Markell v. Eichelberger

JBartol, J., delivered the opinion of this court. The facts in this case are very fuby set out in the agreement of the solicitors, appearing in the record, and may be briefly stated as follows: George J. Fischer was indebted to Corilla H. Smith and Philemon M. Smith in the sum of $535, on his promissory note, dated the 12th day of March 1850, and Jacob Markell was liable as his surety on said note. Fischer, in order “to indemnify, secure and save harmless said Markell from all loss by reason of his liability as security aforesaid,” dn the 26th of November 1850, executed to said Markell a mortgage, with the condition that the said Fischer should pay the aforesaid sum of money, with legal interest thereoh, and should “well and truly indemnify and save harmless the said Markell from all and every loss by reason of his liability as security as hereinbefore recited,” which mortgage was duly executed and recorded; after which the said Fischer executed another mortgage, conveying the same property to other persons, for the purpose of securing other creditors and sureties. The note due Corilla H. and Philemon M, Smith was placed by the payees, after its maturity, in the Farmers & Mechanics Bank of Frederick county, for collection, with instructions to institute suit thereon, if not paid by a certain day.

The cashier then told Fischer, if he would pay a part of the sum due on said note, the bank would discount a note for him,'to enable him to pay the balance. Whereupon the said Markell, together with one Joseph Be van, united with said Fischer in giving a note, dated November 8th, 1854, for $475, payable, in six months, to Thomas Morgan, cashier, or order, and the money raised by said note, together with the sum paid by Fischer, was applied to the payment of the note due C. PI. and P. M. Smith. At the time Markell put his name on said note for $475, it was understood by him and Fischer, that the ⁸⁵ money to be raised upon it, was to be applied to the payment of the balance due on the note to the Smiths. The name of Bevan, thereon, was procured by Fischer, because the bank required another security or drawer; and the same remains unpaid, and is held by the bank.

It is also admitted that Fischer is insolvent, and was generally known to be very heavily indebted at the time the said note was discounted. The mortgaged property was sold under a decree of the Circuit Court for Frederick County, sitting in equity, passed upon a bill filed by prior incumbrancers, and the fund arising from the sale was brought into court. The cause being referred to the auditor, he stated an account, applying the proceeds of sale to the payment of the claims of prior mortgagees, and to parties claiming under the subsequent mortgage, to the exclusion of the said note for $475, held by the bank, on which said Markell is surety. And the said Markell filed exceptions to the auditor’s report, claiming that he is entitled, under the mortgage of the 26th of November 1850, to have the said note for $475 paid out of the fund.

The Circuit Court, by its order of the 25th of September 1857, overruled the exceptions, and ratified the auditor’s account, and from that order this appeal is prosecuted. It is admitted that the fund is insufficient to pay all the mortgage claims, and that the claims Nos. 11 and 12, allowed in the audit, are claims secured by the last mortgage, which was