
    MERCHANTS’ & MANUFACTURERS’ NAT. BANK OF MIDDLETOWN v. CUMMINGS.
    (Supreme Court, General Term, Second Department.
    June 18, 1894.)
    Principal and Surety—Security Held by Surety—Right op Debtor.
    The maker of a note held by plaintiff gave to one J., who was accommodation indorser thereof, a second bote, indorsed by defendant, to secure J. against loss by reason of his indorsement, and J. transferred the collateral note to plaintiff. Held, that plaintiff could sue on the collateral note, though J. had paid nothing on account of his liability as indorser; a creditor being entitled to ail collaterals given by the principal debtor to his sureties.
    Appeal from special term.
    Action by the Merchants’ & Manufacturers’ National Bank of Middletown against Ira T. Cummings. There was a judgment in favor of plaintiff, and defendant appeals.
    Affirmed.
    Argued before BROWN, P. J., and BYKMAN and CULLEN, JJ.
    Daniel Finn, for appellant.
    George H. Dicker, for respondent.
   CULLEN, J.

This is an appeal from a judgment in favor of the plaintiff, entered on the decision of the special term, before which this cause was tried, without a jury. One Joseph Cummings made his note for $2,000, to the order of John L. Cummings, which the latter indorsed for the accommodation of the maker. The note was discounted by the plaintiff. As security for such indorsement, Joseph Cummings made a second note to John L. Cummings for the-same sum, and payable at the same date, which note, before delivery, was indorsed by the defendant, Ira T. Cummings, for the like purpose of securing the first-named indorser. John L. Cummings assigned this latter note to the plaintiff, who, upon default in the payment of the first note, brought this suit Ira T-Cummings, the indorser, alone defends.

On the back of the second note was written, at the time of its-delivery, this statement:

“This note is given and is to be held by John L. Cummings as collateral, security for his indorsement on my note, same date, tenor, and amount, favor of John L. Cummings, to be by him indorsed and delivered to the Merchants’' and Manufacturers’ Bank of Middletown. * * *
“[Signed] Joseph Cummings.”

It is conceded that, though John L. Cummings is the payee and the defendant the indorser on the note in suit, still, by the original agreement between the parties, the defendant is liable as indorser to the payee. The recovery is resisted upon the ground that the payee has paid nothing on account of the original note, and that, therefore, no liability has accrued on the collateral note. We do not think it worth while to follow the elaborate discussions in the briefs of counsel as to the character of the note in suit as affected by the written statement on its back. We may admit that the note could not have been disposed of by the payee either before or after maturity, so as to constitute any obligation against the parties to it, separate from the debt created by the original note discounted by the plaintiff. Still, we think the plaintiff was entitled to recover on it. John L. Cummings, the accommodation indorser, was in the nature of a surety on the debt of the plaintiff. The note in suit was a security to the surety. “It is a settled rule in equity that the creditor shall have the benefit of any counter bonds or collateral securities which the principal debtor has given to the surety, or persons standing in the situation of surety, for his indemnity. Such securities are regarded as trusts for the better security of the debt, and chancery will compel the execution of the trusts for the benefit of the creditor.” Vail v. Foster, 4 N. Y. 312. It is not necessary that the surety shall have paid anything on account of his liability, as such, to give the creditor the right to enforce the collateral obligations. In fact, if the creditor could collect his claim directly from the surety, ordinarily he would have little need to seek these collateral securities. In Vail v. Foster, supra, the principal debtor gave his surety a bond and mortgage as security. The surety paid nothing on the principal debt, and became insolvent. The creditor was held entitled to foreclose the mortgage for the payment of his claim. The case of Crosby v. Crafts, 5 Hun, 327, affirmed 69 N. Y. 607, is still stronger. The debtor confessed judgment in favor of the surety for the amount of the debt. It was assumed that the estate of the surety was discharged from any liability by his decease; yet it was held that the judgment still remained a valid lien, as security for the benefit of the creditor. It follows that the plaintiff could compel John L. Cummings to assign the note in suit to him, and could enforce its payment. The judgment appealed from should be affirmed, with costs. All concur.  