No. 83-119 

IN 'l'HE SUPREME COURT OF THE STATE OF MONTANA 

1983 

RICHARD C. BOSSARD, FLOYD BOSSARD, 

JAMES T. MADDUX, and DAVID P. JACOBSOFJ, 

Plaintitfs and Respondents, 

ZAME K. SULLIVAN, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable john S. Hensonr Judge presiding. 

Counsel of Record: 

For Appellant: 

Boone, Karlberg & Iladdon, Missoula , Montana 

For Respondent : 

Worden, Thane & Haines; Robert J. Phillips, 

Missoula, Montana 

Submitted on Briefs: June 16, 1983 

Decided: October 27, 1983 

Filed: oci .:i iY&i 

Clerk 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

Zane Sullivan (Sullivan) appeals an order of the 

Missoula County District Court granting summary judgment to 

the plaintiffs, Richard C. Bossard, et al. (Rossard) . 

Bossard filed the action to compel Sullivan to pay an equal 

amount on a $120,000 promissory note. All the parties had 

signed personal guaranties, but Sullivan revoked his guaranty 

before payment of the principal was due. Bossard and the 

other stockholders paid part of the interest and principal 

when it came due. The trial court found that Sullivan's 

revocation could not affect his guaranty on the original 

note. The trial court declined to listen to evidence, and 

granted summary judgment to Bossard. Sullivan claims that 

inequality among the parties, modification of the terms of 

the note, and his revocation, excuse payment. 

Sullivan claims that because the parties were in unequal 

positions regarding stock ownership, he should not be 

required to contribute equally. Sullivan also appeals the 

award of Bossard's attorney fees. We vacate the summary 

judgment and remand for further proceedings to determine if 

the doctrine of equality applies. The award of attorney fees 

is reversed. 

On May 2, 1979, the Title Company of Billings executed a 

note to the Montana Bank of Billings. The note was for 

$120,000, annual interest at 13 percent. Interest was 

payable monthly, and the principal due on demand or on May 1, 

1980. 

The same day, Sullivan and plaintiffs Bossard, et al. , 

signed guaranties of the note. The guaranty was a continuing 
one, and provided that no extension of time for payment, nor 

renewal would affect the quarantor's liability. Liability 

was in effect until the Rank received written notice of 

revocation. A guarantor's revocation did not affect 

liability for any obligation or renewal created before 

revocation. 

The original note was renewed on May 1, 1980, and due on 

demand or on May 1, 1981. The renewal was for $121,000 at a 

higher rate of interest. Sullivan did not participate in the 

renewal and did not sign the second renewal note. One month 

before the renewed note was due, Sullivan revoked in writing 

his guaranty. When the second renewal note came due on May 

1, 1981, the title company was insolvent. Bossard and the 

others negotiated with Montana Bank of Billings to defer 

their payment, and on May 7, 1981, they paid $30,000 toward 

the principal and interest. On the same day they signed a 

third note for approximately $92,000, the balance on the 

renewal note. Sullivan did not participate in the 

negotiations, and refused to make any payment. On May 21, 

1981, Bossard and the others demanded that Sullivan 

contribute; when he refused, they brought suit. 

Sullivan argues that receipt of unequal benefits from a 

common obligation destroys the general rule of equal 

contribution. All the parties except Sullivan were 

stockholders in the title company. Sullivan alleges he had 

been promised stock in the company in exchange for setting up 

the corporation, hut Bossard and the others failed to 

complete their promise. Contribution among co-obligors is an 

equitable concept, and an equitable defense of one obligor 

must be permitted to be raised and presented. The trial 

court refused to consider the doctrine of equality, and 
refused to hear evidence on the issue of the inequality of 

the parties' ownership of stock in the corporation, and 

granted summary judgment to Bossard. 

The principle of unequal benefits affecting equal 

liability is illustrated bl7 a Montana. ca.se, In Re Daily's 

Estate (1945), 117 Mont. 194, 159 P.2d 327. In Daily, the 

court held that a husband and wife, both deceased, were joint 

obligors on two promissory notes. The court held that 

without proof to the contrary, the presumption is that joint 

obligors benefited equally from a common debt and the 

obligors equally liable. The Daily's respective estates were 

held to be equally liable. Following this analysis, if one 

joint obligor offers proof that he did not receive equal 

benefits, th.a.t obligor is not required to equally contribute. 

The California courts have held that the right to 

contribution is based in equity and is separate from the 

contract to the creditor. Blankenhorn-Hunter-Dulin Co. v. 

Thayer (CA 1926) , 247 P. 1088, involved marginal traders and 

persons who had paid for their stock in full. The brokerage 

became insolvent, and the trustee in bankruptcy claimed that 

the Blankenhorn-Hunter-Dulin Co., which had paid in full for 

its stock, should contribute rata.bly with the margin 

purchasers to discharge the brokerage's debt. But the 

California Supreme Court held that since the right of 

contribution rested on equity and principles of natural 

justice, it was not equitable for parties in unequal 

positions to be equally liable for payment of a debt. 

In the present case, Sullivan raises the issue of 

equality of benefits, and was prepared to offer proof to the 

contrary. Only a trial could resolve this issue. 
If this were an action by the bank, our decision would 

be different. Between the primary creditor and a co-obligor, 

the guaranty binds the obligor. Had the bank acted against 

Sullivan, he would be liable on the note, and could, in turn, 

seek reimbursement from his co-obligors. However, in this 

case, the action is among the co-obligors, one of whom 

alleges he did not receive an equal benefit from the common 

obligation. 

We also reverse on the issue of attorney fees. The 

trial court granted Bossard and the other stockholders their 

attorney fees and costs. We find no authority for this award 

and the trial court did not give any reasoning. Absent 

statutory authority, or an agreement among the parties, 

Bossard should not have been granted attorney fees. 

Reversed and remanded for further proceedings in 

accordance with this opinion. 

We Concur: