Opinion
03-17-1823
Thweatt's Administrator v. Jones, Administrator, & c. [*]
Leigh, for the appellant. Gilmer, for the appellee.
SYLLABUS
The following opinions present so full a view of the case, that any other statement would be unnecessary.
Leigh, for the appellant.
Gilmer, for the appellee.
Judge Green. Judge Coalter. Judge Cabell. Judge Brooke.
OPINION
GREEN, JUDGE
The appellant filed his bill against the appellees, in the superior court of chancery for the Richmond district, charging, that Thweatt and Hinton were joint inspectors of tobacco at Bolling's warehouse: that, after Hinton's death, Brunett brought an action on the case against Thweatt, as surviving inspector of Thweatt and Hinton, for the value of tobacco inspected at the said warehouse, and not delivered according to the tenor of the receipt, and obtained a judgment therefor, which was paid by Thweatt's administrator, amounting, with costs, to 311. 9s. 10d. A copy of the record of the suit at law is exhibited as a part of the bill. The bill further charges, that Adam Finch brought a suit (an action on the case,) against the said Thweatt and Hinton, the foundation of which was, the non-delivery, by the said inspectors, of other tobacco, inspected at the said warehouse, to the " said Finch, or his order; " in which he recovered 96l. 15s. 2d., and costs, against Thweatt; the suit having abated as to Hinton, by his death: that, after an unsuccessful appeal and injunction, Thweatt's representative had paid the whole or great part of the judgment, damages and costs. A copy of the record, in Finch's case, is also exhibited with the bill, as a part thereof. The bill also states, that the plaintiff " has been advised that for a moiety of the said judgment, and costs and damages, the estate of Hinton should be responsible, inasmuch as the recoveries were for a joint malversation in office." Joseph Jones, styling himself, in his answer, to be administrator of S. Hinton, deceased, late inspector at Robert Bolling's warehouse, in the town of Petersburg, answered. The answer does not admit or deny the matter of the bill. The record, in Brunett's case, shews that the suit abated as to Thweatt, by his death, and was revived against his representative, against whom the verdict and judgment was rendered; and that the tobacco was inspected, and receipts given, by Thweatt and Hinton; and that the demand, and failure to deliver, was in the life-time of both, and whilst they were inspectors. The declaration, in Finch's case, charges, that the defendants Thweatt and Hinton had not only failed to deliver the receipts, for the tobacco inspected, to Finch, but had delivered the receipts and tobacco to another person, not authorized to receive the same. The chancellor dismissed the bill, and the plaintiff appealed
The bill in question, was a bill for contribution, and the case depends entirely upon the question, whether the bill presents a fit case for contribution, or not?
The counsel for the appellant seemed to think, that this question would turn upon the enquiry, whether the actions of Brunett and Finch, would or would not have survived against the representatives of the inspectors, if they had both died before a recovery had; and he contended, that those actions, or actions in some other form, could have been maintained against the representatives of the inspectors; either, because the inspectors were bailees, and bound by an express contract of bailment, to deliver the tobacco to the owners; for a failure in the performance of which contract, an action of assumpsit, founded upon the contract, would lie against the executor of the bailee; or, because our statute provides, that an action of trespass may be brought by or against executors or administrators, for goods taken and carried away, in the lifetime of the testator or intestate.
I doubt whether an action of assumpsit, founded upon the contract, (in which the contract is the gist of the action, and therefore, may be brought by or against an executor,) could be sustained against the inspectors. They are public officers. They have no reward for their services in relation to the crop tobacco brought to the warehouse, other than a fixed salary, which they receive from the commonwealth. In case of the death, removal or resignation of an inspector, his care and responsibility, in relation to the tobacco, devolve on his successor; and neither he nor his executor, has any controul over the tobacco in the warehouse, so as to be enabled to comply with the supposed contract of bailment. Inspectors are liable by the provisions of the act of assembly, to the parties aggrieved by their misconduct, for various specified penalties, and for damages arising from their failure in, or neglect of, duty. In short, the commonwealth seems to be the bailee, (but without responsibility as such,) and the inspectors, her agents and officers. To maintain an action of assumpsit ex contractu, it is necessary to aver and prove a consideration; otherwise, the promise is nudum pactum unde non oritur actio. What consideration could be alleged to exist, between an inspector and a planter, carrying his tobacco to a warehouse for inspection and safe keeping? It is true, that a special action of assumpsit, (as it is called, though it be really an action ex delicto,) may be maintained against a bailee, who, without consideration, undertakes any thing in relation to another's property, and performs his undertaking so unskilfully and negligently, as to produce a damage to the owner. But, in such case, the damages are recovered for the mal-feasance, or negligence of the bailee, which is the gist of the action. The undertaking, indeed, must be alleged and proved; but, it is nevertheless, only matter of inducement. Such an action, therefore, could not be maintained by or against an executor, it being actio personalis quae moritur cum persona; unless it be given by our statute.
It has been decided under the statute of 4 Ed. III. ch. 7, that an executor may maintain an action for any injury done to his testator's personal estate, by which it has been rendered less beneficial to the executor: Because, the title of the act (which is in the terms of an enacting clause,) says, " that an executor shall have an action of trespass for a wrong done to his testator," and recites that " in times past, executors have had no actions for a trespass done to their testators, as of the goods and chattels of their testators taken and carried away," & c. and enacting " that the executors in such cases, shall have an action against the trespassers," & c. In the construction of this statute, it has been decided, that the word trespass, as it was then understood, embraced all cases of tort: that the word wrong in the title is general, and that the words as of the goods & c. were inserted only by way of example, so as to confine the remedy to cases in which the wrong affected the goods and chattels. But, our statute, without any such title or general words as are found in the title, and in the enacting clause of the English statute, gives the action of trespass for goods taken or carried away, and provides for that case only substantively, and not by way of example. So that I should doubt, whether any action would lie against an executor for a tort by his testator, unless it were shewn that goods had been taken or carried away by him. I have not, however, thought it necessary to examine those questions minutely, because they seem to me unimportant to the decision of this case. If, however, it were necessary to shew that Hinton's representatives were responsible to the owners of the tobacco, notwithstanding his death, that responsibility is fully ascertained by the case of Scott v. Hardaway, in which it was decided in this court, that an inspector was liable, on his official bond, for any injury suffered by any person, in consequence of his misconduct.
4 Munf. 263.
Contribution is not due, by reason of any contract, express or implied. But, when any burthen ought, from the relation of the parties, or in respect of property held by them, to be equally borne, and each party is in aequali jure, contribution is due, unless the claim to contribution has arisen out of some actual fraud, or voluntary wrong, in which the party claiming contribution has participated. The mere non-performance or violation of a civil obligation, is not such a wrong, as will condemn a claim to contribution. The act which precludes a party from the right to claim contribution from those who were equally liable to the burthen as himself, must be malum in se, as actual fraud or voluntary wrong. Thus, if there be a common partition wall between two coterminous tenants, and it becomes ruinous, and one, in spite of the prohibition of the other, pulls it down, and re-builds it, he is entitled to contribution for the expense. Thus, if the conusor dies, having sold a part of the lands bound by the recognizance to several purchasers, and leaving a part to descend to his heir, the heir is not entitled to contribution against the purchasers, because he is not in aequali jure; but the purchasers are (without contract, express or implied,) entitled to contribution against each other; without regard to the time or order of the purchases. So, " if judgment be against two disseisors in assize for the land and damages, and one disseisor dies, the execution shall not be awarded against the surviving disseisor, who was party to the wrong, but as well the heir as the disseisor shall be charged; " and, a fortiori, if the surviving disseisor had paid the damages, he ought to have contribution against the representative of the deceased disseisor. The reason why the law refuses its aid to enforce contribution amongst wrong-doers, is that they may be intimidated from committing the wrong, by the danger of each being made responsible for all the consequences; [*] a reason, which does not apply to torts or injuries arising from mistakes or accidents, or involuntary omissions in the discharge of official duties. Courts of law enforce contribution only in cases where a contract between the parties to that effect may be presumed; but, courts of equity indulge in a larger jurisdiction, and admit contribution whenever the parties were originally subject, jointly, to the burthen, and are in aequali jure, and where the party claiming the assistance of the court, is not precluded, by his own turpitude, from receiving it. In the case at bar, the only default of the inspectors appears to have been the non-delivery of the tobacco to the owners of it. This might happen in various ways, without imputing fraud or voluntary wrong, to the inspectors. It might have been delivered, as is stated in the evidence given in one of the suits at law, (which is, however, no evidence against the defendants in this suit,) in consequence of the notes or receipts having been delivered to a person producing a forged order. It might have been delivered to an improper person, by mere mistake, or stolen; and, in the absence of all proof, although it might have been embezzled by the inspectors, such embezzlement ought not to be presumed. Fraud is odious, and ought to be proved. Nor do I think, that this conclusion ought to be affected by the statement in the bill, that the judgments were recovered for a joint malversation in office. That is a loose expression, corrected by the context of the bill, and by the records of those judgments, which exhibit nothing inconsistent with the supposition that the tobacco was lost to the owners by a fraud practised upon the inspectors, or by their mistake.
1 Ves. & B. 117.
4 Johns. Ch. 334.
3 Co. Rep. 13.
4 Johns. Ch. 334; 3 Johns. Ch. Rep.
The case seems to me to resolve itself into these propositions. When parties are equally bound to bear a burthen, and are in aequali jure, that is, liable from the same circumstances existing as to both, contribution is due of right, in equity: that this general proposition is liable to one exception, namely, that the party who would otherwise be entitled to such contribution, forfeits such right, if the joint liability arose from an act malum in se, a fraud or voluntary tort, in which he participated: that when it is shewn that the parties were originally equally bound, and stood in aequali jure, the party who has paid all, is entitled of course to contribution, unless it be shewn on the other side, that his right has been forfeited as aforesaid, by his own wrongful act. No such fact is alleged or proved in this case.
I do not think, that the right to contribution ought to be considered as impaired by the fact (if it really existed in this case,) that one of the parties and his estate was absolved by his death from all liability to the party injured He who claims contribution, does not claim by substitution to the rights of the party whose demand he has satisfied; but, upon the broader principle, that he who has exclusively borne the burthen which ought to have been borne jointly with another, is entitled to be rateably indemnified as in the case of party walls, and average in cases of loss at sea, & c. I presume, (though I have seen no case to that effect,) that if two were bound in a joint obligation before our statute concerning joint rights and obligations for a joint debt or contract, and one of them had died, and the other had discharged the obligation, he would have been entitled to contribution against the executors of the deceased obligor, although they were at law completely exonerated. I think the decree should be reversed, and the plaintiff declared to be entitled to recover against the defendant a moiety of the judgments, costs and damages paid by him or his predecessors.
JUDGE COALTER.
This is a bill for contribution, filed by the appellant against the appellee. It is alleged, that their intestates were many years ago co-inspectors of tobacco, at Bolling's warehouse in Petersburg, and that two judgments had been recovered, one against Thweatt in his life-time, and one against the appellant as his administrator, for breaches of duty in office, alleged to have taken place in the life-time of both inspectors.
As a reason for resorting to a court of equity, instead of going to law, the bill alleges that the appellee had delivered over the assets of his intestate to the distributees, who are made parties, and a discovery of assets is therefore required. In other respects, it is a naked bill for contribution between two officers, against one of whom there had been judgments at law for a failure and refusal to deliver tobacco in one case, and notes in the other to the owners; and it is claimed in the bill on the mere ground, as is alleged, that the recoveries at law were for a joint malversation in office; the whole, or a great part of the damages recovered for which, had been paid by the appellant out of his intestate's estate. It is, therefore, as naked a case in equity, as a declaration on an implied assumpsit, arising from the mere payment of the money by one inspector, would be at law: and the question is, whether, in such a case, contribution can be decreed between two such wrong-doers; admitting that both are proved to be so.
It is said, however, that though the bill expressly alleges that the recoveries at law were for a joint malversation in office, yet if we take the records of those judgments as part of the bill, they being referred to as part thereof, that the case will appear to be one in which contribution can properly be decreed, without violence to the general principle of law which repeis such claim between wrong-doers.
One of these suits was instituted against both inspectors; it abated by the death of Hinton, and judgment finally obtained against Thweatt, who survived.
It is an action on the case for a violation of their duties in their office, in not delivering tobacco notes to the owner of tobacco inspected by them; and on the plea of not guilty, there is verdict and judgment for the plaintiff.
In this case, the defendant moved for a non-suit, because the evidence introduced by the plaintiff, was not sufficient to support his action. The evidence was, that the son of the plaintiff, by his directions, applied to the inspectors for his notes; that the defendant shewed him the books, by which it appeared, the tobacco had been inspected, but was told it had been shipped, the inspectors alleging they had issued notes for it, in pursuance of an order in the name of the plaintiff, which order they shewed, but which, the witness told them, he knew was not the hand writing of the plaintiff: That the witness afterwards produced a written order from the plaintiff for the notes, but they were refused.
Even if this was evidence against the appellee in this case, as far as it goes, and if full proof, that the inspectors had been defrauded of the tobacco, would justify a decree for contribution, yet the proper evidence is not produced, nor is there an allegation in the bill, to justify its exhibition, unless this statement in the record, is to be taken as such allegation. The alleged forged order is neither produced on the trial at law, nor is it exhibited in this suit; nor is it stated who provided it or received the notes, or what has been done with the tobacco If it was shipped, the books directed to be kept by the 48th section of the act, would shew by whom, and probably who was the inspector who delivered it out.
The bill alleges, that there had been an injunction to this judgment, which had been dissolved; but on what ground it was granted, whether on account of this order or not, is neither stated, nor are the proceedings in that case, made part of this, if it would be evidence in this case.
The other suit was likewise an action on the case against Thweatt, instituted after the death of Hinton, alleging that they jointly issued tobacco notes; that, in the life-time of Hinton, the tobacco was demanded, and not delivered; and that, after his death, it was again demanded of Thweatt, who continued in the office of inspector, and who, fraudulently and contrary to law, refused to deliver it. To this, there was also a plea of not guilty, and a general verdict and judgment for the plaintiff.
It was not necessary for the plaintiffs in these suits, to prove an actual embezzlement of the tobacco, in order to entitle them to recover; a delivery into the warehouse, and a refusal of the notes in the one case, and of the tobacco in the other, was sufficient Such proof made the inspector a wrong-doer, as to the plaintiffs, and subjected him to their action; but, for aught that appears to the contrary, actual fraud or culpable neglect may have been proved as to the defendant.
I can discover no ground, therefore, on which I can consider this case, otherwise than as a naked one of contribution, sought between public officers, in consequence of damages recovered, and paid by one of them, for a joint malversation in office, even if it had not been expressly so called in the bill itself I am not at liberty to make any thing else of it, because nothing else is stated, much less proved. I cannot say the notes in the one case were issued in consequence of a forged order, or the other tobacco taken from the warehouse, on the production of forged notes; or that it was stolen, or otherwise taken, without gain to the inspectors, or either of them, and that they have lost it without any culpable neglect in either; nor am I prepared, as between public officers of such trust and responsibility, to say, how for motives to vigilance and attention should be lessened, by a decree for contribution in such case, were it made out. The general doctrine is, that, even between private individuals, there is no contribution between joint wrong-doers. It is not for me to say, that these parties are not to be considered as wrong-doers, unless embezzlement, or culpable neglect is proved in this cause. It is not to be expected that either party would prove this in both, and of course, in himself; and then it must result that contribution will lie in all cases of this kind, unless the verdict which has found the wrong as to the third party, is considered conclusive, until the party claiming it can make out a proper case for contribution, notwithstanding such verdict.
The parties will try each to criminate the other, so as to throw the whole burthen from himself; but it cannot be expected, that a defendant in such case, will try to fix guilt on both, otherwise than as it is established by the verdict. And the court itself, from motives of public policy, will notice that. This doctrine, I think, is clearly laid down in Merriweather v. Nixon. That was an action on the case against two, for an injury done to the reversionary estate in a mill, in which was a count also in trover for the machinery. In that case too, there was a joint judgment, so that both were found guilty. The whole sum was levied on one, who brought his action for contribution. The judge was of opinion, that no contribution could by law be claimed, as between joint wrong-doers; and that, consequently, the action on an implied assumpsit could not be maintained on the new ground, that the plaintiff had alone paid the money, and he non-suited the plaintiff. On a motion to set this aside, Lord Kenyon said, he never had heard of such an action being brought, where the former recovery was for a tort.
8 T. R. 186.
There being no judgment establishing a wrong against Hinton, and what defence he could have made we know not; it must be like a case where a party injured sues one, for he is not obliged to sue all, guilty of a wrong; if that one comes for contribution against others, he surely must make out a case which will justify a recovery against them. The mere judgment against him, and payment, is not enough.
There is no verdict establishing guilt of any kind on the appellee's intestate; he might have been sick during the whole time the tobacco was in the warehouse, or absent during the delivery, and have been protected by the provisions of the 11th and 15th sections of the act. In the absence of a verdict then, to convict him of any wrong or liability, or any proof of such liability, I cannot say that because one has been found liable, the other must of necessity be so too; and although a joint malversation; although it is charged in the bill, there is no proof that the intestate of the appellee, was even an inspector, much less that he had any thing to do with the tobacco in question, other than what is to be found in the declarations in the actions at law, and the evidence spread on the record, when Hinton was dead, and no longer a party to the first suit. The answer of his administrator, says nothing as to these matters, otherwise than calling himself administrator of Hinton, late inspector, but is confined to the discovery of the assets sought of him.
I cannot think that the relation between these parties, as inspectors, is a ground whereon to relax the sound principle of law above insisted on. It would seem to me the reverse; and that it might tend to encourage negligence, if not frauds by inspectors, to hold out a hope, that if matters come to the worst, the burthen will be divided. On the contrary, this court has decided that the vigilant inspector may throw the whole burthen on the fraudulent one, and even hold his securities bound therefor. They give separate bonds, and each is severally liable for his own improper acts. If both are fraudulent, or both negligent, so that no case can be made out by either, so as to throw the whole, or part of the burthen on his fellow, which proper vigilance will generally enable him to do, I think it safest to let them abide by the consequences.
4 Munf. 262.
I am, therefore, for affirming the decree.
JUDGE CABELL.
The new lights thrown on this case by the second argument, have convinced me, that my first views were erroneous; and I take pleasure in abandoning them.
It is admitted to be an universal principle, that where two or more persons have jointly committed a tort, no court of justice, either of law or equity, will interfere to enforce contribution among the participators in the tort. But this principle has never been held to extend to the non-performance of a contract; nor even to the non-performance of a civil obligation or duty, where that non-performance does not proceed, ex maleficio.
Lingard v. Bromley, 1 Ves. & Beam. 114.
Although inspectors may not, strictly speaking, be considered as bailees, yet I can perceive no objection to the position maintained by the counsel for the appellant, that in determining the liability of inspectors to individuals, whose tobacco they have received, we are to be governed by the same principles, which regulate the liabilities of ordinary joint bailees, to persons whose property they have received, or a contract of bailment. The duties of inspectors, in relation to persons whose tobacco they receive, resulting either from the general provisions of the act of assembly on the subject, or from the special written contracts, exhibited in the receipts or notes given by the inspectors, do not vary in character, from the duties of ordinary bailees, growing out of a common contract of bailment. And, if there be a joint failure in two or more bailees to comply with a contract of bailment, which failure does not arise ex maleficio, I hold it to be clear law, that one of them who may have been compelled to pay all the damages recovered, may resort to the others for contribution. If it were otherwise, it would produce great injustice.
If it be said, that the idea of a contract ought to be excluded in the consideration of this case, for that inspectors are public officers, and that, consequently, their duties spring from official obligation, and not from the terms of a voluntary contract; I reply, that there is no difference, in my opinion, between duties resulting from a voluntary contract, and duties resulting from an office which a man has voluntarily accepted. And even if there be a difference, the general principles established in the case of Lingard v. Bromley, before referred to, apply with full force to the case of joint inspectors.
It is objected, however, that the complainant's case, as exhibited by his own bill, does not entitle him to relief, even on the principles above stated. The bill alleges, that the judgments, as to which contribution is sought for, were obtained for the failure to deliver tobacco which the inspectors had received for inspection. And it is now objected, that this failure may have proceeded, ex maleficio; but it is equally probable, that it did not; and, in such a case, I do not hold myself at liberty to presume that the failure proceeded from embezzlement, fraud, or even culpable negligence, on the part of the inspectors, or either of them, until it shall be proved; especially when we know that they act under the solemn obligations of an oath. It would be to invert the order of evidence to require from them, or either of them, proof of the non-existence of such embezzlement, fraud or negligence. The onus probandi, is on him who maintains the affirmative of the proposition. As to the expression in the bill, " joint malversation in office," so confidently relied on by the counsel for the appellees, it is to be remarked, that it forms no part of the allegata of the complainant; and it would be too strict, for a court of equity to hold a man bound to technical accuracy of expression, in unimportant parts of his bill.
I, therefore, think the decree should be reversed, and the cause remanded for farther proceedings, pursuant to the above principles.
JUDGE BROOKE.
The single enquiry in this case is, whether a joint inspector of tobacco, who has been compelled by judgments at law, to pay damages for failing to deliver inspected tobacco, can have contribution against the representative of his co-inspector, without alleging in his bill and proving, that the failure to deliver the tobacco, was produced by some inevitable circumstance, or other cause exempting the inspectors from the charge of refusing to deliver the tobacco, when legally demanded. I suppose this to be the enquiry in this case; because, if a case is really made out, in which the failure to deliver the tobacco, proceeded from no default of the inspectors, I am inclined to think the plaintiff would be relieved, whatever may have been the form of the actions at law in which the judgments were rendered. The bill, I think, exhibits no such case, and the proofs in the record furnish no aid to supply its defects. If the rule that the allegata and probata, must correspond, could be dispensed with, as to one of the cases, it alleges that the suit was prosecuted against the plaintiff's intestate, for the failure to deliver tobacco inspected, agreeably to the tenor of the receipt, for exportation, and that the foundation of the other suit, was the non-delivery of other tobacco; the authority to receive which, is not denied to the party demanding it; and it concludes with saying that the plaintiff is advised that for a moiety of the judgments, costs, and damages, so recovered against the estate of his intestate, he is entitled to contribution, in as much as the said recoveries were for a joint malversation in office. The proceedings at law verify the allegations in the bill, with the exception, that in one of the cases, it is alleged that the inspectors refused to deliver the tobacco, because it had been before delivered to an order, which is said, but not proved, to have been forged. The answer is by the administrator of the deceased inspector, and neither admits nor denies the allegations in the bill, but insists that the recourse ought to be had to the distributees of his intestate, to whom the estate had been delivered. I shall lay no stress on the last allegation in the bill, that the judgments were for a joint malversation in office, because, I think it gives the correct character to the case before stated by the plaintiff,--the failure to deliver the tobacco by the inspectirs, without assigning any other than the circumstances before stated, as the cause was a refusal to deliver it, which was a joint malversation in office. That other circumstances may have existed, is possible, but none are alleged or proved. The refusal to deliver the tobacco, under the circumstances alleged, was a joint wrong in the inspectors, and to joint wrong-doers, neither a court of equity nor of law, will afford contribution. The case in 8 Term Reports, proceeds on this rule. The principle in both courts is, that joint wrong-doers, shall not be tempted to commit wrong by dividing the responsibility. This principal applies a fortiori to public officers. I admit, that courts of equity, take a broader jurisdiction. They relieve in cases to which the jurisdiction of a court of law is not adapted. They relieve in all cases, in which the parties are in aequali jure, but neither court will relieve in a case in which they are in pari delicto, which I consider to be the case now before the court. The case in Vesey and Beames, was decided upon this distinction. I am, therefore, still of opinion, the decree must be affirmed.
CONTRIBUTION AND EXONERATION.
I. Definitions,
A. Contribution.
B. Exoneration.
II. Principles Governing with a View to Preserving Just Priorities and Equalities between All Parties in First Instance.
A. When Creditors May Resort to the Sureties. or Any of Them.
B. When Creditor Will Be Compelled to Resort to Principal, or All the Sureties.
III. Contribution and Exoneration, as Exemplified in Their Application to Particular Relations.
A. Contribution. 1. Between Co-Sureties. a. In General. (a) On What Founded. (b) Who Are Co-Sureties Entitled to Contribution. (c) Who Are Not Such Co-Sureties. (d) Must Show Due Diligence. (e) Res Adjudicata. b. Common Interest or Liability. c. Payment or Discharge of Common Liability. d. Measure of Contribution. 2. Between Tenants in Common, Joint Tenants, and Co-Parceners. a. Improvements. b. Repairs. c. Encumbrances. 3. Between Funds Jointly Liable. 4. Between Indorsers. 5. Between Insurers. 6. Among Legatees and Devisees. 7. Between Partners. 8. Party Walls. 9. Between Remaindermen, and Life Tenant and Remainderman. 10. Between Stockholders. 11. Between Tort Feasors. B. Exoneration. 1. Between Principal and Surety. a. On What Founded. b. General Principles. c. Interest or Liability Only Secondary--Another Primarily Liable. d. Payment or Discharge of Such Liability. e. Measure of Recovery. (a) Only Idemnity Can Be Claimed. (b) Interest and Costs. 2. Among Legatees, Devisees, etc. 3. Between Realty and Personalty of a Decedent. 4. Between Successive Alienees of Portions of the Same Tract of Land, and Retained Portion. 5. Of Indorsers. 6. Other Cases of Exoneration.
IV. Actions and Limitations--Practice.
A. Jurisdiction and Remedies.
1. Remedies in Equity and at Law Compared.
2. Equitable Relief before Payment of Liability.
3. Equitable Relief after Payment of Liability.
4. Right to Contribution and Exoneration as Offsets.
5. What State Law Governs Distributions.
6. Joinder of Actions.
B. Parties.
1. Suits for Contribution among Co-Sureties.
2. Suit by Creditor.
3. Suits for Contribution against Legatees and Distributees.
C. Limitations.
V. Statutory Provisions.
A. Surety May Require Creditor to Sue.
B. Giving Surety a Summary Remedy against Principal.
C. Giving One Surety Remedy against Another.
D. Right of Contribution Unaffected.
Cross References to Monographic Notes.
Bills, Notes and Checks, appended to Archer v. Ward, 9 Gratt. 622.
Bills Quia Timet, appended to Devries & Co. v. Johnston & Wolfe, 27 Gratt. 805.
Costs, appended to Jones v. Tatum, 19 Gratt. 720.
Debts of Decedents, appended to Shores v. Wares, 1 Rob. 1.
Joint Tenants and Tenants in Common, appended to Ambler v. Wyld, Wythe 235.Judgments, appended to Smith v. Charlton, 7 Gratt. 425.
Legacies and Devises, appended to Early v. Early, Gilm. 124.Limitation of Actions, appended to Herrington v. Harkins, 1 Rob. 591.
Marshaling Assets, appended to Carrington v. Didier, 8 Gratt. 260.
Partition, Subrogation, appended to Janney v. Stephen, 2 Patton & H. 11.
I. DEFINITIONS.
A. CONTRIBUTION. --" A payment made by each or by any one of several having a common interest or liability, of his share in a loss suffered, or in an amount necessarily paid, by one of their number in behalf of all." Century Dict., Webster's Int. Dict., Am. & Eng. Enc. of Law, vol. 7, p. 326.
B. EXONERATION. --" A payment made to one or more who have suffered loss or necessarily paid money on an obligation to which they were secondarily liable, by another or others who were primarily liable to the same obligation." Am. & Eng. Enc. of Law, vol. 7, p. 326.
II. PRINCIPLES GOVERNING WITH A VIEW TO PRESERVING JUST PRIORITIES AND EQUALITIES BETWEEN ALL PARTIES IN FIRST INSTANCE.
A. WHEN CREDITOR MAY RESORT TO THE SURETIES, OR ANY OF THEM
The creditor may proceed at law against the principal and the sureties in the first instance, and obtain a judgment and execution against them jointly. Nor will a court of equity interfere by injunction in such case, except under peculiar circumstances, the general rule being that " the creditor is under no obligation to look to the principal debtor or to his property, or to exhaust his remedies against the latter before resort ing to the surety." Penn v. Ingles, 82 Va. 65, citing Meade v. Grigsby, 26 Gratt. 612; Armstrong v. Poole, 30 W.Va. 666, 5 S.E. 257.
Again, in a suit in equity to subject the land of a judgment debtor to judgments against him, which are numerous, and in favor of different persons, the fact that in one of the debts he is a surety with other solvent sureties of an insolvent principal does not require that lands of the solvent co-sureties be brought into the case, and subjected to pay a portion of that debt, though those co-sureties are parties by reason of the right to contribution, nor require a decree of contribution therein, as this would put too great a burden on the creditors here. But the court disclaims holding that, in a proper case, equity would not require it to be done. Farmers' Bank of Philippi v. Woodford, 34 W.Va. 480, 12 S.E. 544. But compare citation from National Bank v. Parsons, 42 W.Va. 137, 24 S.E. 554.
So, where H., with B as his surety, executes his bond to M., executor, for land purchased of him by H., and which H. afterwards conveys to O., M. recovers judgment upon the bond against H. and B, and B pays the debt, M. assigning it to him without recourse. On a bill by B against O. and H. to subject the land to satisfy the debt, whether B claims as assignee or as a security who has paid the debt, M. is not a necessary party. B is entitled to have the land sold to pay his debt without proceeding first against H.; especially as O. did not ask for such a decree in the court below. Omohundro v. Henson, 26 Gratt. 511.
And, under certain circumstances, the sureties on the bond of a personal representative, may be sued in equity for the liabilities of their principal, before the remedy against the latter's heirs and personal representatives has been exhausted. Lacy v. Stamper, 27 Gratt. 42; Barnes v. Trafton, 80 Va. 524; Horton v. Bond, 28 Gratt. 815; Franklin v. Depriest, 13 Gratt. 257. Too onerous terms should not be imposed on the creditor. He ought not to be delayed in his recovery until he has pursued the personal representatives of the principal to the utmost limit of litigation. Dabney v. Smith, 5 Leigh 13; Lacy v. Stamper, 27 Gratt. 42.
The circumstances in the last named case were, that the litigation had been long, extending over twelve years, and the legatees seeking to recover from the executor what was due them under the will, were the widow and minor children of the testator, who had been, nearly ever since living in want and destitution. The decree appealed from was not final and the sureties could obtain all the relief they were entitled to by cross bill or otherwise in the same suit, and the court intimates that if they had made a reasonable payment into bank of what was required by the decree, the plaintiffs would have been compelled to wait for the balance till opportunity was afforded the sureties to proceed against the parties supposed to be primarily liable; the court disclaims intention to lay down any general rule, and distinguishes Aylett v. King, 11 Leigh 486, and Roberts v. Colvin, 3 Gratt. 358.
In Dabney v. Smith, above cited, the parties primarily liable were dead and the creditor was not compelled to have the accounts of their administrators settled in order to a decree against them personally. " This would have been too onerous on creditor."
Creditor with Surety's Money in His Hands.-- Quoere, whether or not creditor with surety's money or its equivalent in his hands will be compelled, without resorting thereto, first to exhaust his remedies against principal. Southall v. Farish, 85 Va. 403, 7 S.E. 534, citing Meade v. Grigsby, 26 Gratt. 612; Penn v. Ingles, 82 Va. 65; Dabney v. Smith, 5 Leigh 13; Horton v. Bond, 28 Gratt. 815; Bell v. McConkey, 82 Va. 176; Paxton v. Rich, 85 Va. 378, 7 S.E. 531.
B. WHEN CREDITOR WILL BE COMPELLED TO RESORT TO THE PRINCIPAL, OR ALL THE SURETIES.
Burden Placed Where It Belongs in First Instance. --" While it is true that the sureties as well as their principal are all bound by the complainant's judgment, and he has the undoubted right to resort for satisfaction to the property of each and all of them, in equity, in a suit in which all the parties are alive and before the court, the court will respect the equities of the parties inter sese, and administer them upon the principles peculiar to that forum as far as can be done without too great delay, and without prejudice to the rights of the creditor. The principal debtors' land should first be subjected to the exoneration of the lands of the sureties. " And where all the sureties are before the court the entire burden should not be thrown upon one of them. (Citing) Gentry v. Allen, 32 Gratt. 254, 261." First Nat. Bank v. Parsons, 42 W.Va. 137, 24 S.E. 554; Updike v. Lane, 78 Va. 132; Stovall v. Border Grange Bank, 78 Va. 188; Paxton v. Rich, 85 Va. 378, 7 S.E. 531; Womack v. Paxton, 84 Va. 9, 5 S.E. 550; National Bank v. Bates, 20 W.Va. 210; Muse v. Friedenwald, 77 Va. 57; Penn v. Ingles, 82 Va. 65; Wytheville, etc., Co. v. Frick Co., 96 Va. 141, 30 S.E. 491.
But this rule will not be carried to the extent of delaying the creditor indefinitely. Bell v. McConkey, 82 Va. 176; Martin v. South Salem Land Co., 97 Va. 349, 33 S.E. 600.
In Bentley v. Harris, 2 Gratt. 357, it is put on the ground of waiver by the creditor of his rights.
So, upon a bill by a judgment creditor to subject the lands of a principal and his sureties, after the lands of the principal debtor are sold and applied pro tanto to the satisfaction of the judgment, the portion of the judgment which each surety should pay should be ascertained, and a separate decree should be made against each surety for his said portion and upon his failure to pay it, for a sale of his land. And if either of the sureties should fail to pay the decree against him, and his land when sold does not satisfy the decree, the amount of the deficiency should be apportioned among the other sureties, with decree against them in same form, and so on until judgment is satisfied or all the lands of all the sureties are sold. Horton v. Bond, 28 Gratt. 815; Dobyns v. Rawley, 76 Va. 537; Redd v. Ramey, 31 Gratt. 265.
Equality between Co-Sureties Should Be Preserved if Possible.--It is error to decree against the land of one surety, on a bond with a deceased principal, alone for the whole amount of the judgment, until an inquiry had been made as to whether there were lands held by the other sureties which might be subjected to satisfy their portion of the judgment, all being before the court. Gentry v. Allen, 32 Gratt. 254; Stovall v. Border Grange Bank, 78 Va. 188; Horton v. Bond, 28 Gratt. 815. See also, Hall v. James, 75 Va. 111; Nat. Bank v. Bates, 20 W.Va. 210; First Nat. Bank v. Parsons, 42 W.Va. 137, 24 S.E. 554.
Erroneous Decree against Surety.--It is error to decree the sale of the surety's land before inquiry as to whether the principal has not land first liable. Dillard v. Krise, 86 Va. 410, 10 S.E. 430; Ewing v. Ferguson, 33 Gratt. 548; Womack v. Paxton, 84 Va. 9, 5 S.E. 550.
A decree should not be made against the representatives of the surety of a guardian until the account of the administratrix of the guardian is settled, and an inquiry is directed to ascertain whether any estate, real or personal, of the guardian remains. Roberts v. Colvin, 3 Gratt. 358. Here the suit for an account of the guardianship had lingered along for twenty-four years, and the decision was said, in Lacy v. Stamper, 27 Gratt. 42, to be intended to rest on its own peculiar circumstances and not to overrule Dabney v. Smith, 5 Leigh 13.
Effort Must Be Made to Collect from Primary Debtor First.--Where an executor dies indebted to his testator's estate, but leaving assets sufficient to discharge the debt, which are received by his executor, who, instead of making payment to the legatees of the first testator, distributes the assets among the legatees of his own testator, the surety of the first executor is responsible for the amount due to the first testator's legatees, but equity will not subject him to the payment thereof, until the legatees of the first executor, who received the assets of his estate, and the sureties of the second executor, have been brought before the court, and an effort to collect from them the amount due has proved unavailing. Aylett v. King, 11 Leigh 486; Dabney v. Smith, 5 Leigh 13, distinguished.
III. CONTRIBUTION AND EXONERATION, AS EXEMPLIFIED IN THEIR APPLICATION TO PARTICULAR RELATIONS.
A. CONTRIBUTION.
1. Between Co-Sureties.
a. In General.
(a) On What Founded. --The right of one surety to call upon his co-surety for contribution, like the right of all the sureties to call upon the principal for indemnity, arises from a principle of equity, growing out of the relation which the parties have assumed towards each other; the equity springs up at the time of entering into that relation, and is fully consummated when the surety is compelled to pay the debt. Wayland v. Tucker, 4 Gratt. 267. Cited with approval in Tate v. Winfree, 99 Va. 255, 37 S.E. 956.
The claim of one security for contribution from his co-securities, upon which the demand of the appellant is based, is the creature of the courts of equity. " It is bottomed and fixed on general principles of justice, and does not spring from contract, though contract may qualify it." L. C. B. Eyre in Dearing v. Earl of Winchelsea, 2 Bos. & P. 270, 1 Lea. Ca. Eq.; Claybrook v. Scott, 1 Va. Dec. 316.
On What Founded. --Liability Limited by Amount for Which He Is Bound.--The right to contribution is not affected by the co-securities being bound jointly or severally; or by the same or different instruments; or at the same or different times; or for the same or different amounts, except that when the amounts are different, a co-security cannot be required to contribute beyond the sum for which he was bound, nor does it matter whether the co-securities were aware of their being such. Claybrook v. Scott, 1 Va. Dec. 316.
Must Be Bound for Same Principal and Same Engagement.--It is essential that they should be " co-securities for the same principal and for the same engagement." Claybrook v. Scott, 1 Va. Dec. 316.
When such is the case, and one of the co-securities has paid the debt, his right to contribution becomes absolute, and this upon a principle of natural justice, that when all are equally bound, the burden should be borne not by one alone, but by all equally. The right to contribution is therefore stated to depend upon the principles of equity, and not upon contract, except as it may be so represented upon the implied knowledge of those principles; and it was upon the implied assumpsit then arising that Lord Eldon, in Craythorne v. Swinburne, 14 Ves. 164, justified the jurisdiction of courts of law upon this subject. Claybrook v. Scott, 1 Va. Dec. 316; Robertson v. Trigg, 32 Gratt. 76; Applegate v. Hinkson, 8 W.Va. 594; Hawker v. Moore, 40 W.Va. 49, 20 S.E. 848.
Court Looks to the Real Transaction.--In ascertaining whether such co-securityship exists as to give the right to contribution, the court looks to the real transaction. The liability depends not on its form, but its essence, and parol evidence is admissible to show what the contract was, out of which the alleged liability to contribution arises. Claybrook v. Scott, 1 Va. Dec. 316, citing Harrison v. Lane, 5 Leigh 414.
(b) Who Are Co-Sureties Entitled to Contribution.--Those bound for the same thing, though by different instruments, at different times and without one another's knowledge, are co-sureties, and will be made, in equity, to contribute. Rosenbaum v. Goodman, 78 Va. 121; Corprew v. Boyle, 24 Gratt. 284, 292; Harrison v. Lane, 5 Leigh 414. See infra, " Common Interest or Liability."
Co-Surety, Though Subsequent in Time.--And so, if there be two parties bound as principal and surety for a debt or other engagement, and a third party afterwards, at the request of the principal, bind himself as surety for such debt or engagement, the two sureties, in the absence of any agreement to the contrary, become co-sureties of the same principal and for the same debt or engagement. In either case, to establish the relation predicated, it is not necessary to show an express request by direct proof. Circumstances may be shown from which a request may be fairly and reasonably inferred. Harnsberger v. Yancey, 33 Gratt. 527; Perrins v. Ragland, 5 Leigh 552.
Knowledge of Each Other's Suretyship Immaterial.--It is of no consequence whether one surety knew that the other had signed it or not, for where successive indorsers all indorse for accommodation of the maker, though at different times and without communication or mutual understanding, they are in equity co-sureties and subject to common contribution. Stovall v. Border Grange Bank, 78 Va. 188; Stout v. Vause, 1 Rob. 169; Rosenbaum v. Goodman, 78 Va. 121.
Signing as Surety Prima Facie Evidence of Suretyship. --The addition of the word " surety" or " security," to the signature of a bond is prima facie evidence of the suretyship; though it may be rebutted by proof to the contrary. Boulware v. Hartsook, 83 Va. 679, 3 S.E. 289; Harper v. McVeigh, 82 Va. 751, 1 S.E. 193.
Forthcoming Bond--Obligee Here Also a Surety Having So Signed.--A debtor in execution executes a forthcoming bond to the creditor and a third person, and the obligee execute the bond with the debtor, as his sureties. The bond being forfeited, the obligee gives notice to the principal obligor and the other surety, of a motion for award of execution upon the bond, against them; but the notice does not mention the obligee as a co-obligor. The bond is a valid bond to bind the other surety, but he is only liable as a co-surety with the obligee, and if the principal creditor proves insolvent, the surety may be relieved to the extent of one moiety of the debt, either by bill in equity, or by motion under the statute for the relief of sureties. Booth v. Kinsey, 8 Gratt. 560.
(c) Who Are Not Such Co-Sureties.--L. bought goods of E. just before he was adjudicated bankrupt. The marshal seized them, claiming sale fraudulent, and L. gave a forthcoming bond for them, with R. as surety. The sale being held fraudulent, L. appealed, with new sureties on the appeal bond, and lost. He then appealed to the United States supreme court, and lost again, with another appeal bond and new sureties. By this time the goods were squandered and R., forced to pay their value, sued the appeal bonds sureties for indemnity, which was denied because those sureties were not co-sureties of R., being bound for wholly distinct things; R. being bound for the delivery of the goods on the decree of the court, they only for the damages and costs resulting from L.'s failure to prosecute his appeals to the reversal of the decrees appealed from. Rosenbaum v. Goodman, 78 Va. 121.
And so, although those bound for the same thing, though by different instruments, at different times and without one another's knowledge, may still be co-sureties, it is not so where the obligations are for wholly distinct things, though arising from same principal indebtedness. Rosenbaum v. Goodman, 78 Va. 121; Langford v. Perrin, 5 Leigh 552; Givens v. Nelson, 10 Leigh 382.
The addition of the word " surety" or " security," to the signature of a bond, while prima facie evidence of the suretyship, may be rebutted by proof to the contrary, and especially by proof that the party claiming to be surety got the benefit of the money individually, or as partner in a firm into whose business it went. Boulware v. Hartsook, 83 Va. 679, 3 S.E. 289; Harper v. McVeigh, 82 Va. 751, 1 S.E. 193.
Co-Suretyship a Matter of Contract.--But the sureties on the official bond of a deputy sheriff cannot claim contribution from the sureties on a second and supplemental bond of the same form and nature, given later, and containing a memorandum to the effect that it should not be resorted to as long as the sureties in the first bond should be residents of the state and it should appear that complete indemnity could be had without resorting thereto. Harrison v. Lane, 5 Leigh 414; Corprew v. Boyle, 24 Gratt. 284.
Surety of a Surety.--One who has executed a bond as surety for the principals therein, is not entitled to call for contribution, he having satisfied the bond, upon another party thereto who signed, not as co-surety with himself, but as surety for him as well as for the principals. It is further said, by way of dictum, that the same would have been true, even if it had been a true co-suretyship, because he had voluntarily and without the knowledge of his principals executed his bond for the amount of the indebtedness, and later for a new consideration to himself, viz. extension of time of payment, executed his notes for the balance remaining due, which was accepted in discharge of his principal's indebtedness. Singer Mfg. Co. v. Bennett, 28 W.Va. 16; Stout v. Vause, 1 Rob. 169.
(d) Must Show Due Diligence.--A court of equity will not compel a security in a bond to contribute to the relief of his co-surety who has been forced to pay the debt, unless it appear that due diligence was used, without effect, to obtain reimbursement from the principal obligor, or that he was insolvent. M'Cormack v. Obannon, 3 Munf. 484, cited with approval in Galt v. Calland, 7 Leigh 594.
(e) Res Adjudicata.--B. brought her action against C., the principal, and C., H. and M., as sureties, on a note. M. denied making the note. Case tried by jury; H. taking an active part, consulting and as witness in behalf of plaintiff, seeking to hold M. liable on the note. Verdict and judgment for M. against B. for costs, while plaintiff recovered against the other defendants. H. paid the judgment of plaintiff in full, and sued M. for contribution as co-surety. Held, that H.'s right being only by subrogation to the rights of B., M. was not liable for contribution, not having been liable to B. on the note. Hood v. Morgan, 47 W.Va. 817, 35 S.E. 911.
b. Common Interest or Liability.
Contribution Denied--Because Not Co-Sureties for Same Principal and for Same Engagement.--Where the obligee in a bond assigned same to S. agreeing in writing as follows: " I have this day passed to S. the bond (describing it), for which I bind myself and my heirs to said S. as one of the securities," the original security on the bond, paying the debt upon insolvency of the principals, could not enforce contribution against him as co-surety, their suretyship not being for the same principal and for the same engagement. Claybrook v. Scott, 1 Va. Dec. 316.
There Must Be Involuntary Satisfaction by One of Claim for Which Another Is Equally Liable--Bond Conditioned to Convey Land with General Warranty--Breach--Sureties.--M. sold land to H., and executed to him a bond with A and B as sureties, by which he bound himself to convey the land to H. by a good deed with general warranty, and to indemnify him against the title or claim of any other person to said land, M. afterwards selling another part of the same tract to A. Suit was brought by a prior mortgagee of the whole tract against A, to foreclose the mortgage, and under a decree in that suit, to which H. was not a party, A paid off the mortgage debt. Pending the suit, A purchased of H. his land. The breach of the condition of M.'s bond was not established so as to entitle A to proceed thereon for contribution to the satisfaction of the mortgage debt against his co-surety B, M. being insolvent. Henkle v. Allstadt, 4 Gratt. 284.
Obligor Paying Must Be Compellable to Pay--Co-Obligor Legally Liable. --To entitle one joint obligor to recover from his co-obligor money paid by him in excess of his proportion, the payment must have been made upon a debt for which the latter was legally liable at the time of the payment, and which the obligor paying was compellable to pay, and not upon a debt that was barred as to the obligor sought to be charged, and who may be, as in the case here, a personal representative, forbidden to pay, under Code, § 2676, without making himself personally liable to extent of such payment. Turner v. Thom, 89 Va. 745, 17 S.E. 323.
Contribution Denied Where Forthcoming Bond Is Given to Save Principal's Property.--Here one of the sureties in the original bond, who went upon the forthcoming bond as surety for his principal was held to have no right to contribution from another surety in the original bond, who had nothing to do with the forthcoming bond, because the latter was discharged from liability by the levy of the execution sued out for the original debt on the property of the principal debtor, and the forthcoming bond taken under that execution. Langford v. Perrin, 5 Leigh 552. See Lusk v. Ramsay, 3 Munf. 417.
c. Payment or Discharge of Common Liability. --(See same caption under " Exoneration," infra.)
d. Measure of Contribution.
Sureties May Claim Benefit of Securities Held by Their Co-Sureties. --" Sureties are not only entitled to contribution as between themselves personally, for moneys paid in discharge of the common debt, but they may also claim the benefit of all securities which any one of their number may have taken for his indemnity: and if a surety who seeks contribution has been reimbursed part of what he has paid, either by the debtor himself, or through a counter security, or from any source, he must give credit for the amount reimbursed, and can only claim contribution for the balance. From these principles it follows, as a necessary corollary, that if one surety purchases in the common debt for less than its nominal amount he can only claim contribution of a co-surety for the amount actually paid by him." Tarr v. Ravenscroft, 12 Gratt. 642, 653; Boughner v. Hall, 24 W.Va. 249; Strother v. Mitchell, 80 Va. 149; M'Mahon v. Fawcett, 2 Rand. 514.
Contribution Denied Where Surety Was Indebted to Principal.--Where surety pays a portion of note after judgment has been rendered against him alone thereon, if such payment was made by him when he was indebted to the principal in the note, in an amount sufficient to pay the judgment so obtained against him, he is not entitled to contribution from his co-sureties. Neely v. Bee, 32 W.Va. 519, 9 S.E. 898.
A surety is entitled to the benefit of any indemnity or security held by his co-surety; and if the co-surety has it in his power to pay off and discharge the indebtedness for which they are jointly liable out of money or other thing belonging to the principal, and fails to do so, he cannot call upon his co-surety for contribution. Neely v. Bee, 32 W.Va. 519, 9 S.E. 898.
Surety Must Avail Himself of Any Security He Holds. --Where several sureties have a common security from their principal, but before it is realized they are sued and ratably contribute to pay the debt, one surety, who has gotten a decree against the principal for what he paid and obtained a bounds bond from him, which is forfeited, is bound to proceed thereon against the sureties therein, and can only resort to the common security for any deficiency in his recovery from them. Givens v. Nelson, 10 Leigh 382.
Contribution--How Apportioned between Sureties. --One surety of an insolvent principal is entitled to contribution from his co-sureties; and if all the sureties are solvent, each is bound for his share of the sum advanced and paid to relieve them from a common burden. Preston v. Preston, 4 Gratt. 88.
Contribution--In Case of Insolvency.--The general rule is, that if one surety is insolvent his share shall be apportioned among the solvent sureties. Preston v. Preston, 4 Gratt. 88.
But where one surety, against whom judgment has been recovered and on whose property an execution has been levied, executes a forthcoming bond with another of the sureties, against whom no judgment had been obtained, as his surety in the forthcoming bond, and their bond is forfeited and he becomes insolvent, the surety in the forthcoming bond, who has paid the debt, will not be entitled to recover from the other sureties in the original bond any part of the share of his principal in the forthcoming bond--who was also a surety in the original bond--because by executing the forthcoming bond he released the property of that surety and to that extent injured his other co-sureties. Preston v. Preston, 4 Gratt. 88. Cited with approval in Harnsberger v. Yancey, 33 Gratt. 527, and Dent v. Wait, 9 W.Va. 41, 48. But he will be entitled to recover what he has paid for the others. Preston v. Preston, 4 Gratt. 88.
Can Only Recover Excess.--When surety has paid more than his portion of a joint debt, he can demand contribution from his co-surety, but only for the excess he paid over his portion. Gordon v. Rixey, 86 Va. 853, 11 S.E. 562.
Debt Paid by Co-Surety of Decedent--For What He May Prove.--The liabilities of the estate of a decedent, and the rights of his creditors, are fixed by his death. If at that time a creditor has the right to prove against his estate a debt for which the decedent and another are bound as sureties, and subsequently the co-surety pays the debt, he is substituted to the right of the creditor, and may prove the whole debt against the estate of the decedent, and receive dividends thereon until one-half of the debt is paid, although the estate of the decedent will not pay his debts in full. Pace v. Pace, 95 Va. 792, 30 S.E. 361.
Note. --Observe that a large majority of the cases of contribution are between co-sureties, and the general requirements that must be fulfilled in order to its application to that relationship, obtain very generally in the other relationships to which it is applicable.
2. Between Tenants in Common, Joint Tenants and Co-Parceners.
a. Improvements.
Joint Tenants--Improvements of Common Property. --A joint tenant who improves the common property at his own expense is entitled, in a partition suit, to compensation for the improvements, whether the co-tenant assented thereto or not. But such an outlay does not in strictness constitute a lien on the estate, and this allowance is made, not as a matter of legal right, but merely from a desire to do justice between the parties, and hence will be so estimated as to inflict no injury on the co-tenant. Ballou v. Ballou, 94 Va. 350, 26 S.E. 840; Chinn v. Murray, 4 Gratt. 348. See monographic note on " Joint Tenants and Tenants in Common" (compensation for improvements) appended to Ambler v. Wyld, Wythe 235. See Ruffners v. Lewis, 7 Leigh 720, generally, for what improvements and expenses compensation will be allowed. Also, Graham v. Pierce, 19 Gratt. 28.
But no action of assumpsit can be maintained to recover any part of the cost of improvements made by one co-tenant, the other is under no obligation to contribute to them, and a co-tenant cannot recover from his fellow tenants a share of the expense encurred by him in making improvements on the common property, in the absence of an express assent on their part, or of such circumstances or dealings between the parties as will convince the court that an understanding existed to the effect that the expenses were to be repaid. Ballou v. Ballou, 94 Va. 350, 26 S.E. 840.
Joint Tenants--Improvements--Priority of Creditors.--When two joint tenants of real estate agree with each other, that one shall, with his own money, erect improvements on the real estate jointly held, and have a lien on the interest of the other, for the money so expended, the agreement, with the actual erection of the improvements by the one and the acquiescence of the other, constitutes such a lien as will be recognized and enforced in a court of equity. But such a lien is not valid, and will not be enforced in favor of the tenant who erects the improvements, against a creditor of the other, who has caused his interest in the property to be attached, or a purchaser under such attachment; --whether the creditor attaching, or the purchaser under the attachment, have notice of the previous equitable lien or not. Houston v. McCluney, 8 W.Va. 135.
But the rule as to priority is different where it is an encumbrance such as a vendor's lien that was paid by the joint tenant, for in that case he will have priority over a creditor who is not a purchaser without notice of the encumbrance. Tompkins v. Mitchell, 2 Rand. 428.
Contribution for Improvements between Co-Tenants, etc. --W. Va. Doctrine.--" I think it can be safely laid down, that, with the exception stated, (a mill or a house,) no joint tenant, tenant in common, or parcener can compel his co-tenant to make improvements, or maintain an action against him personally to compel him to contribute to the expense of improvements made by him upon the estate, without his consent, express or implied, or fix it as a lien on his interest in the estate. One cannot improve his fellow out of his estate. He has voluntarily put improvements on land of another, knowing his right, and he cannot impose a debt on him or his estate, without his consent. It is not the case of one making improvements in good faith believing the land to be his. The common law denied such a one relief, and it is only allowed by statute. Code, c. 91. It seems that where a tenant in common or joint tenant is called on for rents and profits in equity, he may deduct ordinary repairs on the principle that he who asked help from a court of equity, must do equity. Where partition is made, the part improved should, if not prejudicial to others, be allotted to the one who made improvements, estimating its value without improvements. But if this cannot be done, he to whom the improvement falls does not have to pay for it." (It is on this point the West Virginia rule is different from that in Virginia.) " Where improvements are made with consent of the co-tenants, they are personally bound, and the demand is a lien on their shares. Houston v. McCluney, 8 W.Va. 135; Freem. Coten. § 262." Ward v. Ward, 40 W.Va. 611, 21 S.E. 746; Dodson v. Hays, 29 W.Va. 577, 2 S.E. 415.
Where Property Is Sold for Partition. --Where, however, the property is not susceptible of partition, and must be sold to divide the proceeds, the coparcener who made repairs and permanent improvements shall receive out of the proceeds that amount by which the property, at the date of sale, remains enhanced in value from the improvements, not their original cost. Ward v. Ward. 40 W.Va. 611, 21 S.E. 746.
b. Repairs.
" The rule applicable in the matter of repairs is different from that in the case of improvements, in the former case the weight of authority is that, when the repair of joint property is necessary to its use and preservation, one joint tenant, when his fellows refuse to unite, may have the property repaired and sue for compensation, but we have been referred to no authority which holds that this can be done in the case of improvements." Ballou v. Ballou, 94 Va. 350, 26 S.E. 840.
c. Incumbrances.
The right of a co-tenant, who discharges an incumbrance upon the common property, or pays more than his share of the purchase price, to ratable contribution from his co-tenants, is said to arise out of the trust relationship which exists among joint owners of property, rather than by way of subrogation. But whatever may have been its origin, the doctrine is firmly established by the authorities. Grove v. Grove, 100 Va. 556, 42 S.E. 312; Tompkins v. Mitchell, 2 Rand. 428.
As to priorities between claims for contribution to discharge of incumbrances and creditors, see supra, " Improvements."
3. Between Funds Jointly Liable.
Contribution between Realty and Personalty to Pay Debts.--In the case of Perrin v. Lomax, 2 Rob. 133, where an entire estate had been conveyed by deed of trust to pay the debts of the grantor therein, and for other purposes, with plenary powers to the trustee in dealing with the estate to support the grantor, his wife and family, etc. (see syllabus of the case), it was held, among other things that when the grantor and his wife being dead, the succession to the realty and personalty fell into different channels, the equity arose that the owners of realty and personalty should contribute ratably to the burthen of paying the debts remaining unsatisfied at the widow's death.
4. Between Indorsers.
An indorser on a negotiable note is not liable for contribution--like a surety on nonnegotiable paper--to a prior indorser, without an agreement to be equally bound, which must be proved by the person asserting it. Willis v. Willis, 42 W.Va. 522, 26 S.E. 515; Farmers' Bank v. Vanmeter, 4 Rand. 553.
Negotiable Note--Joint Makers--Renewal--New Note--Separate Transaction--Assignee Indorser on New Note Not Bound to Contribute from His Security to Save Indorser on Old Note.--Nearly a month after the protest of a negotiable note on which two makers are bound, one of the makers, for the purpose of paying the note, executes his two negotiable notes, dated on the day of their execution, and with one exception indorsed by new indorsers, and has the same discounted and the proceeds placed to his personal credit in bank. Out of the money thus obtained he pays the original note by his individual check, and the note is marked paid by him and delivered to him, and he assigns the same to the indorser of one of the new notes. This is not a renewal of the first note, but an independent transaction, and the assignee of that note is entitled, as successor to the rights of his assignor who had paid the whole note, to demand of the other joint maker of it the payment of one-half thereof for his sole benefit, to the exclusion of the other indorsers of the new notes. Conrad v. Smith, 91 Va. 292, 21 S.E. 501.
5. Between Insurers.
The doctrine of contribution applies in cases of double insurance, where the engagements of the insurers are for the same person, upon the same subject matter, and against the same risks. It rests upon the principle of natural justice, that where there are several persons bound for the same person and same engagement, that all of them should contribute pro rata to the satisfaction or extinguishment of the common burden. Conn. F. Ins. Co. v. M. & M. Ins. Co., 1 Va. Dec. 592.
6. Among Legatees and Devisees.
Contribution Where Whole Estate Is Charged with Debts. --Where testator has charged his whole estate with the payment of his debts, and there is a deficiency in the residuum to pay the debts, equity will apply the maxim that equality is equity and enforce a ratable contribution thereto from the property devised and bequeathed. Elliott v. Carter, 9 Gratt. 541; Murphy v. Carter, 23 Gratt. 477; Cockerille v. Dale, 33 Gratt. 451, and other cases cited in foot-note ; also monographic note on " Debts of Decedents" appended to Shores v. Wares, 1 Rob. 1.
Executor Need Not First Appeal from Decree against Him.--If, without fraud or collusion, a decree be rendered, by a court of competent jurisdiction, against an executor, he may bring his suit in equity against the legatees, for contribution to satisfy such decree, without paying the money himself, and without having appealed to a superior court, though requested and advised to do so. Bower v. Glendening, 4 Munf. 219.
To Raise Portion of Posthumous Child.--The portion of such posthumous child is not to be raised by a division of the estate, into equal parts, but by a proportionable contribution by the devisees and legatees and those claiming under them. Armistead v. Dangerfield, 3 Munf. 20. See Code of Va. (1887), § 2528.
Between Devisees of Lands Bound by Bond. --When lands held by several devisees in the same will, are charged in equity to satisfy a bond debt of the devisor, the decree should be against the lands of all the devisees, (or the money received, or claimed, in lieu thereof), in ratable proportions, and not against the land of one only, with liability to that one to sue the others for contribution. Foster v. Crenshaw, 3 Munf. 514; Mason v. Peter, 1 Munf. 437.
Between Devisees of Lands Bound by Bond--Insolvency.--And the whole of the real estate of which the decedent died possessed is liable for his debts; and if one of the heirs or devisees has aliened or wasted his part of the estate, and is insolvent, the others must contribute ratably to make up the deficiency, according to the value of the lands descended. Ryan v. McLeod, 32 Gratt. 367; Lewis v. Overby, 31 Gratt. 601; Hopkirk v. Dennis, 2 Munf. 326; Leake v. Leake, 75 Va. 792.
Contribution among Devisees to Pay Debts of Decedent.--The court should subject each devisee for his proportion of the debt, according to the value of the land devised to him or her, and direct a sale of his or her land not sold in the first instance for the payment of his or her proportion of the debt. If the land still held by one of them does not discharge his or her proportion of the debt, the balance remaining unpaid should be apportioned in like manner among the others, and the land of each sold to pay his or her proportion thereof, and so on until the whole debt is paid or the whole land sold. Lewis v. Overby, 31 Gratt. 601; Ryan v. McLeod, 32 Gratt. 367.
Realty Not Charged with Debts by Will--No Contribution from Other Devisees to Pay a Subsequent Incumbrance on Realty Devised.--The Code, § 2665, making all real estate of any person who may die intestate, or which. though he die testate, is not charged with the payment of his debts, assets for payment of debts in the order in which personalty is to be applied, merely abolishes the distinction existing at common law between record and specialty debts and simple contract debts, and makes the real and personal estate liable for all debts, but does not alter the order of the liability of decedent's assets; and hence it does not alter the assets applicable to the payment of a subsequent incumbrance on a part of lands devised, so as to give the devisee thereof contribution from the devisees of other realty. Frasier v. Littleton, 100 Va. 9, 40 S.E. 108; McCandlish v. Keen, 13 Gratt. 615, 630; Peirce v. Graham, 85 Va. 227, 235, 7 S.E. 189; Elliott v. Carter, 9 Gratt. 541; Edmunds v. Scott, 78 Va. 720. But it is said, obiter, that where a testator, subsequent to the execution of his will, places an incumbrance upon a part of the lands divided, but by his will directs that his real estate shall be chargeable with the payment of his debts, not only the incumbered part, but all his real estate, must contribute to the payment of such incumbrance. Frasier v. Littleton, 100 Va. 9, 40 S.E. 108.
7. Between Partners.
In General.--It is well settled that one partner who has paid out of his own means debts of a partnership of which he is a member, may, upon a settlement of the partnership accounts, have contribution from the other partners of their due proportion of the debt so paid. Sands v. Durham, 98 Va. 392, 36 S.E. 472. This case was reheard and is reported again in 99 Va. 263, 38 S.E. 145. There it is held, it having been denied at the first hearing, that the right of subrogation, as a means to enforce contribution, obtains in favor of one partner, who is not in arrears to the firm, against the real estate of his co-partner, in the hands of a subsequent purchaser, to the extent to which his payments exceed his proportional part of the liability, the partnership having been dissolved, the social assets exhausted and a settlement of the partnership accounts having been had.
There Must First Be a Settlement of Accounts. --" A partner who takes exclusive possession and control of the assets of a firm, on its dissolution, and undertakes to close up the business, is not entitled to contribution from a partner for firm debts paid by him, without making a settlement of partnership accounts. Smith v. Zumbro, 41 W.Va. 623, 24 S.E. 653; Compton v. Thorn, 90 Va. 653, 19 S.E. 451.
Laches.--And when a partner waited for twenty-six years after the firm ceased to do business before seeking to subject the land of his co-partner, long deceased, to contribution, he was held to be barred by his laches in failing to prosecute his claim within a reasonable time, and in the lifetime of other parties who had knowledge of the facts. Compton v. Thorn, 90 Va. 653, 19 S.E. 451. See infra, " Suits for Contribution among Co-Sureties." See monographic note on " Partnership" appended to Scott v. Trent, 1 Wash. (VA) 77.
8. Party Walls.
There Must Be Express or Implied Adoption of the Wall-Liability to Pay Therefore Runs Not with Land.--In 1844 a foundation wall was built, one-half of which projected or extended on the adjacent lot; no contract was made between the lot owners as to the cost of such building. In 1860 the party controlling the adjoining lot erected a house, using the wall so projecting, and the vendee of the party who originally built the wall brought a suit in chancery for contribution, claiming one-half of the cost of erecting it. No proof of a contract to pay for the erection of one-half of the wall being produced, it only became a party wall from continued use after it was adopted by the adjacent lot holder; but no liability arose from such adoption to pay for the original construction sixteen years prior, nor could arise except by express agreement. List v. Hornbrook, 2 W.Va. 340. A contract to pay could not be implied from mere assent to the building of the wall, if it existed, and such a contract would be purely personal and would not run with the land. List v. Hornbrook, 2 W.Va. 340.
But see Thweatt v. Jones, 1 Rand. 328, where it is said, by way of illustration, if there be a common partition wall between two coterminous tenants and it become ruinous, and one, in spite of the prohibition of the other, pulls it down, and rebuilds it, he is entitled to contribution for the expense.
Keeping in Repair.--After a wall obtains the character of a party wall--as in this case, perhaps, when the house was built on the adjacent lot, joined to it, and it became the subject of common use and enjoyment--equity will raise the duty and liability to contribute to keep the same in repairs. List v. Hornbrook, 2 W.Va. 340.
9. Between Remaindermen and Life Tenant and Remainderman.
Between Remaindermen--Denied under the Circumstances. --Where one of several remaindermen had rented the property from the life tenant at a price more than sufficient to satisfy the taxes, and had paid the taxes, the other remaindermen had the right to presume that he was paying them for the life tenant, and he cannot call on them for contribution. Downey v. Strouse, 101 Va. 226, 43 S.E. 348.
Between an Estate and Its Life Tenant--Claim against Estate.--Where a testator devises and bequeaths his estate to his wife for life, remainder to others; and the wife was executrix; and a claim arises against testator's estate upon a covenant, which is ascertained, after the death of the tenant for life and executrix, the tenant for life's estate is not bound to contribute to the payment of such debt, it not having been ascertained or payable in her lifetime, or to keep down the interest thereof. Poindexter v. Green, 6 Leigh 504.
10. Between Stockholders.
One Having Sold Out to the Other.--P. owned $ 37,500 of stock for which he paid $ 17,500 in cash, the balance being issued on the betterments to the corporation's property, to pay for which its notes indorsed by P. & S. and another stockholder were outstanding and unpaid. S. bought P.'s stock " on the basis of cost" and $ 5,000. In another similar contract, S. used the same expression, which he interpreted as an assumption of the other party's liabilities as to said corporation, and P. was cognizant of that interpretation, S., who afterwards paid off said notes and sued P. as his co-indorser for contribution, is bound by his own interpretation to treat P. as released from all liability as respects said notes. Peyton v. Stuart, 88 Va. 50, 13 S.E. 408.
11. Between Tort Feasors.
Allowed for Non-Performance of Civil Obligation.--In equity, contribution may be claimed by one inspector of tobacco, against his co-inspector, for the amount of a judgment had against the former, for failing to deliver tobacco, when legally demanded, which judgment he has discharged, when the failure does not proceed ex maleficio, or from some actual fraud, or voluntary wrong. The mere non-performance or violation of a civil obligation, is not such a wrong, as will condemn a claim to contribution. But it is incumbent on the party asking relief, to show that he is innocent of such imputations. Thweatt v. Jones, 1 Rand. 328.
Donees in Deeds Set Aside as Fraudulent--No Actual Fraud.--Where a decree is rendered on behalf of a creditor, against several voluntary donees of the debtor, a court of equity should decree contribution among them, so that each man should only pay his just proportion of the debt. But, all the donees should be liable for the failure of any one to pay his proportion, until the debt is completely discharged, as far as he has received the funds of the donor. Chamberlayne v. Temple, 2 Rand. 384.
B. EXONERATION.
1. Between Principal and Surety.
a. On What Founded.
A principal for whom another, at his request, undertakes as surety, although such principal's name does not appear in the obligation given by the surety, is as much bound to indemnify such surety for what he pays on the obligation as if his name appeared in it as principal, and the surety in such case is entitled by subrogation to enforce for his exoneration or indemnity all the rights, remedies, and securities of the creditor against the principal debtor. Upon this principle the case of Enders, etc., v. Brune, 4 Rand. 438, was decided. And in applying the principle the rule is broad enough, it is said, to include every instance where one pays a debt for which another is primarily answerable. and that should in equity and good conscience have been discharged by him. Harnsberger v. Yancey, 33 Gratt. 527.
A surety who pays the debt of his principal, upon the plainest principles of natural reason and justice, has a right to be reimbursed by him. And this principle is recognized by both courts of law and equity. There is an implied contract of indemnity between the principal and his surety, which obliges the former to reimburse the latter who has paid his debt; and the courts of equity will substitute him to the remedies and securities of the creditor for his indemnity; and this not upon the ground of contract, but upon a principle of natural equity and justice. Kendrick v. Forney, 22 Gratt. 748; Butler v. Butler, 8 W.Va. 674. See Conrad v. Buck, 21 W.Va. 396; Baxter v. Moore, 5 Leigh 219; Tompkins v. Mitchell, 2 Rand. 428; Woods v. Douglas, 46 W.Va. 657, 33 S.E. 771: Nebergall v. Tykee, 2 W.Va. 474.
b. General Principles.
Parties May Fix Their Liability by Agreement.--It is competent for the principal obligors in a bond to contract that as between themselves, one shall be the principal and the others his sureties and as such entitled to be subrogated to the rights of the creditor against him as their principal. Buchanan v. Clark, 10 Gratt. 164.
Retention of Funds.--A surety has in respect of his liability the right of a creditor as against his principal, and upon the insolvency of the principal debtor he may retain any funds belonging to such debtor by way of indemnity against his liability. Mattingly v. Sutton, 19 W.Va. 19.
Surety Need Not First Appeal from Decision Fixing His Liability. --See Taylor v. Cox, 32 W.Va. 148, 9 S.E. 70, where it is held that the executors of a deceased surety on a note, to whom other notes had been assigned to indemnify the estate of the surety, he having been forced to pay the note, need not appeal from a decision of a lower court rejecting the judgment on one of said notes which they had sought to prove for their use in said court, before resorting to the property of the principal for reimbursement.
Surety Reimbursing Stranger Who Has Paid Debt.--Where stranger has paid principal's debt, and surety reimburses him, surety becomes entitled to recover the amount from principal. Harper v. McVeigh, 82 Va. 751, 1 S.E. 193.
Forthcoming Bond--Rights of Surety. --A surety in a forfeited forthcoming bond is a surety for the debt; and when he pays it as such surety, he is entitled to all the rights of the creditor against the original debtor, subsisting at the time he became bound for the debt. Hill v. Manser, 11 Gratt. 522. See foot-note and ca. ci. Robinson v. Sherman, 2 Gratt. 178; Preston v. Preston, 4 Gratt. 88; Dent v. Wait, 9 W.Va. 41; Leake v. Ferguson, 2 Gratt. 419; Garland v. Lynch, 1 Rob. 545.
Surety in Injunction Bond Paying Debt Entitled to Exoneration from Debtor, and to Claim Lien of Judgment.--A judgment debtor having obtained an injunction to the judgment, which was afterwards dissolved, and the surety in the injunction bond having been sued thereon, and judgment recovered against him, which he has discharged, he is entitled to the benefit of the creditor's judgment lien. Rodgers v. M'Cluer, 4 Gratt. 81.
Must Not Be Mere Volunteer. --Subrogation is not applied in favor of one who has, officiously and as a mere volunteer, paid the debt of another, for which neither he nor his property was answerable; but it will be applied, whenever the person claiming its benefit has paid a debt for which another was primarily answerable, and which he was compelled to pay in order to protect his own rights or save his own property. McNeil v. Miller, 29 W.Va. 480, 2 S.E. 335; Hawker v. Moore, 40 W.Va. 49, 20 S.E. 848; Newlon v. Wade, 43 W.Va. 283, 27 S.E. 244; Janney v. Stephen, 2 Patton & H. 11; Neely v. Jones, 16 W.Va. 625, 635. See infra, " Payment or Discharge of Liability."
A surety who pays money voluntarily on a judgment absolutely barred, loses his remedy against his principal; but a payment cannot be said to be voluntary, as long as the judgment can be enforced in any way, either by scire facias or action of debt. Randolph v. Randolph, 3 Rand. 490.
Must Not Be Mere Volunteer--Ratification by Debtor.--It is well settled that a stranger, who pays the debt of another without his knowledge and authority, cannot sue the debtor for money paid for his use, unless the debtor has ratified the act of the stranger by promising to repay him the amount, or in some other manner. But if, after the stranger pays the debt, the debtor ratifies the payment, as by relying on this payment as a payment when sued upon the debt, or in any other manner, he will be liable in action of assumpsit brought by the stranger against him for money paid at his request for his use, the subsequent ratification being equivalent to a previous request. Neely v. Jones, 16 W.Va. 625; Lipscomb v. Winston, 1 Hen. & M. 453; Clevinger v. Miller, 27 Gratt. 740. See State v. B. & O. R. Co., 41 W.Va. 81, 93, 23 S.E. 677.
Administrator Overpaying a Creditor's Dividend Cannot Recover from Surety of His Intestate.--An administrator, with money of his decedent, pays on a note made by his decedent, as principal, with sureties, an amount in excess of the sum applicable out of the assets to that debt, under the mistaken belief that he was surety in such note, and that the estate would pay a somewhat larger per cent. of its liability than it did. He brings in his own name an action of assumpsit against a surety to compel the surety to refund the amount so paid in excess of the ratable share of the assets applicable to such debt. He cannot recover of the surety, being in the position of a stranger who has paid the debt of another without request, or subsequent ratification. Proudfoot v. Clevenger, 33 W.Va. 267, 10 S.E. 394.
c. Interest or Liability Only Secondary--Another Primarily Liable.
First Surety Entitled to Indemnity from Latter Surety.--" But where there is a judgment or decree against a principal debtor and his surety, and a third party at the instance of the principal and for his sole benefit and without the assent of the surety, enters as surety for the principal in an obligation, the effect of which is to suspend the execution of the judgment or decree and thus prejudice the rights of the first surety, the equity of the latter is superior; and it seems to be well settled that in such case the second surety would not be entitled to contribution from the first, and there is much authority for the proposition that the first would be entitled to indemnity from the second. This principle has been applied to injunction bonds, bail-bonds, prison-bounds bonds, forthcoming bonds, and appeal bonds. Langford v. Perrin, 5 Leigh 552; Douglass v. Fagg, 8 Leigh 588; Givens v. Nelson, 10 Leigh 382; Stout v. Vause, 1 Rob. 169; Robinson v. Sherman, 2 Gratt. 178; Bentley v. Harris, 2 Gratt. 357; Leake v. Ferguson, 2 Gratt. 419; Preston v. Preston, 4 Gratt. 88." Harnsberger v. Yancey, 33 Gratt. 527, 541; Sherman v. Shaver, 75 Va. 1; Coffman v. Hopkins, 75 Va. 645; 3 Min. Inst. (3d Ed.) 421.
First Surety Entitled to Indemnity from Latter Surety--Exception.--The rule supposes that the first surety does not sanction the interposition of the second. It does not apply, therefore, where the surety in the second bond becomes bound for a purpose in which both the principal and the prior surety concur, in which they both have an interest, and where the assent of the prior surety is expressly given, or is clearly to be inferred from the circumstances. Harnsberger v. Yancey, 33 Gratt. 527. See, as to what constitutes the relation of co-surety, Langford v. Perrin, 5 Leigh 552, and supra, " Who Are Co-Sureties."
Exoneration of One Set of Sureties by Another Set Primarily Liable--Insolvency of Principal.--Land of executor, in arrears to legatees of testator, was sold in suit on his executorial bond, for enough to pay their demands, and he became purchaser and gave bond with sureties. Failing to pay the bond, his executorial sureties had to pay the legatees: the latter, being only secondarily bound, and having paid what the sureties for the purchase money were primarily bound to pay, are entitled to be substituted to the legatees' rights, and to be compensated by those primarily bound. Insolvency of principal debtor is sufficiently shown by the sale of his lands at auction and the return of execution unsatisfied. Hanby v. Henritze, 85 Va. 177, 7 S.E. 204.
d. Payment or Discharge of Such Liability.
Before a surety is entitled to be subrogated to the rights of the creditor he must have paid or satisfied the debt of the principal. The mere execution of a bond to a creditor is not sufficient, unless it be accepted in satisfaction of the debt of the principal. There must be satisfaction by the surety. Combs v. Candler, 95 Va. 7, 27 S.E. 815.
Satisfaction of Debt Must Be Clearly Shown.--The surety, if his action is brought before the debt is actually paid in money or its equivalent, such as personal or real property, cannot recover against his principal in an action at law for money paid by him as his surety, unless he clearly proves that his said negotiable note was accepted and received by the creditor, by express agreement, in absolute and complete satisfaction and discharge of the pre-existing debt, and of the principal debtor therefrom. Feamster v. Withrow, 12 W.Va. 611.
Satisfaction of Debt Must Be Clearly Shown--Surety Need Not Await Suit.--Surety may, at any time, voluntarily pay the debt after it is due; and he is at once entitled to his action, but such payment must amount to a satisfaction of the original debt and a release and discharge of the principal debtor therefrom, Feamster v. Withrow, 12 W.Va. 611; Clevinger v. Miller, 27 Gratt. 740; Cranmer v. McSwords, 26 W.Va. 412.
Onus of Proving Payment.--Where surety is seeking subrogation for his indemnity against his principal, the onus of proving the payment, so as to entitle him to the relief he asks, rests on him. Barksdale v. Fitzgerald. 76 Va. 892.
The rule is certainly too well settled to be controverted, nor is it disputed that the contract between the principal and the surety is for indemnity only, and therefore if the surety discharges an obligation for a less sum than its full amount, he can only claim against the principal the sum so paid. Southall v. Farish, 85 Va. 403, 7 S.E. 534; Kendrick v. Forney, 22 Gratt. 748; Butler v. Butler, 8 W.Va. 674; Feamster v. Withrow, 9 W.Va. 296; Feamster v. Withrow, 12 W.Va. 611; Matthews v. Hall, 21 W.Va. 510; Tarr v. Ravenscroft, 12 Gratt. 642; Cromer v. Cromer, 29 Gratt. 280. So, where one is compelled to pay a bond a second time, having paid with notice to one who had no right to it, he can only have a decree against the man so paid, for what he actually paid him, with interest, though it be less than the face of the bond. Pickens v. McCoy, 24 W.Va. 344.
e. Measure of Recovery.
(a) Only Indemnity Can Be Claimed.
Surety Paying in Depreciated Currency. --If the surety pays the debt of his principal in depreciated currency, or depreciated notes of banks or other institutions, the general rule is, that he can recover only the value thereof at the time he paid the debt for his principal; and the criterion is the market value. Kendrick v. Forney, 22 Gratt. 748; Butler v. Butler, 8 W.Va. 674; Feamster v. Withrow, 12 W.Va. 611; Feamster v. Withrow, 9 W.Va. 296.
Surety Paying in Depreciated Currency--Exception.--Insolvent bank holds judgments against principal and surety, on which it pays sixty per cent., but which third party had contracted to take at par. The surety paying judgments with his deposits, under agreement with principal to repay the face value of the deposits so used, is entitled to receive face value of the deposits; though the general rule is that if surety discharges the debt for less than its full amount, he can only claim against principal the sum paid. Southall v. Farish, 85 Va. 403, 7 S.E. 534.
Where Surety Has Compromised the Liability and Taken Assignment. --And where exoneration is sought by a surety from the party primarily liable for what he has had to pay, having compromised the claim for less than was actually due, he can only demand indemnity for what he has actually paid, with interest, though he may have taken an assignment in full of the claim. Blow v. Maynard, 2 L.
(b) Interest and Costs.
Right to Recover Interest.--It is the settled law that where a surety pays the debt of his principal he is entitled at once, upon such payment, to an action for the amount paid including principal and interest, and if payment is not made then by the principal, the surety is entitled to interest on the whole sum paid. Cranmer v. McSwords, 26 W.Va. 412; Feamster v. Withrow, 12 W.Va. 611; Blow v. Maynard, 2 Leigh 29.
Right to Recover Costs.--Whether the surety who has paid costs on account of the debt of his principal, can recover such costs from the principal depends upon the circumstances of each case. But the principal is not liable for costs and expenses unnecessarily incurred by the surety in litigation carried on by him in order to get rid of his liability or defeat the efforts of a party seeking to enforce it. Surety must show that the litigation was entered into in good faith and on reasonable grounds, and was a measure of defense necessary to the interest of both parties, and was calculated so to result. Cranmer v. McSwords, 26 W.Va. 412.
Surety in Forthcoming Bond--Costs.--The surety in a forthcoming bond given by one debtor, who has become insolvent, is entitled to recover from the other original debtors the principal, interest, and costs of the original judgment; but not the costs incurred by the execution and forfeiture of the forthcoming bond. Robinson v. Sherman, 2 Gratt. 178.
Right to Recover Costs in Each of Several Motions.--A surety having paid five several sums of money for his principal, may maintain five several motions, and recover several judgments, for the debts, and for the costs of each motion. Ayres v. Lewellin, 3 Leigh 609.
2. Among Legatees, Devisees, etc.
Between Executor and Devisees.--Where the executors have been held liable for an unpaid debt of their decedent, not having exacted a refunding bond or distributing the personal property, and all the parties being before the court, the executors are entitled to have the devisees to whom they paid over the proceeds of the personal property, subjected in the first place to pay the amount to the creditor. Lewis v. Overby, 31 Gratt. 601; Watts v. Taylor, 80 Va. 627; Max Meadows Land, etc., Co. v. McGavock, 96 Va. 131, 30 S.E. 460.
Exoneration of Legacies Out of Realty--Renunciation of Will by Widow.--Where a widow renounces the will which devised the real estate to her for her life and then to a son, and claims her legal rights, the two-thirds of the land remaining after assignment of her dower should be applied to indemnify the legatees of the personal estate, for the loss they had sustained by her renunciation of the will and claim of her third of this personal estate, and for this purpose the said two-thirds of the land should be rented out, and the proceeds applied to their satisfaction, until said satisfaction was complete or until the death of the widow, whichever should happen first, when it would be delivered to the devisee in remainder under the will. McReynolds v. Counts, 9 Gratt. 242; Findley v. Findley, 11 Gratt. 434; Mitchells v. Johnsons, 6 Leigh 461 (here devisees also were so exonerated); Morriss v. Garland, 78 Va. 215; Kinnaird v. Williams, 8 Leigh 400; Cowan v. Epes, 2 Patton & H. 520.
Waiver of Legacy--Legacy Goes to Disappointed Devisee.--Though a legatee under a will which devises away property belonging to him, elect to retain such property and to waive the legacy, the testator is not thereby rendered intestate as to the subject of such legacy, but it shall go to the disappointed devisee, in satisfaction of his loss. Kinnaird v. Williams, 8 Leigh 400.
3. Between Realty and Personalty of a Decedent.
Realty to Be Relieved by Personalty.--It is well settled--a rule of the equity courts almost universally recognized--that the personal estate of the deceased is the natural and primary fund for the payment of the debts; and the lands will not be charged without first taking an account of such personal estate, and directing it to be applied to that object. 2 Rob. Prac. 86; Foster v. Crenshaw, 3 Munf. 514; Elliott v. George, 23 Gratt. 780; Edmunds v. Scott, 78 Va. 720: Laidley v. Kline, 8 W.Va. 218; New v. Bass, 92 Va. 383, 23 S.E. 747; Cranmer v. McSwords, 24 W.Va. 594.
Deficiency of Personal Assets.--This exemption of real estate devised extends as well to the case of a deficiency of personal assets for the payment of legacies as of debts; the legatees having no right to call upon the devisee to contribute to the payment of their legacies, unless the real estate be expressly charged. Elliott v. Carter, 9 Gratt. 541; Allen v. Patton, 83 Va. 255, 2 S.E. 143. See monographic note on " Debts of Decedents," appended to Shores v. Wares, 1 Rob. 1.
4. Between Successive Alienees of Portions of the Same Tract of Land, and Retained Portion.
Exoneration--Of Part of Tract of Land Sold, by Retained Portion.--It is well settled that where an entire tract is subject to an incumbrance, parts of it sold off are entitled to exoneration from what is retained by the grantor. And if he has retained none or not enough, each part is entitled to exoneration what from was aliened after it was sold off. The different tracts are to be subjected in the inverse order of their alienation. Henkle v. Allstadt, 4 Gratt. 284; Jones v. Myrick, 8 Gratt. 179; Alley v. Rogers, 19 Gratt. 366, 389, and foot-note ; Jones v. Phelan, 20 Gratt. 229; Miller v. Holland, 84 Va. 652, 5 S.E. 701; Gracey v. Myers, 15 W.Va. 194. See references in foot-note to Rodgers v. M'Cluer, 4 Gratt. 81, and monographic note on " Judgments" appended to Smith v. Charlton, 7 Gratt. 425, and on " Marshaling Assets" appended to Carrington v. Didier, 8 Gratt. 260; Conrad v. Harrison, 3 Leigh 532; M'Clung v. Beirne, 10 Leigh 394; Jones v. Phelan, 20 Gratt. 229; Whitten v. Saunders, 75 Va. 563; Renick v. Ludington, 20 W.Va. 511. The rule is now statutory. Va. Code, § 3575; Code W.Va. (1899), chap. 139, § 8. See Harman v. Oberdorfer, 33 Gratt. 497.
5. Of Indorsers.
The accommodation indorsers on a note due at bank, to secure whom and the bank, the maker had conveyed land by deed of trust with covenant of warranty for himself and heirs, with the trustees and the bank respectively, that he has an absolute estate of inheritance, may, having paid the note, and the trust land having been sold under a prior deed of trust, come into equity for satisfaction out of the real assets in the hands of the heirs, to the extent of the damages accruing from the breach of the ancestor's covenant. Haffey v. Birchetts, 11 Leigh 83.
Surety for Second Indorser Entitled to Indemnity from Prior Indorser.--A surety on an injunction bond for the second indorser of a negotiable note, who has been compelled to pay said note, is entitled to recourse against the first indorser to recover the amount so paid.
Such surety is not barred from such recourse by the fact that in a suit in equity, brought by the holder of such note against the maker and indorsers, a decree was rendered in favor of the first indorser.
Nor is such party barred of such recourse by the fact, that in another suit in equity, brought by the second endorser to establish the liability to him of the first endorser, the bill was dismissed upon answer and demurrer, there being set out several causes of demurrer, of which some went to the merits of the controversy, and others did not, and it not appearing for what cause the bill was dismissed. Chrisman v. Harman, 29 Gratt. 494.
As to exoneration of subsequent by prior endorser, see monographic note on " Bills, Notes and Checks" appended to Archer v. Ward, 9 Gratt. 622.
6. Other Cases of Exoneration.
Exoneration of Bona Fide Purchasers Out of Property Subject to Lien Which Deprived Them of Their Land.--While a mortgagee of lands and slaves, cannot be compelled to resort to a sale of the slaves before he shall disturb the possession of bona fide purchasers of the lands from the mortgagor, the decree against such purchasers ought to permit them, after satisfying the claim of the mortgagee, to seek indemnity out of the mortgaged slaves, or the estate of the mortgagor, or any other person liable to such demand, so far as the mortgagee might be able to charge such party, or otherwise. Mayo v. Tomkies, 6 Munf. 520.
Sale of Land--Agreement of Vendee to Pay Lien Thereon--Effect. --Where the vendee of land, under his contract with the vendor, is bound to pay a debt which is a lien on the land, he becomes principal debtor and his vendor surety only, and the latter, and the creditors who succeeded to his equities, have the right to require the land held by the vendee to be subjected to the satisfaction of the lien which rests upon it in exoneration of the lands subsequently aliened by the vendor and encumbered by a deed of trust. Schultz v. Hansbrough, 33 Gratt. 567, 583; Douglass v. Fagg, 8 Leigh 588.
Sureties of Fiduciary--Devastavit--Recourse to Rights of Legatees.--If the sureties of a delinquent fiduciary pay the amount of the devastavit to the legatees, they are entitled to be substituted to the rights of the legatees against the party uniting with the fiduciary in the breach of trust. Pinckard v. Woods, 8 Gratt. 140; Jones v. Clark, 25 Gratt. 642; Asberry v. Asberry, 33 Gratt. 463; Sherman v. Shaver, 75 Va. 1, 11.
IV. ACTIONS AND LIMITATIONS, PRACTICE.
A. JURISDICTION AND REMEDIES.
1. Remedies in Equity and at Law Compared. --The doctrine of contribution among sureties being founded rather on principles of equity and natural justice than upon any notion of mutual contract, express or implied, it is true it may be enforced at law, although no positive contract between the sureties can be shown, but the principles and the measure of relief afforded in the court of equity are different from those of the law courts. Thus, if one of the several sureties be insolvent, and another pays the debt, he can at law recover from the other solvent sureties only their original quotas without regard to the share of the insolvent surety. But in equity the share of the insolvent surety will be apportioned amongst those who are solvent. Tarr v. Ravenscroft, 12 Gratt. 642, 652; Robertson v. Trigg, 32 Gratt. 76; Preston v. Preston, 4 Gratt. 88.
So, if one surety die, the remedy at law lay only against the survivors; but a court of equity would compel contribution from the estate of the deceased surety. Tarr v. Ravenscroft, 12 Gratt. 642, 652.
And in Wayland v. Tucker, 4 Gratt. 267, it was said that " no adequate relief could have been afforded at law; as the security can only recover at law the aliquot portions of each security. But in the present case as there were three securities and the co-security was insolvent, a resort to a court of equity was necessary to apportion his share among the two remaining sureties."
Contribution between Legatees--Choice of Remedies.--A creditor, having obtained a judgment against an executor as such, and sued out a fi. fa. de bonis testatoris, which proved ineffectual, may either resort to his action at law to establish a devastavit, or file a bill in equity against the executor and legatees, for an account of assets, and proportional contribution to pay the debt. Sampson v. Payne, 5 Munf. 176. See Burnley v. Lambert, 1 Va. 308, 312.
Effect of Assumption of Jurisdiction by Courts of Law.--The jurisdiction now assumed by courts of law to enforce contribution in some cases, does not affect the jurisdiction originally belonging to a court of equity. Wayland v. Tucker, 4 Gratt. 267; Russell v. Dickeschied, 24 W.Va. 61; and cases cited in foot-note to former case. Cabell v. Megginson, 6 Munf. 202.
2. Equitable Relief before Payment of Liability--Bill Quia Timet. --A surety is entitled, the debt being due, to come into equity by a bill quia timet, against the creditor and the debtor, and compel the latter to make payment of the debt so as to exonerate himself from his responsibility. He may enforce for his exoneration, any liens of the creditor on the estate of the principal; and if the latter be dead, may bring any suit in equity which the creditor could bring for a settlement of the administration account of the estate of the decedent, and for administration of the assets, whether legal or equitable. Stephenson v. Taverners, 9 Gratt. 398, 404; Call v. Scott, 4 Call 402; Kent v. Matthews, 12 Leigh 573; Penn v. Ingles, 82 Va. 65; Meade v. Grigsby, 26 Gratt. 612; Mattingly v. Sutton, 19 W.Va. 19; Watson v. Wigginton, 28 W.Va. 533; Neal v. Buffington, 42 W.Va. 327, 26 S.E. 172. See monographic note on " Bills Quia Timet" appended to Devries & Co. v. Johnston, 27 Gratt. 805.
But surety is entitled only to such security as the creditor has against the principal. Barton v. Brent, 87 Va. 385, 13 S.E. 29.
The only difference is that he must bring the creditor into court along with him, in order that he may receive the money when it is recovered. Stephenson v. Taverners, 9 Gratt. 398, 404; Call v. Scott, 4 Call 402.
A surety upon the purchase money bonds given for a tract of land, against whom judgments have been recovered on the bonds, no conveyance having been made for said land, may go into a court of equity to subject the land to the payment of the debt, before he has been compelled to pay it himself. Hatcher v. Hatcher, 1 Rand. 53.
3. Equitable Relief after Payment of Liability.
Sureties on Official Bond Seeking Exoneration, Where Bond Is Joint Only.--If an official bond, given by a sheriff and his sureties before the act of 1786, be so worded as not to be joint and several, but joint only, a court of chancery is the proper tribunal to give the sureties relief against the estate of the sheriff after his death; upon their being compelled to pay a sum of money for a delinquency of such sheriff in his lifetime. Mountjoy v. Banks, 6 Munf. 387.
Principal and Sureties--Rights of Sureties.--Where a defaulting, insolvent ex-sheriff, with the proceeds of taxes collected by him, has taken up a large number of county orders, and, instead of having them credited as payments on his arrearage, is engaged in secretly selling and transferring them to various persons, who are trying to collect them again from the county, at the instance of the sureties of such ex-sheriff a court of equity will interfere, and compel the application of such orders to the relief of such sureties. Maxwell v. Miller, 38 W.Va. 261, 18 S.E. 449.
Remedy in Equity to Surety Paying Judgment.--A surety in a bond, having paid to the creditor the amount of a judgment against him thereupon, may file a bill in equity (without having made a motion or brought any action in law), against the administrator and heirs of the principal obligor; for the purpose of establishing his demand; of having an account of the personal and real estates; and of being permitted to stand in the place of the obligee in the bond, so as to be paid out of the real estate, in default of the personal. Tinsley v. Oliver, 5 Munf. 419.
4. Right to Contribution and Exoneration as Offsets.
Contribution--Against Assigned Bond.--The principal and two of three sureties in a bond became insolvent, and the other surety paid the debt having previously executed his bond for less than half the first bond, to one of his co-sureties, who had conveyed it in trust for his creditors. After the payment of the first mentioned debt by the solvent surety, judgment being rendered against him on his own bond, which he enjoined, claiming to offset it by his co-sureties' portion of the debt he had paid, he is entitled in preference to the assignee of his bond, and to relief in equity, notwithstanding the judgment at law. Wayland v. Tucker, 4 Gratt. 267.
Exoneration.--A payment by the surety to the creditors may be set off in an action by the principal against the surety, although not made until after suit brought. * * * And a court of equity will not permit a plaintiff at law to enforce against the defendant the collection of a debt, when the defendant stands as surety for the plaintiff to an amount greater than that sued for, unless the plaintiff will fully indemnify the defendant against his liability as his surety, more especially if the plaintiff is shown to be insolvent. Mattingly v. Sutton, 19 W.Va. 19.
And where the obligee in defendant's bond, payable January, 1820, after it became due assigned it to plaintiff: but before notice of the assignment, defendant became the obligee's surety on another bond, payable in 1822, and he became insolvent, defendant is entitled, in equity, to set-off the amount of the latter bond, on which he was surety, though not due, against his own bond in the hands of the plaintiff assignee. Feazle v. Dillard, 5 Leigh 30; Gordon v. Rixey, 86 Va. 853, 11 S.E. 562.
5. What State Law Governs Distributions. --Where heirs and legatees have received their shares of a decedent's estate under the laws of Louisiana, their right to hold and enjoy the same, and their liability to make contribution for the payment of debts must be regulated and controlled by the same law. De Ende v. Wilkinson, 2 Patton & H. 663. See monographic note on " Debts of Decedents" appended to Shores v. Wares, 1 Rob. 1.
6. Joinder of Actions. --On a joint purchase by three, and several payments by two, the right of action of the latter against the third party for contribution is several. Armstrong v. Henderson, 99 Va. 234, 37 S.E. 839; Carthrae v. Brown, 3 Leigh 98.
B. PARTIES.
1. Suits for Contribution among Co-Sureties.
Widow of a Surety Claiming Dower--A Necessary Party.--In a suit for contribution it appears that one of the co-sureties in the bond is dead, leaving a will authorizing his widow, the executrix, to sell the real estate, which she did, joining as widow in the deed to the purchaser, as she avers in her answer as such executrix, also averring that no dower had been assigned her. The answer being sworn to, and nothing appearing in the record to show that it is not true, the court erred in rejecting it, but should have allowed it to be filed, and should have directed the widow to be made a party in her own right, and enquired into the fact, as to whether she was entitled to dower. Bruce v. Bickerton, 18 W.Va. 342.
Insolvent Deceased Co-Sureties--Personal Representatives.--In a suit for contribution it is not necessary to make parties to the suit the personal representatives of insolvent deceased co-sureties, for whom the plaintiff has been compelled to pay money as a co-surety. Bruce v. Bickerton. 18 W.Va. 342; Montague v. Turpin, 8 Gratt. 453.
But in that case the plaintiff takes the risk of their insolvency being denied in the answer; and unless the allegation of insolvency is proved, when so denied, no decree can be rendered unless their personal representatives are before the court. Bruce v. Bickerton, 18 W.Va. 342.
Insolvent Deceased Co-Sureties--Heirs at Law.--In a suit for contribution between sureties, when the bill alleges the insolvency of a co-surety, who is dead, and such allegation is not denied, but admitted, the heirs at law of such dead co-surety are not necessary parties to the suit. Holsberry v. Poling, 38 W.Va. 186, 18 S.E. 485.
Deceased Solvent Co-Sureties. --In a suit in equity for contribution it is generally necessary to have the personal representatives of every deceased solvent co-surety of the plaintiff before the court, and to settle the estates of such deceased parties, if need be, or if such deceased parties had no personal estate, but owned real estate, it would in such a suit be necessary to have the heirs of such deceased sureties before the court, to the end that the whole matter might be settled in one suit, and proper contribution made by each party or estate real or personal, liable to contribution, unless the party claiming contribution, who is entitled thereto, elect to take a decree against the defendant sued in full discharge of his liability for the least amount, which he would be entitled to recover against him, if all the sureties were solvent. Bruce v. Bickerton, 18 W.Va. 342.
The Vendor of Land Claimed by Wife or Surety, the Title Being in Him, Should Be Party.--Where a suit in equity is brought by one or more sureties against their co-sureties to compel contribution, and a tract of land is sought to be sold as the property of one of said co-sureties, which is claimed by the wife of said co-surety as having been purchased and paid for by her, although the title remains in her vendor, it is error to decree a sale thereof without making said vendor a party to the suit. Holsberry v. Poling, 38 W.Va. 186, 18 S.E. 485.
Partnership.--The administrator and heirs of a deceased co-partner are necessary parties to a suit for contribution by another partner against the estate of a third member of the same firm. Compton v. Thorn, 90 Va. 653, 19 S.E. 451.
2. Suit by Creditor.
Suit to Subject Deceased Surety's Land--Co-Sureties Necessary Parties.--His co-sureties should be made parties before the land of one surety can be taken to pay a complainant's debt. His representatives have a right to contribution from his co-sureties in the payment of the debt. Hall v. James, 75 Va. 111. See Horton v. Bond, 28 Gratt. 815, and cases there cited.
Void Decree--Right to Complain.--The co-surety being a necessary party to a suit to subject the land of a surety to a judgment against them and their principal, the first surety has a right to complain that the court entered a void decree against his cosurety without service of process. Findley v. Smith, 42 W.Va. 299. 26 S.E. 370.
3. Suits for Contribution against Legatees and Distributees. --In a suit for contribution against legatees or distributees, the executor, or administrator, or, if he be dead, the person who succeeded him in the executorship or administration, ought to be made a party, unless it appear that the account of such executorship or administration has been regularly made up, and the estate thereupon delivered over to the legatees or distributees. Hooper v. Royster, 1 Munf. 119.
When Legatees Are Called upon to Refund.--Where legatees are called upon to refund at the suit of a creditor, the general principle is that all must be before the court and the burden apportioned among them if it can be done without material delay or injury to the creditor. But if some of the legatees are insolvent, the others will be required to make good the deficiency to the extent of what they have received. Leake v. Leake, 75 Va. 792; Hopkirk v. Dennis, 2 Munf. 326; Chamberlayne v. Temple, 2 Rand. 384; Lewis v. Overby, 31 Gratt. 601; Ryan v. McLeod, 32 Gratt. 367.
C. LIMITATIONS.
Recourse against Co-Surety.--The statute of limitation applicable to the case of a surety who calls upon a co-surety for contribution is three years, and not the limitation which applies to the bond, note or other writing which they have been compelled to pay. Tate v. Winfree, 99 Va. 255, 37 S.E. 956.
When Cause of Action Arises.--Surety's claim on principal arises on actual payment of the joint obligation. Harper v. McVeigh, 82 Va. 751. (See monographic note on " Limitation of Actions" appended to Herrington v. Harkins, 1 Rob. 591.
Contribution Not Barred by Statute of Limitations--Particular Circumstances.--One of two joint indorsers who held an assignment, to indemnify him for said endorsement among other liabilities, of the drawer, in 1756, took in the protested bill so endorsed and executed his own bond for the balance due thereon. In 1768, he sued the other indorser for half of said balance, with interest. In the plea of the statute of limitations, he replied that he was employed many years in settling the principal's affairs, and the suit was within the time since the amount to be contributed had been ascertained. Plea overruled by county court and appeal to high court of chancery. The two chancellors being divided, case adjourned to court of appeals, who held that under the particular circumstances the statute should not bar, not having begun to run till the trust to pay the debts of the drawer was concluded.
See remarks thereon of Wythe, C., criticising the decision. Pendleton v. Lomax, Wythe 5. See the principal case, cited in Field v. Harrison, Wythe 281. See 3 Call 538, for the court's reasons.
Improvements--Joint-Tenants.--The right to claim compensation for improvements made under the circumstances disclosed by the record does not arise until the suit for partition is brought, and the right to partition arises whenever the parties may choose to assert it. Statutes of limitation have no application to suits for partition, nor to the equity for compensation which arises only when the partition is asked for. Ballou v. Ballou, 94 Va. 350, 26 S.E. 840; Grove v. Grove, 100 Va. 556, 42 S.E. 312.
V. STATUTORY PROVISIONS.
A. SURETY MAY REQUIRE CREDITOR TO SUE. --" The surety, or guarantor, indorser (or his committee or personal representative), of any person bound by any contract, may, if a right of action has accrued thereon, require the creditor or his committee, or personal representative, by notice in writing, forthwith to institute suit thereon, and if he be bound in a bond with a condition, or for the performance of some collateral undertaking, he shall also specify in such requirement the breach of the condition or undertaking for which he requires suit to be brought." Va. Code, § 2890.
Effect of Failure to Sue. --" If such creditor, or his committee, or personal representative, shall not, in a reasonable time after such requirement, institute suit against every party to such contract, who is resident in this state and not insolvent, and prosecute the same with due diligence to judgment and by execution, he shall forfeit his right to demand of such surety or his estate, and all his co-sureties and their estates, the money due by any such contract for the payment of money, or the damages sustained by any breach of the collateral condition or undertaking specified as aforesaid; but the conditions, rights and remedies against the principal debtor shall remain unimpaired thereby." Va. Code, § 2891. The West Virginia statute is practically the same as the Virginia provision, the only difference being that it says nothing about the " committee" of the creditor. See W.Va. Code (1899), chap. 101, § § 1, 2.
Effect of Failure to Sue. --Construction of Statute.--Without such notice it is well understood that the creditor loses no rights as against the surety by failing to press collection from the principal. Coleman v. Stone, 85 Va. 386, 7 S.E. 241; Alexander v. Byrd, 85 Va. 690, 8 S.E. 577; Updike v. Lane, 78 Va. 132; Knight v. Charter, 22 W.Va. 422.
Where one surety in a bond gives notice to the obligee to sue the obligor, the statute does not peremptorily require the obligee, after obtaining judgment, to sue out execution upon it; it only requires him to use due diligence in prosecuting suit " to judgment, and by execution." Harrison v. Price, 25 Gratt. 553.
The creditor to whom the notice should be given is the party having the legal title to the claim and the right to institute suit, and not a party merely claiming to have an equitable ownership. Gillilan v. Ludington, 6 W.Va. 128.
The object of the statute being protection to the sureties, we must, to that end, give it a liberal construction. Wright v. Stockton, 5 Leigh 153; Gillilan v. Ludington, 6 W.Va. 128.
When Replication Is Good.--A replication that the defendant, after giving the notice in the plea mentioned, had withdrawn the same, and notified the plaintiff not to sue as required by said notice, whereby the defendant remained bound in said bond, is good. Gillilan v. Ludington, 6 W.Va. 128.
What May Be Proved by Defendant.--A plaintiff who has received notice under the statute, and fails to comply with its provisions by instituting suit within a reasonable time against resident, solvent debtors, and prosecuting it with diligence to judgment and execution, is not at liberty to show that the defendant has sustained no injury or loss by his omission: not having put this fact in issue by the pleadings. Gillilan v. Ludington, 6 W.Va. 128.
But he is at liberty to reply to a plea under the statute, by way of avoidance, that he has complied with the requirements of the statute as contained, in the second section, setting them out at length Gillilan v. Ludington, 6 W.Va. 128.
When Plea under the Statute Sufficient.--A plea under the statute (Code, ch. 101), for relief of sureties, reciting that A was the security of B, and had given the plaintiff, who was the payee in a bond, notice in writing forthwith to institute suit thereon, and that the plaintiff, notwithstanding said notice, had failed for a long space of time, to-wit: ___ years, to bring suit thereon, and until after the death of the principal in said bond, so that the plaintiff's right to collect said debt of him has been forfeited and is gone, is held to be sufficient. Gillilan v. Ludington, 6 W.Va. 128. But see Barnes v. Boyers, 34 W.Va. 303, 12 S.E. 708, infra.
What a Plea under the Statute Should Aver.--A plea drawn under § § 1 and 2 of ch. 101 of the Code, should aver, not only the solvency of the principal at the time suit should have been instituted, but also that he then resided in this state. Barnes v. Boyers, 34 W.Va. 303, 12 S.E. 708. This would seem to overrule Gillilan v. Ludington, 6 W.Va. 128, on this point (see preceding section), though no reference is made to it, and this was on a demurrer, and that case on a motion to reject the plea as insufficient.
Statute Held Not to Apply.--One obligor on a partnership note, on a dissolution of partnership agreed with the other partner that he should take all assets and pay all debts, and duly notified the common creditor of this agreement, and required him to bring suit as provided in § § 1 and 2 of ch. 101 of the Code; but the creditor never assented to the arrangement, and did not bring suit until the remaining partner had become insolvent, when he brought this action. Held, that such agreement between the partners, so far as the common creditor was concerned, was res inter alios acta, and he retained unimpaired all of his rights and remedies against both partners as principals, and the said provisions in the Code for the relief of sureties do not apply to such a case. Barnes v. Boyers, 34 W.Va. 303, 12 S.E. 708.
B. GIVING SURETY A SUMMARY REMEDY AGAINST PRINCIPAL.
Surety's Remedy against Principal for Money Paid.--" If any person liable as bail, surety, guarantor, or endorser, or any sheriff liable for not taking sufficient bail, or the committee or heir, or personal representative of any so liable, pay, in whole or in part, any judgment, decree, or execution, rendered or awarded on account of such liability, the person having right of action for the amount so paid, may, by motion in the court in which the said judgment, decree, or execution was rendered or awarded, obtain judgment or decree against any person against whom such a right of action exists for the amount so paid, with interest from the time of payment, and five per cent. damages on said amount." Va. Code 1887, § 2893, Code W.Va. (1899), chap. 101, § 3.
Surety's Remedy against Principal for Money Paid. --Construction.--And under the statute giving summary remedy to all sureties against their principals, no motion lies for sureties against devisees of their principals. Bacchus v. Gee, 2 Leigh 68.
Surety's Remedy against Principal for Money Paid. --Notice of Motion.--If the notice apprise the defendant of the grounds of the motion, it is sufficient. Graves v. Webb, 1 Call 443.
Surety's Remedy against Principal for Money Paid. --For What Entitled to Judgment.--The surety is entitled to judgment against the principal, for the same specific thing which he has been adjudged to pay himself. Graves v. Webb, 1 Call 443.
Remedy in Equity Unimpaired.--Surety is entitled to his remedy in equity (without having made a motion or brought any action at law) against the administrator and heir of the principal obligor for the purpose of establishing his demand, etc. Tinsley v. Oliver, 5 Munf. 419; Cabell v. Megginson, 6 Munf. 202.
Pleading--How Notice of Motion Made Part of Record.--In the case of a summary motion by surety against principal, to recover money paid by the surety, under the statute, 1 Rev. Code, ch. 116, if the defendant appears, and judgment be rendered. on a hearing of the parties, the notice of the motion is not a part of the record, unless it be made so by a bill of exceptions to the opinion of the court. Ayres v. Lewellin, 3 Leigh 609.
Federal Court Judgment.--It seems, that a surety paying a federal court judgment for the surety debt, cannot recover it against a devisee of the principal debtor, by motion, or any action at common law, in the general court, or any other court of law, of this commonwealth. Cabell v. Megginson, 6 Munf. 202.
C. GIVING ONE SURETY REMEDY AGAINST ANOTHER.
Remedy of One Surety against Another.--" If the principal debtor be insolvent, any surety or his committee, or personal representative, against whom a judgment or decree has been rendered on the contract for which he was surety, may obtain a judgment or decree, by motion, in the court in which the former judgment or decree was rendered, against any co-surety, or his committee, or personal representative, for his share, in law or equity, of the amount for which the first mentioned judgment or decree has been rendered; and, if the same has been paid, for such share of the amount so paid, with interest thereon from the time of such payment." Va. Code, § 2895; W.Va. Code (1899), ch. 101, § 5.
Construction of Statute.--Unless such judgment has been rendered, a surety cannot have judgment against co-surety, except after due proof in proper proceedings to which he is a party. Strother v. Mitchell, 80 Va. 149.
D. RIGHT OF CONTRIBUTION UNAFFECTED.
Effect of Compromise.--Where a creditor has compromised with one of several joint obligors, under § § 2857, 2858 and 2859 of the Code of Va., and received his full share of the obligation and released him, the right of contribution between the (other) joint obligors is not, under said sections, impaired by such compromise. Penn v. Bahnson, 89 Va. 253, 15 S.E. 586. Section 2859, above construed, is as follows: " Right of contribution not affected. Nothing contained in the three preceding sections shall affect or impair the right of contribution between joint contractors and co-obligors."
Effect of Compromise. --Rights Not Affected by Statute.--By the terms of § 2859 of the Code of Va., the release of a surety by compromise with the creditor cannot affect or impair the right of any other surety, who may have been required to pay more of the debt than was so released, to call on him for contribution. And when a surety has conveyed all his property in trust to secure ratably all his debts, said property is liable to contribution to his cosurety. Yuille v. Wimbish, 77 Va. 308.
[*]For monographic note on Contribution and Exoneration, see end of case.
[*]The case in 8 T. R. 186, cited at the bar, seems to be one of a voluntary and active tort. --Note in Original Edition.