It has been said that:

"If two persons sign the same obligation as sureties for a third, one of them, at the request of the principal, and the other at the request of the first surety, they are not cosureties as between themselves, but the first surety stands in the relation of principal to the second; is responsible to him for whatever he may be compelled to pay, and has in no event any claim against him for contribution." 80

That one is ignorant of the existence of other sureties for the same debt does not prevent them from being co-sureties. As one opinion stated the principle of law, which is generally recognized:

"Persons are co-sureties, so as to give the right of contribution, when they are bound for the performance by the same principal of the same duty; and whether they became so at the same time or at different times, by one or by several instruments and even that they are bound in different amounts, or that each is ignorant that the others are sureties, does not affect the relation nor the right.” 31

Separate and distinct obligations assumed by different parties, for equal portions of a debt due from the same principal, do not constitute them co-obligors, and the right of contribution does not exist. Where a judgment against a principal and a surety is recovered by the obligee, and the principal only appeals, the appeal bond being signed by a different surety than

30 Cutter, Executor V. Emery, Adm'r (1859) 37 N. H. 567, 575. See Pickering v. Marsh (1834) 7 N. H. 192; Apgar's Adm'rs v. Hiler (1854) 24 N. J. L. 812.

31 Young v. Shunk et al. (1883) 30 Minn. 503, 16 N. W. 402. Lord Russell, C. J., said in his opinion in Ellesmere Brewery Co. v. Cooper et al. (1896) 1 Q. B. 75, 79: 66

sureties for the same principal and for the same engagement, even although bound by different instruments and for different amounts,

have a common interest and a common burthen; so that if one surety who is directly liable to the creditor pays such creditor, he can claim contribution from his co-sureties whose obligation to the creditor he has discharged. "" Accord: Deering v. Earl of Winchelsea (1787) 2 Bosanquet and Puller 270, 126 Eng. Rep. Reprint 1276; Steel v. Dixon (1881) 17 Ch. D. 825; Golsen V. Brand (1874) 75 Ill. 148; Durbin v. Kuney et al. (1890) 19 Oregon 71, 23 Pac. 661.

the one on the original obligation, the two are not co-sureties. On affirmance of judgment by the appellate court, the surety on appeal cannot maintain an action for contribution against the original surety.32 In the particular case it must be determined whether the sureties have entered into separate undertakings, or whether the same transaction is split into different parts.33

§ 170. Contribution among compensated sureties. A difference is recognized between a gratuitous and a compensated surety when the controversy arises between the obligee and such sureties.34 But when the obligee is not concerned, and the question arises among the sureties, no different rule is applied whether they are gratuitous or compensated. But it must be emphasized that we are now speaking of compensated and not indemnified sureties. In spite of the fact that contribution rests upon principles of equity, which might seem, at first blush, to frown upon a rule requiring a gratuitous surety to contribute to his compensated co-surety, it is held that they must all bear the loss equally. Speaking for the Circuit Court of Appeals, Eighth Circuit, Judge Sanborn said:

where some of the co-sureties for a common debt have been compensated, but not indemnified, for their suretyship, and others became co-sureties 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. . . . If the rule were otherwise it would necessarily follow that an accommodation co-surety who had paid more than his proportion could not have contribution from a compensated cosurety, for the inequality suggested inheres in the contracts and exists in one situation as well as in the other." 85

32 Chaffin, Executor v. Campbell (1856) 4 Sneed (Tenn.) 184. See Sec. 174, infra.

38 Coope v. Twynam (1823) Turner and Russel, 426, 37 Eng. Rep. Reprint 1164. See Williston on Contracts (1920) Vol. 2, Sec. 1282. 34 See The Compensated Surety" (1926) 26 Columbia Law Be

view 171. See Chapter XII, infra.

35 United States Fidelity & Guaranty Co. v. Naylor et al. (1916) 237 Fed. 314, 321, 151 C. C. A. 20. See Fidelity and Deposit Co. of Md. v. Phillips (1912) 235 Pa. 469, 84 Atl. 432.

As to subrogation of compensated sureties, see Sec. 139, supra.

§ 171. Contribution where the parties are not co-guarantors. The doctrine of contribution is applicable between all persons jointly liable in contract for a common obligation. Equality of burden as well as of the benefits is the basis for its recognition.36 This right to insist upon equality of burden exists between principal debtors in the same manner as between sureties.87 Where several persons agreed "in equal parts, to aid, comfort, and take care of" one who had bequeathed to them her property in equal shares, and the major portion of the services in caring for the testatrix had been rendered by one, equity will compel the equalization of the burden.38

But liability to contribute may arise without any contract between the parties. It has been held to apply where several persons have an interest in common, not founded upon an agreement, as where one rebuilds a party wall which was beneficial to the adjoining owner.39 Where the common agent of several principals pledged property or securities to secure his own debt in breach of his trust, and the property of one principal was used to pay the agent's debt, the other principals must contribute in proportion to the several interests pledged. Loss to one

36 Fletcher, Adm'r V. Grover (1840) 11 N. H. 368, 35 Am. Dec. 497.

37 Wright et al. v. Rumph (1916) 238 Fed. 138, 151 C. C. A. 214; Van Petten v. Richardson (1878) 68 Mo. 379, 382; Kimball v. Williams et al. (1900) 51 App. Div. 616, 65 N. Y. S. 69.

38 Odiome v. Moulton et al. (1887) 64 N. H. 211, 9 Atl. 625; Davis v. Cheuvront (1918) 82 W. Va. 182, 95 S. E. 651.

The right of contribution existed where the devisees did not agree to support a third person, but who accepted lands devised under a will which made it the duty of the devisees to support a third person. In such case, if one of them was compelled to bear the whole burden in consequence of the inability or

refusal of the other to bear his share of it, the former became entitled to contribution from the latter." Shillito v. Shillito (1894) 160 Pa. St. 167, 28 Atl. 637.

A fortiori, contribution should be recovered where several parties contracted to support a third, and the support has been given by one of them. Jacobsmeyer et al. v. Jacobsmeyer (1901) 88 Mo. App. 102.

39 Chancellor Kent in Campbell v. Mesier (1820) 4 Johns. Ch. 335, 8 Am. Dec. 570.

But not where adjoining owners are not tenants in common of the party wall. Bloch v. Isham (1867) 28 Ind. 37, and the notes following the report of the case in 92 Am. Dec. 289-306. See article on "The Law of Contribution" (1869) 8 Am. Law Register (N. S.) 449, 461.

10

having been caused by the common agent, the burden of the loss must be shared pro rata.40 Legislation imposing on corporate stockholders a personal liability in addition to the amount of the stock for which they subscribed, for the purpose of securing corporate creditors, is frequently found. Such enactments are for the benefit of creditors, and not for the corporation; 41 and one stockholder who is sued may insist that his co-stockholders be made parties so that a general accounting may be effected, and to require them to contribute in proportion to their shares of stock. While there is no express contract between stockholders, the right of contribution arises from the relation existing among them.42 One tenant in common who has paid the taxes on property owned by himself and others in common is entitled to contribution from his co-tenants. Those claiming an equality of benefit must submit to an equality of burden.48

The relation of the parties must determine the right to demand contribution. Merely because one person receives an advantage from the act of another does not give a right to the one conferring the benefit to collect a portion of the expense from the person benefitted.44

§ 172. How to determine the relation of the parties. Frequently it is not possible to determine from the face of an instrument whether the parties are principals, guarantors, or sureties. If one is a principal and the others guarantors or sureties, the principal is ultimately liable to pay the entire debt without any aid from his co-guarantors. Those who are guarantors and sureties may be required to pay an aliquot portion to any one of the others who has paid more than his share. If,

40 McBride et al. v. Potter-Lovell Co. et al. (1897) 169 Mass. 7, 47 N. E. 242, 61 A. S. R. 265; Asylum of St. Vincent De Paul v. McGuire et al. (1925) 239 N. Y. 375, 146 N. E. 632.

41 Wright v. McCormack et al. (1866) 17 Oh. St. 87.

42 Umsted v. Buskirk et al. (1866) 17 Oh. St. 114; Wolters et al. v. Henningsan et al. (1896) 114 Cal. 433, 46 Pac. 277. See Buchanan v.

271

Meisser (1883) 105 Ill. 638; Lex et al. v. Selway Steel Corporation (1925) Ia. 206 N. W. 586.

43 McClintock et al. v. Fontaine et al. (1902) 119 Fed. 448. See Robinson v. McDonald (1854) 11 Texas 385, and the notes following the report of the same case in 62 Am. Dec. 482-487.

44 The Ruabon Steamship Co., Ltd. V. The London Assurance (1900) App. Cas. 6, 10.

however, they are all jointly obligated, all must contribute. There is nothing to prevent parol evidence to establish the relation of the parties on non-negotiable instruments. Between an obligee and a person signing his name on a negotiable instrument parol evidence is inadmissible to change his liability.

"As between the sureties and the creditors, they are all principals, and being principals by the terms of their written contract, parol evidence will not be received to vary or contradict it.' 45

Unless one signs as maker, drawer or acceptor of a negotiable instrument, he is held as indorser, no matter what was the verbal agreement of the parties.46 But parol evidence is receivable to show the actual agreement where the action is between the parties on a negotiable instrument, such as for contribution.47 This may be done to establish the relation of the parties, even though the parol evidence contradicts the instrument.48

§ 173. Relation of indorsers. In the absence of an express agreement among themselves, those who indorse a negotiable instrument are not liable to contribute, because their contracts