126 N.Y.S. 51 | N.Y. App. Div. | 1910
The plaintiffSampson Q. Mingle, defendant’s testator, and one Thompson, on July 20,1899, executed and delivered to the Chatham National Bank an instrument of- joint- and several guaranty of payment, as follows:
“ New York, July 20,1899.
“ For value received and for the purpose of giving the Realty Corporation of North. America credit' at the Chatham National' iBank of New York, we hereby jointly'and severally guarantee the payment at maturity of all checks, drafts and promissory notes upon - which said Realty Corporation of North America is now or hereafter shall be liable to said bank as maker, endorser, drawer or*171 acceptor, to au amount not exceeding fifteen thousand dollars, hereby waiving demand and notice of non-payment thereof, this to be a continuing guaranty.” -
On'July 13, 1903, the realty corporation executed and delivered its three months’ promissory note for $15,000 to1 one Gilbert; .and Gilbert indorsed and delivered the note for value, before maturity to the Chatham National Bank, which received it upon the faith of the guaranty. The realty corporation never made any payment on the note, having become insolvent.
On September. 15,1903, and before said note became due, Mingle died, leaving a last will and testament which was duly probated on October 7, 1903, whereby he appointed his widow, the defendant, sole executrix. Pursuant to an order of the Surrogate’s Court dated October 10, 1903, the defendant duly published a notice for all claims against the estate of her testator to be presented to her on or before May 1, 1904.
On April 28, 1904, the Chatham National Bank presented in writing to the defendant a claim against the estate of her testator for the principal and accrued interest on the said note. On the 3d of November, 1904, defendant, in.writing, disputed and rejected the said claim. No written consent was filed by the defendánt. and the Chatham National Bank with the surrogate that said claim of the bank might be heard and determined by said surrogate upon the judicial settlement of the accounts of the defendant as executrix.
The bank, on the 11th of May, 1905, commenced an action against the defendant on said claim, which, however, was some eight days after the six months period prescribed by section' 1822 of the Code of Civil Procedure. “ Where an executor or administrator disputes or rejects a claim against the estate of a decedent, exhibited to him, * * - unless a written consent shall be filed by the respective parties with the surrogate that' said claim may be heard and determined by him upon the judicial settlement of the accounts of said executor or administrator, * * * the. claimant must commence an action for the recovery thereof against the executor or administrator within six months after the dispute or rejection, * * ■ * in default whereof he, and all the persons claiming under him are forever barred from maintaining such an action thereupon, and from every other remedy to enforce payment thereof out
On; February 14, 1906, a' written notice was personally served •upon the plaintiff stating that the bank had presented its claim in writing; that such claim- had. been rejected; that the bank'had not commenced suit within. six months thereafter, and that, therefore, the claim of the bank- was barred and extinguished as against the estate of Sampson Q. Mingle, and' that plaintiff would at his peril and on his own liability and responsibility, and without any right for contribution from the- estate; pay any sum to the bank on said claim.
On October 20, 1906, plaintiff paid to the Chatham National Bank, ' upon its demand, on . said . note, $15,000 -principal and $1,811.67 interest. .This action was commenced on or.'about July 9, 1907, to recover under the doctrine' of contribution, $5,603.89, one-third of the amount so paid on said note by the plaintiff under said joint and several guaranty. ■
The facts were stipulated or conceded -upon the trial. ' The learned Special Term held as conclusions • of law that after May 5, 1905, the claim of the Chatham .National Bank against, the estate of : Sampson- Q. Mingle, deceased, on the' said guaranty was barred and. extinguished and the said estate was absolutely discharged, from all liability to the bank thereon ; that the plaintiff was not legally liable to pay to the bank more than two-thirds of the amount due-'on the loan to the realty corporation on account of said guaranty, and that - the plaintiff, is not-entitled to recover in"this action, and. judgment was, therefore, directed for the defendant on the merits. From said judgment plaintiff appeals. '
The question • presented is, has one . of three joint and several guarantors of -payment, who has paid the1 full amount due under the guaranty, a -right to recover contribution of- one-third of the amount paid against the estate .of, one of his coguarantors, as to which no enforeible liability by the principal, continues to exist by reason of the running of the short . Statute of Limitations provided by section 1822" of the' Code of Civil Procedure. ‘
It is conceded that there are no .cases in this State precisely decisive
There the court having'determined .that the discharge under the Bankruptcy Act had the effect of releasing, uncertain and contingent demands, said: “When the sureties contracted for tlieir princk pal they knew that the National Legislature could, in the case that has .' arisen, discharge either' of them from the obligation thereby assumed, and that the right of contribution woiild cease with the liability to which' it was, antecedent. If the plaintiff.is without remedy it is by, an . act of the law to which lie, in common with every other citizen, is presumed to have assented.”
It will .be', seen that what- was: decided, therefore, was that the Bankruptcy Act which was passed after the original bond had been executed had the effect, when the discharge provided for there-^ under liad, béen granted, o.f wiping out all the debts, fixed,-uncertain or contingent of the bankrupt. *' ■
Aspinwall v. Sacchi (57 N. Y. 331) was an action brought against stockholders for Contribution by a stockholder against whom judgment had been obtained for liabilities against his company. .The court, after'citing numerous cases, said: '“It will thus'be seen . that it is no. answer to a claim for contribution that it cannot -be .based .upon any contract,, that the parties are, séverálly and not jointly bound, that they are bound by separate instruments, that they are' liable for the same debt or obligation in different amounts, ■ that it can' make no difference, whether they be principal debtors or mere, sureties, -and that the doctrine of contribution rests upon the broad principle of justice,, that when one has discharged'á debt or - obligation, which others were equally bound- with him to-discharge, ■ and -thus, removed a common .burden, the others who have received a benefit ought, in conscience, to refund to hi in a ratable proportion.”
In Johnson v. Harvey (84 N. Y. 363) a'surety who had paid a" judgment sued the administrator of a cosurety, who had died before a trial off the litigation in which the bond had been given, for coii- ' tribution to the. amount of oiie-half -of the amount paid. The ■-court said": “ The sole question presented and. argued is, whether
Wé have examined the other cases cited, but none of them are upon the precise point, and but restate the foregoing general propositions, and are all based upon the language in Tobias v. Rogers (supra), which, as we have' pointed out, was really a decision as to the effect of the United States'Bankruptcy Act, ■ •
In Wood v. Leland (1 Metc. 387) the plaintiff sued the heirs aud devisees of a cosurety for contribution upon an amount paid by him after the short Statute of Limitations of Mássachusetts of one year had run. Chief Justice Shaw said: “ Now the. defendants contend that, as they could not be held' responsible to the obligee for such breach of the bond after one year, so they would not be held liable for a contribution to a surety after that time. But the court are of. opinion that .the Statute of Limitations cannot be so applied; It ' may well be admitted that the Statute of Limitations would be a good bar to an action by the obligee against the heirs .and legatees; but the righ't .of action by the surety for contribution does not accrue at the breach of the bond, but upon his payment of the money ' pursuant to that breach. The suit against him is not barred in one year. * * ' * But his right of action for contribution arises when he does pay, and not before;- Notwithstanding a breach, the debt may be-paid by the principal, or relinquished or compromised, and the surety never' compelled to pay. If so, he never has a cause of action against the co-surety or his representatives. The right of action grows out of the original implied agreement, arising out of there béing- co-sureties, that if one, shall be compelled to pay the whole or a disproportionate part of the debt for which both thus collaterally' and provisionally stipulate to be liable, the other will pay such a sum as will make the common burden equal,; and, in case of the death of either, this obligation devolves upon his legal' representatives.- This suit, being brought within one year from the time, of the payment of the money by’ the plaintiff, is not, we think, barfed by the Statute’ of Limitations.”
In Crosby v. Wyatt (23 Me. 156) the court said: “ The obligation of one surety to repay to another, who has paid .the whole debt, a moiety.of it, does not arise solely out of the consideration that he has thereby been.relieved of a burden, but also from the consideration that,he engaged to indemnify.him against loss arising from his own neglect to pay * * *. • It. is no sufficient, defense, therefore,
In Sibley v. McAllaster (8 N. H. 389), an action for contribution, the court said ;• “ We are, therefore, of opinion that although no action could have been maintained against the executor upon the note at the time the plaintiff paid it, still the plaintiff remained liable.upon the note, and that he is entitled to recover in this case whatever he paid to discharge, himself from that liability.”
And in Peaslee v. Breed (10 N. H. 489) the court said: “ The * * * case raises the question whether, when one of two makers of a note is discharged by the Statute of Limitations, and the other remains liable, and pays, the latter is entitled to recover of the former a contribution” ; "and held that he could.
To the same effect is Boardman v. Paige (11 N. H. 431), where the court said: “ The undertaking of the co-promisers, then, is á liability, or undertaking, which in its very nature continues so long as the original liability continues on the part of any one, for the payment of the debt; for so long as the liability of any one continues.he may be compelled to pay, and when he pays he is entitled to recover contribution. ' We would further remark that we are now considering the rule of law, resting upon an equitable foundation. Contribution, indeed, is said to be bottomed on a fixed principle of justice and not upon contract.” “ The rule of law, then, would seem to be that when one of two or more co-promisers, without assuming any new ground of liability, still continues liable upon the original contract to the promisee, and is lawfully compelled, by virtue of such- contract, to pay the debt, or discharge the original liability of all the co-promisers to the promisee in such case, the equitable liability of the other co-promisers for contribution of their fair proportion will still "remain not withstanding any contract of the -promisee for the relief of' such pthei co-promisers, and notwithstanding they may be discharged
In Marshall v. Hudson (9 Yerg. [Tenn.]. 57) a note had been made by a -principal debtor with, two sureties. The principal debtor died. ■Administration was.grañtéd to his widow. No claim was exhibited to her within two years after qualification... Thereafter suit was instituted against her and she pleaded the Statute of Limitations, upon which'plea "judgment was 'rendered.in her favor. Thereafter the bank instituted a' suit against one of the sureties, who relied upon the Statute, of Limitations of-two years in favor of the estate of. the deceased persons, and the judgment in favor of-the administratrix as discharging the estate of the principal, and that as surety he was discharged, but judgment was rendered against him, and he, . paid the full amount thereon and brought suit against the administratrix of the principal, ■ Notwithstanding that, judgment had gone ■in her favor when sued as principal' upon the -main debt, judgment went against her iri this case,.the court saying: “ It has been settled. that the cause of action-, although growing, out of the. relation of principal and surety created by the original contract,-commences; in point, of time, with, and is" founded upon, 'the payment of the debt by the-surety, or, at the earliest, by a statute :of our own, upon the rendition of a judgment against him.. It; is then he becomes a creditor of-his-principal.” ■ .-
In Reeves v. Pulliam (68 Tenn. 153):the defendant, who was' the-executor of a cosurety, relied upon the Statute-of Limitations of two years and six months. - The court, after reviewing the Tennessee cases in regard to contribution, said:' “In these cases the defendants were discharged from the original debts, But the payment of. their co-surety gave a cause of action' notwithstanding. Certainly the right to plead the statute-of limitations, which we can • "see would be a' good defense to'the original .obligation, can contribute no higher or better defense against the action of the co-surety, than the actual discharge.from- such original debt. The. surety’s right who has paid "the debt, of his có-surety to recover, therefore, does not depend upon the payment of the debt which they were jointly bound -to- pay at the time the payment was made, but upon the fact of their being co-sureties in the obligation which
Cawthorne v. Weisienger (6 Ala. [N. S.] 714): “ But although the payee may have lost his right to proceed against the estate of the deceased by his omission to present the note -to the executor within eighteen months after the grant of letters testamentary, if the whole should be recovered against the witness as maker, he would have a right to proceed against ;the estate of the deceased for contribution; as-liis right to contribution would arise from the payment of the money, and would not be affected by the omission of the payee to present it in time. This is the principle of the case of McBroom v. The Governor, 6 Porter, 32.”
In Camp v. Bostwick (20 Ohio St. 337) the question raised was the plea of the running of the Statute of Limitations against the principal debtor as a bar to an action for contribution. “ But the doctrine of contribution has its origin in the relation of co-sureties or other joint promisors in the same , degree of obligation. It is not founded upon the contract of suretyship. * * It is an equity which springs up at the. time the relation of co-sureties is entered into, and ripens into a cause of action when one surety pays more than his proportion of the debt. * * * From this relation the common law implies a promise to contribute in case of unequal payments by co-sureties. But equity resorts to, no such fiction. It equalizes burden's and recognizes and enforces the reasonable expectations of co-sureties because it is just and right in good morals, and not because of any supposed promise between them. This equity, having once arisen between co-sureties, this reasonable expectation that each will bear his share of the burden is, as it were, a vested right in each, and remains for liis protection, until he is released from all his liability in excess of ■ his ratable share of the burden. Heitlier the creditor, the principal, the statute of limitations, nor the death of a party, can take it away.”
In Koelsch v. Mixer (52 Ohio St. 207), referring to Camp v. Bostwick (supra), the court said: “ And so, it was there held, that though the estate was, by the statute of limitations, released from its direct liability to the creditor, it nevertheless remained liable to contribute to a co-surety who had paid more than his moiety of the debt.”
We, therefore, think that the judgment appealed from should be reversed, with costs; and as there is no dispute about the facts, that judgment should be entered upon the findings of. fact in favor of the appellant, with costs and'disbursements.
Ingraham, P. J., McLaughlin, Laughlin and Dowling, JJ., .concurred. ' .
'Judgment reversed, with costs, and judgment ordered'for appellant as directed in opinion, .-with- costs. . Settle order on notice.
13 N. Y. 463.— [Rep.