John v. Jones , 16 Ala. 454 ( 1849 )

CHILTON, J.

We cannot perceive upon what principle the evidence rejected could be admitted. There was no attempt in the court below to impeach the bona fides of the sale to Parke Jones. The controversy seems to have been with respect to the application of the proceeds of the sale of the land, and both parties seem to have acquiesced in the sale. The proof was therefore most clearly irrelevant, and its exclusion could not possibly have been attended with any injurious consequences to the defendant. It may also futher be questioned whether one standing in the relation of co-surety to the beneficiary in the deed, can, when sued for contribution at laio, be allowed to impeach the validity of a purchase made by the plaintiff, of the trust effects conveyed for the plaintiff’s indemnity, and thus by charging the plaintiff with a higher price for the effects purchased by him, lessen pro tanto the demand for which the parties were bound as sureties. Should not the defendant in such case resort to a court of equity, so that the parties might be placed in statu quo, and the land resold, according to the rules prescribed by that court? As it is not necessary to a correct disposal of this case, we decline a decision of the question. — See 11 Ala. Rep. 519. It was correctly decided that the estale of the deceased co-surety was bound to contribute towards the payment of the joint liability by Parke Jones, as to any surplus which should remain after a proper application of the trust funds of the principal to the satisfaction of the demands, unless the statute of non-claim interposed a bar; for it is very clear that the co-surety has a right to share equally with ihe plaintiff who demands contribution, the benefit of any payment made by the principal, or out of his effects.

In respect however, to the right of Parke Jones to be reim-bnrsed the marshal’s commissions, and the costs of the Circuit and Supreme Courts, together with damages of ten per cent added by the judgment of the latter court on affirmance, out of the trust effects, being funds in his hands as the proceeds of the sale of the land, we think the Circuit Court mistook the law. It is certainly true that Parke Jones had the right to protect himself against his individual liability for Allen Jones by the deed of trust, and so far as he had paid, or was liable to pay, at the time of the execution of the trust deed, cost, damages, &c., he had a right under the deed to be reimbursed; but the law will not permit him, holding the funds in his own hands, to suffer costs and damages to accrue upon the debts which the funds are designed to adjust and pay off, and to hold either his principal or co-surety liable for the same.

It is said by Mr. Pitman, in his work on Principal and Surety, 152, that a surety cannot claim contribution from his co-surety for the costs of defending an action brought against him by the creditor, unless the co-sureties authorised him to defend the action. The reason assigned is, that it is the duty of the surety to pay the debt, if just, when demanded by the creditor, in which event, the costs, damages and sheriff’s commissions would have been avoided. But another reason may be given: The surety has a right to stand on the very terms of his contract. He is, in default of the principal, bound to contribute to the payment of the debt, but he does not obligate himself to pay any portion oí the costs and damages, which may be superadded by the unauthorised act of his co-surety. This is not a common burthen, but must be borne by him who has been the cause of creating it. Suppose that Parke Jones had interposed the plea of non est factum, and in litigating that defence, a large amount of costs and damages had occurred, would it not be manifestly absurd to say that his co-surety should contribute to the expense attendant upon an effort to cast upon him the payment of the whole debt? In Knight v. Hughes, 3 Car. & Payne 467, a judgment had been rendered against one W, for whom the parties were sureties, as collector of taxes, and afterwards, W failing to pay, separate suits were instituted against his sureties, Knight and Hughes. Judgment being rendered against the former for the amount of the judgment and costs against "W, he paid it, and sued Hughes in assumpsit for contribution. It was held by Lord Tenderden, C. J., that Hughes was only liable to pay one moiety of the amount of the original verdict, and further that as against Hughes, the plaintiff had no right to set off an amount he had recovered from the principal against the cost, but that it might go towards the extinguishment of the demand for which the co-surety was bound. See also Bleaden v. Charles 7 Bing. 246; Roach v. Thompson, M. & K. 487; Gillett v. Reppon, ib. 406; Pitman on Prin. & Sur. 135.

The sueing out of the writ of error to the Supreme Court, and giving bond for its prosecution, does not have the effect to destroy his right to contribution. It is true, if Saunders had paid the debt, he could not have claimed contribution from Wm. H. Jones, as the latter was not bound with him upon the bond, but the giving of the writ oí error bond by Parke Jones was incident only to the defence which he set up, and as he was under an obligation to indemnify Saunders, the judgment being against him, when he pays the debt, the right to contribution attaches as against the other co-surety, bound for the payment of the note on which the judgment was founded. So that while we consider the cases of Dunlap v. Foster, 7 Ala. Rep. 730, and Fitzpatrick’s adm’r v. Hill, 9 Ala. Rep. 883, as holding the correct doctrine, which would exclude Saunders from the right to contribution, if he had paid the money, so far as W. H. Jones is concerned, still these decisions do not apply to the right which Parke Jones, the surety upon the note, has to call on his co-surety, notwithstanding he may have superseded the judgment against him by giving the bond.

If, however, we were mistaken in this view, there is another view of the case, which is in our opinion conclusive of it, so far as its decision in this upon the record now before us is concerned. By the agreement of 31st October 1845, the present plaintiff, in consideration of its execution, and the alteration made of the deed in respect to the manner of selling the land, &c., agreed to release Allen Jones from all claims wherein he the said Parke was bound at the time of the execution of said agreement as security for Allen Jones, except some claims which have no connection with this controversy. It is insisted by the counsel for the defendant that this instrument cannot take effect as a release, inasmuch as the liability of the principal to Parke Jones had not then fully accrued, and 1hat until the surety had paid the debt, there was no such existing liability as could be released, because a release technically so called, must operate in presentí. But we think it very clear, the counsel mistakes the nature of this argreement. Parke Jones does not propose to release the principal from his then liability to him by reason of previous payments made on account of the principal, but to release him from all debts for which he was then bound as surety. In other words, the said Parke Jones undertakes, in consideration of the provisiou made for him by the said Allen Jones, himself to become the principal, and to discharge the said Allen from the debts — or, which is the same thing, to procure his release from all the claims. This covenant is hot only under seal, but we think, under the facts presented by the record must be regarded as sustained by a valuable consideration. By reason of it, the whole estate was sold at one time, and Parke Jones enabled to become the purchaser, without paying ready money for it. By it, ho acquired the right to have the property sold before he was compelled to pay the money, and if he esteemed the property conveyed of value sufficient to pay the debts, there was nothing unreasonable in his engagement to discharge the principal from the debts, as be had the power (and the agreement seems to contemplate its exercise) of buying in the estate when sold, as it appears he afterwards did.

Having thus ascertained ihe true construction of the covenant, on the part of Parke Jones, in the agreement of the 31st October 1845, to release the principal from all claims, &c., it follows, that having satisfied them, he cannot call on his co-surety for contribution on account of these claims. Did such right exist, and were Parke Jones allowed to recover from Wm. H. Jones’ estate, the administrator could recover the amount thus adjudged against him, from Allen, the principal who in turn would recover from the plaintiff in this case. Here then would be three suits, and nothing finally accomplished, save the loss of the costs of their prosecution. But this doctrine of contribution is founded upon equitable principles, and it would be most inequitable to permit the plaintiff to recover from his co-surety money which, by his covenant, he would be bound to refund upon the action of their common principal.

The views we have taken being conclusive of the case, it is unnecessary further to elaborate this opinion in discussing the other poiuts raised upon the record.

Let the judgment be reversed, and the cause remanded.