Case Name: EARL F. CRANSTON v. A. N. INGLE et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1927-11-22
Citations: 123 Or. 280
Docket Number: 
Parties: EARL F. CRANSTON v. A. N. INGLE et al.
Judges: Belt, J., did not participate in this decision.
Reporter: Oregon Reports
Volume: 123
Pages: 280–286

Head Matter:
Argued at Pendleton, October 31,
modified November 22,
costs retaxed December 6, 1927.
EARL F. CRANSTON v. A. N. INGLE et al.
(261 Pac. 55.)
For appellant there was a brief over the names of Messrs. Nichols, Hallock S Donald and Messrs. Davis & Lytle, with an oral argument by Mr. Blaine Hallock.
For respondent there was a brief and oral argument by Mr. Chas. H. Kahn-.

Opinion:
B.OSSMAN, J.
We have ' carefully considered the evidence; we do not believe that it supports the defendant Stanfield's contention that the parties agreed to limit their liability by way of contribution to one fourth of the amount of the loan. We are clearly convinced, however, that the common understanding was that the plaintiff, as well as the three defendants, should be responsible for the discharge of this obligation. The evidence shows that the four men applied to Mr. Pollman for $6,500; the plaintiff concedes that had they obtained from him that sum of money, he would have attached his signature to the note; when Mr. Pollman refused to loan $6,500 and suggested that the plaintiff loan half of it, the four men did not enter into a new arrangement for the eventual discharge of the debt; nor did they alter their relationship to each other; all four still remained the stockholders and the directors of the cor poration; it was this interest in a common venture which created the desire for the $6,500 and which made them feel a duty resting upon all four to eventually discharge the debt; thus all four signed the Pollman note. These facts, together with the other evidence offered at the trial, convince ns that the duty to discharge this note as well as the Pollman note belongs to all four of the men, and not to three only of them. The plaintiff clearly understood this, and so stated after all but himself had signed this note; thus, one of the witnesses testified, without contradiction, "We signed the note, and after it was signed I said, 'Cranston hasn't his name on the note.' 'Well,' he said, 'I have got plenty of time to put my name on it. I figure I will have it all to pay anyway.' "
The plan to have all four sign was due to the fact that they desired to make the note as easy to dispose of as possible; this same purpose led them to insert 8 per cent as the rate of interest instead of 6 per cent, which was the rate in the Pollman note. Perhaps a note with Cranston both as payee and also as one of the makers is somewhat unusual; but when we bear in mind that their plan was to have Cranston dispose of the note to a purchaser, we see that by inserting his name as payee they thought that they were doing something which would enable the plaintiff to more readily dispose of the note; in other words, all that it would be necessary for him to do would be to endorse it. The plan would have been more in harmony with ordinary usages, had they left the space of the payee blank and had given the plaintiff authority to insert the payee's name when he found someone willing to take their note. The evidence leaves no doubt as to what they had in mind; their plan, however, was interrupted when the plaintiff, instead of disposing of the note to some third party, kept it, put $3,250 in the bank to the credit of the company, and then last of all failed to sign the note.
These being the facts, what relief is the plaintiff entitled to? We can best measure out this relief if we consider that as done which should have been done; that is, if we regard the note as being in the possession of a third party, with the signature of the plaintiff and the three defendants attached to the note as makers. The plaintiff now bears the entire burden of a debt which should be shared by all four. Two of the four are insolvent; the defendant and the plaintiff alone are solvent. The plea sets forth an equitable defense. Equity will retain jurisdiction until full justice is done. The equitable doctrine of contribution is to the effect that,—
"When the parties stand in aequali jure, the law requires equality, which is equity, and one of them shall not be obliged to 'bear a common burden in ease of the rest. It is founded on principles of equity and natural justice and does not arise from contract. In other words, the doctrine of contribution is not founded on contract, but comes from the application of principles of equity to the condition in which the parties are found in consequence of some of them, as between themselves, having done more than their share in performing a common obligation." 13 C. J., p. 821.
Under the circumstances the plaintiff himself should bear one half the burden and the defendant Stanfield the other. The decree should be so modified. We are aware of the fact that the insolvent defendant, Adrian, was not served. However, it was the defendant Stanfield who interposed the equitable answer; he therefore is in no position to object to the absence of Adrian. Decree modified as above. Costs to defendant Stanfield. Modified.
Belt, J., did not participate in this decision.