Apperson v. Wilbourn

| Miss. | Oct 15, 1880

Campbell, J.,

delivered the opinion of the court.

Both sureties on a bond died. The estate of one was solvent, that of the other insolvent. The creditor proved the full amount of the liability under the bond as a claim against the insolvent estate, and received on it an amount less than one-half of the claim, and the remainder of it, being more than half, was paid by the estate of the solvent surety. The other creditors of the insolvent estate, uniting with its administrator, exhibited this bill against the solvent estate, to compel it to pay back one-half of the sum paid by the insolvent estate on the claim under the bond. The bill was dismissed on demurrer, and the question is, whether the administrator of the insolvent estate can, for the benefit of its creditors, recover of the solvent estate the excess over what would have been the sum paid by the insolvent estate if the claim by virtue of the bond had been proved for half of its amount instead of the whole of it?

Whether a surety who has paid the whole debt is entitled to a dividend for the whole against the estate of an insolvent co-surety, or only for so much as exceeds his just proportion, has been a disputed question, and has been answered differently.

In Hess’ Estate, 69 Pa. St. 272, it was held that such surety might prove for the whole, because the creditor could, and he was substituted to his rights.

In Maxwell’s Creditors v. Heron’s Trustees, 3 Ross’ Ld. Cas. 92, it was held by the House of Lords that he was entitled to “rank” for only half.

In this case the solvent surety did not pay, but the creditor, in the exercise of his undoubted right, proved his whole claim against the insolvent estate, and realized from it less than one-half of.it; and the precise question is, whether the insolvent estate is entitled, as against the estate of the co-surety, to be relieved from the burden of the one-half of the liability? Equality of burden was the obligation as between the two sureties. One who paid less than the half, which his relation to his co-surety made it his duty to pay, would not have a right to call on his co-surety for contribution. If the surety whose estate is insolvent, and in behalf of the creditors of which this suit is brought, had lived, and paid less than his half of the debt, he would not have had a right of action against the other surety. Certainly his administi’ator cannot have any greater claim than the intestate would have had, and we approve the view expressed by the Supreme Court of New Hampshire in the case of Fletcher v. Grover, 11 N. H. 368, as follows : “ We, however, are not aware of any principle upon which it can reasonably be held that the administrators of deceased persons, or their creditors, can derive greater or other benefits from their contracts with, or the equitable relations in which they may have stood while living, to other persons, than the deceased would be entitled to if still living.”

We are quite sure that if the solvent estate had paid the debt it would have been entitled to prove only half of it against the other, and to receive a dividend on the half; hutas the creditor got less than half of the claim from the insolvent estate, no right exists in it to visit on the estate of the other surety the loss it would have had to hear if the creditor had resorted to it in the first instance for the whole demand. It is fortunate that, through the action of the creditor, justice was effected as far as possible by obtaining from the insolvent estate a dividend on the whole demand. The creditors of the insolvent estate have no just cause of complaint because of this. Their debtor, at the time of his death, owed the whole debt as to the creditor, and the half of it as to his co-surety. Had he lived, so much of his estate as was necessary to pay half of the debt would have been required for it. That would have subtracted from his ability to meet their demands against him. They have not been injured by the dividend, on the whole. The other surety’s estate has borne its full share of the joint burden, and more. The insolvent estate has not met its full responsibility, but because of the requirement of a pro rata distribution of assets among creditors it is relieved from paying more. To allow the recovery sought by this suit would be to impose on the solvent surety more than his just proportion of the common obligation, for the benefit of creditors of the insolvent surety, who, because of insufficiency of estate, was not able to meet its just proportion of the debt. The misfortunes of the creditors of the insolvent must be borne by themselves, and not visited on the solvent surety, whose estate has contributed more than, as between the two sureties, it was under obligation to pay.

Decree affirmed.

Chalmers, C. J., took no part in this decision.