Armitage v. Pulver et al.

Armitage v. Pulver et al. Relief.—Cosureties. When the complaint sets forth a legal cause of action, a referee, before whom the case is tried, is bound to grant equitable relief, if warranted by the facts alleged and proved—no question being raised as to the mode of trial. The rights and obligations of sureties inter sese are the same, whether bound in one or several like obligations ; where there are several distinct bonds, in different penalties, they are bound to contribute in proportion to the amount of the penalties of their respective bonds. It seems, that in an action for contribution against several co-sureties, it is error to render a joint judgment. Appeal from the general term of the Supreme Court, in the fifth district, where a judgment entered in favor of the plaintiff, upon the report of a referee, had been affirmed. This was an action by William Armitage against Frank Pulver, William W. Pulver and Peter A. Pulver, to recover contribution from the defendants as co-sureties with the plaintiff for one Delos Gary. In December 1855, Gary was appointed under-sheriff of Oswego county, and required to give bond to the sheriff in $20,000, for the faithful discharge of his duties; in pursuance whereof, the plaintiff gave a bond to Rufus Hawkins, the sheriff, in the penalty of $2000, and the defendants another bond in the penalty of $18,000, conditioned as aforesaid. The sheriff was subsequently damnified, through the official misconduct of Gary, to the amount of $1002.72; and in an action upon the plaintiff’s bond there was a recovery against him for $1052.92, and costs; ^whereupon, he brought this suit for contribution. . The complaint set forth these facts, and the insolvency of Gary; and prayed that the defendants might be adjudged to pay nine-tenths of the sum so paid by the plaintiff, amounting to $981.24, with interest. The answer, among other things, insisted, that the plaintiff’s bond was a primary security for the defendants’ indemnity, as well as for the indemnity of the sheriff, and that the defendants were not liable, until the amount of the bond given by the plaintiff was exhausted. The case was tried before a referee, who found the facts, in substance, as stated in the complaint; that both bonds were delivered to the sheriff, at the same time, by Gary, as security for the faithful performance of his duty, and also that “ in January 1859, there were other claims to a large amount against Hawkins, as sheriff, growing out of the acts and alleged defaults of Gary as under-sheriff; that some of these had been disposed of, without damage to the sheriff; some were supposed to have been paid by the defendants, but the evidence did not disclose the precise amount paid, nor determine their liability to pay, and some claims were still outstanding.” The referee did not sustain the allegation, that the plaintiff’s bond was given as a primary security, intended for the protection of the defendants as well as an indemnity to the sheriff. The referee decided as matter of law, that the two bonds were held as security for the same purpose and liability; that the sureties are liable to contribute to the payment of the liabilities incurred by the default of Gary; and that an action could be brought whenever one entire claim had been paid by one of them. And further, that the plaintiff and defendants were liable to contribute in proportion to the amount of their respective bonds; that is, the plaintiff was liable to pay two-twentieths and the defendants eighteen-twentieths of *°*a'*' amount barged upon all the sureties. *He accordingly awarded to the plaintiff eighteen-twentieths of the amount paid by him, and judgment was entered against the defendants jointly. The general term, on appeal, required the plaintiff to abate certain sums included in the judgment, for costs, and affirmed the judgment for the residue ; whereupon, the defendants took a further appeal to this court. Berry, for the appellants. Kernan, for the respondent. Also reported in 5 Trans. App. 186. Hale v. Omaha Bank, 49 N. Y. 626; Sternberger v. McGovern, 56 Ibid. 12; Williams v. Slote, 70 Ibid. 601; Johnson v. Hathorn, 2 Abb. Dec. 465. [MAJORITY — Woodruff, J.] Woodruff, J. The grounds upon which the appellants seek to reverse the judgment in this action, are : 1. That it is “ an action at law,” and cannot be maintained, because, (1st.) The plaintiff has not yet paid the sum assumed by him, and there are still outstanding claims against the sheriff, which Gary’s sureties may hereafter be required to pay. (2d.) The plaintiff and the defendants were bound by different bonds, and in distinct and several penalties. (3d.) The plaintiff cannot recover in an action at law against the defendants jointly. 2. If the action be regarded as an equitable action, it is prematurely brought, other claims being outstanding to which the sureties may be liable. 3. The plaintiff should bear one-fourth of the whole burden to the sum of $8000, i. e., until he had paid one-fourth, up to the amount of his bond, $2000. 4. If the action be equitable, still the plaintiff was not entitled to a judgment against the defendants jointly. This enables him to collect the whole from one defendant, and drive him to another action for contribution. The counsel for the appellants stated also, that one of the defendants has become insolvent, but no such fact appears in the allegations of the parties, and no sack fact appears in the finding of the referee. In the face of an express statute providing that where the defendants appear and answer, the court may grant the ^plaintiff any relief consistent with the case made by the complaint, and embraced within the issue (Code, § 275), it is not error, to allow the plaintiff any judgment to which, upon the allegations and proof, he is entitled, either at law or in equity. It may be conceded, that by abrogating the distinction in the form of the action, the legislature has not, and could not, under the constitution, deprive a party of the right of trial by jury, “ in cases in which it has been heretofore used.” But, where the facts alleged and proved entitle the plaintiff to equitable relief, and no question has arisen touching the mode of trial, a referee, to whom the trial of an action, whether legal or equitable, may be lawfully referred, is bound, in obedience to the above quoted section (§ 275), to grant the plaintiff any relief, whether legal or equitable, to which, upon the allegations and proofs, he is entitled. The questions, therefore, are, whether the plaintiff was, at the time this action was brought, entitled to any contribution from the defendants, and if so, in what proportion ? and should the judgment be reversed, because it is, in form, against the three defendants jointly, for a gross sum ? There are no special circumstances found by the referee, indicating that the bond given by the defendants was given at the solicitation or for the accommodation of the plaintiff, or upon any consideration arising between the plaintiff and the defendants, creating an equity in their favor, to be protected from contribution,; nor any facts indicating that the bond of the defendants was intended as a subsidiary security, and the other, as between those parties, the primary security, to operate pro tanto for the defendants’ protection. Some claim of this kind was set up in the answer, but no facts appear to have been proved warranting such claim. The general doctrine, that there existed from the moment of the delivery of these bonds an equitable right to contribution, in case a liability should arise against all of the sureties, if one only should, be compelled to pay, is, therefore, directly applicable, unless the fact that the parties were bound by separate bonds, in different penalties, per se, changes their relations to each other in this respect. one two or more sureties for a common principal, who has been compelled to pay the whole or more than his just proportion of the sum for which all were bound, may compel the others to contribute their just shares of what he has so paid, is not and cannot at this day be denied. That the rights and obligations of the sureties, inter se, are the same, whether they are bound under one or several like obligations, for the same principal, and for the same debt or duty, is stated by Mr. Justice Story (Eq. Jur., § 495), and where there are several distinct bonds, with different penalties, contribution between the sureties is in proportion to the penalties of their respective bonds (§ 497), is also stated. He refers to the opinion of Lord Chief Baron Eyre in the English Exchequer (Deering v. Earl of Winchelsea, 2 Bos. & Pul. 273), in which he says, “ they are bound, as effectually, quoad contribution, as if bound in one instrument, with this difference only, that the sums in each instrument ascertain the proportions, whereas, if they were all joined in the same engagement, they must all contribute equally.” Lord Eldon, in Mayhew v. Crichett (2 Swanst. 198), says: “Although the doctrine at one time prevailed, that where there were separate securities, there should, be no contribution, that has been exploded since the case of Deering v. Lord Winchelsea and again (p. 201), referring to that case, “having myself been counsel against that doctrine, I was much dissatisfied with it; but on further and maturer consideration, I ought to make so much amends as to say, that I am convinced it was right.” This case of Deering v. Lord Winchelsea is a leading case on the subject; it rests the right of contribution upon the principles of natural justice and equity, and not upon any ground of implied or presumed contract between the sureties. And hence, the case has since been followed and applied to cases in which some of the sureties become such, without the knowledge that the others were bound, and to cases in which the suretyship of some was entered into subsequently to that of others. Always, however, provided the obligations were **for the same debt or duty, and were • not other and distinct transactions, and where it did not appear that one was intended to be secondary or collateral to the other. (See Norton v. Coons, 1 Denio 130; Warner v. Price, 3 Wend. 397; Barry v. Ransom, 12 N. Y. 462, 466.) I have not been able to find a case, in which the rule, as stated by Chief Baron Eyre, has been, since that time, denied. It is true, that, in the case itself, as reported, the sureties appear to have been bound in equal sums, but as a statement of a rule of equity, in a case very often referred to with approbation, it is entitled to be regarded as high authority. Mr. Justice Bedeield, in the eighth edition of Story’s Equity Jurisprudence, has added a section (§ 497 a), not very intelligible in the connection in which it is found, and the counsel for the appellant in the present case has cited it as an intimation of dissent from the doctrine, that where the sureties are bound in different sums, their contribution should be in the like relative proportion. The interpolated section does not bear such a construction. It questions “whether the more recent decisions in courts of equity justify any such discrimination between sureties for the same debt, by different bonds, with different sums as penalties, unless where the purpose of the different sums in which the sureties are bound, is to show that the obligor incurs the hazard of only a portion of the debt, or a portion of what the other assumes.” That is to say, where the instruments show that each surety became bound for' the whole debt, the circumstance that the penalties of the bond were unequal, might not affect the rate of contribution. He cites no new authority, but his note to the section shows that his meaning is as last suggested-—-citing Deering v. Lord Winchelsea, he says: “ This is the case which first decided that contribution among sureties is not a matter of contract, but of general equity, on the ground 'of equality of burden and benefit. We infer, therefore, that the difference between the penalties will make no difference, provided each exceed the debt, or the purpose of each is to bind all the sureties to the extent of the whole debt.” ^he converse of this supposed qualification is, that where the penalties respectively are less than the whole debt, or the purpose is not to bind all the sureties to the extent of the whole debt, actual or contingent, the contribution will be proportioned to the burden assumed by each, i. e., pro rata. That is the present case: each assumed a part, and only a part, of the responsibility, and they should share whatever is losj; thereby, in the proportion in which they took the hazard of the aggregate whole. The notes to the case of Deering v. Winchelsea, in White’s Leading Cases in Equity (vol. 1, pp. 60-71, with American notes, in the Law Library edition, vol. 65, pp. 78-104), contain a full collection of authorities bearing upon this subject, many of which are from this state. I regard the rule as well warranted by authority, and just and right in itself, which holds the parties before us to contribution in the proportion in which they became bound to the sheriff. It remains to inquire, whether the action must be held to be prematurely brought, because the referee has found that “ some claims are still outstanding” against the sheriff, “ growing out of the acts and alleged defaults of Gary as under-sheriff.” 1. No such defence is set up in the answer of the defendants, and, therefore, no such defence was available to them on the trial. 2. As to such claims as the referee finds had “been disposed of, without damage to the sheriff,” the sureties were no longer in any peril; as to such as “ are supposed to have been paid by the defendants,” the silence of the answer on the subject is conclusive that they constitute no ground of defence whatever. And as to “ some claims” not shown to have any validity, resting alone in “ alleged” defaults of Gary, of which there was no proof satisfactory to the referee, they are not proved or found to be obligations for which the principal, Gary, is liable, and, therefore, are not shown to be within the obligation of the bonds. *It is, therefore, not -necessary to discuss the question, whether, if it had been alleged as a defence, and had been proved on the trial, that the principal had been guilty of acts or defaults for which he was liable to the sheriff, that proof would have availed to defeat the plaintiff’s action as premature. But I am not satisfied, that the plaintiff was entitled to a judgment against the defendants jointly, upon which he may collect the whole amount from one only. The plaintiff’s action, and the judgment in his favor, is sustained as an equitable action for contribution. The proper judgment or decree in such case should determine the sums which the several defendants are bound to contribute. Had it appeared, that the defendants made any such claim, or had, -on the trial, insisted upon any apportionment of the amount due by them, or called the attention of the referee to the subject, the general exception taken to his conclusion, that the plaintiff was entitled to judgment against the defendants for the sum found by him, should prevail. But, having in no wise raised tlm question below, I think, the judgment should be affirmed. Judgment affirmed Geoveb, J., dissented, on the ground, that, it was error to render a joint judgment against the three defendants.