Page images
PDF
EPUB

the security before suing the surety has been more broadly stated or applied.45 How far the surety may affect the creditor's position by a request in pais to sue the principal has been previously considered. In view of the attitude of many American courts on the latter point it is not surprising that it has been held or suggested in a number of cases that on application to a court of equity by a surety, after maturity of the debt, the court will order the creditor to sue the principal debtor,47 but no such right is universally conceded. 48

§ 1277. Contribution.

The right of one of two or more sureties who has paid more than the share which as between himself and his co-sureties, he ought to pay, to recover the excess from them, was early allowed in equity (though not at law) on general principles of justice, and has been continuously recognized subsequently. At law the right was first recognized about the end of the eighteenth century, 50 and has since become well established. At law, however, the plaintiff can generally recover but an aliquot share from a co-surety, 51 and each co

45 Re Babcock, 3 Story, 393; Richards v. Osceola Bank, 79 Ia. 707, 713, 45 N. W. 294; Philadelphia & Reading R. v. Little, 41 N. J. Eq. 519, 7 Atl. 356; Kidd v. Hurley, 54 N. J. Eq. 177, 33 Atl. 1057; Wright v. Austin, 56 Barb. 13; Sheppard v. Conley, 9 N. Y. S. 777; Polk v. Gallant, 2 Dev. & B. Eq. 395; Egerton v. Alley, 6 Ired. Eq. 188; Hatcher's Adm. v. Hatcher's Ex., 1 Rand. 53. 48 Supra, § 1236.

47 Re Babcock, 3 Story, 393; Rice v. Downing, 12 B. Mon. 44, 45; Sasscer v. Young, 6 Gill & J. 243, 248; Whitridge v. Durkee, 2 Md. Ch. 442; Bellows v. Lovell, 5 Pick. 307, 310; King v. Baldwin, 17 Johns. 384, 390, 8 Am. Dec. 415, 2 Johns. Ch. 554, 561; Bingham v. Mears, 4 N. Dak. 437, 61 N. W. 808, 27 L. R. A. 257; Hogaboom v. Herrick, 4 Vt. 131, 134; Harris v. Newell, 42 Wis. 687, 691. In many of these cases

the qualification is made that indemnity for costs of the suit against the principal shall be given by the surety.

48 Woffington v. Sparks, 2 Ves. 569; First Nat. Bank v. Wood, 71 N. Y. 405, 411, 27 Am. Rep. 66; Meade v. Grigsby's Adm., 26 Gratt. 612; Penn v. Ingles, 82 Va. 65. But where the creditor goes into equity to enforce his claim against principal and sureties, the burden will be laid first on the principal. Penn v. Ingles, supra; Paxton v. Rich, 85 Va. 378. 49 Wormleighton and Hunter's Case, Godbolt, 243; Fleetwood D. Charnock, Nelson, 10; Peter v. Rich, 1 Reports in Ch. 34.

50 Turner v. Davies, 2 Esp. 479; Cowell v. Edwards, 2 B. & P. 268. 51 Cowell v. Edwards, 2 B. & P. 268; Brown v. Lee, 6 B. &. C. 689, 697; United States Fidelity &c. Co. v. Naylor, 237 Fed. 314, 323, 151

surety from whom contribution is claimed must be sued separately.52 In equity, however, insolvent sureties, 53 and those residing outside the jurisdiction 54 are not considered in

C. C. A. 20; Chipman v. Morrill, 20 Cal. 130; Trego v. Cunningham's Est., 267 Ill. 367, 108 N. E. 350; Morrison v. Poyntz, 7 Dana, 307, 308, 32 Am. Dec. 92; Young v. Lyons, 8 Gill, 162, 165; Griffin v. Kelleher, 132 Mass. 82; Dodd v. Winn, 27 Mo. 501; Stothoff v. Dunham, 19 N. J. (4 Harrison) 181; Easterly v. Barber, 66 N. Y. 433; Adams v. Hayes, 120 N. C. 383, 386, 27 S. E. 47; Fischer v. Gaither, 32 Oreg. 161, 51 Pac. 736; Croft v. Moore, 9 Watts, 451, 453; Aikin v. Peay, 5 Strob. 15 (but see Harris v. Ferguson, 2 Bail. 397, 401); Riley v. Rhea, 5 Lea, 115; Gross v. Davis, 87 Tenn. 226, 230, 11 S. W. 92, 10 Am. St. Rep. 635; Acers v. Curtis, 68 Tex. 423, 4 S. W. 551; Tarr v. Ravenscroft, 12 Gratt. 642, 652. In some States, however, courts of law like courts of equity disregard insolvent sureties. Couch v. Terry's Adm., 12 Ala. 225 (statutory); McAllister v. Irwin's Est., 31 Col. 253, 254, 73 Pac. 47; Michal v. Allbright, 126 Ind. 172, 25 N. E. 902; Sanders v. Herndon, 122 Ky. 760, 765, 93 S. W. 14, 5 L. R. A. (N. S.) 1072, 121 Am. St. Rep. 493 (statutory); Van Petten v. Richardson, 68 Mo. 379 (statutory); Cass v. Stearns, 66 N. H. 301, 303, 23 Atl. 80; Liddell v. Wiswell, 59 Vt. 365, 8 Atl. 680; Wetmore & Morse Granite Co. v. Ryle (Vt.), 107 Atl. 108; Faurot v. Gates, 86 Wis. 569, 57 N. W. 294 (statutory).

52 Chipman v. Morrill, 20 Cal. 130; Voss v. Lewis, 126 Ind. 155, 25 N. E. 892; Powell v. Matthis, 4 Ired. 83, 40 Am. Dec. 427; Adams v. Hayes, 120 N. C. 383, 27 S. E. 47; Burnham v. Choat, 5 Up. Can. Q. B. (O. S.) 736.

53 Peter v. Rich, 1 Reports in Ch. 34; Lowe v. Dixon, 16 Q. B. D. 455,

458; United States Fidelity &c. Co. v. Naylor, 237 Fed. 314, 323, 151 C. C. A. 20; Werborn's Adm. v. Kahn, 93 Ala. 201, 9 So. 729; Williams v. Riehl, 127 Cal. 365, 59 Pac. 762, 78 Am. St. Rep. 60; Security Ins. Co. v. St. Paul Ins. Co., 50 Conn. 233; Hayden v. Thrasher, 18 Fla. 795, 805; Trego v. Cummingham's Est., 267 Ill. 367, 108 N. E. 350; Newton v. Pence, 10 Ind. App. 672, 38 N. E. 484; Greene v. Anderson, 102 Ky. 216, 43 S. W. 195; Swift's Ex'r v. Donahue, 104 Ky. 137, 46 S. W. 683; Young v. Lyons, 8 Gill. 162; Griffin v. Kelleher, 132 Mass. 82, 83; Stewart v. Goulden, 52 Mich. 143, 17 N. W. 731; Comstock v. Potter, 191 Mich. 629, 158 N. W. 102; Dodd v. Winn, 27 Mo. 501, 502; Smith v. Mason, 44 Neb. 610, 63 N. W. 41; Vliet v. Wyckoff, 42 N. J. Eq. 642, 9 Atl. 679; Jones v. Blanton, 6 Ired. Eq. 115, 51 Am. Dec. 415; McKenna v. George, 2 Rich. Eq. 15; Gross v. Davis, 87 Tenn. 226, 230, 11 S. W. 92, 10 Am. St. Rep. 635; Acers v. Curtis, 68 Tex. 423, 425, 4 S. W. 551; Marsh v. Harrington, 18 Vt. 150; Beckham v. Duncan (Va.), 9 S. E. 1002; Lindblom v. Johnston, 92 Wash. 171, 158 Pac. 972; Faurot v. Gates, 86 Wis. 569, 57 N. W. 294; Boutin v. Etsell, 110 Wis. 276, 85 N. W. 964; In re McDonaghs, Ir. R. 10 Eq. 269; McKelvey v. Davis, 17 Grant Ch. 355. 54 United States Fidelity &c. Co. v. Naylor, 237 Fed. 314, 322, 151 C. C. A. 20; Security Ins. Co. v. St. Paul Ins. Co., 50 Conn. 233; Bosley v. Taylor, 5 Dana, 157, 30 Am. Dec. 677; Wood v. Leland, 1 Met. (Mass.) 387; Stewart v. Goulden, 52 Mich. 143, 17 N. W. 731; Currier v. Baker, 51 N. H. 613; Jones v. Blanton, 6 Ired. Eq. 115, 51 Am. Dec. 415; Mc

the calculation. At law, moreover, in order to make out his case, a plaintiff seeking contribution need not allege or prove the insolvency of the principal debtor; 55 whereas in equity the insolvency of the principal must be alleged and proved or he must be joined as a party defendant, 56 and all solvent cosureties within the jurisdiction must also be made parties.57

The right of contribution may frequently be given by express contract or by a contract implied in fact, but the existence of the right does not depend on such a contract. It, therefore, makes no difference as to the right to claim contribution that each of the sureties was ignorant that the other was also bound for payment of the debt;58 and it is immaterial that sureties are bound by different contracts. If they are liable for the same debt, one of them who pays is entitled to contribution from the others.59

Kenna v. George, 2 Rich. Eq. 15; Liddell v. Wiswell, 59 Vt. 365, 8 Atl. 680; Faurot v. Gates, 86 Wis. 569, 57 N. W. 294.

55 Buckner's Adm. v. Stewart, 34 Ala. 529; Taylor v. Reynolds, 53 Cal. 686; Sloo v. Pool, 15 Ill. 47; Rankin v. Collins, 50 Ind. 158; Goodall v. Wentworth, 20 Me. 322; Mosely v. Fullerton, 59 Mo. App. 143; Smith v. Mason, 44 Nev. 610, 63 N. W. 41; Odlin v. Greenleaf, 3 N. H. 270; Lucas v. Curry's Ex'rs, 2 Bail. 403. But see contra-Bolling v. Doneghy, 1 Duv. 220; Glasscock v. Hamilton, 62 Tex. 143.

56 Lawson v. Wright, 1 Cox Eq. 275; Couch v. Terry's Adm., 12 Ala. 225, 229; Chrisman v. Jones, 34 Ark. 73; Johnson's Adm. v. Vaughn, 65 Ill. 425; Daniel v. Ballard, 2 Dana, 296; Byers v. McClanahan, 6 Gill, & J. 250; Stone v. Buckner, 20 Miss. 73; Allen v. Wood, 3 Ired. Eq. 386; Fischer v. Gaither, 32 Oreg. 161, 51 Pac. 736; Gross v. Davis, 87 Tenn. 226, 230, 11 S. W. 92, 10 Am. St. Rep. 635.

57 Johnson's Adm. v. Vaughn, 65 Ill. 425; Young v. Lyons, 8 Gill, 162;

Adams v. Hayes, 120 N. C. 383, 27
S. E. 47; Bruce v. Bickerton, 18 W.
Va. 342.

58 Muckenthaler v. Noller (Kan.), 180 Pac. 453; Warner v. Morrison, 3 Allen, 566.

59 Deering v. Winchelsea, 2 B. & P. 270; In re Ennis, [1893] 3 Ch. 238; Dugger v. Wright, 51 Ark. 232, 11 S. W. 213, 14 Am. St. Rep. 48; Powell v. Powell, 48 Cal. 234; Monson v. Drakeley, 40 Conn. 552, 16 Am. Rep. 74; Stevens v. Tucker, 87 Ind. 109; Muckenthaler v. Noller (Kan.), 180 Pac. 453; Cobb v. Haynes, 8 B. Mon. 137; Stockmeyer v. Oertling, 35 La. Ann. 467; Craig v. Ankeney, 4 Gill. 225; Brooks v. Whitmore, 142 Mass. 399, 8 N. E. 117; Forbes v. Harrington, 171 Mass. 386, 50 N. E. 641; Young v. Shunk, 30 Minn. 503, 16 N. W. 402; Wood v. Williams, 61 Mo. 63; Aspinwall v. Sacchi, 57 N. Y. 331; Unangst v. Roe, 177 N. Y. S. 706; Yawger v. American Surety Co., 212 N. Y. 292, 106 N. E. 64, L. R. A. 1915 D. 481; Robinson v. Boyd, 60 Oh. St. 57, 53 N. E. 494; Thompson v. Dekum, 32 Oreg. 506, 52 Pac. 517, 755; Commonwealth v. Cox, 36 Pa.

§ 1278. Nature and limits of the right of contribution.

The obligation exists from the time when the contract of suretyship is entered into, though no liability arises upon it until after payment is made. It is therefore immaterial that at the time of payment the co-surety called upon to contribute is no longer liable to the creditor; as, for instance, where one of several joint sureties dies before payment made by another, or where the statute of limitations has run against one but not the other.60

In order to entitle himself to contribution it is not essential that a surety shall have paid the whole debt; his right arises as soon as, but not before, he has paid anything in excess of the share which as between himself and his co-sureties he ought to bear.61 The reason, however, why one surety who has paid more than his share of the suretyship obligation has a right to contribution from his co-sureties is because by such payment he has relieved them of a common burden and hence they ought to reimburse him for their proportionate part of his loss; and, therefore, one who was never liable as surety because of an original infirmity in his obligation to the creditor can be under no obligation to anybody as cosurety, unless by contract with the surety who has paid or by estoppel he has subjected himself to liability.62

442; Enicks v. Powell, 2 Strob. Eq. 196; Odom v. Owens, 2 Baxt. 446; Remage v. Marple, 76 W. Va. 379, 85 S. E. 663.

60 See infra, § 1286.

61 Davies v. Humphreys, 6 M. & W. 153; Ex parte Snowdon, 17 Ch. D. 44; Stirling v. Burdett, [1911] 2 Ch. 418; Preslar v. Stallworth, 37 Ala. 402, 405; Richter v. Henningsan, 110 Cal. 530, 42 Pac. 1077; De Paris v. Wilmington Trust Co., (Del. 1918), 104 Atl. 691, 1 A. L. R. 1352; Robinson v. Jennings, 7 Bush 630; Hooper v. Hooper, 81 Md. 155, 174, 31 Atl. 508, 48 Am. St. Rep. 496; Pass v. Granada County, 71 Miss. 426, 14 So. 447; Singleton v. Townsend, 45 Mo. 379; Singleton v. Shepherd, (Mo. App. 1916), 183 S. W. 1077;

Leak v. Covington, 99 N. C. 559, 6 S. E. 241; Durbin v. Kuney, 19 Oreg. 71, 23 Pac. 661; Mateer v. Cockrill, 18 Tex. Civ. App. 391, 45 S. W. 751; Zachry v. Peterson (Tex. Civ. App.), 171 S. W. 494; Bushnell v. Bushnell, 77 Wis. 435, 46 N. W. 442, 9 L. R. A. 411.

62 Connor V. Craig, 226 Mass. 255, 115 N. E. 309, citing Ledoux v. Durrive, 10 La. Ann. 7, 9; Hood v. Morgan, 47 W. Va. 817, 822, 35 S. E. 911; Ruff v. Montgomery, 83 Miss. 185, 36 So. 67; Craven v. Freeman, 82 N. C. 361. In the Massachusetts case, the creditor had sued the sureties in one action and judgment had gone against one surety but in favor of the other on the ground that his signature had been

§ 1279. Contribution where sureties are liable for different amounts.

Not infrequently sureties by their contracts limit the amount of their liability to a fixed sum, and co-sureties sometimes thus fix different limits for themselves or sign bonds with different penalties. In such a case where one surety pays more than his proportion of the debt, the contribution between the sureties must be in proportion to their several contractual liabilities, that is if one surety contracts to be answerable for the common debt to the extent of $10,000 and another to the extent of $5,000, the contribution must be so adjusted that the former pays two-thirds of the debt and the latter one-third.63

procured by the principal's fraud. The court held that the former having paid the judgment could not recover from the latter, and added:

"If the rule be stated in the form that the utmost extent of the claim of a surety who has made payment is subrogation to the rights of the creditor, so that he will rank against the co-surety as would the main creditor, as was said in Russell v. Failor, 1 Ohio St. 327, 330, 59 Am. Dec. 631, the same conclusion is reached. Another phase of this principle is shown by the cases which hold that a surety, who has had no notice of an action against a co-surety, may show in an action by such co-surety against him any legal defence which he might have shown in an action against himself on the bond. Briggs v. Boyd, 37 Vt. 534, 539; Lowndes v. Pinckney, 1 Rich. Ch. 155, 178, 179; Deering v. Winchelsea, 2 B. & P. 270. Although the universal accuracy of these last two statements may be doubted (Warner v. Morrison, 3 Allen, 566, 568), they are sound as applicable to the facts here disclosed.

"This conclusion does not depend upon the doctrine of res judicata,

but flows from fundamental
ceptions of the law of suretyship.

66

con

The sentence in Clapp v. Rice, 15 Gray, 557, at page 559, 77 Am. Dec. 387, that the 'discharge of one' cosurety 'from his principal obligation, if the others are not discharged, will not release him from the liability to contribute to their indemnity,' was used in a quite different connection relating to the short statute of limitations in favor of the estate of a deceased co-surety as to whose original liability there was no question. This statement cannot be wrested from its connection, and distended to other facts for which it was not intended. Swan v. Justices of the Superior Court, 222 Mass. 542, 455, 111 N. E. 386." See further, infra, § 1286.

63 United States Fidelity, etc., Co. v. Naylor, 237 Fed. 314, 322, 151 C. C. A. 20, citing Armitage v. Pulver, 37 N. Y. 494; Jones v. Blanton, 41 N. C. 115 (6 Ired. Eq.), 51 Am. Dec. 415; Loring v. Bacon, 57 Mass. (3 Cush.) 465, 468; Deering v. Winchelsea, 2 Bos. & Pul. 270; Bosley v. Taylor, 5 Dana, 157, 30 Am. Dec. 677; Moore v. Boudinot, 64 N. C. 190. See also Young .

« PreviousContinue »