Carter v. Fidelity & Deposit Co. , 134 Ala. 369 ( 1901 )

TYSON, J.

The bill in this cause was filed by a surety upon one of a series of bonds executed by E. B. Lott as tax-collector of Mobile county, against certain of the sureties upon other bonds for contribution. It appears from the bill as amended that on the 22d day of August, 1896, Lott executed a -bond as tax-collector of Mobile county in the penalty of one hundred thousand dollars, with certain of the respondents as sureties thereon; that this bond was approved by the judge of probate and Lott entered upon the duties of the office as such tax-collector, and continued therein until the 15th day of September, 1897, when he resigned his office. It further appears that in 1896, in compliance with the recommendations of'the. grand jury of Mobile county, Lott was required to give additional, security in the sum of fifty thousand dollars as such tax-collector, and on the 14th day of January, 1897, he gave bond in said sum with sureties which was approved by the judge of probate. It also further appears that upon the application of one of the sureties upon the last mentioned bond for his discharge as surety “notice was issued to Lott ordering him to file a new additional bond as said tax-collector of Mobile county on or before March 31st, 1897. That in compliance therewith said Lott as such tax-collector” gave four bonds with different sureties aggregating in amount fifty thousand dollars, which were taken and approved by the, judge of probate of said county on tlie 10th day of April, 1897. The hill as amended further avers “that said Lott continued to act under said bonds as such tax-collector and that the sureties upon said bonds were not thereafter in any manner discharged as sureties upon said bonds.” On the 15th day of June, 1897, the complainant in the hill became sole surety upon another bond of 'Lott as tax-collector. It is also further averred that Lott as tax-collector on the 1st day of July, 1897, defaulted in failing to pay over to the county of Mobile as required by laAV the sum of $12,309.54, the amount of the taxes Avhich he had collected for the county Avhich he failed to pay over, and that there Avas in force at the time of such default the six bonds above stated aggregating two hundred thousand dollars. It is further averred that the county of Mobile brought suit against the complainant as surety of said Lott on the 27th day of September, 1897, for the sum of $23,062.51, claiming said sumí to be the amount AAdiich Lott as tax-collector should have accounted for and paid OArer to the said county of Mobile on the 1st day of July, 1897; that it became1 necessary for complainant to defendí said suit and by reason of such defense said amount so claimed Avas reduced to $13,797.69, for AAdiich the county obtained judgment against the complainant together with the costs of court; that complainant appealed and the judgment Avas thereafter affirmed for the above amount with interest, damages and costs amounting to $16,547.47, AAdiich complainant paid to the cleric of the circuit court of Mobile county on the 20th day of February, 1900. It is further averred that complainant paid in addition the sum of $76.10 costs of said appeal amounting in the aggregate to $16,623.57. The hill also avers that defenses were interposed l>v the complainant in the suit against it hv the county, that Avent to its entire claim, and the adAmrse ruling upon one of the defenses, stated in the hill, Avas the ground of appeal to this court..

The prayer of the hill is that the defendants, sureties upon the other bonds given by Lott as tax-collector, he required to contribute to the payment of the amount paid by complainant for his default, inclusive of costs of court and damages upon appeal, in proportion to the penalties of their respective bonds.

The bill as amended was demurred to, and the demurrer's being overruled, this appeal is prosecuted to review that decree. The only demurrer insisted upon in argument here was interposed by Carter, one of the sureties upon one of the four bonds given on the 10th day of April, 1897, the penalty of which is $25,000. It is insisted by this demurrer, consisting of’many grounds, that the bill is defective in failing to allege that tax-collector, Lott, converted money of the county subsequent to the 10th day of April, 1897, the date of the execution of demurrant’s bond. The averment in the bill, in this respect, to' repeat, is that “said Lott as tax-collector on the 1st day of July, 1897, defaulted in failing to pay over 'to' the county of Mobile as required by law the sum of $12,309.54,” etc. Proof of this fact we held in the Fidelity and Deposit Co. v. Mobile Co., (124 Ala. 146), was sufficient to authorize a judgment in favor of the county against the surety upon the tax-collector’s bond, and that the claim by the surety that the default had in fact occurred prior to the execution of the bond was., if sufficient excuse, defensive matter. The allegation of the default of the principal alleged in the bill would have been sufficient if appellant had been sued by the1 county, and no good reason can be given why it should not be sufficient when sued by a surety, who has paid such default, for contribution. If the default of the principal - occurred prior to the execution of the bond by appellant, 'that is matter of defense for him to invoke.

It is next insisted that the right to¡ contribution is limited to the actual default of the principal and should not and cannot embrace the costs of the suit against the surety in; which such default was established. It is doubtless true that when the defense of a, suit by tlie creditor against a surety was needless or frivolous the costs of such suit cannot be included in the claim of the surety for contribution. He cannot, of course, claim for the consequences of his own wrong. Such was the case of Jones v. Jones, 16 Ala. 545, relied upon by appellant. The surety there was secured by a deed of trust to which he could have resorted for the payment of the principal’s default. It was needless for him to have suffered suit, having funds in his own hands out of which he could have discharged the debt. While authorities are cited and expressions used in tlve opinion of the court in that case indicating, that the surety can never claim contribution as> to the'costs and damages of a, suit against him by the creditor, the decision to this extent was unnecessary and the reasons given therefor are not sound. It was said that the surety has the right to stand! upon the terms of his contract which is limited to the payment of the principal’s default, and that it was the duty of the surety to pay the debt, if just, when demanded by the creditor. It has been repeatedly held that the right to' contribution does not depend on contract. “It is a principle of equity, having its foundation in natural justice, that when one discharges more than his just portion of a common burden another who has received the benefit ought to refund to him a, ratable proportion.” — Owen v. McGehee, 61 Ala. 440. And! while it was the duty of the surety to pay the debt, if just, when demanded by the creditor, the duty rested equally upon the co'-surety who was not sued. While it is time a surety is not hound to await the bringing of suit by the creditor in order to entitle him to contribution, we know of no rule which compels him to accept Lie amount claimed by the creditor as just and correct, nor of any rule which makes his determination of its validity or amount conclusive upon his co-surety. If the creditor having a claim against several sureties may select the one he wishes to' sue, and the one sued is limited in his right of contribution to the actual default of the principal exclusive of the costs of suit, he can by his selection, to' the extent of the costs of the suit, make a victim of the surety sued and thus make the common burden personal oppression. We think the true rule is. that where the surety obtains any advantage from the suit, or where, although the resist énoe of the suit was unsuccessful, there was reasonable grounds of defense, if he acted as a prudent man would, in the light of facts and circumstances showing a probability of success, in whole or in part, the surety .sued should he entitled to include the costs and damages of the suit in Ms claim for contribution against Ms co-sureties. His co-sureties ouglit not and cannot complain, for the burden of paying the debt rested equally upon them and they could have prevented suit or even stopped it after its commencement by paying the demand of the creditor. The; extra liability for the costs and damages; of suit, not frivolously nor neednessly defended, should not be imposed upon one of several equally bound at tbe caprice of tbe common creditor, any more than the payment of tbe debt itself. Particularly is this true where, as in the. case in band, tbe amount of the common liability is not necessarily tbe amount named in tbe bond, or instrument, but must have been, ascertained by matter extraneous thereto. — 3 Am. & Eng. I)e;c. in Equity, 171] 7 Am. & Eng. Enc.y. Law (2d ed.), 344; 1 Brandt on Suretyship, § 283. According to the averments of the bill, in consequence of the defense' of the suit by complainant, tbe demand of tbe common creditor-was reduced in the lower court from $23,062.51 to $13,797.69. Tbe. defense of ¡the suit, therefore, was not only reasonable but was a manifest advantage to'tire other sureties, and we are. not prepared! to bold that the prosecution of tbe appeal to this court was unreasonable.

The contention that tbe bond upon which appellant, Carter, was surety was not a statutory bond is without merit. The bill clearly avers that Lott, as tax-collector, Avas required under tbe statutes to give the bond and that it aauis acted under by him. Therefore, although it may be subject to objection as to penalty, time of approval, etc., its stands by virtue of the statute in the place of tbe official bond, subject to all the remedies of a bond executed, approved arid filed according to lav .('Code, 1896, § 3089;. Code, 1886, § 275), including those conferred by sections 300 and 286 of-Code of 1886 (§§ 3132 and 3118 of Code of 1896) upon sureties among themselves.

Nor is the objection to- tbe dismissal of tbe bill as to two of tbe sureties whd 'paid to complainant their proportion of the debt! well taken. The liability of appellant, Carter, was not thereby increased.

We have considered, the objections raised by the de- . nxurrer to the hill which have been argued, and we find no’ error1 in the decree.

Affirmed.