Meyer v. Bouchier

May 17, 1917. The opinion of the Court was delivered by Plaintiff brought suit against H.T. Bouchier and W.E. McNulty for foreclosure of a mortgage given by them to secure their joint and several bond for $18,500. After suit brought, McNulty compounded with plaintiff by paying him $3,100, for which plaintiff gave him a release from all further liability in accordance with the statute. Civ. Code 1912, sec. 3944. Bouchier then set up the release of McNulty as having the legal effect of discharging him (Bouchier) from all liability to plaintiff; and, if not from all liability, at least from liability for one-half the debt — McNulty share thereof. The Court overruled his contention, and held that he was entitled to credit only for the amount paid by McNulty, and gave judgment for plaintiff for the full amount of the debt, and directed that the release be filed with the judgment, and the amount paid by McNulty be credited thereon. Appellant concedes that the ruling is in accord with the construction of the statute in Symmes v.Cauble, 72 S.C. 330, 51 S.E. 862, but asked and obtained permission to review that case. After careful consideration of the statute, in the light of appellant's argument, we have not been convinced that the decision in Symmes v. Cauble was wrong.

The statute provides that any joint debtor may make a separate composition with his creditor — the manner being therein prescribed — which shall discharge the debtor making it, and him only; and that the release shall not impair the creditor's right of action against any other joint debtor, unless that intention shall appear on the face of the release. Section 3946 preserves all the rights of a noncompounding joint debtor against the creditor, and also against the compounding debtor, and specifically saves his right to pursue the latter for contribution. It also gives the noncompounding debtor the right to set up by way of discount against the creditor "the amount compounded by his joint debtor."

What is meant by "the amount compounded?" Appellant contends that it means at least the compounding debtor's share of the debt. This argument overlooks the legal relation and liability of joint debtors to their creditor. Each is liable for the whole debt, and not for his part only. In that view the amount compounded could as well mean the whole debt as the compounding debtor's share of it. Evidently it does not mean the whole debt. That construction would make the statute of no effect at all. The provisions saving all the rights of the noncompounding debtor, just as if no composition had been made, both as against the creditor and the compounding debtor, and specifically saving the right of the former to pursue the latter for contribution and giving him the right to set off against the creditor "the amount compounded by his joint debtor," are inconsistent with the notion that the words "amount compounded" mean the compounding debtor's full share of the debt. So, also, is the provision in section 3944 that the release of the compounding debtor shall not impair the creditor's right of action against any other joint debtor. If the release of McNulty, on payment of $3,100, is to have the effect of satisfying half the debt of $18,500, clearly plaintiff's right of action against Bouchier has been seriously impaired. The words "amount compounded" were used in the sense of "amount paid." That construction harmonizes all the provisions of the statute with its purpose, and results in no injury to the noncompounding debtor, who, therefore, has no right to complain of the release of his joint debtor.

Judgment affirmed.