
    Stanley v. Beatty and Others.
    The assignment of one of several notes secured by a mortgage is an equitable assignment, pro tanto, of the mortgage.
    The person holding the note which first becomes due, is entitled first to be satisfied out of the proceeds of the mortgage.
    The holder of one of several notes secured by mortgage is not obliged first to sue at law upon the notes, but he may, in the first instance, proceed in chancery for foreclosure.
    APPEAL from the Miami Circuit Court.
    
      Saturday, May 28.
   Stuart, J.

This was a bill in chancery to foreclose a mortgage. From the agreed state of facts, and such allegations in the bill as are otherwise established, we extract the following:

The defendant, Wallick, had purchased from Hamilton and Godfroy, respectively, two lots in Peru, and taken their title-bonds. These lots Wallick sold to the defendant, Jones, and instead of assigning the title-bonds of Hamilton and Godfroy, he gave his own separate obligation to Jones for a deed. Jones and the defendant Kite, had executed to the defendant Beatty, their two joint notes of 604 dollars each; the one due February 23, 1848, the other May 23, 1848. To secure the payment of these notes, Jones executed to Beatty a mortgage on the lots. Beatty after-wards assigned the note due February 23, 1848, to Stanley. Stanley put the note in suit, but on the guarantee of Peeples and Skillman, (who are not parties to the record), that the note would be paid by the 1st day of May, 1848, the suit was dismissed. At that time Jones was supposed to be solvent; but in two months after he fled the country, wholly insolvent. Kite paid Stanley in property 100 dollars, to be credited on the note; and to save Peeples harmless on the guarantee, he gave P. a mortgage on eighty acres of land in Marshall county. Peeples assigned this mortgage to Stanley, and at the same time took Stanley's obligation not to sell the land or permit it to be sold for less than 300 dollars.

Stanley renewed his suit at law on the-note and recovered judgment against Kite—Jones not found. Having had a return of nvJla bona in Miami county, Stanley directed execution to Marshall county, sold Kite's equity of redemption in the eighty acres mortgaged to Peeples, and Stanley, himself the assignee of that mortgage, became the purchaser at sheriff’s sale, for 25 dollars. He then filed this bill to obtain satisfaction of the balance of the note out of the Jones lots.

Wallick had meanwhile assigned the title-bonds of Hamilton and Godfroy to Beatty.

The lots were worth from 700 to 800 dollars. There was a small balance of the purchase-money due from Jones to Wallick, and from Wallick to Hamilton and Godfroy, in whom the legal title was still vested. The bill prays that the lots be sold, and the liens paid in the order of their priority, &c. Hamilton, Godfroy, Beatty, Wallick, and Jones, are made defendants. On final hearing, the Court dismissed the bill. Stanley appeals.

The assignment of the note by Beatty to Stanley was an equitable transfer of the mortgage given to secure the note. 1 Blackf. 137.—4 id. 379.-7 id. 297.

But the mortgage was given to secure both notes—the one assigned to Stanley, the other still held by Beatty. What then are the equities of Stanley and Beatty, respectively, in this common security? Stanley's note was due February 23, 1848; Beatty's May 23, 1848. The note first due is to be first satisfied out of the proceeds of the mortgage. State Bank v. Tweedy, 8 Blackf. 447. This settles the prior equity in favor of Stanley, if no other disturbing causes intervene.

It is objected that Stanley might have collected the note had he not dismissed his first suit at law. But Stanley was not compelled to proceed at law. He might, in the first instance, have proceeded in chancery to foreclose, and swept the whole mortgaged property. Instead of that, he pursued the course which would give him, as the law then stood, the benefit of both remedies in proper succession. Under the proceeding at law he made part of the rhoney, and had a return of nulla bona. When Stanley seeks his further remedy in chancery against the mortgaged lots, Beatty has no right to complain further than to see that all which Stanley actually realized by his legal proceedings, has been applied to the note; for the suit at law which secured part payment of the Stanley note, has resulted to the benefit of Beatty, who, standing in the situation of a junior mortgagee, acquired additional security by Stanley's success. The amount of Beatty's interest in the common security was thereby increased.

A. A. Cole, for the appellant.

I). D. Pratt, for the appellees.

In one contingency alone would the laches of Stanley be available to Beatty. If Stanley should seek recourse on him as the assignor of the note, Stanley's diligence at law might then be properly put in issue.

What disposition should be made of the mortgage on the Marshall county land, it is not proper to decide. All the parties iii interest are not before the Court. Peeples is interested in the disposition to be made of that security. So is Kite. And there may also be equities between Kite, Peeples, and Skillman, to be adjusted. None of them are parties to the bill. Whether the fact that Stanley was the assignee of the Kite mortgage at the time he purchased the equity of redemption at sheriff’s sale, brings him within the rule in Murphy v. Elliot, 6 Blackf. 482, is not before us, and we intimate no opinion. But even if he is, there would still be a balance due on the note for which he would be entitled to payment out of the Jones lots. In such case, and especially if new parties were necessary, the bill should not be dismissed, but should stand over for amendment. 6 Blackf. 223. We think the Court erred in dismissing the bill.

Per Curiam.

The decree is reversed with costs. Cause remanded, &c.  