27 N.J.L. 503 | N.J. | 1859
The opinion of the court was delivered by
This was an action for contribution, brought by Kaighn against Paulin. Kaighn, Paulin, and one Cooper executed a joint bond, on the 9lh September, 1852, to one Champion. Judgment was obtained upon it, and Kaighn and Cooper paid it off, each paying one-half. Kaighn brings this action to recover of Paulin the one-third of the one-half paid by him. The case, on the part of the plaintiff, was made out on the trial. But the defence offered by the defendants was overruled, and error is brought on bills of exception for this overruling.
The defendants offered to show, by parol evidence, that the bond was executed by the three obligors, as sureties for the South Camden Ferry Company. This was proved
The defendants offered to show that the Camden Ferry .Company put into the hands of Kaighn and Cooper securities to indemnify them against their liability, which they surrendered without the consent of Paulin. They also offered to prove that the ferry company executed a ■mortgage to Kaighn, Cooper, Paulin, and others, for the sum of $30,000, to secure the persons named as mortgagees' therein for all sums of money advanced, or to be advanced, and for all responsibility by them incurred for the company, pro ratá\ to the extent of the thirty thousand dollars; that said mortgage was held' by said Kaighn and Cooper, ánd was by them canceled and discharged, .without the consent of Paulin, after the payment to Champion.
It is said that the offer made did not amount to an offer to prove that Kaigim, Cooper and Paulin were sureties for the ferry company; that it did not appear that the company was liable to Champion at all; that the plaintiff, defendant, and Cooper absolutely assumed to pay the debt, not as sureties for the company, but as principal debtors.
I understand the offer to have been to prove that these persons were sureties to Champion for the debt of the ferry company—at all events it was a liability contracted for the company at its request; the company, as to them, was bound to pay the debt in their exoneration; that constituted the relation of sureties inter sese; each had his remedy against the company for what he might be compelled to pay on the contract; each had his remedy against the other for contribution.
It seems well settled that sureties are not only entitled to contribution from each other for moneys paid in discharge of their joint liabilities for the principal, but they are also entitled to the benefit of all the securities which have been taken by any one of them to indemnify himself against such liabilities. The action for contribution rests not upon contract, but upon the broad principle of equity, that in cases where there is an equality in the obligation there shall be equality in supporting if. Equality is equity in such cases—being equally hound, they shall equally pay. 1 Story’s Eq. 499; Theobold on Principal and Surety, ch. 11, § 283; Swain v. Wall, 1 Ch. Rep. 149.
The surety may fake colli fora Is from his principal to indemnify himself against his liability; and if he brings ail action against his co surety for contribution, his holding such collaterals will not bar his recovery. Done v. Walley, 2 Wels., H. & Gor. 198; Bachelder v. Fiske, 17 Mass. R. 464.
In this case the collaterals were not only, in law, for the benefit of all the co-sureties—they not only enured for their benefit, but a portion of them were in fact for the benefit of Paulin by their very terms; the security was intrusted to two of the sureties for all. This was given up without the consent of Paulin. He was thus deprived, by the act of' the plaintiff, of the indemnity intended by the principal debtor for his benefit; to give it up was to practise a fraud upon him, if done without his consent for that purpose. The opening does not charge fraud in fact upon Kaighn- and Cooper, nor does it state that the securities given up would have been sufficient to indemnify; for aught that appears, they may have been of small value.
But the main question still remains to be settled—what is the effect of the relinquishment of these collaterals, the joint property of all the sureties, the precise value of which is unknown, without the consent of the joint owners. It did not change the liability of the ferry company to Paulin, if he had been compelled to pay the debt, nor did it, in any way, affect the right of Paulin to his action for contribution against Kaighn and Cooper; the liabilities growing out of the relation of co-sureties still remained the same.
Where timers given by a valid contract upon ,a sufficient consideration by the creditor to the principal debtor, the surety is discharged, because the original contract upon which he was surety is materially modified without his consent; the contract upon which he was surety no longer exists. Bell ads. Martin, 3 Harr. 171, and cases
In the case of Woodruff v. The Insurance Co., 2 Dutcher 557, Chancellor Williamson, delivering the opinion of the Court of Errors, seems to have held that where an insurer had a right of subrogation to certain collaterals held by the insured, that if the insured relinquished any of them he must deduct their value from the insurance money. What was said by the learned Chancellor was said arguendo, and was unnecessary for the decision of the case. If he meant to be understood as holding that this deduction could be made in a court of law in an action for the insurance money, either by way of set-off, payment or forfeiture pro tanto, I cannot yield my assent to the doctrine; it is utterly without support, either upon principle or authority. A court of law cannot thus convert a mere breach of an equitable right without express proof of injury occasioned thereby, and the amount of that injury into a debt, to be set off, or treat it as a payment made.
If the securities still remained in the possession of Kaighn, notwithstanding that he would still be entitled to contribution, and to maintain his action for it, and Paulin, upon payment of his eontributive share, could then, by bill in equity, enforce his right of subrogation to these securities, or if they had been given up without his
I am of opinion that the relinquishment by Kaighn of the securities held by him without fraud, although without the consent of Paulin, did not discharge the liability of Paulin to contribution.
The defendant opened a further defence, in substance, that Kaighn, with others, had signed an agreement not under seal, dated the 29th December, 1855, by which the signers agreed to receive, in lieu of their respective debts, certain bonds to the amount thereof, secured by a mortgage upon the property of the company, upon certain terms therein expressed; and that certain creditors, who liad signed the agreement, did receive the bonds mentioned in it; and that it was part of the agreement that all of the indebtedness of Kaighn, Cooper, and the other creditors who signed it, that time should be given upon such indebtedness funded as aforesaid, and that Kaighn was bound to fund the indebtedness for which this suit was brought.
One of the terms upon which this agreement was to be binding upon the signers was, that all the other creditors of the company, except certain second mortgage creditors, would accept these bonds in lieu of their indebtedness, except certain small creditors, who were to be paid after giving a credit of six months.
The defendant did hot offer to show that all the creditors signed this agreement; on the contrary, Paulin himself never signed it., and Was not bound by it.
It wits an agreement not amounting to a release; its terms were never complied with; Kaighn never was bound to. ltiil'd. his- indebtedness Under its provisions; at the
There, was no valid agreement to give time to the company —none which the company were ever in a condition to enforce against Kaighn ; his rights against them remained unchanged. Paulin's remedy against the company was in no way changed by the action of Kaighn ; the whole arrangement remained incompleto, and became, by non-compliance with its stipulations, a dead letter.
The opening of the defendant in regard to that agreement, and the action of the plaintiff under it, fall far short of showing a legal defence to this action.
There can be no doubt but that if that agreement to fund the debt had been signed by all the necessary parties, and the conditions upon which it was to be binding bad been performed, so that it was capable of being enforced by the company against all who signed it, it would have materially changed the position of Paulin ; but these events never happened—the agreement never did become binding upon any of the signers, and nothing done under it by Kaighn ever affected his rights against Paulin.
The judgment must be affirmed.
Reversed, 5 Dutch. 480.