The case of the exrs of W. C. Nicholas with Morrison, and of the same with Owings.

George Nicholas of Kentucky was, in his lifetime, indebted to Wilson Cary Nicholas between 9. & 10,000.£. Kentucky currency, for so much cash advanced for him;1 to secure which he promised, in writing, to mortgage certain property. he was also, with Willis Green as his security, indebted to John Read £2336–17. current money of Kentucky, and was moreover2 a partner in the Bourbon iron-works (to the amount of 21⁄48 of them) with John Cockey Owings and Walter Beall, under the firm of John Cockey Owings and co. which company was indebted to David Williamson3 of Baltimore in the sum of £2000. he owed to other creditors likewise between 6. and 7,000.£.4 George Nicholas died without having executed the mortgage to W. C. Nicholas, making James Morrison, and Joseph N. Daveiss his exrs, with power to dispose of his whole estate for the payment of his debts. the exrs mortgaged to W.C.N. the lands and slaves specifically engaged to him by George Nicholas, &5 his lot of 5. acres of land in Lexington, whereon he lived, and a farm of 255. acres in the neighborhood being under mortgage to Willis Green (his security to Read) but whether by his own deed or that of his exrs is not said, the exrs6 conveyed the same to W.C.N. and S. Smith in consideration of their paying £2336–17 the debt due thereon to Read.

W.C.N. and Samuel Smith accordingly7 paid the debt to Green, took assignment of his mortgage, foreclosed it, and bought the property.8 Williamson obtained a judgment against the Bourbon company, which judgment W.C.N. and S.S. purchased, and W.C.N. bought9 the whole 48. shares under execution. he foreclosed his own mortgage, and bought that property also10 under the decree of foreclosure. this mortgage had included the 21⁄48 of the Bourbon works.11

On the 14th of June 1803. W.C.N. sold the whole property of the Bourbon company, which he had purchased under the decree, by Articles of agreement, to Thomas Dye Owings, warranting only the 21. shares of G.N. and only against claims under G.N. Thos D. Owings executes two bonds for the purchase money, one of 10,000.£ Ky to W.C.N. the other of 3366. £ to S. Smith. they are to bear no interest till July 1. 1805. and if he annually pays up 6. p. cent interest, the principal was not to be demandable until July 1. 1815. Owings exonerates the estate of G.N. from all debts to which it is liable for the Bourbon co. and is free to pay Beall and Green12 whatever G.N. owed them; and, if done within 2. years, he is to be credited for it. if the sale of the Sheriff of Montgomery of the Bourbon property should be set aside, then he is to repay to W.C.N. 1700.£ with interest from the date hereof. he is also to mortgage the 21⁄48 to W.C.N. as security for the 13,366£ and also the remaining 27⁄48 after they shall have satisfied a mortgage of them to Beall. both covenant to execute the necessary bonds and deeds. he accordingly, on the same day, executed the two bonds as aforesaid and a mortgage for the 21. and 27. shares as agreed.

W.C.N. in a letter to Morrison of 1805. Dec. 1. expresses his anxiety to take care of the widow and children of his brother; that, as things stand however, this is contingent, that if any accident happens to him, those who may have the direction of his affairs may not have the power or the disposition to provide as well for mrs Nicholas and her family as he wishes to do; that he has always considered the property he bought a pledge for Owings’ obligations, and his warranties, and expresses his intentions to settle any surplus remaining on mrs N. and her children. as to his brother’s general creditors, amounting to 6. or 7,000.£ they must be postponed to his specific liens; that he holds himself Owings’ bond for 10,000.£ for which he is willing to take lands, as he supposes S.S. would for that also for 3366.£

Nothing, but the death of mrs Nicholas,13 appears intermediate between this letter of Dec. 1. 1805. and Apr. 1. 1820. when in Articles of agreement of that date between N. & S. and Morrison it is stated that there has been no settlement between W.C.N. and T. D. Owings, that W.C.N. and S.S. have, out of the sales of the property, been paid their whole purchase money, interest, costs and charges (except Owings’ bond to S. Smith) they therefore grant, bargain, sell, convey, transfer and assign, by these articles, to Morrison, his heirs, exrs, admrs, and assigns all the residue of the property, real and personal, purchased by them as aforesd, all bonds, debts Etc [by terms reaching all choses in action] relating to, due, founded on, issuing or growing from the same, including the sale to T. D. Owings,14 and the Articles of agreement relating to it; To have and to hold the premisses to the sd Jas Morrison his heirs, executors admnrs and assigns, to their only proper use and behoof; and the sd W.C.N. and S.S. the sd premisses warrant and defend against themselves their heirs, exrs Etc. In trust 1. to pay all claims against the sd W.C.N. and S.S. as above mentioned.

2. the claims of Morrison for trouble, advances, management, collection, responsibilities, transactions of administration Etc

3. the Surplus to all the children of G.N. in a specified way.

and Morrison warrants, as far as the premisses will go, to indemnify against T. D. Owings under the articles of agreement, and all other purchasers from W.C.N. and S.S. of the aforesd property, and other transactions relating thereto (except from the wives of W.C.N. and S.S.) they make Morrison their Attorney irrevocable, by himself in his life, or by15 substitute, or by last will, to enter into, and take possession of the premisses, and to demand, sue for and recover the same In trust for the uses aforesd.

Samuel Smith, holding Owings’ smaller bond, and satisfied with it as to all his claims not yet satisfied, severs himself from this case, and disclaims all further connection, interest, or concern in it.

W. C. Nicholas16 did not compleat, by a delivery to Morrison the assignment of Owings’ larger bond: but retained it in his own possession; and, consequently, the legal property in it remained in him until his death, which happened in Oct. 1820. and then became legally vested17 in the exrs appointed by his will, to wit his two sons Robert and Wilson Nicholas, and his son in law Thomas J. Randolph, in whose possession it still is. the death of W. C. Nicholas being in itself a revocation of the Attorneyship of Morrison, the exrs have to bring suit, in their own names, on the larger bond of Owings. Morrison cannot, on the sole ground of the Articles of agreement, because, on such suit, the original bond must be produced in court, as being the best, and therefore the only admissible evidence, of it’s existence and purport; and that the def. may crave Oyer of the condition, which can only be given on inspection of the bond itself, and this Morrison cannot produce.18

At this period he is bound to render to the exrs an account of his administration of their testator’s affairs, to wit, to shew what sales he has made, or has still to make of the mortgaged property bought in and conveyed to him by Nicholas and Smith or either of them, to whom, and for how much; what monies he has recieved, or still has to recieve, from whom and how much; to whom, and for what he has paid these monies, the expence of his collection and administration, the trouble of his own services (not of any incumbent on him as exr of G.N. but) as the Agent of W. C. Nicholas for which a reasonable Quantum meruit may be claimed, Etc. Etc. Etc.19 this settlement is indispensably necessary, as well of general right, as to shew the Surplus, if any, of which, in these Articles of agreement, he was made a trustee. for the assignment to him was not as of his own property, but in trust20 for the benefit of the children of G.N. as then intended, but now for that of the Creditors of W.C.N. whose rights as bonâ fide creditors,21 in whatever was the property of their debtor, are to be preferred to those of mere voluntary claimants:22 and the bond is a legal Asset to be administered by the executors among them according to the dignities of their respective claims.

The claim of one of these creditors; being under a peculiar protection of the law, against all others not of superior dignity, must now be stated. Thos J. Randolph, one of the exrs of W.C.N. was, in the lifetime of his testator, bound with him23 to John W. Eppes in 4. obligations amounting to 11,000.D. of this sum 10000.D.24 were the proper debt of W.C.N. for which T.J.R. was security only, and the remaining 1000.D. was the proper debt of T.J.R. for which W.C.N. was security only. at the death of W.C.N. a balance of 2750.D. with interest from the 1st of July 1819.25 remained due on these bonds, for which suit was brought by the obligee against the exrs of W.C.N. & T.J.R. as security, judgment obtained exn levied on the property of W.C.N. to the amt of 900. or 1000.D. the residue paid by T.J.R. which, after deducting his own26 portion of the debt, constituted him a creditor of W.C.N. for [2500.D. with int. and costs.]27 under judgment.

Besides this, the sd T.J.R. is at this time under obligation to the Branch bank of the US. at Richmond as a security for W.C.N. in a sum of 20,000.D. due to the sd bank from W.C.N. on a bond of his of 20,000.D.,28 for the payment of which sum he is liable to be called on at every, and any moment at which the bank shall determine to withdraw it’s indulgence. thus a creditor of the sd W.C.N. by judgment and bond to the amount of   and holding the possession and legal property in the sd larger bond of Owings, he claims a right to pay, out of the sd bond, his own debt first, on the principle of law that an exr may first pay himself out of the Assets of his testator, before any other creditor, not of superior dignity. and should Morrison, under the inchoate lien or29 assignment of that bond in the Articles of agreement, apply to a Court of Equity to compel a completion of his right by formal assignment and delivery thereof, the sd T.J.R. insists that his own equal equity as a creditor by judgment and bond, will balance and rebut that of Morrison’s for services Etc. and having the advantage at law of the possession and legal right in the bond,30 a court of equity will not take that legal advantage from him, to bestow it on another, with whom he stands otherwise on equal ground at least. this would be, as the Chancellors have observed, in similar cases,31 to take away the plank which one has siesed in a shipwreck to give it to another. he claims therefore to retain his legal right to recover & recieve unobstructed32 the monies due from Owings, or so much thereof as may satisfy first his own just demand; not contesting however, at the same time, the right of Morrison to any surplus, beyond that, which his settlement shall shew to be justly due to him.

Among the questions arising in this case, may be the following. in the preceding statement T.J.R. is called a creditor by judgment and bond. but how have been the decisions on this subject? on a judgment against Co-obligors, paid by one who was security only, does he thereupon stand ipso facto in the shoes of the obligee as a judgment creditor? or not until he has obtained a judgment, on his own suit, against his principal? Again, on the death of his principal before a suit brought, does his co-obligation make him, on payment, a bond creditor?33 or merely one by simple contract only?34