TOMPKINS Us LI’I'I*1sEi‘sBOOE.¤6'c".ET. B. BY. 23 \
‘· The broad doctrine hasalso been softerr asserted that equity will regards
security, given, by a principal debtor to his surety, though merely for the sure—
ty’s indemnity, as a trust created for the payment of the debt, and will see,
that it is applied for that purpose, by substituting, if necessary, thecreditor
to its benefit.” Section 163. •* The security for the debt, in whosesoever hands
it may be, is treated as a fund held in trust for the payment of the debt; if it
is in the hands of the creditor, the surety, upon paying the debt, will be sub-
rogated to it for indemnity; if·it is in the hands of a surety, the creditor may
resort to it to secure the payment of his demand." Section 155. - , _
The authorities cited by the learned author support the text.
In Rice’s Appeal, 79 Pa. St. 206, the court says: · 4 s
•* The principle is well settled that where a su1·ety,or a person standing in
the position of a surety, for the payment of a-debt, receives security for his
indemnity, and to discharge such indebtedness, the principal creditor is in
equity entitled to the benefit of· that security, and it makes no difference that
the principal creditor did not know of this at the time, or- givecredit on the
faith ofit." pl girl _ by p·,. y_   A)  
The case of Handy. S. at G. R.·R..12 S. C. 314, was insome of its
features not unlike the case at bar, and the court said: ‘TA provisioni
forthe payment of the bonds is primarilya security for those hold-4
ing the bonds. lt is always so in equity and at»law;when its forms
V permit." V, F w m ° .. ,  
p ». There is, however, no occasion to invoke the doctrine of submgation.:
The very object of the statutory mortgage was to securethe payment.
oi the state bonds by the company. inthe Florida case the supreme · ‘ A
court say :» "In our opinion there is: no occasion for applying here
the doctrines of subrogation, because in aunmistakable language, the
statute has made the mortgage of thecompany security for the paye
ment of the obligations of the‘_state." By the provisions of the seventh
section of the act of 1868,; the road was not to be discharged from the
claim or liens on the part of the state until "the amountof bonds is-
sued to such company, with the interest thereon, shall have been paid
by mid company? The company was to paythe bonds, andthe stat- `
utory mortgage was taken to secure that result, and stands as ase-
curity for that purpose to every, bondholder. i` ‘ . P ·: V
It is contended that if the provision of the act_of—1868 in relation
to the issue of the state bonds is void, the one in-relation   the stat-.
utory lien is void also., This was the contention before;the¢.supreme
court in theFlorida case, and was thus answered by the..eourt~: c"lt
is contended, however, that as the provision of the act inirespect tot
the execution-andiexchange of the state bonds is unconstitutional,-
the one in relation to thestututory lieuon the property of; the 410111-;