Brief for the Appellant.

"No. 2. If the jury believe, from the evidence, that the securities in question were bid in by Lowenthal and Loomis, at the sale by Bisbee, on the understanding and agreement between them that the proceeds of said securities should be applied to the same uses as was provided in the trust deed to Bisbee, and that afterwards said securities could have been sold for $11,000,-that is to say, if the Burlington and Quincy and Illinois Central railroad companies offered that sum in the aggregate for the releases in evidence, and that Bisbee approved of and desired such sale, and that a sum could thereby have been realized which would, in pursuance of the terms of said agreement, have paid the note sued on in this case and the other notes mentioned in the trust deed to Bisbee, and that Loomis wished said sale to be made and said note paid, and that Lowenthal knew the facts aforesaid, and that $11,000 could be realized as above, and still refused to let said securities be sold, and prevented a sale of the same, and that such sale would have been made and said note paid but for such refusal of said Lowenthal, and that said securities, shortly after such refusal of Lowenthal, became valueless, then the jury are instructed that the facts aforesaid, if proven, operated to release said Loomis from all obligations as guarantor of said note."

-To the giving of which instruction the plaintiff, by his counsel, excepted.

Verdict and judgment were given for defendant, and this judgment, on appeal, was affirmed in the Appellate Court, and plaintiff appeals to this court.

Messrs. ROSENTHAL & PENCE, for the appellant:

The trustee's sale in October, 1878, to Loomis and Lowenthal passed no title. No money was paid, and the trustee executed no assignment, but retained all the papers as before. Loomis testifies that the collaterals were still held for the same purposes. Bisbee still remained trustee, and could not

Brief for the Appellee.

be permitted to violate his trust. The pledge remaining in Bisbee's hands as security for all the notes, in the same way, after as before the pretended sale, he had the power to sell and dispose of the same, and could not be controlled by one of his beneficiaries. He represented both the pledger and pledgees. The bank can not be held responsible for his neglect or lack of judgment.

The pledger having the general property in the pledge, might have sold it, and compelled its restoration upon paying the money to redeem; but not offering to redeem, the bank can not be charged with any depreciation or loss. Rozet v. McClellan, 48 Ill. 345; Granite Bank v. Richardson, 7 Metc. 407; Robinson v. Hurley, 11 Iowa, 410; Smouse v. Bail, 1 Grant's Cases, 398; Ward v. Morgan, 5 Sneed, 79; Story on Bailments, sec. 315.

There is no evidence that Cozzens, or Bisbee, or Loomis, or Lowenthal, had any title to this pretended patent right claim.

Messrs. DENT & BLACK, for the appellee:

Lowenthal, by preventing the sale of the releases, and causing their loss, discharged Loomis from all liability on account of the guaranty in question.

Sureties and guarantors are favored, and the courts will lay hold of any act that favors them. Ludlow v. Simons, 2 Caines' Cases, 56; Law v. East India Co. 4 Ves. 824; Kingsbury v. Westfall, 61 N. Y. 356; Stull v. Hance, 62 Ill. 55.

If a creditor has a surety for a debt, and also a lien on any kind of property belonging to the principal as a security for the same debt, and he relinquishes the property, the surety is released to the extent of the value of the property so lost. Willis v. Davis, 3 Minn. 17; Cummings v. Little, 45 Maine, 183; Loop v. Summers, 3 Rand. 511; New Hampshire Savings Bank v. Concord, 15 N. H. 119; Armor v. Ames, 4 La. Ann. 172; Wharton v. Donnan, 83 Pa. St. 40; Ives v. Bank of Lansing, 12 Mich. 361; Bonney v. Bonney, 29 Iowa, 448;

Opinion of the Court.

Hurd v. Spencer, 40 Vt. 581; Foss v. Chicago, 34 Ill. 488; American Bank v. Baker, 4 Metc. 164; Holland v. Johnson, 51 Ind. 346; McMullen v. Winkle, 39 Miss. 142; Mayhew v. Crickett, 2 Swanst. 185; Dixon v. Ewing, 3 Ham. 281; Springer v. Toothaker, 43 Maine, 381; State Bank v. Edwards, 20 Ala. 512; Sneed v. White, 3 J. J. Marsh. 525.

Among many other cases which hold the surety discharged by the creditor causing or suffering the release of a levy on the property of the principal to the injury of the surety, the following may be referred to: Houston v. Hurley, 2 Del. Ch. 247; Morley v. Dickinson, 12 Cal. 561; Spencer v. Thompson, 6 Irish C. L. 537; Comstock v. Creon, 1 Rob. 528; Alexander v. Bank of Commonwealth, 7 J. J. Marsh. 580; Winston v. Yeargin, 50 Ala. 340; Bank v. Fordyce, 9 Pa. St. 275; Shannon v. McMullin, 25 Gratt. 211; Finley v. King, 1 Head, 123; Melles v. Green, 5 Grant's Ch. 655; Parker v. Nations, 33 Texas, 210; Davis v. Mikell, 1 Freem. Ch. 655; Lumsden v. Leonard, 55 Ga. 374; Quick v. Black, 2 C. E. Green, 189; Robeson v. Roberts, 20 Ind. 155.

A surety is discharged when the creditor accepts as collateral security for a debt the obligation of a third person, and through his negligence in failing to enforce the obligation it is lost. Kemmerer v. Wilson, 31 Pa. St. 110; Pickens v. Yearborough's Admr. 26 Ala. 417; Noland v. Clark, 10 B. Mon. 239; Jennison v. Parker, 7 Mich. 355; Sellers v. Jones, 22 Pa. St. 423; Hill v. Bourcier, 29 La. Ann. 841; Lamberton v. Windom, 18 Minn. 506; Douglas v. Reynolds, 7 Pet. 113; Lee v. Baldwin, 10 Ga. 218; Shippen's Admr. v. Clapp, 36 Pa. St. 89; Wakeman v. Gowdy, 10 Bosw. 208.

Mr. JUSTICE DICKEY delivered the opinion of the Court:

We think the Superior Court of the county of Cook erred in refusing instruction No. 1, asked by appellant, and in giving instruction No. 2, asked by the appellee, and for that cause the Appellate Court erred in affirming the judgment.

Opinion of the Court.

There is some discussion as to the legal effect of the supposed sale of these securities by Bisbee to the bank, and to Loomis. Without determining what effect is to be attributed to the proceedings connected with that supposed sale, it is clear that either the sale was entirely inoperative, and produced no change in the status of these securities; or the sale passed the absolute ownership of these securities to the bank and Loomis, as joint owners, freed from all trusts, to be used by the purchasers for their own profit, without reference to the debts and liabilities for which Bisbee had before that held them, the purchasers taking the same rights which strangers purchasing would have taken had they bid and paid the $1500, and received a written transfer of the same to them from Bisbee; or the sale vested such ownership in the bank and Loomis jointly, as trustees, to realize the most that might be had for such securities by these trustees, by the exercise of reasonable judgment, care and diligence to that end, for the benefit, first, of Loomis, in relieving him from his liabilities as guarantor, or otherwise, in relation to the three debts for which he was personally bound; second, for the benefit of the bank, in procuring the payment of the $2420 note, for which Loomis was not personally liable; and third, for the benefit of whomsoever might be entitled to the surplus, if any; and the proofs tend to show that in such case this surplus, if any had been realized, would have belonged, in equity, one-half to the bank, and one-half to Cozzens and Ten Broeke, or one of them.

On the first hypothesis these securities remained, after the sale, vested in Bisbee, as trustee, with full power of sale, and no consent of the bank or of Lowenthal was at all necessary to the sale if Bisbee thought best to sell to the railroad companies, and neither Lowenthal nor the bank was under any obligations or duty to assume any responsibility in the matter, and neither was bound to give consent, even if good judgment

40-110 ILL.

Opinion of the Court.

required the sale to be made to the railroad companies on the terms offered.

On the second hypothesis, the bank, being an absolute joint owner with Loomis, had the absolute right to refuse to sell its interest, or to sell the same, as it might choose, and the other joint owner had no rights which could lawfully limit the exercise of that choice.

On the third and last hypothesis, the bank and Loomis being joint trustees, and Loomis being one of the beneficiaries, he had a right to demand of the bank fidelity in the exercise of the trust, and so had Cozzens and Ten Broeke, who were interested with the bank in the surplus which might remain after relieving Loomis from his personal liability on the first three debts, and after paying the $2420 note held by the bank. The proof tends to show that when the offer of $11,000 was made for these securities it was generally thought that the decision of the Supreme Court of the United States would declare the validity of the same, and there is not one word of proof tending to show that Lowenthal, at the time when he refused to give the consent of the bank to the proposed sale for $11,000, had not good reason to believe, or did not believe, that a larger amount could and ought to be realized from the sale. If, in good faith, as a trustee, he exercised his honest judgment in so refusing, and acted, as he supposed, for the best interests of all concerned,-unless that judgment was grossly erroneous, with the lights he had,-he surely can not be charged with wronging any one by acting upon his judgment. The mere fact that it turned out afterwards that he was mistaken, does not charge him with a wrong done to any one.

We think the proofs do not tend to support the exact hypothesis assumed in the second instruction given at request of appellee. That hypothesis varies from the third hypothesis, supra, in this only, that it would give the entire surplus to Cozzens, after fulfilling the supposed trusts. But