Case Name: William Knotts vs. Joel Butler, adm'r, and others
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1857-02
Citations: 10 Rich. Eq. 143
Docket Number: 
Parties: William Knotts vs. Joel Butler, adm’r, and others.
Judges: Dargan & Wardlaw, CC., concurred.
Reporter: South Carolina Equity Reports
Volume: 31
Pages: 143–148

Head Matter:
William Knotts vs. Joel Butler, adm’r, and others.
Guaranty — Co-Sureties—Limitations, Statute of
A guaranty given to protect future liabilities, and containing a stipulation that it may be revoked on written notice, is not revoked by the death of the guarantor, nor by the neglect of the creditor to give notice to the administrator.
The cause of action of one surety against his co-surety arises only when he has paid the debt; and the Statute of Limitation commences to run only from that time
BEFORE WARDLAW, CH., AT ORANGEBURG,
FEBRUARY, 1857.
Wardlaw, Ch. In 1847, and for some time afterwards, Sanders Glover, Sanders L. Glover, and William R. Davis, conducted the business of factors, in the city of Charleston, as partners, under the style of Glovers & Davis. For the credit and accommodation of the firm, some of their friends in the country signed the following guaranty:
“ To the President and Directors of the Bank of the State of South Carolina:
The subscribers hereby guarantee, jointly and severally, the payment of all drafts or notes made, or to be made, by Messrs. Glovers & Davis, factors, of Charleston, and of all drafts accepted by them, which may be discounted by you; and we declare this to be a continuing guaranty, and that it is to remain of force till revoked by written notice to the President or Cashier of said Bank; and we waive notice of the acceptance of this guaranty. This guaranty to take effect from the date hereof, and our liability thereunder not to exceed five thousand dollars.
CHARLES GLOVER,
WILLIAM KNOTTS,
V. D. V. JAMISON,
JAMES GRIMES.”
The guaranty is undated, except by a pencil mark, September, 1847; and it is conceded that it was delivered to the Bank about that time.
In August and September, 1852, Glovers & Davis made five notes for the aggregate sum of $19,300, payable at the said Bank of the State, which were discounted by said Bank, and not being paid at maturity were protested for non-payment.
On February 9th, 1854, the Bank brought an action of assumpsit against the plaintiff, Knotts, in the Court of Common Pleas for Orangeburg, for recovery of so much of said unpaid notes as was protected by the guaranty; and at Spring Term, 1856, of said Court, recovered judgment against him for $5,000, with interest from October 1, 1852, and costs. . On January 12, 1857, plaintiff Knotts satisfied this judgment in'full, viz: $5,752.40.
Charles Glover, one of the guarantors, died intestate, February 11, 1848, and administration of his estate was committed to the defendant, Joel Butler, April 6, 1848, who published the proper notice for twelve months to creditors to present their demands. He avers that he had no notice of this guaranty until the commencement of the suit against Knotts. The Bank presented no claim against intestate’s éstate, and gave no notice to the administrator.
Glovers & Davis are insolvent; and so also are two of the guarantors, Y. D. V. Jamison and James Grimes. The estate of Charles Glover is ample, and 'much of it remains undistributed in the hands of the administrator.
Plaintiff filed this bill January 12, 1857, against the administrator of Charles Glover, and against Jamison and Grimes, to compel contribution for his payment in extinguishment of their common guaranty.
Defence is made only in behalf of Charles Glover’s estate. By the express terms of the guaranty, it was continuing as to existing and future drafts and notes of Glovers & Davis, discounted by the Bank, until revoked in a special mode by writ ten notice to the President or Cashier. The liability of the guarantors was limited only as to the amount. The statute of limitations, which is pleaded, but not urged, is inapplicable between the Bank and the guarantors, and there is no pretence of improper delay on the part of the plaintiff in seeking a remedy. It is supposed, but'without reason, that he is in some fault for not giving notice to the administrator of the liability of intestate’s estate; but he and intestate were equal joint contractors, bound by the same law and equities, and without any special duty on his part to intestate. Until he discharged the guaranty, his laches could not begin.
It is urged, however, that the death of intestate, more than four years before the debt to the Bank protected by the guaranty was created, and the notice of administrator to creditors, are together equivalent to the special revocation of the guaranty stipulated in the instrument, as equity looks to substance and not form; consequently that the liability of intestate to the Bank and to the plaintiff had ceased. The notice to creditors required by our Act of 1789, is intended for the protection of an administrator who proceeds to make regular distribution of the estate, in ignorance of some dormant debts of his intestate; but until he has made distribution, and so long as he retains assets for the satisfaction of all debts, it. is quite immaterial to creditors and to himself whether or not he may be informed of particular claims, not brought specially to his attention within a year. An administrator becomes a debtor by relation and not by his own contract, and does not necessarily know, nor is bound to know, all denfands created by his intestate; and this affords an adequate reason why he should not suffer in his private estate from the laches of creditors in bringing forward their claims, but where the reason is inapplicable, the unnecessary protection ceases. Here there was no debt, no breach of the guaranty, at the death of the intestate. Intestate contracted for an indefinite space of time to indemnify the Bank in discounting certain drafts and notes; and no principle requires that his contract should terminate with his life. The guaranty is not the mere delegation of an agency to the Bank to deal, instead of Charles'Glover, as principal, -with Glovers & Davis in certain matters, which would, cease at the principal’s death; but it is a contract to indemnify against certain acts of third persons, and to assume a future contingent liability, if these acts be done. What obstructs one from indemnifying against the consequences of an event which may not happen for more than four years after his death, more than giving his promissory note, which may not reach maturity for more than four years from his death? It is asked, how long shall such a guaranty continue in force? and the answer is, until it be ended according to its terms. The administrator on whom the liability devolved, might have given the written notice to the President or Cashier, prescribed by the instrument. I am of opinion that the plaintiff is" entitled to contribution from the defendants; and that the case is governed by the doctrines of McKenna vs. George, 2 Rich. Eq. 15. As to the costs of the law case, as there is no evidence that Knotts defended except for his own accommodation, or of any agreement on the subject, or of any benefit from the defence to the guarantors, plaintiff is not entitled to contribution on that score.
It is adjudged and decreed, that the plaintiff, William Knotts, recover from the defendant, Joel Butler, administrator, one moiety of the sum paid by the plaintiff in extinguishment of the guaranty, with interest from January 12, 18,57. It is further adjudged that a lien be created on the estates of Y. D. Y Jamison and James Grimes, respectively, for their equal shares in liability under said guaranty; and it is ordered that, if when the defendant, Butler, as administrator, shall have paid said moiety, the said defendant and the said plaintiff may have execution against said Jamison and Grimes, to compel contribution ; care being taken that actual contributions be kept equal, and that no party be exempt from one-fourth part of the sum covered by the guaranty.
It is further ordered, that the parties have leave to apply, at the foot of this decree, for further orders in execution of the decree.
The defendant, Joel Butler, appealed :
L Because it was the right of each of the several guarantors to end his own liability at any time by giving written notice to the President or Cashier of the Bank, and it is submitted that the death of Charles Glover, the defendant’s intestate, in February, 1848, more than four years before any liability under the said guaranty had attached, and public written notice by his administrator to the creditors of the said Charles Glover to render their demands, were in substance equivalent to the notice required by the said guaranty, and released the estate of the said Charles Glover from future responsibilities.
2. Because, if the death of the said Charles Glover, and the subsequent call on his creditors by his administrator, were not sufficient to discharge his estate, then his death destroyed the equality of rights and liabilities which the said guaranty contemplated, and put it in the power of the surviving guarantors, by releasing themselves, to throw the entire responsibility on the estate of the said Charles Glover.
3. Because, if the obligation of the guaranty continued and followed the éstate of the said Charles Glover after his death, the means provided by the said guaranty of avoiding them, was the right of his administrator ; it is, therefore, submitted that the failure of the Bank to give him notice of the existence and nature of his intestate’s obligation, and of the important right therein reserved to him, released his estate.
4. Because, if the Bank could not have recovered from the estate of the said Charles Glover in January, 1857, when the complainant paid the amount for which he seeks contribution, the complainant can have no right against the estate of the said Charles Glover, for he has removed from it no common burthen nor conferred on it any benefit.
DeTreville, for appellant.
Bauskett, contra.

Opinion:
The opinion of the Court was delivered by
Dunkin, Ch.
All the grounds of appeal, except the last, seem sufficiently answered by the decree of the Chancellor. The fourth and last ground is founded on a misapprehension. The implied contract for contribution between co-sureties is entirely different, from the contract between the creditor and the principal debtor, or the creditor and the sureties. As between the creditor and a surety the liability maybe discharged, and yet the right to contribution against the same suréty on the part of his co-sureties may remain. This is well illustrated by Lord Eldon in Ex parte Gifford, 6 Ves. 805.
The right, of the co-surety to contribution is not founded upon' any original contract; but arises out of a principle of equity that, when one surety has paid the debt of the principal for which all were equally bound, he shall have a right to call upon his co-sureties to re-imburse him for what he has paid beyond his proportionate share. A question has sometimes arisen whether the surety may call on his co-sureties before he has paid the entire debt, but no such question is here presented. In Davies vs. Humphreys, 6 M. and W. 152, the subject is fully discussed by Baron Parke, and it is there ruled that the cause of action of the surety against his co-surety, arises, not when the cause of abtion of the creditor against the principal or sureties arises, but when the surety has paid the debt, or more than his proportion thereof, and that the Statute of Limitations, as between him and his co-sureties, commences to run from that time. In this case, Knotts, the plaintiff, filed his bill for contribution on the same day that he paid the debt to the Bank.
It is ordered and decreed that the appeal be dismissed.
Dargan & Wardlaw, CC., concurred.
Appeal dismissed.