legacy operated with precisely the same effect as if voluntary payment had been made by the assignor after the assignment; that is, that it extinguished the debt to the amount recovered. No doubt, it did. But it is not as creditor that he is entitled to the distributive share of the trust fund. His rights are those of an owner, by virtue of the deed of assignment. The amount of the debt due to him is important only so far as it determines the question of his ownership. The reduction of that debt, therefore, after creation of the trust, and after his ownership had become fixed, it would seem, must be immaterial."

There are many cases holding that where a creditor of an insolvent person, who is dead, or has made an assignment for the general benefit of creditors, holds collateral security for his debt, and, after the death or the assignment of his debtor, realizes on the collaterals, he may, notwithstanding, prove against the decedent's estate or the assigned estate for the full amount of his debt as it stood at the time of the death or assignment. The grounds upon which these cases proceed are ably set forth in the opinion of Judge TAFT in Bank v. Armstrong, 59 Fed. 380, 8 C. C. A. 163, in which he reviews all the authorities.

The only case involving the question here presented, cited by appellee, is that of Institution v. Hathaway, 134 Mass. 69. In this case the holder of a note, by an arrangement with a solvent surety thereon, proved the note against the insolvent estate of another surety, and then assigned the note with his claim against the estate to the solvent surety, who paid the holder in full. The court held that this amounted to a payment of the note, ordered the proof to be expunged, and only allowed the surety to prove one-half of the claim. In this conclusion we cannot concur. There are three authorities cited in its support, which are not in our judgment, entitled to the weight given them. The one chiefly relied on is Maxwell v. Heron, a Scotch case, which, if applicable, has been overruled in England, and the law there settled, as we have seen, to the contrary.

It further appears that the decisions of the Massachusetts court upon analogous questions have not been in accord with the views of this and other courts upon like questions.

An important, if not yital, objection to the Massachusetts view of this question, is that the rights of the surety, instead of being fixed and certain, are made to depend upon accident or upon

the caprice of the creditor. It encourages a policy of obstruction. in the administration of estate; for, if those interested in the insolvent estate can delay its settlement until the creditor demands his debt from the solvent surety, they reap the advantage by having a smaller debt to share with them in its distribution. On the other hand, temptation is held out for a corresponding effort on the part of the solvent surety to avoid paying, until the creditor has received such dividends as the insolvent estate will pay, because the amount for which he is liable is thereby reduced. It gives opportunity to the creditor, by collusion or otherwise, to further the interest of one surety at the expense of the just and equal rights of the co-surety.

Results like these, which depend, not upon the rights of the parties fixed by law, but upon the superior skill of one over the other in maneuvering for position, or upon the will and caprice of the creditor, or upon mere accident, cannot be founded upon sound principles.

In Watts v. Kinney, 3 Leigh, 272, Judge TUCKER, speaking for this court, says: The surety, in paying the debt, "is governed by the law of this court. Even on entering into his engagement as surety he looks to its well-established principles. He knows, if he pays the debt to the obligee, he will stand in the obligee's shoes. He knows he will be subrogated to all the rights of the obligee, as they subsist at the time he makes his payment. IIe knows that a court of equity looks not to form, but to substance; that it looks to the debt which is to be paid, not to the hand which may happen to hold it; that the fund charged with its payment shall be so applied, whosoever may be the person entitled; and that it considers a debt as never discharged until it is discharged by payment to the proper person, and by the proper person. He knows that that court, which permits no act of a trustee to prejudice the cestui que trust, will not permit one who stands in the relation of the creditor or obligee to the surety to bar him of those rights which the principles of equity have secured to him. He is conscious that his rights do not depend upon the caprice of the creditor, or the whim of an executor, or the sense of right of other creditors, but rest upon the immutable principles of justice and equity; and, in making his payment, he does it in the confidence that he will be entitled to be indemnified to the full amount to which his creditor could have charged the assets of the principal."

These considerations bring us, in the case at bar, to the conclusion that John R. Pace's estate and James B. Pace were each bond in solido to their common creditor William F. Cheek for the entire amount of the debt in question; that, at the death of John R. Pace, the rights of his creditors became fixed, the assets of the state passing, as a trust fund, into the hands of his representatives charged with the payment of his debts; that, subject to costs of administration and preferred debts, William F. Cheek then became entitled to an interest in said estate, not then ascertained, but capable of being made certain, bearing such proportion to the entire assets as his debt bore to the entire indebtedness; that when James B. Pace, the surety, paid his debt, he became at once subrogated to all the rights, remedies, and means of payment, in respect thereto, that were possessed by the creditor, and had the right to prove, as the creditor could have done, the entire debt against the estate of his co-surety John R. Pace, and to receive dividends upon the basis of the entire debt until reimbursed that half of the common burden belonging to the co-surety. This conclusion works no injustice to the other creditors of John R. Pace. Their rights, which became fixed at the death of the debtor, remain unimpaired. They had no interest in that proportion of the assets belonging to William F. Cheek. That interest was as distinct and separate from theirs as if it had been already segregated and set apart for the benefit of William F. Cheek. They could not add to or take from it while it was the property of Cheek; nor can they do so now that it stands, in equity, as indemnity for the surety who has paid it.

For these reasons, the decree appealed from must be reversed, and the cause remanded, to be proceeded with in accordance with the views expressed in this opinion.

CARDWELL, J., absent. BUCHANAN, J., absent, interested in case involving same question.

CHAPTER XI.

GUARANTY OF PAYMENT OR COLLECTION.

a. A guarantor of payment is immediately and absolutely liable to the creditor.

ROBERTS v. HAWKINS. 1888.

70 Mich. 566; 38 N. W. 575.

Error to Superior Court of Grand Rapids. Assumpsit.

LONG, J. January 12, 1884, one Lyman D. Follett made his promissory note as follows:

"$1,000.

Grand Rapids, Mich., January 12, 1884. One year after date, I promise to pay to the order of Helen M. Roberts one thousand dollars, with interest at eight per cent. per annum. Value received. LYMAN D. FOLLETT."

And defendant signed an indorsement on the back thereof, as follows:

"For value received, I hereby guarantee the payment of the within. Value received. L. E. HAWKINS."

On the delivery of this note to plaintiff, she paid Follett $1,000. January 8, 1885, seven days before this note became due, Follett paid one year's interest; and neither at that time, nor at the maturity of the note, was the same presented to Follett or defendant for payment. No notice of non-payment was given defendant then or at any time prior to June 8, 1887. January 25, 1886, Follett paid the interest for the next year, and January 17, 1887, for the year following. About June 8, 1887, the note being then two years and five months overdue, it was first presented to defendant, and payment demanded and refused. August 13 this suit was brought.

On the trial, plaintiff, having proved the note and guaranty, and its non-payment, rested. Defendant then sought to make his defense as pleaded, and offer to show:

1. That he was an accommodation guarantor, without consideration or security.

2. That, at or about the maturity of the note, he inquired of the maker of the note if it was paid, and was told it was.

3. That neither at the maturity of the note, nor at any subsequent time, prior to June 8, 1887, was any notice of the nonpayment of this note given to defendant, nor any demand male on him for the payment thereof.

4. That at the maturity of this note, and for some considerable time thereafter-at least a year-Follett, the maker of the note, was solvent, and had property out of which defendant could have procured him to pay the note or obtained security.

5. That when defendant, on June 8, 1887, learned of the non-payment of this note, the maker was insolvent, out of the jurisdiction, and that he could then obtain no security or pay· ment.

The court directed a general verdict for plaintiff on all the counts of the declaration. Judgment being entered on the verdict in favor of plaintiff for the amount of the note and interest, defendant brings the case into this court by writ of

error.

The declaration contains three counts. The first alleges the guaranty, demand of the maker at maturity, non-payment and notice of said demand and non-payment to defendant at maturity.

The second alleges the guaranty, the refusal by maker to pay at maturity, and notice to defendant, at maturity, of maker's refusal.

The third is the common counts in assumpsit, with copy of note annexed, and an alleged indorsement on back of L. E. Hawkins, without any guaranty over it.

The plea is the general issue, with notice of the defense of release by plaintiff's failure to give notice of non-payment to defendant, and the consequent damage and loss to him thereby.

It is claimed that the court erred in receiving the note and guaranty in evidence under the third count in plaintiff's declaration, for the reason that the note and guaranty offered were not the note and guaranty set forth in that count; that the contract set out in plaintiff's third count was that defendant had indorsed his name in black on the back of the note, not payable to his order; and that this would make him a maker of the note, and liable as such, while the note offered had a guaranty of payment indorsed thereon. Defendant claimed that this was a variance, and that the court should have excluded the guar