учебный год 2023 / Child, Handbook of the law of suretyship and guaranty
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WHAT IS PAYMENT. |
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pay without consulting his co-surety ; " and, if sued, he need not notify his co-surety of that fact.u He is not required to resort first to the principal,41 nor to notify his co-surety that the debt has been paid,41 nor to make any demand before bringing suit.10 He may pay the debt before it is due, if the creditor be willing, though he cannot have contribution until the maturity of the debt,51 unless such prior payment was at the request of the co-surety.
Exoneration in Equity before Payment.
The general rule that a co-surety must pay the debt before he can bring an action for contribution, like most general rules, is subject to exception.n As contribution is enforced in an effort to do equity, a court of equity will not require payment by a co-surety seeking contribution, where to insist upon prior payment would work a great hardship and injustice.118 Suppose 10 persons were co-sureties for $50,000. It might be ruinous for one to raise this entire sum on short notice, or be compelled to borrow it at interest. In such a case, one co-surety, before making payment, could file a bill in equity to require the others to contribute their shares. u So,
" Hoyt v. TutbJll, 33 Hun, 196.
n Fisk v. Comstock, 2 Rob. (La.) 25.
u Buckner's Adm'r v. Stewart, 34 Ala. 529; Taylor v. Reynolds. 53 Cal 686; Sloo v. Pool, 15 Ill. 47; Rankin v. Collins, 50 Ind. 158; Caldwell v. Roberts, 31 !{y. (1 Dana) 355; Goodall v. Wentworth, 20 lie. 322; Mosely v. Fullerton, 59 Mo. App. 143; Smith v. Mason, 44 Neb. 610, 63 N. W. 41; Odlln v. Greenleaf, 3 N. H. 270; Boutin v. Etsell, 110 Wis. 276, 85 N. W. 964.
u Taylor v. Reynolds, 53 Cal. 686; Wood v. Perry, 9 Iowa, 479; Bright v. Lennon, 83 N. C. 183; Mason v. Pierron, 69 Wis. 585, 34 N. W. 921.
ao Ward v. Henry, 5 Conn. 595, 13 Am. Dec. 119; Morrison v. Poyntz, 7 Dana (Ky.) 307, 32 Am. Dec. 92; Chall'ee v. Jones. 86 Mass.
(19 Pick.) 2GO; Vliet v. Wyckoff. 42 N. J. F.q. 644, 9 AU. 679; |
Sher- |
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v. Woodard, 15 N. C. 360, 25 Am. Dec. 714; Lucas v. Guy, 2 |
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Bailey (8. |
C.) 403; Cage v. Foster, 13 |
Tenn. (5 Yerg.) 261, 26 Am. |
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Dec. 265; |
Foster v. Johnson, 5 Vt. 60; |
40 Cent. Dig. col. 2370. |
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Machado v. Fernandez, 74 Cal. 302. 16 Pac. 19. |
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O:FFJJEY v. JOHNSON (1584) 2 Leonard, 160, pl. 202. |
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Hyde v. Tracy, 2 Day, 492; Hodgson v. Baldwin, 65 Ill. |
532; |
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McKenna v. George, 2 Rich. Eq. (S.C.) 15; MORGAN v. SEYMOUR, 1 Rep. in Ch. 120.
u WOLMERSHAUSEN v. GULLICK [1893] 2 Ch. 514.
DEFENSES. |
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as, where a corporation is the co-surety, that such act was ultra vires.111
Non payment by Plaintiff.
A co-surety can show, as a complete defense, or in reduction of the plaintiff's claim, that the latter either did not pay at all,118 or that he made payment with the principal's funds.' u But, where a surety's property bas been taken in satisfaction of the debt, it cannot be said that he has not made payment because he afterwards acquires the identical property through a devise. 110 \Vhere the co-surety, seeking contribution, has received security, and has converted the security into money, the defendant will be entitled to have such proceeds applied to the claim of the plaintiff; 110 but it is no defense that the plaintiff is indebted to the principal,111 unless the plaintiff is insolvent.
111 Lucas v. White Line Co., 70 Iowa, 1541, 30 N. W. 771, 59 Am. Rep. 449. For similar defense as between surety and principal, see ante, § 159 {b).
111 See Cockayne v. Sumner, 22 Pick. (Mass.) 117.
tu Sllvey v. Dowell, 53 Ill. 260; Wolcott v. Hagerman, 50 N. J. Law, 289, 13 AU. 605. Where a co-surety purchases the property of the prlnclpal at nominal prices, under an execution on a judgment against all, he loses his right of contribution If the property of the principal, at a fair and reasonable valuation, exceeds the debt. The property of the principal Is a common fund tor the protection of all, and the utmost good faith Is required. The purchasing co-surety becomes a trustee of the property purchased by him, and cannot avail blmselt' of any advantage to his profit. SANDERS v. WEELBURG, 10'1 Ind. 266, 7 N. E. 573; J,fylngAton's Ex'rs v. Van Rensselaer, 6 Wend. (N. Y.) 63; Dennis v. Gillespie, 24 Miss. 581.
ua Caldwell v. Roberts, 31 Ky. (1 Dana) 355.
no Steele v. lfeallng, 24 Ala. 285; Gibson v. Shehan, 5 App. D. C. 391; Whitcmnn v. Harriman, 85 Ind. 49: Hoover v. Mowrer, 84 Iowa, 43, 00 N. W. 62, 35 Am. St. Rep. 293; Morrison v. Poyntz, 7 Dano (Ky.) 307, 32 Am. Dec. 92; Bachelder v. Fl~ke, 17 Mass. 464; Doolittle v. Dwight, 43 1\Iass. (2 Mete.) 561; Harrison v. Phillips 46 Mo. 520; Currier v. Fellows, 27 N. H. 366; Wolrott v. Hn~ermun, 50
N.J. Law, 289. 13 Atl. 605; Fagan v. Jacocks, 15 N. C. 263; Agnew
v.Bell, 4 Watts (Pa.) 31; Hlnsdlll v. Murray, 6 Vt. 136. And see note 42, supra.
117 DAVIS v. TOULMIN, 77 N. Y. 280; O'Blenls v. Karlng, 57 N.
Y.649.
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IRREGULAR INDORSERS. |
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Jersey no presumption will be indulged, but the exact liability assumed must be shown.11
As a Joint Promisor.
In many states the irregular indorser is regarded as a joint promisor, or a surety in the narrower sense. This excuses notice to him of nonpayment; but he is not a joint promisor in the sense that presentment and demand must be made as to him as maker in order to hold other parties who are entitled to notice of dishonor.21
As a Guarantor.
The reasoning in the states which hold that the irregular indorser is a guarantor is that he intended to assume some liability. He could not have intended to be a joint promisor with the maker, else he would have placed his name on the front of the instrument with the maker. He is not a regular indorser, as the position of the indorsement indicates that he did not intend to transfer title, which is the essential object of a regular indorsement. Hence his contract must be that of a guarantor of payment, there being nothing inconsistent with such a presumption. Where the irregular indorser is held to be liable as a joint maker, or as a guarantor, such liability can be enforced by the payee, as well as by subsequent holders.
As an Indorser.
In several states the liability of the irregular indorser has been fixed by statute, changing, in many instances, the liability as previously announced by the courts; so that in most jurisdictions, at the present time, the rights and liabilities of the irregular indorser are the same as those of a regular indorser, to the payee as well as to subsequent parties, if the indorsement was made before delivery to the payee.
If the irregular indorser were regarded as a second indorser, he could not be held liable by the payee, as the payee becomes the first indorser.
S. E. 306; Burton v. Hansford, 10 W. Va. 470, 27 Am. Rep. 571. If the instrument Is nonne~otlnhle, the lrre,:rulnr Indorser Is prima facie a ~rUarnntor. KEAHNES v. :\IONTGOllERY, 4 W. Va. 29.
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Chaddock "'· Vannefls, 35 N. J. Law, 517, 10 Am. Rep. 256. |
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Stearns, Law of Suretyship, p. 208. |
