§ 1280. Compensated sureties are entitled to contribution. Where some of the co-sureties for a common debt have been compensated, but not indemnified, for their suretyship, and others signed gratuitously for the accommodation of their principals, that fact is immaterial, and the compensated co-sureties who have paid more than their proportion of the common liability, are entitled to contribution from the accommodation co-sureties.64

§ 1281. A surety must share with his co-sureties the benefit of security.

The principle of equity requiring co-sureties to bear equally the burden of any loss caused by default of the principal debtor involves the consequence that the benefit of securities held by one surety enures equally to the benefit of all. 65 The mere fact, however, that a surety who has been

compelled to pay, holds security for his indemnity will not bar recovery in an action for contribution, except to the extent that payment has been realized from the security." After the recovery of contribution the contributing surety may seek the benefit of the security, and any sums realized by the party who obtained contribution must be accounted for. The obligation to share security does not continue after the sureties have finally contributed the amounts equitably due from each one and if, thereafter, one of them receives property for his indemnity, he need not share the benefit of it. From the duty of a surety who has received security to share the benefit with his co-sureties, it follows that he is under the duties of a fiduciary with reference to his conduct in connection with the security. If he wastes it either wilfully or negligently, he is chargeable with the loss in accounting with his co-sureties.68

67

Where a surety has security to protect him against loss on two claims, he is not obliged to share the benefit of the security, or a ratable portion of it, with a co-surety on one of the claims.69 It has also been held that a debt due from one surety to the principal is not within the rule requiring the sharing of benefits by co-sureties, and that the indebted

898. But the principle is inapplicable where several sureties bind themselves respectively each for a distinct fraction of a total liability. Assets Realization Co. v. American Bonding Co., 88 Ohio St. 216, 102 N. E. 719, Ann. Cas. 1915 A. 1194.

66 Done v. Walley, 2 Exch. 198; Anthony v. Percifull, 8 Ark. 494; Williams v. Riehl, 127 Cal. 365, 59 Pac. 762, 78 Am. St. Rep. 60; Johnson's Adm. v. Vaughn, 65 Ill. 425; Bachelder v. Fiske, 17 Mass. 464; Mosely v. Fullerton, 59 Mo. App. 143; Paulin v. Kaighn, 29 N. J. L. 480; Vliet v. Wyckoff, 42 N. J. Eq. 642, 9 Atl. 679. But see contra Morrison v. Taylor, 21 Ala. 779; Morrison v. Poyntz, 7 Dana, 307, 32 Am. Dec. 92.

67 Harrison v. Phillips, 46 Mo. 520; Hall v. Cushman, 16 N. H. 462, 43

Am. Dec. 562; Urbahn v. Martin, 19 Tex. Civ. App. 93, 97, 46 S. W. 291.

68 Taylor v. Morrison, 26 Ala. 728, 62 Am. Dec. 747; Simmons v. Camp, 71 Ga. 54; Frink v. Peabody, 26 Ill. App. 390; White v. Carlton, 52 Ind. 371; Sanders v. Weelburg, 107 Ind. 266, 7 N. E. 573; Teeter v. Pierce, 11 B. Mon. 399; Schmidt v. Coulter, 6 Minn. 492; Chilton v. Chapman, 13 Mo. 470; Crisfield v. Murdock, 127 N. Y. 315, 27 N. E. 1046; Kerns v. Chambers, 3 Ired. Eq. 576; Neely v. Bee, 32 W. Va. 519, 9 S. E. 898.

69 Titcomb v. McAllister, 81 Me. 399, 17 Atl. 315. See also supra, § 1272. But in Moore v. Moberly, 7 B. Mon. 299, it was held that the security must be ratably apportioned to the several debts.

surety if he makes payment may recover his full share from co-sureties without regard to such advantages as the paying surety may derive from his ability to set off against the principal debtor the amount which the latter owes him; 70 though in case of the principal's insolvency, it has been said that a court of equity having all the parties before it might give relief." And where the debt due from the paying surety to the principal exceeded in amount the debt which the surety paid he has been denied contribution altogether.72 It seems no more than just that the surety from whom contribution is sought should be allowed to defeat or reduce the right of contribution by means of any indebtedness great or small of the paying surety to the principal, which could be set off in litigation between them; but it may be desirable that the surety sued for contribution should be required to assert his defence by a bill in equity in which the principal is made a party.

§ 1282. Co-sureties and successive sureties.

The rights of two parties who are sureties on the same obligation depend on whether they are both sureties for the principal or whether one is surety for the principal and the other surety for the prior surety. What their relation to one another is, depends upon the proper inferences to be drawn from their contracts and the circumstances of the case. It is not doubted that it is always possible for sureties to agree with one another on entering into the obligation, or for sufficient consideration subsequently, that as between themselves one shall be primarily liable."

73

Whether an agreement by a new obligor with the creditor or principal debtor when signing that he did so not as cosurety for the principal with a surety who had already signed, but as surety for the surety, is effectual has been doubted.

70 Davis v. Toulmin, 77 N. Y. 280; Smith v. Dickinson, 100 Wis. 574, 76 N. Y. 766.

71 Davis v. Toulmin, 77 N. Y. 280; Smith v. Dickinson, 100 Wis. 574, 76 N. W. 766.

72 Bezzell v. White, 13 Ala. 422;

Neely v. Bee, 32 W. Va. 519, 9 S. E. 898.

73 Reed v. Rogers (Ark.), 204 S. W. 973; Hayden v. Thrasher, 18 Fla. 795; Hoyt v. Griggs, 164 Iowa, 672, 146 N. W. 745; Blake v. Cole, 22 Pick. 97.

It has been held that the prior surety, by requesting the later surety to bind himself or in some other way, must have consented to the arrangement.734 But there seems no sound reason to question the right of a later obligor, who is under no duty to enter into any obligation, to dictate the terms upon which he will bind himself, to agree to become surety for one already bound as surety, rather than a co-surety with him. This does not enlarge the liabilities or vary the obligations of prior signers. Accordingly other decisions, including the more recent ones, allow the creation of such a relation without the knowledge or assent of the prior surety, 736 and proof of the relation may be made by parol.73€

Instances of successive suretyship are common in negotiable instruments,74 and are also to be found where in the course of legal proceedings to enforce a debt for which both a principal and a surety are bound, a bond with sureties is entered into at the request of the principal. In such a case if the original surety is forced to pay the debt, he is subrogated to the creditor's rights upon the bond, and may enforce it against the surety thereon.75 And conversely if the surety on the bond pays the debt, he has no right to contribution from the surety on the original debt.76 These rules are only

73a Whitehouse v. Hanson, 42 N. H. 9; Warner v. Price, 3 Wend. 397; Norton v. Coons, 3 Denio, 130; Lathrop v. Wilson, 30 Vt. 604. (Cf. Adams v. Flanagan, 36 Vt. 400.) See also Simmons v. Camp, 64 Ga. 726; Fernald v. Dawley, 26 Me. 470; Crouse v. Wagner, 41 Ohio St. 470.

14

736 Craythorne v. Swinburne, Ves. 160; Bulkeley v. House, 62 Conn. 459, 26 Atl. 352, 21 L. R. A. 247; Baldwin v. Fleming, 90 Ind. 177; Houck v. Graham, 123 Ind. 277, 24 N. E. 113; Chepeze v. Young, 87 Ky. 476, 9 S. W. 399; Schram v. Werner, 83 Hun, 293; Oldham v. Broom, 28 Ohio St. 41; Harrison v. Lane, 5 Leigh, 414, 27 Am. Dec. 607; Singer Mfg. Co. v. Bennett, 28 W. Va. 16; Huffman v. Manley (W. Va.), 98 S. E. 613.

73C See cases in the preceding note.

74 See supra, §§ 644, 1163.

75 Opp v. Ward, 125 Ind. 241, 24 N. E. 94, 21 Am. St. Rep. 220; Kellar v. Williams, 10 Bush, 216; Culliford v. Walser, 158 N. Y. 65, 705, 52 N. E. 648, 53 N. E. 1124, 70 Am. St. Rep. 437; Schnitzel's Appeal, 49 Pa. 23, 78 Am. Dec. 477; Winchester v. Beardin, 10 Humph. 247, 51 Am. Dec. 702; Hanner v. Douglass, 4 Jones Eq. 262; Denier v. Myers, 20 Oh. St. 336; Hanby's Adm'r v. Henritze's Adm'r, 85 Va. 177, 7 S. E. 204. In Maine and Massachusetts, however, the principles of subrogation are not applied as between sureties on successive obligations in judicial proceedings. Morse v. Williams, 22 Me. 17; Holmes v. Day, 108 Mass. 563.

76 Fidelity & Deposit Co. v. Bowen, 123 Ia. 356, 98 N. W. 897, 6 L. R. A.

applicable, however, where the second surety became such at the request of the principal only. If the second obligation was entered into at the express or implied request of the original surety as well as of the principal, the second surety on paying the debt is entitled to be subrogated to the creditor's right against the original surety."

§ 1283. A surety who pays unnecessarily is not entitled to indemnity or contribution.

If a surety is under no obligation to pay a debt, he is a mere volunteer if he makes payment, and though by giving the transaction the form of a purchase and taking an assignment from the creditor he may become owner of the claim and enforce it against the debtor, there is no obligation implied of contribution or indemnity.78 The application of this principle to cases where the surety is under an imperfect obligation though one not enforceable against him is troublesome. It has been held that one who has made an oral guaranty may fulfill his promise though unenforceable, and recover from the principal the amount paid." Similarly a surety in favor of whom the Statute of Limitations has run has been allowed to recover from the principal against whom the claim was not barred; 80 and where a claim against the principal or co-surety was still valid, a surety discharged by alteration of the contract,81 by an extension of time given by the creditor to the principal,82 a failure to make proper protest,83 or failure to

(N. S.) 1021; Daniel v. Joyner, 3 Ired. Eq. 513; Dent v. Wait's Adm'r, 9 W. Va. 41; Hammock v. Baker, 3 Bush, 208.

"Dessar v. King, 110 Ind. 69, 10 N. E. 621; Dillon v. Scofield, 11 Neb. 419, 9 N. W. 554; Hartwell v. Smith, 15 Oh. St. 200; Yeager's Appeal (Pa.), 8 Atl. 225; Coffman v. Hopkins, 75 Va. 645. In Louisiana the assumption seems always made in favor of the second surety that his obligation was entered into on the faith of the prior obligation of the first surety. Howe v. Frazer, 2 Rob. (La.) 424. See also Smith v. Anderson, 18 Md. 520.

78 Sleigh v. Sleigh, 5 Ex. 514; Halsey v. Murray, 112 Ala. 185, 20 So. 575; Curtis v. Parks, 55 Cal. 106; Hollinsbee v. Ritchey, 49 Ind. 261, 263; Briggs v. Hinton, 14 Lea, 233; Aldrich v. Aldrich, 56 Vt. 324, 327, 48 Am. Rep. 791.

79 Beal v. Brown, 13 Allen, 114. 80 McClatchie v. Durham, 44 Mich. 435, 7 N. W. 76.

81 Houck v. Graham, 106 Ind. 195, 6 N. E. 594.

82 Brown v. Marmaduke, 248 Pa. 247, 93 Atl. 1023.

83 Tredway v. Antisdel, 86 Mich. 82, 48 N. W. 956.