contract implied in law among the co-sureties. This implied contract can be defeated only by such facts as will rebut it.6 An early American opinion thus traced the origin of contribution: "It was in courts of equity exclusively according to the ancient practice, that one surety who had been made to pay the whole of the debt, had a right to claim contribution from his co-sureties; because, in such case, there is no express contract for contribution. His right to demand it stands upon the broad principles of natural justice, and not upon any express contract. The doctrine is now well settled, that redress may be obtained at law; but the court of chancery has not been ousted of its jurisdiction."7 5"Courts of equity, therefore, naturally took jurisdiction of cases of contribution, where one surety had paid more than his just proportion. But the equitable doctrine, in progress of time, became so well established, that parties were presumed to enter into contracts of suretyship upon its knowledge; and consequently, upon a mutual understanding that, if the principal failed, each would be bound to share with the others a proportionate loss. Courts of common law thereupon assumed jurisdiction to enforce contribution between the sureties, proceeding on the principle that from their joint undertaking there was an implied promise on the part of each surety to contribute his share, if necessary, to make up the common loss. . . . This jurisdiction of the common-law courts did not, however, impair the concurrent jurisdiction of equity. Indeed, in many cases, especially where the sureties were numerous, and some of them were insolvent, or where some of the sureties had died, courts of equity were alone adequate to afford complete remedy." Chipman v. Morrill and Webster (1862) 20 Cal. 130, 135. See Couch v. Terry's Adm'rs (1847) 12 Ala. 225. Probably the first opinion recognizing the right of contribution at law, was the obiter of Lord Kenyon in Turner v. Davies (1796) 2 Esp. 479: "I have no doubt that where two parties became joint sureties for a third person, if one is called upon and forced to pay the whole of the money, he has a right to call on his co-security for the contribution." Though contribution certainly was recognized in the days of Elizabeth (1558-1603), "there seems to be no reported instance of contribution between sureties before the 17th century.' Wolmerhausen v. Gullick (1893) 2 Ch. 514. See note in Ames' Cases on Suretyship, p. 537. 6 Bagott et al. v. Mullen (1869) 32 Ind. 332, 2 Am. Rep. 351. 7 Mitchell's and Davis' Adm'r v. Sproul (1831) 5 J. J. Marsh (28 Ky.) 264, 270. See Williston on Contracts (1920) Vol. 2, Sec. 1277; Estate of Koch (1912) 148 Wis. 548, 134 N. W. 663. "The common law has adopted, and given effect to this equitable principle on which a surety is en In many cases, law cannot give an adequate remedy, and equity only can give full relief. This is true if the sureties are numerous, and to recover contribution would require the paying sureties to institute a multitude of suits at law. Under such circumstances, a court of equity would be justified in acting. § 167. Contribution at law. Before 1800, we find courts approving assumpsit as the proper form of action for a surety who has paid more than his share of the principal's debt." Assumpsit was early said to be "founded in the common principles of justice" which require "that where the law gives a right it also gives a remedy." 10 These considerations recognize an implied promise on the part of a surety to reimburse another surety who has paid more of the principal's debt than his share. The promise is implied from the original transaction of the parties,11 and even though a surety intended not to contribute, titled to contribution from his cosurety. This equitable obligation to contribute having been established, the law raises an implied assumpsit on the part of the co-surety, to pay his share of the loss resulting from a concurrent liability to pay a common debt. This jurisdiction, by an action at law, is, therefore resorted to, when the case is not complicated; and the more extensive and efficient aid of a court of equity is thus rendered unnecessary. It follows that this action can only be sustained where there exists a just and equitable ground for contribution.'' Russell v. Failor (1853) 1 Oh. St. 327, 329, 59 Am. Dec. 631. 8 Dysart et al. v. Crow et al. (1902) 170 Mo. 275, 70 S. W. 689; Black et al. v. Shreeve et al. (1848) 7 N. J. Eq. 440, 457. 9 Refer to the opening sentence of Lord Kenyon in his brief opinion in Turner v. Davies (1796) 2 Esp. 479; Cowell, Adm'r v. Edwards (1800) 2 Bosanquet and Puller 268, 126 Eng. Rep. Reprint 1275. 10 Kenyon, C. J., and Le Blanc, J., in Birkley et al. v. Presgrave (1801) 1 East 220, 102 English Reports Reprint 86. 11"Indeed, it is difficult to conceive of a right in one party founded on the fixed principles of justice,' and recognized by the law of the land, which does not involve a corresponding obligation on the other party; and a legal obligation is a sufficient ground of an implied promise. We are, therefore, satisfied, both on principle and authority, that assumpsit will lie on an implied promise by one surety, to contribute towards indemnifying another." Bachelder v. Fiske et al., Executors (1821) 17 Mass. 463, 467. In Dillenbeck v. Dygert (1884) 97 N. Y. 303, 49 Am. Rep. 525, 527, in speaking of contribution, it was said: "It rests rather upon the equity of equality than upon contract, though at law, to save the right, a promise to contribute will be implied." Accord: Goodall v. Wentworth (1841) 20 Me. 322; Old it will be no defense unless he made known his intention to his co-sureties at the time he became bound for his principal's default.18 After the principal's debt is extinguished, a new condition arises between the joint promisors who have paid and those who have not. This could not be adjusted by the contract, but only by the application of principles of equity.18 And the implied promise of each to contribute is individual, so that at law each must be sued separately for contribution,14 although if two or more persons jointly pay the obligee, they may sue jointly as plaintiffs to recover from a surety who has not paid.15 However, the presumption, to overcome which proof is required, is that each paid his own share, and that the payment was not joint.16 "After the debt is thus paid, each surety becomes an independent creditor, and stands in the same relation to the principal and to his co-securities as any other independent creditor would stand in to a common debtor and other creditors, if their equities were equal." 17 ham v. Broom (1875) 28 Oh. St. 41; Van Winkle v. Johnson (1884) 11 Oregon 469, 50 Am. Rep. 495; Caldwell v. Hurley (1906) 41 Wash. 296, 83 Pac. 318. 12 Young v. Shunk et al. (1883) 30 Minn. 503, 16 N. W. 402. 18 Dysart et al. v. Crow et al. (1902) 170 Mo. 275, 70 S. W. 689, 691. For instance, where one surety died before his co-surety paid the creditor, the estate of the deceased surety is liable for contribution. The fiction of the implied promise is made necessary in such a case for justice to prevail. "Originating in equity, it has been grafted upon the law with the aid of an implied promise to secure the legal remedy." Johnson v. Harvey (1881) 84 N. Y. 363, 38 Am. Rep. 515. 14 Sloo, Adm'r v. Pool (1853) 15 Ill. 47, 48; Powell v. Matthis et al. (1843) 4 Ired. (N. C.) 83, 40 Am. Dec. 427. See Smith et al. v. Rumsey et al. (1876) 33 Mich. 183, 194. In Moore v. Isley (1839) 22 N. C. 372, 378, this was said: "So, when one of several sureties neglects to pay his part of the debt of an insolvent principal, and the whole is paid by the other sureties, then as to the sums respectively paid by them to make up his deficiency, he stands to each of them as a principal, and each in like manner has a several claim to prosecute against him to this extent." 15 Dussol et al. V. Brugiere (1875) 50 Cal. 456; Gottschalk et al. v. Gottschalk (1921) 222 Ill. App. 56, 60; Fletcher et al. v. Jackson et al. (1861) 23 Vt. 581, 593, 56 Am. Dec. 98. 16 Lombard et al. v. Cobb (1837) 14 Me. 222. 17 Harrison v. Phillips (1870) 46 Mo. 520, 525. § 168. Rights prior to payment. At law, a surety has no rights enforceable against the co-sureties, prior to the time he pays the principal's obligation in part. His rights in equity are discussed in the chapter on Exoneration.18 Even if the principal has indemnified the defendant's co-surety, he cannot resist execution against himself after judgment by the creditor. He should first pay the debt, then compel his co-surety to make an accounting.19 § 169. Who are co-sureties? Of course, those who sign an instrument for the same obligation of a principal are presumed to be co-sureties, whether they have bound themselves jointly or severally.20 Likewise, those signing separate instruments agreeing to pay portions of the same debt of the principal may be compelled to contribute to one who has paid more than his share. It is sufficient that they are co-guarantors; it is not required that they be joint guarantors.22 So that those who are bound for distinct portions of the same debt as principals are not considered as co-guarantors.23 Where a probate court is empowered to increase a guardian's bond, and requires a second bond to be given with a different surety than in the first one, both being to protect the ward against default of the guardian, the sureties, though on separate instruments and for different amounts, are co-sureties, and "as between themselves, compellable to contribute in proportion to the penalties of their respective bonds." 24 But a surety on an 18 See Chapter VI. Also Ladd v. Chamber of Commerce (1900) 37 Oregon 49, 60 Pac. 713, 61 Pac. 1127, 62 Pac. 208. 19 Williams v. Riehl et al. (1899) 127 Cal. 365, 59 Pac. 762, 78 A. S. R. 60; Manning v. Weyman (1896) 99 Ga. 57, 26 S. E. 58. 20 Baldwin v. Fleming (1883) 90 Ind. 177, 180. 21 Deering v. Earl of Winchelsea (1787) 2 Bosanquet and Puller 270, 126 Eng. Rep. Reprint 1276. 22 Golsen v. Brand (1874) 75 Ill. 148, 150. 28The principle of equity, on which the right of contribution is founded, applies only where the parties are under a common burden of liability. Where the parties are severally bound for a specific portion of a debt, as principals, and one pays more than he is bound for, he is entitled to no contribution from the other for such excess. "" Weinberg Co. V. Heller (1925) California Court of Appeals, 239 Pac. 358, 363. 24 Loring, Judge v. Bacon, Adm'r (1849) 3 Cush. (Mass.) 465, 468. Accord: Stevens et al. v. Tucker et al. (1882) 87 Ind. 109, 121. administrator's general bond is not a co-surety with one who subsequently signed a separate bond with the administrator as principal, on condition that the principal would account for all moneys coming into his hands from the sale of certain realty, which the court directed to be sold. The first surety obligated himself for the performance of every duty imposed by law upon the administrator, while the second was bound for the accounting of moneys arising out of the sale of the land, in the event the first bond was insufficient.25 But it was held that the sureties on the official bond of a sheriff, who was also tax collector, are liable for contribution to the sureties on his bond as collector, in spite of the fact that the first bond covered all his official acts, and the latter was limited to defaults incident to his duties as collector of taxes.26 A surety for a surety is not entitled to contribution; and one who signs an instrument as surety for all prior parties who appear on the face as principals, is not compellable to contribute to such prior parties because they are treated as principals just as they appear on the instrument.27 One surety is not liable for contribution to another who is in fact a co-surety, but who led the former to believe he was a principal.28 Nor is one a cosurety who gives a bond of indemnity to save harmless a surety for loss he may incur for his principal on an undertaking for the latter.29 25 Salyers v. Ross et al. (1860) 15 Ind. 130. 26 Burnett et al. v. Millsaps et al. (1881) 59 Miss. 333. 27 Bulkeley v. House (1893) 62 Conn. 459, 26 Atl. 352, 21 L. R. A. 247; Chapeze v. Young (1888) 87 Ky. 476, 9 S. W. 399. See also Craythorne v. Swinburne (1870) 14 Ves. Jr., 160, 33 Eng. Rep. Reprint 482, where parol evidence was admitted to show whether the defendant was a co-surety with plaintiff for the principal debtor, or whether he was surety for both the principal and the plaintiff. In the first case he must contribute; in the latter event, he cannot be required to do so. Keith v. Goodwin (1885) 31 Vt. 268, 73 Am. Dec. 345. See Harrison v. Lane (1834) 5 Leigh (Va.) 414, 27 Am. Dec. 607. 28 Wells v. Miller (1876) 66 N. Y. 255. See Keith v. Goodwin (1858) 31 Vt. 268, 73 Am. Dec. 345; Sherman v. Black (1876) 49 Vt. 198. 29 Gibson et al. v. Sheehan et al. (1895) 5 D. C. App. 391, 28 L. R. A. 400. See Thomas v. Cook (1828) 8 Barnewall & Cresswell 728, 108 Eng. Rep. Reprint 1213. |