Barge v. Van Der Horck ( 1894 )

Mitchell, J.

This action is tbe sequel of that of Mueller v. Barge, 54 Minn. 314, (56 N. W. 36,) having been brought to compel defendant to contribute bis pro rata share of tbe money which, under our decision in that case, plaintiff, Barge, was compelled to pay to tbe estate of Mueller. This appeal is from an order sustaining a demurrer to the complaint on tbe ground that it does not state a cause of action. The facts stated in tbe complaint are substantially those stated in tbe opinion in Mueller v. Barge, and may be epitomized in xbeir chronological order as follows: Westphal, as principal, and Barge and Mueller, as sureties, executed to Jonas F. Brown a note for $4,000. Westphal, as principal, and Barge and Van Der Horelc, as sureties, executed to Henry F. Brown a note for $10,000, and, at the same time, Westphal assigned to Barge and Van Der Horde certain shares of stock for the purpose of securing them as indorsers or sureties on the $10,000 note, and of securing Barge as indorser or surety on the $4,000 note.

Barge and Mueller took up the $4,000 note by each giving to Jonas F. Brown his individual note for $2,000. Barge paid his note for $2,000. Barge and Van Der Horck paid the $10,000; each paying one-half, or $5,000. Barge and Van Der Horck sold the stock assigned to them by Westphal for $9,000, and believing and understanding that it was given and received solely for the purpose of securing them, and nobody else, divided the proceeds between themselves, in good faith, in accordance with the understanding, — Barge taking seven-twelfths, or $5,250; and Van Der Horck, five-twelfths, or $3,750.

The estate of Mueller paid his note for $2,000 to Jonas F. Brown, and then brought suit against Barge to compel him to contribute or pay over a pro rata share of the proceeds of the stock. The result of that suit was that Barge was compelled, for the reasons stated in Mueller v. Barge, supra, to - pay the estate of Mueller $1,28^.72,— that is, two-fourteenths of the $9,000; and Barge now sues tó compel Van Der Horck to contribute five-twelfths of this, or $535.70, out of the $3,750 which he received in. the division of the proceeds of the collateral stock.

The only contention of defendant worthy of special consideration is that the division of the proceeds of the collateral stock between himself and plaintiff was in the nature of a voluntary payment under a pure mistake of law, and therefore that none of the money can be recovered back. We do not think the rule of law invoked has any application to the facts. It will be observed that the transaction was not the settlement or compromise of a doubtful or disputed claim of the one against the other, but merely the division between themselves of a fund held by the two in accordance with their supposed respective rights. The mistake, if any, was not as to the legal scope of what they were then doing, to wit, dividing the fund, but as to what were their own antecedent legal rights and liabilities in respect to the fund under and by virtue of the prior transaction; they not then understanding that, under these previous transactions, Mueller might, as cosurety with Barge, have a right to share in the fund. The division which they made was in exact accordance with their legal rights, as between themselves, in case Mueller never called for a contribution. At the time this division was made, Mueller’s estate had not paid the $2,000 to Brown, and had no+ asserted any right of contribution, and might never do so. But since this division was made a new state of facts has arisen. Muelles estate has paid the note, asserted its right to the fund, and compelled Barge to contribute. The result is that Barge now has $585.70 less, and Van Der Horck that much more, of the common fund than he is entitled to.

Whether the division was not made under what would be considered a mistake of fact, it is not necessary to decide. Under the circumstances the division of the fund must be deemed merely provisional, and subject to the contingency of readjustment in case a new state of facts should arise. This has arisen, by reason of the subsequent successful assertion by Mueller’s estate of its right to a share of the money. Barge having been compelled to satisfy that demand against the common fund, equity and good conscience require that Van Der Horck should contribute his pro rata share.

Order reversed.

Collins and Canty, JJ., took no part in this decision.

(Opinion published 59 N. W. 630.)