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the surety is in no way bound to signify his intention to avail himself of the right; the circumstances of the surety's position create the right; he can lose it only by waiving his right to it, or delaying unduly his claim to the same; that is, by being guilty of laches. A surety ought to use due diligence in asserting his claim to subrogation. The right of subrogation does not arise to one who pays the debt of another as a mere volunteer, that is, one who pays without being liable to pay."1 A surety ordinarily is not entitled to subrogation until the whole debt is paid, but the payment may be in part by the principal, and in part by the surety. The learned jurist, Marshall, has remarked in passing on the right of a surety to be subrogated to the creditor's rights against his co-surety, holding that he had such right; he spoke as follows: "Where a person has paid money for which others are responsible, the equitable claim which such payment gives him on those who were so responsible, shall be clothed with the legal garb with which the contract he has discharged was invested, and he shall be substituted to every equitable intent and purpose in the place of the creditor whose claim he has discharged. This principle of substitution is completely established in the books, and being established, it must apply to all persons who are parties to the security, so far as is equitable. The cases suppose the surety to stand in the place of the creditor as completely as if the instrument had been transferred to him, or to a trustee for his use. Under this supposition, he would be at full liberty to proceed against every person bound by the instrument. Equity would undoubtedly restrain him from obtaining more from any individual than the just proportion of that indiSuppinger vs. Garrels, 20 Ill. App., 625.

vidual; but to that extent his claim upon his cosurety is precisely as valid as upon his principal." "

SECTION 41. SURETY SUBROGATED TO LIEN OF JUDGMENT AGAINST PRINCIPAL.

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Prior to the passage of the Mercantile Law amendment, the holding in England was that the payment of a judgment, even by a surety, extinguished the judgment. But by this act the right was given to the surety, who paid the debt of his principal, to have assigned to him, or to a trustee for him, every judgment specialty, or other security which shall be held by the creditor in respect of such debt, or duty, and such person shall be permitted to stand in the place of such creditor, and to have all his remedies, and if need be, to use the name of the creditor in any proceeding at law or in equity to recover his indemnity against the principal debtor. In the United States the generally accepted principle in this regard is, that where a surety pays the judgment, whether it is a joint judgment against both surety and principal, or whether it is a judgment against the principal alone, he is entitled to be subrogated to all the rights and lien of the creditor on account of the judgment. And it is held that if the creditor's judgment is against several co-sureties the surety who pays such judgment will be subrogated to the creditor's rights on such judgment as against his co-sureties.65

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SECTION 42. CONVENTIONAL SUBROGATION.

Equitable subrogation is to be distinguished from conventional subrogation which arises when the surety

"Lidderdale vs. Robinson, 2 Brock.,

159.

Statutes 19 and 20 Vic. C., 97 S.. 5

Lumpkin vs. Mills, 4 Ga., 343; Hill vs. King, 48 Ohio State, 75. 65 Smith vs. Rumsey, 33 Mich., 183.

is substituted in the place of the creditor, by agreement. This latter kind of subrogation may give the surety greater rights than he could claim without the agreement, as it may afford to the surety a chance, in a way, to speculate on the transaction, as for instance he may pay the debt before it matures, the creditor agreeing in consideration of early payment to take less than the whole, and to transfer the debt to the surety, and in such case on maturity of the obligation the surety may collect the entire amount.

SECTION 43. EQUITABLE CONTRIBUTION.

Among the remedies allowed to the surety, that of equitable contribution must not be overlooked. A leading case on this principle is that of Wolmerhausen vs. Gullick," reported as late as 1893. In that case it is said there is on this question a remarkable absence of express authority. In that case, one of the sureties was called upon to pay the debt, and before payment she sought by bill in equity to invoke the doctrine of equitable contribution, that is to compel payment by the co-sureties, of their proportionate share of the debt, before she had paid the debt herself. The defense was that the plaintiff was not entitled to contribution, having paid nothing on account of the debt herself. The plaintiff insisted, she was willing to pay her proportion, but insisted actual payment of it was not necessary as a condition precedent to her right to contribution, on the showing that present payment of the whole debt by her would geatly embarrass her in her business investments, namely, by a withdrawal of the money necessary to pay the debt, even though the money was to be used for a short time only. 66 L. R., 2 Ch., 314.

"Obviously if a man were surety," the court says, "with nine others for ten thousand pounds, it might be a ruinous hardship if he were compelled to raise the whole 10,000 pounds at once and perhaps to pay interest on the 9,000 pounds by actions or debtor summons against his co-sureties." After a review of the authorities, showing that contribution is founded purely in equity and not in contract, the court said in substance that had the creditor been made a party to the suit, that the plaintiff would then have had a right to have had the court decree that the solvent co-surety pay his proportion to the principal creditor. The court then proceeded to declare the plaintiff's rights and made a prospective order under which the plaintiff would have the right to hold the co-surety for any sum paid over her proportionate share, and further that on the plaintiff paying her own share, that the defendant is to indemnify her against further payment or liability, and that the defendant is by payment to her, or to the creditor, to thereby exonerate the plaintiff from liability beyond the extent of her own share.

It would seem then that the right of the so-called equitable contribution is firmly established, unless the courts are to take a backward step,

"C!. IX-12.