Case ID: va_45/html/0088-01.html
Source: Caselaw Access Project
Author: {"author": "Allen, J\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lewisburg.
    T. L. Preston v. J. Preston & als.
    
    (Absent Cabell, P. and Brooke, J.)
    1847. July Term.
    
    1. One surety of an insolvent principal is entitled to contribution from bis cosureties; and if all the sureties are solvent, each is bound for his share of the sum advanced and paid to relieve them from a common burthen.
    
      2. A judgment having been recovered against one surety, and an execution levied on his property, he executes a forthcoming bond with another of the sureties, against whom no judgment had then been obtained, as his surety in the forthcoming bond; and the bond is forfeited. The surety in the forthcoming bond, having paid the debt, is entitled to contribution from the other sureties in the original bond.
    3. The general rule is, that if one surety is insolvent his share shall be apportioned among the solvent sureties; but the surety in the forthcoming bond having, by executing that bond, released the property of the principal in said bond; and that principal having become insolvent, his surety will not be entitled to recover from the other sureties in the original bond, any part of the share of the said principal in the forthcoming bond, as one of the sureties in the original bond.
    
      4. The surety in the forthcoming bond, is entitled to a decree for the costs of awarding the execution on said bond, neither against the principal in the original bond, nor his sureties, but only against the principal in the forthcoming bond.
    This was a bill filed by Thomas L. Preston against ° . John Preston, to compel contribution to the satisfaction of a debt for which they were the sureties of William P. Floyd. The facts are as follows:
    In September 1841, James Rhea recovered a judgment against William P. Floyd, John B. Floyd, and John Preston, on a bond for 1000 dollars ; and in April 1842 he recovered a judgment on the same bond against Thomas L. Preston. William P. Floyd was the principal in this bond, and the other parties were his sureties. On the first judgment an execution was issued, which was levied on the property of John B. Floyd; and he thereupon executed a forthcoming bond with Thomas L. Preston as his security. An execution afterwards issued against John B. Floyd and Thomas L. Preston on the forthcoming bond ; and at the same time a separate execution was issued against Thomas L. Preston on the separate judgment recovered against him. Both William P. Floyd and John B. Floyd had then become insolvent j and Thomas L. Preston paid off the debt; paying the principal and interest of the debt on the separate execution against himself, and the costs of the forthcoming bond and the execution thereon, on the execution against John B. Floyd and himself. He then filed this bill against John Preston for contribution ; who objected that he had been released by the plaintiff’s joining in the forthcoming bond ; and especially, as by his so doing the property of John B. Floyd, which had been levied on, had thereby been released. And he charged, that by agreement between William P. Floyd and John B., the latter had undertaken to pay the debt.
    
      When the cause came on to be heard the Court dismissed the bill; and the plaintiff thereupon applied to this Court for an appeal, which was allowed.
    
      B. R. Johnston, for the appellant.
    „ ,, Sheffey, for the appellee.
   Allen, J

delivered the opinion of the Court.

The Court is of opinion, that by the principles of equity, the right accrues to one security having paid the debt of the principal, in the event of the insolvency of the principal, to receive contribution from the other securities ; and where all the sureties are solvent each surety is liable for his share of the sum so advanced and paid to relieve them from a common burthen. The Court is further of opinion, that there is no evidence of any contract or obligation on the part of John B. Floyd, one of the sureties, to pay the debt in exoneration of his cosecurities; and if when the execution was levied on the property of said John B. Floyd, he had paid the debt instead of giving a forthcoming bond, he would have been entitled to receive contribution from the other sureties. And as the forthcoming bond was executed by said John B. Floyd and one of the cosecurities, against whom judgment had not been obtained, and no new party was introduced, the execution and forfeiture of said bond alone, in the absence of any other circumstance affecting the liability of the parties, could not of itself operate so as to destroy the right of the security for the original principal, having paid the debt, to call for contribution ; although such security was also a security in the forthcoming bond. And whether the security who so paid the debt elected to pay the same on the judgment against himself for the original debt, or on the judgment on the forthcoming bond, the substance of the transaction, as it respects the original debt and the legal costs incurred in the discharge thereof, was the same, the relieving of the cosecurities from a burthen resting on all, and from which neither had been exonerated.

The Court is further of opinion, that where a security seeks for the application of a rule growing out of the general principles of equity, and not affected by any specific contract of the parties, the relief given should be regulated by the circumstances of the case ; that though if one security is insolvent, his share, as a general rule, should be apportioned amongst the solvent sureties, in this case the appellant is not entitled to charge his solvent cosecurity with a moiety of the share of the said John B. Floyd, alleged to be insolvent; for as it appears that the execution which issued on the first judgment was levied on the property of said John B. Floyd, if no forthcoming bond had been executed the proportion of the said John B. Floyd would have been made out of his property. Justice between the securities required that the remaining two should have paid their proportions, leaving the property of said John B. Floyd liable for his. By uniting with said Floyd in the forthcoming bond, the appellant disturbed the relation which then existed between the sureties, so far as to enable the said Floyd to withdraw from the lien of the execution the property which had been levied upon ; and if in consequence of the subsequent insolvency of said Floyd, he is unable to contribute his proportion, the loss occasioned thereby should not be borne by the cosecurity who did not join in the forthcoming bond, but was merely passive. The Court is further of opinion, that the cosecurity, John Preston, is not responsible for the costs in awarding execution on the forthcoming bond, as that was given for the benefit of the said John B. Floyd, alone ; and for such costs the appellant was entitled to an immediate decree against said John B. Floyd. But the Court is of opinion, that the appellant was entitled to a decree against the principal debtor for the whole amount paid by him, with interest, except the costs of awarding the judgment- on' the forthcoming bond ; and in the event said decree should prove unavailing, then to a decree against said John Preston, for one third of amount °f the sum so decreed against said William P. Floyd, the principal, or any residue remaining unsatisfied ; and to a decree against said John B. Floyd for the remaining third of the amount decreed against said William P. Floyd, or any balance which remained unsatisfied!.

The Court is therefore of opinion, that said decree was erroneous, and the same is reversed with costs“j/and the cause is remanded, with instructions to render a decree in favour of the plaintiff against said William P. Floyd for the amount paid by the appellant on account of said judgments in the bill and proceedings mentioned, deducting therefrom the costs of the award of execution on the forthcoming bond, and a second commission, should the same be included in the sum paid by the appellant; and also a decree against said John B. Floyd, for the costs of the judgment on the forthcoming bond, and such second commission if included in the amount of the receipts. And to retain the case, with leave to the appellant to apply to the Court for decrees against said John Preston and John B. Floyd respectively, for their parts of the decree against their common principal, William P. Floyd, in the event of the decree against him proving unavailing, or for one third of so much thereof as may not be collected from said William P. Floyd, according to the principles aforesaid.