which the surety is liable, the latter on paying the debt is subrogated to the lien; as he is likewise to the creditor's right against a fund held by the State for the security of creditors of the principal debtor. So the sureties of a sheriff who have been forced to satisfy his liability to the owner of property which he had wrongly seized for the debt of a third party, succeed to the owner's right to reclaim the property or its value.9 § 1267. The surety is subrogated to intangible advantages of the creditor. Not only is a surety who has paid the debt subrogated to the creditor's claim against property of any kind held as security, but also to other advantages of the creditor in enforcing his claim. Thus a surety for a debtor of the Government on payment of the debt is entitled to the same priority as the Government.10 So if the sureties of a trustee are made liable and have satisfied those injured by a breach of trust, they are subrogated both to the trustee's rights and to those of the cestuis que trust against those who participated in the wrongful acts.11 So in the case of a corporation's lien on its stockholder's shares; Young v. Vough, 23 N. J. Eq. 325; Klopp v. Lebanon Bank, 46 Pa. 88; Petersburg Savings & Ins. Co. v. Lumsden, 75 Va. 327; a vendor's lien on land; Lang v. Constance, 20 Ky. L. Rep. 502, 46 S. W. 693; Ellis v. Roscoe, 4 Baxter, 418; Uzzell v. Mack, 4 Humph. 319, 40 Am. Dec. 648. (But see Allen v. Caylor, 120 Ala. 251, 24 So. 512, 74 Am. St. Rep. 31.) Statutory liens of various kinds. Turner v. Teague, 73 Ala. 554; Watts v. Eufaula Bank, 76 Ala. 474; Cummings v. May, 110 Ala. 479, 20 So. 307; Singleton v. United States &c Guaranty Co., 195 Ala. 506, 70 So. 169; Richeson v. Crawford, 94 Ill. 165, 101 Ill. 351; Hook v. Richeson, 115 Ill. 431, 5 N. E. 98; McCoy v. Wood, 70 N. C. 125; Barger v. Buckland, 28 Gratt. 850. But a surety on a bond given to discharge an admiralty lien, will not on paying the bond be subrogated to the lien, for that was discharged when the bond was given. The Robertson, 8 Biss. C. C. 180. 8 National Surety Co. v. Berggren, 126 Minn. 188, 148 N. W. 55. Skiff v. Cross, 21 Iowa, 459; Philbrick v. Shaw, 61 N. H. 356. 10 In re Churchill, 39 Ch. Div. 174; United States v. Herron, 20 Wall. 251, 22 L. R. A. 275; Richeson v. Crawford, 94 Ill. 165; Boltz' Estate, 133 Pa. 77, 19 Atl. 303. On the same principle a surety was subrogated to a right of priority of the creditor against an insolvent railroad company in Love v. North American Co., 229 Fed. 103, 143 C. C. A. 379. 11 Richeson v. Crawford, 94 III. 165; Wheeler v. Hawkins, 116 Ind. 515, 19 § 1268. Subrogation to rights of the creditor which have been legally destroyed by the surety's payment. Under a narrow view taken by the English courts it was held that a surety could not be subrogated to advantages of the creditor which were legally destroyed by payment of the debt. That is, the advantage which the creditor might have as a bond creditor, or a judgment creditor, would not enure to the benefit of the surety, since his payment satisfied the bond or the judgment. 12 And this rule has been followed more or less completely in a few of the United States. 13 As subrogation is an equitable doctrine, there seems no difficulty in keeping alive for the benefit of the surety an obligation which has been satisfied at law. The refusal of equity to allow a legal defence its ordinary operation when injustice will thereby be caused, is no novelty. This result has been achieved in England by statute,11 and the same principle is largely adopted in the United States, 15 N. E. 470; Blake v. Traders' Nat. Bank, 145 Mass. 13, 12 N. E. 414; Wernecke v. Kenyon, 66 Mo. 275; Clark v. First Bank of Harrisonville, 57 Mo. App. 277; Brown v. Houck, 41 Hun, 16; Bunting v. Ricks, 2 Dev. & B. Eq. 130, 32 Am. Dec. 699; Thompson v. Humphrey, 83 N. C. 416; Rhame v. Lewis, 13 Rich. Eq. 269; Edmunds v. Venable, 1 Pat. & H. 121; Pinckard v. Woods, 8 Gratt. 140. 12 Jones v. Davis, 4 Russell, 277; Armitage v. Baldwin, 5 Beav. 278; Dowbiggen v. Bourne, 2 Y. & C. Ex. 462. 13 Whittier v. Heminway, 22 Me. 238, 38 Am. Dec. 309; Adams v. Drake, 11 Cush. 504; Holmes v. Day, 108 Mass. 563; New Bedford Savings Inst. v. Hathaway, 134 Mass. 69, 45 Am. Rep. 289; Frevert v. Henry, 14 Nev. 191; Moore v. Campbell, 36 Vt. 361. 14 Mercantile Law Amendment Act, 19-20 Victoria, c. 97, Sec. 5. 15 Schindelholz v. Cullum, 55 Fed. 885, 889, 5 C. C. A. 293, 12 U. S. App. 242; Bragg v. Patterson, 85 Ala. 233, 4 So. 716 (statutory); Talbot V. Wilkins, 31 Ark. 411, 423; Williams v. Riehl, 127 Cal. 365, 370, 59 Pac. 762, 78 Am. St. Rep. 60; Merriken v. Godwin, 2 Del. Ch. 236; Dodd v. Wilson, 4 Del. Ch. 399; Patterson v. Clark, 101 Ga. 214, 28 S. E. 623 (statutory); Rice v. Rice, 108 Ill. 199; Manford v. Firth, 68 Ind. 83; Frank v. Traylor, 130 Ind. 145, 148, 29 N. E. 486, 16 L. R. A. 115; Hollingsworth v. Pearson, 53 Ia. 53, 3 N. W. 818; Schleissman v. Kallenberg, 72 Ia. 338, 33 N. W. 459; Harris v. Frank, 29 Kans. 200 (statutory); Honce v. Schram, 73 Kan. 368, 85 Pac. 535; Roberts v. Bruce, 12 Ky. L. Rep. 932, 15 S. W. 872; Connely v. Bourg, 16 La. Ann. 108, 79 Am. Dec. 568; Wallace v. Jones, 110 Md. 143, 72 Atl. 769 (statutory); Smith v. Rumsey, 33 Mich. 183; Kimmel v. Lowe, 28 Minn. 265, 9 N. W. 764; Swan v. Smith, 57 Miss. 548 (statutory); Benne v. Schnecko, 100 Mo. 250, 13 S. W. 82; Bledsoe v. Nixon, 68 N. C. 521; Rice v. Hearn, 109 N. C. 150, 13 S. E. 895; Fowle v. McLean, 168 N. C. 537, 84 S. E. 852; Durand v. though the procedure in the various States which is essential for the protection of the surety is not uniform. § 1269. Subrogation is allowed only when the debt is fully paid. The surety's right of subrogation does not arise until the debt is paid in full. A partial payment of the debt even though it may be of the full amount for which the surety has bound himself, will not entitle him to subrogation to the creditor's rights and securities. 16 But "while it is true that the rights of the sureties to the remedies of the principal do not become complete and are incapable of present enforcement until they shall have discharged their principal's obligation, yet their right becomes an inchoate one as soon as they have entered into the relation of suretyship; and their equitable assignment of their principal's rights and remedies, when completed by their performance of his obligation, relates back, as against each other and their principal, to that earlier time. And all persons who have in the meantime received any securities or payments from either party to the principal contract, with notice of the facts and of the surety's responsibilities and consequent rights, must in equity hold them for his benefit." 18 Trusdell, 44 N. J. L. 597 (statutory); McKenna v. Corcoran, 70 N. J. Eq. 627, 61 Atl. 1026; Brewer v. Franklin Mills, 42 N. H. 292; Wilson v. Burney, 8 Neb. 39; Townsend v. Whitney, 75 N. Y. 425; City Trust Co. v. American Brewing Co., 70 N. Y. App. D. 511, affirmed, 174 N. Y. 486, 67 N. E. 62; Peters v. McWilliams, 36 Oh. St. 155 (statutory); Cottrell's App., 23 Pa. 294; Richter v. Cummings, 60 Pa. 441; Boltz's Estate, 133 Pa. 77, 19 Atl. 303; Garvin v. Garvin, 27 S. C. 472, 4 S. E. 148; M'Nairy v. Eastland, 10 Yerg. 310; Krall v. Campbell Printing Press Co., 79 Tex. 556, 15 S. W. 565. 18 Cooper v. Jenkins, 32 Beav. 337; Peoples v. Peoples Bros., Inc., 254 Fed. 489; Schoonover v. Allen, 40 Ark. 132; Rice v. Morris, 82 Ind. 204; Swan v. Patterson, 7 Md. 164; Wilcox v. Fairhaven Bank, 7 Allen, 270; Musgrave v. Dickson, 172 Pa. 629, 33 Atl. 705, 51 Am. St. Rep. 765. 17 Labbe v. Bernard, 196 Mass. 551, 82 N. E. 688, 14 L. R. A. (N. S.) 457; citing Rice v. Southgate, 16 Gray, 142; Wood v. Lake, 62 Ala. 489; Lewis v. Faber, 65 Ala. 460; Conner v. Howe, 35 Minn. 518, 29 N. W. 314; McArthur v. Martin, 23 Minn. 74; Forbes v. Jackson, 19 Ch. D. 615. See also Stavrelis v. Zacharias, (N. H. 1919), 106 Atl. 306. 18 Labbe v. Berrard, 196 Mass. 551, 82 N. E. 688, 14 L. R. A. (N. S.) 457; citing Norton v. Soule, 2 Greenl. 341; Atwood v. Vincent, 17 Conn. 575; Greene v. Ferrie, 1 Desaus. Eq. § 1270. Surety of a surety is entitled to subrogation. The surety of a surety is entitled to the same right of subrogation to which the prior surety is entitled; for as to the subsequent surety, the prior one is a principal and the subsequent surety having paid the debt stands in the shoes of the prior surety, and, by right of the latter, in the shoes of the creditor, 19 § 1271. A surety is entitled to subrogation against a co-surety. If one co-surety pays the debt he is generally held entitled to enforce by way of subrogation the creditor's right against co-sureties; being limited, however, in the enforcement of the right to the amount necessary to repay him for any excess beyond what as between himself and his co-sureties he ought to pay.20 This principle, however, has not been universally recognized in the decisions.21 In effect the same result is thus achieved if the co-sureties are solvent as by enforcing contribution. Where, however, 164; Drew v. Lockett, 32 Beav. 499. See also Empire State Surety Co. v. Cohen, 93 N. Y. Misc. 299, 156 N. Y. S. 935. 19 McDaniels v. Flower Brook Mfg. Co., 22 Vt. 274. See also Hall v. Smith, 5 How. 96, 12 L. Ed. 66. 20 Pratt v. Law, 9 Cranch, 456, 3 L. Ed. 791, s. c. sub nom. Campbell v. Pratt, 5 Wheat. 429, 5 L. Ed. 126; Reber v. Gundy, 13 Fed, 53. Dowdy v. Blake, 50 Ark. 205, 6 S. W. 897, 7 Am. St. Rep. 88; Sumner v. Rhodes, 14 Conn. 135; Simpson v. Gardiner, 97 Ill. 237; Schoenewald v. Dieden, 8 Ill. App. 389; Hall v. Hall, 34 Ind. 314; Koboliska v. Swehla, 107 Iowa, 124, 77 N. W. 576; Smith v. Latimer, 15 B. Mon. 75; Whitehead's Succ., 3 La. Ann. 396; Henderson v. McDuffie, 5 N. H. 38, 20 Am. Dec. 557; Crafts v. Mott, 4 N. Y. 603; Vincent v. Logsdon, 17 Oreg. 284, 20 Pac. 429; Ackerman's App., 106 Pa. 1 (overruling contrary intimations in earlier Pennsylvania cases. But see In re Hoge's Estate, 188 Pa. 527, 533, 41 Atl. 621, 1119); Haverford L. & B. Assoc. v. Fire Ass'n, 180 Pa. 522, 37 Atl. 179, 57 Am. St. Rep. 657; Stokes v. Hodges, 11 Rich. Eq. 135; Greenlaw v. Pettit, 87 Tenn. 467, 11 S. W. 357; Stebbins v. Willard, 53 Vt. 665; Dobyns v. Rawley, 76 Va. 537. 21 Bartlett v. McRæ, 4 Ala. 688; Hogan v. Reynolds, 21 Ala. 56, 56 Am. Dec. 236; Clark v. Warren, 55 Ga. 575; Montgomery v. Vickery, 110 Ind. 211, 11 N. E. 38; Frank v. Traylor, 130 Ind. 145, 29 N. E. 486; Walsh v. McBride, 72 Md. 45, 19 Atl. 4; Hammatt v. Wyman, 9 Mass. 138; Brackett v. Winslow, 17 Mass. 153; Bryant v. Smith, 10 Cush. 169; Adams v. Drake, 11 Cush. 504; Stanley v. Nutter, 16 N. H. 22; Harbeck v. Vanderbilt, 20 N. Y. 395; Booth v. Farmers' Bank, 74 N. Y. 228; Towe v. Felton, 7 Jones (N. C.). 216; Baldwin v. Merrill, 8 Humph. 132; Maxwell v. Owen, 7 Coldw. 630. the co-sureties are insolvent this is not the case. A right of contribution against an insolvent co-surety gives merely a provable claim for the amount due. Not so the right of subrogation. Where one of two sureties pays the debt in full and his co-surety is bankrupt, the surety who has paid is subrogated to the creditor's proof against the bankrupt's estate if already made, or if the creditor has not proved, the surety may prove for the full amount of the debt, being restricted, however, in the recovery of dividends to an amount equal to the share of the debt, which the bankrupt equitably ought to pay.22 Any other rule would enable the creditor to vary the ultimate payments of the two sureties, for the creditor unquestionably can either prove against the bankrupt surety for the full debt, and then recover from the solvent surety the deficiency; or at his option sue the latter for the whole debt without proving against the bankrupt estate. If the solvent surety cannot then by subrogation prove for the full debt against the bankrupt estate, the ultimate situation of the parties will be varied according as the creditor chooses one or the other course. § 1272. Security for several debts. Where a surety pays his entire indebtedness he is entitled to subrogation to any right or security of the creditor exclusively applicable to that debt. But where the creditor holds security for several debts, payment of his entire obligation by a surety for one of those debts will not entitle him to subrogation to any part of the security until the creditor has satisfied all the debts to which the security was applicable. 23 22 Ex parte Stokes, De Gex, 618; In re Parker, [1894], 3 Ch. 400; Hess's Estate, 69 Pa. 272; Pace v. Pace's Adm'r, 95 Va. 792, 30 S. E. 361, 44 L. R. A. 459. See also Federal Bankruptcy Act, Sec. 57 (i). But see contra-Maxwell v. Heron, 3 Ross, L. C. 129, s. c. sub nom. Keith v. Forbes, 3 Paton, 350; Apperson v. Wilbourn, 58 Miss. 439, 444; New Bedford Institution v. Hathaway, 134 23 Rice v. Morris, 82 Ind. 204; |