13 N.Y. 59 | NY | 1855
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *61 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *63 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *65 The plaintiff and defendant were sureties in a replevin bond for Mahoney and Trull, conditioned, among other things, for the payment to the defendants in the replevin suit "of all such sums as might by them be recovered against Mahoney and Trull in that suit." The bond was executed in 1837. Rogers, the defendant in this suit, presented his petition in 1842, and obtained his discharge in 1843. The discharge operated upon "all debts, contracts and other engagements of the bankrupt, provable under the act." The 5th section of the bankrupt act provides, "that all persons having uncertain or contingent demands against such bankrupt, shall have a right to come in and prove such debts or claims, and shall have a right when their debts and claims become absolute, to have the same allowed to them." Ten years after the execution of the bond, and five after the presentation by Rogers of his petition, the defendants in the replevin suit, recovered judgment against Mahoney and Trull for over $1300, which Tobias, the plaintiff in this action was compelled to pay; and he now brings this suit against Rogers, his co-surety in the replevin bond, for contribution *66
The effect of the discharge was to exonerate Rogers from his obligation incurred to the defendants in the replevin suit, by his execution of the bond in their favor, as one of the sureties of Mahoney and Trull. His liability as a co-obligor with the plaintiff was extinguished by operation of law; and from that moment he ceased to be co-surety with him for a common liability or a common principal. Now if the right to contribution results from a general principle of equity, that sureties in æqualijure must bear the common burden equally, and that it will be enforced whenever they are bound for a principal debtor in relation to one and the same transaction, as determined by the supreme court in Norton v. Coons (3 Den., 130), and by this court, in effect, in Barry v. Ransom (2 Kernan, 462), then it follows, that all claim to it ceases when that obligation is canceled, either by the act of the parties or by operation of law. The defendants in the replevin suit could have released one of the sureties with the assent of the other, leaving the latter sole guarantor of the performance of the contract of the principal. What the parties could do by agreement the law has done without it. When the sureties contracted for their principal, 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 would 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 he, in common with every other citizen, is presumed to have assented.
Contribution is not founded upon, although it may be modified by contract. The right to it is as complete in the case where the sureties are unknown to each other, as in any other. The law following equity will imply a promise to contribute, in order to afford a remedy. But as this is in most instances a fiction, in aid of an equitable right, it will never be tolerated where the relation upon which the equity is founded is wanting. Such is this case. The liability *67 of the defendant upon the replevin bond, was discharged four years before the suit by the obligees against the plaintiff; subsequent to that time, the plaintiff and defendant have never stood in æquali jure, in reference to the obligation of their principal. The burden, which pressed with its whole weight upon the plaintiff, was removed from the defendant by aid of the bankrupt law. When the former paid the judgment recovered upon the replevin bond, it was as sole surety for Mahoney and Trull, and not as co-surety with the defendant.
The plaintiff executed the bond at the request and for the benefit of Mahoney and Trull, and paid the debt secured by it for their use, and not for the use of the defendant as to the whole or any part of the sum advanced. (6 M. W., 167.) No assumpsit arises until the co-surety has paid more than his proportion, even by way of furnishing a legal remedy. (Davies v.Humphreys, 6 M. W., 153.)
I think the judgment of the supreme court should be affirmed, upon the ground that when the money was paid by the plaintiff, the relation of co-surety did not exist between him and the defendant; and consequently no action, either at law or in equity, founded on that relation, can be maintained.
DENIO, JOHNSON, CRIPPEN and MARVIN, Js., concurred in the foregoing opinion.
Dissenting Opinion
I propose to examine only the first ground of demurrer. This is the important question and goes to the merits of the case, viz: Whether the discharge of the defendant released him from the plaintiff's claim.
The 1st section of the general bankrupt act provides that the debtor shall, in his petition, set forth a list of his creditors, their respective places of residence, the amount due to each, c. The 4th section provides for a notice to *68 the creditors and for publication. It also declares that the discharge shall be a full and complete discharge of all debts, contracts and other engagements provable under the act. The object of compelling the applicant to set forth in his petition a list of his creditors, and then providing for the publication and personal notice was, that those interested in preventing the discharge might appear and oppose. And it would seem as though no claims should be cut off by the discharge but those held by persons who would have a right to appear and oppose the discharge. The 5th section does not, however, limit the claims to be proved to debts, but includes persons whose debts are not due, sureties, bail or other persons having uncertain and contingent demands against the bankrupt. We are bound, in construing this clause of the act, to give the language used its full and fair meaning, but not to stretch it so as to include every case which may by any possibility be brought within it, particularly when by such a construction the whole scope and intention of the act is violated.
The case of Crafts v. Mott (4 Com., 604,) but reiterates the plain language of the act, when it declares that whether the discharge and certificate will operate as a discharge of a particular debt, depends upon the question whether the debt is provable under the act; and that case only decides that as the plaintiff, by the bond executed to him by the defendant, was surety for the defendant, that his claim was provable and therefore discharged. It does not hold that the uncertain and contingent claim of a co-surety, before any default of the principal or payment by any of the sureties, is cut off by the discharges.
The 52d and 56th sections of the act of 6 Geo. IV., chap. 6 are very similar in their provisions to the portion of the 5th section of our bankrupt act which we are now considering; and yet, it has never been held under that act that the claim of a co-surety before default, was discharged; on the contrary, the whole course of decisions holds, "that a *69 liability incapable of valuation at the time of the bankruptcy is not provable; as where the contingency is, whether the original debtor would not himself pay, and whether the bankrupt would ever be called upon to pay." (Burge on Sureties, 431; Clements v.Langley, 5 B. Ald., 372.) In the case at bar there was a contingency whether a judgment in the replevin suit would ever be obtained against the principals in the bond. And in this it differs from a bond to pay money absolutely. But if a judgment should be obtained against the principal in the bond, there was another contingency, whether Mahoney and Trull, the principals in the bond, would not themselves pay the sum recovered against them. If they failed thus to pay, there was then this third contingency, whether either of the sureties would pay more than his share, and thus acquire a right against his co-surety to contribution. There was hence no possible manner in which the plaintiff could establish a demand against the defendant, or in which the demand, if it may be called such, could be valued.
It will not be pretended that the plaintiff, at the time of the proceedings in bankruptcy, was a creditor of the defendant, nor was he a surety, or endorser, or bail for the defendant. Did he come within the designation, "other persons having uncertain or contingent demands against such bankrupt?" Demand, here, must be understood as some claim or obligation due from the defendant to the plaintiff, but the amount of which is uncertain or contingent. Because in the same proviso, creditors, whose debts are not due until a future day, are permitted to come in and prove their claim; in this case the demand of the plaintiff against his co-surety did not exist until payment by the plaintiff. At the last term of this court, in the case of Barry v. Ransom (2 Kernan, 462), we held that the right of one of two sureties to recover against his co-surety did not depend upon the bond executed by them, but upon equitable principles; and that the right of action grew out of the *70 payment, by one of the co-sureties, of more than his share of the money. Applying these principles to this case, it will appear that the plaintiff, at the time of the proceedings in bankruptcy, had no demand of any kind against the defendant; but that his demand originated at the time of the payment of the money on the bond by the plaintiff. I think the cases of Holbrook v. Foss (27 Maine R., 441), and of Ellis v. Ham (28 Maine R., 385), are authority in point.
It is not, however, in this case, necessary to say whether the obligees in the bond had such a demand as might have been proved. It is sufficient at this time to decide the case at bar; and in deciding this case, the statute in question should be fairly construed, giving to the terms used their ordinary signification. But I am unwilling, by judicial construction, to so stretch its language as to make it a universal expunger to wipe out all claims, whether they existed at the time of the proceedings in bankruptcy or originated afterwards.
I am of opinion that the judgment of the supreme court should be reversed.
Judgment affirmed.
