DANCY v. DUNCAN. SMITH, C. J., (after stating the facts). The purchaser at the judicial sale acquired title to the land, and the mortgage by the defendants in the suit, of their shares, only had the effect of putting the mortgagee in the place of the mortgagors, so that he could claim what remained after payment of the testator's debts, what the devisees would have been entitled to, if no mortgage had been made. His right was transferred from the thing sold to its substituted proceeds. This was quite distinctly announced in the opinion when, with other features, the case was before us three years since. "And as the assignee of the former class, (next of kin or legatees,) must assert his claim in the distribution of the personal, so must the mortgagee prefer his, when the real estate fund is to be paid over to those of the latter class," (heirs or devisees). "A verdict and judgment in an action of detinue," in the words of HENDERSON, J., are conclusive as to the title. between the parties and their privies." "Privies in estate are those who come in under the owner, and the estate stands burthened, in their hands, with those incumbrances created by him before he parted with it. Therefore if a suit was pending against him for the property when he parted with it, in which there was afterwards a judgment, that judgment relates to the commencement of the suit and binds subsequent purchasers." Briley v. Cherry, 2 Dev., 2; Cates v. Whitfield, 8 Jones, 266. * * No change in the rule is brought about by the statute prescribing how notice of a lis pendens shall be given, The Code, $229, when the transaction is in one and the same county, as in the present case, and notice is furnished in the record in the pending action. So it is held in Badger v. Daniel, 77 N. C., 251; Rollins v. Henry, 78 N. C., 342; Todd v. Outlaw, 79 N. C., 235. Besides the constructive notice given by the record of the pending suit, all the parties in interest were fully cognizant of all that was done, and the loan and mortgage were in DANCY v. DUNCAN. tended to be, and so known to the mortgagee, as well as to the others, in furtherance of the objects of the suit, and to secure a more advantageous sale of the land. The doctrine of subrogation, if applicable, need not be invoked in aid of the plaintiff's equity. As assignee of the estate of the several devisees, the guardian who loaned the money succeeds to all their rights to come in and take what they could respectively have taken had no assignment been made; that is, their shares of the surplus of the proceeds of sale not required in the course of administration, so far as was necessary to discharge the mortgage debt. This is the legal effect of the conveyance, and it is not necessary to resort to a substitution in place of creditors. This is so obviously the position of the plaintiff in the controversy as to need no comments in further elucidation. The case of Smith v. Fortescue, Busb. Eq., 127; fully warrants the present proceeding, and is almost a direct decision in favor of the judgment. The conduct of Whitaker in his voluntary participation in the wrongful disposal of the note, and appropriation of it to the executor's own debt, renders him equally liable to be called on to restore the money to those thus defrauded. He will not be permitted thus to use trust funds when he is fully aware of their nature, or there are circumstances to awaken suspicion and put him on inquiry. The authorities upon this point are numerous, and we refer to a few. Exum v. Bowden, 4 Ired. Eq., 281; Wilson v. Doster, 7 Ired. Eq., 231; Lemly v. Atwood, 65 N. C., 46. We find no error in the record, and the judgment must be affirmed. No error. Affirmed. BANK v. HARRIS. THE STATE NATIONAL BANK et als. v. J. M. HARRIS et als. Statute of Limitations-Partial Payment. 1. The effect of §172 of The Code, is to leave the law as it was prior to the adoption of the Code of Civil Procedure as regards the effect of a partial payment in removing the bar of the statute of limitations. 2. The fact that the maker of a note has a claim against the holder, which the holder endorses as a credit on the note without the assent of the maker, will not be such a partial payment as will rebut the statute of limitations, but an agreement to apply one existing liability to another, is such a partial payment as will stop the operation of the statute, although the endorsement is never actually made on the note. (Green v. The College, 83 N. C., 449: Woodhouse v. Simmons, 73 N. C., 30; Hewlett v. Schenck, 82 N. C. 234; Riggs v. Roberts, 85 N. C., 151; cited and approved). CIVIL ACTION, tried before Connor, Judge, at April Civil Term, 1886, of WAKE Superior Court. This action is upon a bond or promissory note under seal, made by the defendant James M. Harris, principal, and the other defendants, his sureties, to John Gatling, one of the plaintiffs, for $400, due December 15, 1881, and deposited at the plaintiff Bank as collateral security for money loaned. The suit was commenced on August 1st, 1885, and the defence mainly relied on and brought up in the appeal, is the bar of the statute of limitations, pleaded by the sureties. To rebut this, the plaintiffs allege a partial payment of $286.02 to have been made by the defendant Bridgers, on or about March 5, 1882, under §172 of The Code. The testimony upon this point was as follows: The plaintiff Gatling gave his note for $262.30 for value, to one T. V. Hill, who endorsed it to the defendant Bridgers, by whom it was again endorsed to Norris, Wyatt & Taylor, who brought suit on the note against the maker and endorser Bridgers, and at August Term, 1883, BANK v. HARRIS. recovered judgment against the latter alone. Execution issued thereon, and on March 5th, 1884, was satisfied by payment in full by Bridgers. Thereupon, it was agreed between him and Gatling, that the amount so paid should go and be appropriated as a part payment of the note now in suit, and be credited thereon. This credit was not in fact so entered, though repeatedly demanded, and with assurances that it should be done. The note sued on, though payable to Gatling personally, was the property of Annie M. Parker, of whom the former was attorney in law and fact until the winter of 1884-'5, but this was not known to the sureties. The said Annie M. and her husband have been allowed to intervene in the action and assert her claim to the security. The second article of the complaint alleges the payment by Bridgers, on March 5, 1884, of $286.02, and only the residue of the debt is demanded. The answer of Bridgers denies that upon the facts any payment has been made to interrupt the running of the statute, and insists upon its protection. Of the three issues submitted to the jury, two responses, declaring the said Annie M. to be the owner of the note, and the defendants W. S. Harris and Bridgers to be sureties, were by consent, and the remaining one: "Did defendant T. B. Bridgers pay on said bond $286.02, or any other sum, on or about 5th of March, 1884 ?" was answered in the affirmative. The defendants insisted that there was no evidence to sustain an affirmative finding upon this issue. This instruction was in these words: "The Court charged the jury, that if they believed it was understood and agreed between Gatling and Bridgers, prior to 15th of December, 1884, that the amount due by Gatling to Bridgers should constitute a payment on the note in suit, they should find the second issue in the affirmative, and they should consider all the facts and circumstances in evidence in coming to a conclusion. That the burden of proof BANK V. HARRIS. was on the plaintiffs, and it made no difference that the note was the property of Mrs. Parker, she having by her answer ratified whatever Gatling had done in regard to the note." To this charge the defendants excepted. There was a judgment for the plaintiffs; and the defendants appealed. Mr. R. II. Battle, for the plaintiffs. Messrs. Thos. M. Argo and Sam'l Wilder, for the defendants. SMITH, C. J., (after stating the facts). The sole question to be determined, is as to the effect of the agreement that the indebtedness incurred by Gatling to his surety upon the latter's discharge of the execution, should be applied to that in possession of the Bank, and the amount entered thereon as a credit, in removing the statutory defence arising from the lapse of time. Was it equivalent to an actual payment within the meaning of $172 of The Code, which leaves in force the previous law as to the effect of a part payment of a debt? Green v. The College, 83 N. C., 449. The present controversy assumes a very singular aspect. The creditor is not refusing to give effect to the agreement to consider his debt paid pro tanto, but declares that result to have been brought about, as if what is termed an executory, had become an executed contract, accomplished by the entry of the credit. The debtor seeks to repudiate his own action, and deprive himself of what it is admitted he is entitled to. Undoubtedly, if the relations of the parties were reversed, and the statutory obstruction was not in the way of the debt to be reduced, while it did take away from the surety debtor his remedy by action on the promise of his principal, whether implied or express, there would be no hesitancy in treating the case a direct reducing of the plaintiffs' demand, so that no detriment should come to him from delay. Why should the result be different for the benefit of a debtor repudiating his contract and against |