to another person to avoid any question as to the effect of an assignment to the surety, one of the defendants in the judgments. The debtor has no merits in his favor. He has not only wrongfully retained trust funds, but he has thrown the consequences of his wrong-doing- on his surety, whom he ought to have protected from loss. And now he is endeavoring to escape from his liability to that surety on technical grounds.

The order must be-reversed, with $10 costs and printing, dis-_ bursements and proceedings remitted to surrogate with direction to issue process.

Present — Learned, P. J., BoARDMAN'and Westbrook, JJ.

Ordered- accordingly.