debtors, holding in their hands as security for the debt, and
their indemnity, the mortgage upon the vcaacl.

With what propriety, then, can they or their assignees, repre-
senting their general creditors, say that the holders of these bills,
for whose security the arrangement was made, shall participate
with them in the loss resulting from a sale of the vessel for less
than the amount which the complainant stipulated to pay for
her. Though Whittington & Snyder were to be indemnified
for their risk io accepting the bills, they certainly were to in-
detoaify the holders of them; and one of the instruments of in-
demnity was the mortgage upon the vessel, executed to them
by the vendor Applegartb.

Suppose Whittington & Snyder had made no payment on
the bills, but had other claims against the drawer; ana the
contest was between their assignees, representing their general
creditors, and the holders; could there be a doubt in that case,
that the proceeds of the sales would he awarded to the holders
of the bills ? Bat why so ? why simply and exclusively because
the mortgage to Whittington & Snyder was for tneir benefit,
as the holders of the claims intended to be secured by it. But
if the court in the case supposed, would award the proceeds to
the parties holding the bills, in preference to the general credi-
tors of Whittington & Snyder, why shall they not have the
same preference, notwithstanding the partial payment made by
those persons ? They are, it is true, in respect of such partial
payment, creditors of the fund; but their claim upon it, or to
be indemnified out of it, is subordinate to the claim of the hold-
ers of the bills, and must give way until they are satisfied in
full. Such being my opinion, I shall pass an order ratifying
the account of the Auditor, of the 3d instant, which is stated
upon this view of the relative rights of the parties.

[No appeal was taken from this order.]

vol.l—16