Allen v. Wood, 38 N.C. 386, 3 Ired. Eq. 386 (1844)

Dec. 1844 · Supreme Court of North Carolina

38 N.C. 386, 3 Ired. Eq. 386

JOHN B. ALLEN, ADM’R. &c. vs. JOHN WOOD.

The right of a surety to have contribution from his co-surety, in Equity, is not founded upon any principle oí' contract, but is the result of natural justice.

When one surety brings a bill for contribution against a co-surety, he should at least allege that the principal is insolvent, so that he can have no redress against him. For the equity oí a plaintiff, seeking contribution from a co-surety, lies in the insolvency of the principal.

Where money is advanced b3r the principal to one of the sureties, to discharge the debt, before the debt is actually discharged, the co-surety may lile his bill in equity for an account and for relief.

But if the money is paid by the principal, after the debt has been discharged by the sureties, to one of two sureties, to reimburse both, then the co-surety has his remedy against the surety, receiving the money, by an action at law for money had and received, and, theiefore, cannot support a suit in equity.

The cases of Williams v. Helm, 1 Dev. Eq. 159. Rainey v. Yarborough, 2 Ired. Eq. and Bell v. Jasper, 2 Ired. Eq. cited and approved. 3MÍ S'??

Cause removed from the Court of Equity of Johnston County, at the Fall Term, 1844.

The bill sets forth, that the defendant and William B. Allen, the intestate of the plaintiff, became the sureties of one Joshua B. Wood, and one H. C. Ennis, on a note for one thousand dollars, to one Robert W. Snead; that a suit was brought on said note against all the obligors, except Joshua B. Wood, who had removed from the State, and judgment obtained against all the defendants to the action for the sum of $953 28, with interest; that on this judgment, execution issued against all the defendants, and was discharged by the said William B. Allen and the defendant John Wood, in equal proportions. The bill further states, that, some short time after the judgment was obtained, the defendant received from Joshua B. Wood, one of the principals in the bond or note, the sum of $ 300 or $ 350, with directions to apply it to the payment, as far as it would go, of the said execution, to the equal benefit of the said intestate and the said defendant, and should said execution have been discharged by the sure-' ties, that one-half of said money should be paid over to the said intestate, or to his use and benefit. It then charges, that the defendant had applied the whole of said money, so received, to his own individual use, and that he has refused, though often requested so to do, to pay over to the said intestate, in his life-time, or to the plaintiff, since his death, any portion of said money, and that by receiving the money in the way he did, and for the purposes alleged, he became a trustee for the said "William B. Allen, the intestate, for one-half thereof.

It then prays, that the defendant may be decreed to pay over to the plaintiff one-half of the money so received.

The answer admits the statements made in the bill, as to the suretyship, and the payment by the intestate and himself, in equal portions of the judgment obtained by Robert W. Snead, against all the parties to the bond, except Joshua B. -Wood, and the amount of the judgment. It admits that the defendant did receive from Joshua B. Wood the sum of $350, but denies that he was directed by said Joshua B. Wood, or in any manner instructed, to apply the same equally, for the benefit of the said William B. Allen, on account of their said suretyship, or towards the payment of said execution ; denies he ever admitted to the intestate or any other person, that the money so recieved was to be applied to the equal benefit of himself and said intestate, or that said intestate was to derive any benefit therefrom, but that he believes it was sent to him, for his sole benefit, on account of his being liable as the surety of said Joshua B. Wood.

The answer further admits the death of William B. Allen, and that the plaintiff is his administrator. To this answer there is a general replication, and proofs having been taken, the cause was transmitted here for hearing.

G. W. Haywood and Miller for the plaintiff.

J. H. Bryan for the defendant.

Nash, J.

The right of a surety to have contribution from his co-surety is not founded upon any principle of contract, bLlt is the result of natural justice, upon the maxim, qui sentit commodum, sentiré debet onus] 1st Story’s Eq. 471. The plaintiff alleges, that the money, received by the defendant from Joshua B. Wood, was paid to him for the mutual benefit of him, the defendant, and the intestate, William B. Allen. This, by the answer, is denied, nor is there any sufficient testimony to show the fact was, as is alleged in the bill. The evidence only proves, that the defendant, at different rimes, said he had lived an honest man, and he intended to die one, and the intestate should have one half of the money. This, to us, rather confirms the answer; he did not think it honest, and perhaps he was right, to keep to his own use, the whole of the money. It was, however, a matter within his own discretion. The pleadings do not very clearly establish, when the money was received, whether before or after the execution was discharged. We rather, however, think it may be gathered to have been before, and if so, the plaintiff would have been entitled to contribution, if the bill had been properly framed. Perhaps the facts would not justify a statement, different from t!ie one made; if so, the plaintiff has no equity. There were two persons, principals in the bond or note, Joshua B. Wood, and Henry Ennis, and neither of them is made a party to the bill, nor is it alleged that they are insolvent and unable to pay to the plaintiff what his intestate paid. For aught that appears in the case, both these individuals are perfectly solvent, and Ennis may now be living in the County of Johnston, where this bill is filed. The equity of a plaintiff lies in the insolvency of the principals, where he is seeking contribution from a co-surety. Williams v. Helme, 1 Dev. Eq. 159. Rainey v. Yarborough, 2 Ired. Eq. 257. Bell v. Jasper, 2 Ired. Eq. 200. Mahew v. Crickett, 2 Swans. 185. Daring v. Winchelsea, 1 Cox. 318. And the reason is obvious — the eo-surety is bound to answer only in the place of his principal, and, if he is able, it is the duty of the surety, who has paid the debt to look to him; if he is not able, he then, and only then, has a right to seek his redress from his co-surety. In this case according to the answer, and there is nothing in the evidence to contradict it, the money was to him by J oshua to indemnify him, and when called on by the plaintiff he might well answer, go to the principal Wood or to the principal Ennis; they will pay you what you have advanced. They are able to do so.

It is not very plain to us, upon what ground the complainant places his right to redress ; whether as a surety seeking contribution from a co-surety, or upon the ground that the defendant has received, from one of the principals, after the execution was discharged, a sum of money, which was paid to him, for the joint benefit of the defendant and his intestate. If the former, for the reasons above given, the bill cannot be sustained. Neither can it be sustained on the latter ground. In that case, if true, his claim would be purely a legal one, to be enforced in a court of law, by an action of assumpsit for money had and received to his use. He cannot have redress in this court for it.

Per Curiam, , Bill dismissed with costs.