
    Josiah Marshall versus Nathaniel Bryant.
    One having a mortgage made to secure a debt due to himself, and another debt due to a third person, engaged, that, when he could, by any sale or appraisement of the mortgaged premises, realize a sum equal to both the debts, he would dispose of the same, and apply the proceeds to the payment of the debt due to said other creditor. Having sold the premises for the most they would fetch, but not for enough to pay both debts; it was holden, that he might lawfully first satisfy his own claim, and pay the residue only to the other creditor.
    Debt on bond for $500, dated the 23d of May, 1807, and payable on demand.
    The condition of the bond, of which the defendant had oyer, recited that one B. Pearson had on that day assigned to the defendant a certain mortgage made to him by one J. Thurston, dated the I3th of April, 1807, the condition of which mortgage was, the pay ment of two notes of hand, one payable in six and the other in twelve months from the date of the said mortgage ; and that the latter of the said notes had been indorsed by Pearson to the plaintiff, and the other to the defendant; and that the defendant had agreed to save the said Pearson harmless from any liability he mignt [ * 322 ] * be under by reason of his indorsing either of said notes ; and that the defendant had agreed, whenever he could, by any sale or fair appraisement of the said mortgaged premises, realize a sum equal to the sums then due on said notes, that he would, in that case, immediately so dispose of the same, and apply the same to the payment of said note indorsed by said Pearson to the plaintiff; and, if the defendant should well and truly perform said condition, according to the true intent and meaning of the said agreement, the obligation was to be void.
    The defendant then pleads in bar of the action, that at, &c., on, &c., in order to realize the value of the said mortgaged premises, and to raise a sum of money equal to the amount of the said two notes of hand, and therewith to pay and satisfy the same, after advertising the said premises for sale at public auction, he sold the same to the highest bidder for the sum of $ 605 ; whereupon, after deducting from the said proceeds the sum of $389.54, due to him on a judgment recovered by him against the said Thurston, for the sum of $349.94 on the note so assigned to him, with interest, and necessary expenses in procuring the assignment and making sale of said premises, he paid over to the plaintiff the residue of said $ 605, being the sum of $215.46 ; which sum the plaintiff then and there received in part payment of the said note so indorsed to him.
    To this plea in bar the plaintiff demurred, and the defendant joined the demurrer.
    Stebbins, for the plaintiff.
    Wild, for the defendant.
    The cause being continued nisi for advisement, judgment was pronounced at the following September term in Berkshire.
    
   Parker, C. J.

The question, presented by the demurrer and joinder in this case, turns upon the construction of the condition of the bond which is sued.

.Tt was contended on the part of the plaintiff, that the legal effect of the stipulation recited in the condition is, to oblige * the defendant to keep the mortgage, until he could raise [*323] enough from it to pay the plaintiff’s whole demand ; or that, if he should dispose of it for a less sum than would be sufficient for the payment of both notes, he must still satisfy the plaintiff the whole amount of his demand.

But we are satisfied that this is not the true construction of the instrument. It is unreasonable to suppose that the parties intended that the pledge should not be disposed of, unless it would produce sufficient to pay the two debts. It might be sinking in its value ; and then it would be for the interest of both parties that it should be sold as soon as possible.

If there was any unfairness in the sale, and an advantage acquired by the defendant in consequence of selling the premises for a price below the sums they were intended to secure, such facts should have been replied in answer to the plea in bar, in order that the fairness af the transaction might have been tried by the jury.

But it must be^ taken as admitted, that the mortgaged premises were sold at a fair price ; and then the question is, whether the note due to the plaintiff was to be paid in full, before any portion of the proceeds of the sale could be applied by the defendant to the payment of his own note.

Now, it is our opinion, that, from the terms of the contract, it is to be understood, that, if the proceeds of the sale should be equal to the sums due on the two notes, then the plaintiff was to be paid in full. But, as there is no stipulated appropriation in case the proceeds should fall short, we must consider the defendant as holding the pledge, entitled to satisfy his own demand, and obliged to pay over the surplus only to the plaintiff; the true construction of the agreement being, that the defendant would pay over whatever should remain, after satisfying himself his own debt.

But, in doing this, he is restricted to the amount of his debt and interest; and is not entitled to any thing for the [*324] * costs of his suit against Thurston; which he was under no necessity of commencing, since he had a sufficient pledge in his hands, out of which he might have satisfied his demand.

As he retained something for these costs, and also for the expense of the assignment, which it does not appear was intended to be saved by him when the contract was made, he has forfeited the condition of his bond. He is entitled to a hearing in chancery, by which the amount due from him will be ascertained. 
      
       One might reasonably infer from the report of this case, that the mortgage was assigned to the defendant in trust for the equal benefit of both parties, to secure the payment pro raid, of their respective demands. And, in such case, the defendant, if he had lawfully disposed of it in order to satisfy their demands, had no right, in case of a deficiency, to retain more than sufficient to pay a ratable proportion cf ais demand. Vide Van Horne vs Fonda, 5 Johns. Ch. 407.
     