Bagley

Upon carefully reading the bill, I have become satisfied that complainants were not mere contract creditors, as claimed by the objecting defendants. The gravamen of the bill arises from complainants’ liability under a surety bond, a so-called lender’s bond, by which complainants obligated themselves to advance $100,000, to construct and complete the apartment building and garages erected by the principals who are primary defendants herein and who agreed on their part to pay off the debts, claims, and liens arising from the construction. Their alleged failure so to do under the terms of the surety bonds involves complainants in liability, collaterally, for large amounts, and accordingly they invoke the equitable jurisdiction of this court to marshal the assets for their protection and for the benefit of the various claimants and lienors who performed work, labor, and services and furnished supplies in the construction and completion of the buildings in question. The bill avers the insolvency of the owners of the property and their failure to fulfill the conditions primarily imposed upon them by bond.

In such a situation a surety and guarantor has the right to apply to a court of…