Court Opinion

ID: 6576144
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:28.893018+00
Date Added: 2024-06-11T15:57:06.418058
License: Public Domain

The opinion of the court was delivered by
Isham, J.
This is an action of assumpsit by one surety against his co-surety for contribution. The defendant has pleaded a discharge in bankruptcy. The certificate of discharge was obtained January 16, 1844. The note was signed by the plaintiff and defendant as co-sureties before the defendant’s discharge, but the payment of the money by the plaintiff was made afterwards. The question, under the issue presented by the pleadings in this case, arises, whether the plaintiff’s claim for contribution is barred by that certificate. The fourth section of the bankrupt act provides, that the bankrupt shall be discharged from all liability for any matter or claim which could be proved under that commission. The fifth section specifies the claims which may be allowed or proved, and provides : “ That all creditors whose debts are not due and payable until a future day, all annuities, sureties, indorsers, bail, or other persons having uncertain or contingent demands against the bankrupt shall be permitted to prove such debts, and have the same allowed, when they become absolute.” Had this plaintiff a claim against the defendant for contribution, contingent or otherwise, which could be proved under that commission ? If such a claim existed this action cannot be sustained, but if otherwise, the plaintiff is entitled to recover. In the case of Mace v. Wells, 7 Howard 272, it was held, that a surety could prove a claim under proceedings in bankruptcy against the principal, though he had not paid the debt, nor had in any way been dam-nified by reason of his becoming surety. The certificate of discharge given to the principal was a discharge of any claim for subsequent payments made by the surety. The direct liability of the surety to the creditor for a debt then in actual existence, created at least a contingent claim, which could be proved under the fifth section of the act. But a different rule exists between co-sureties, where no payments have been made by either of them. As between co-sureties no claim exists until payment has been made upon the debt by one of them. There is no existing liability from *295one surety to the other until that event; and where there is no liability upon a claim then in existence between the parties, there is no claim, contingent or otherwise, which can be proved under proceedings in bankruptcy. At the time of the defendant’s discharge, the plaintiff’s claim was solely against the Hadleys for whom he had signed as surety, and for whom he was under an existing liability; and that claim was purely contingent, for it was founded only upon his liability to pay the debt. At that time the plaintiff had no claim against the defendant, his co-surety, contingent or otherwise. There was a mere possibility that a claim might arise in case the plaintiff should pay the debt. The distinction is well defined in reported cases “ between subsisting debts which are payable on a contingency, and contingent liabilities which may never become debt'sthe former may be proved under proceedings in bankruptcy, the latter, not. Exparte Marshall, 3 Dea. & Ch. 120; 2 Parson on Cont., Ed. of 1857, 657 and cases cited. In the case of Woodard v. Hubert, 24 Maine 358, it was held, that a distinction existed between contingent demands and a contingency whether a demand will ever exist. The former is provable, but not the latter. The same doctrine was sustained in Ellis v. Ham, 28 Maine 387; Dole v. Warren, 2 Reddington (Maine) 94; Goss v. Gibson, 8 Humph. 197; Dunn v. Sparks, 1 Carter 397. The plaintiff in this case could have made no claim upon the defendant previous to his discharge, for there was a contingency whether a demand would ever exist, and as a contingent claim it could not have been allowed. Neither did the plaintiff stand as surety for the defendant in that matter. He was surety for the principals on the note, but that relation does not exist between co-sureties; one is not a surety for the other. If that relation existed between them, the liability for contribution would arise upon contract, either express or implied. But the doctrine is well settled that that obligation exists independent of any contract. It rests upon principles of general equity. That is the doctrine of Justice Story, 1 Eq. Juris., sec. 493, and of Lord Baron Eyre in Deering v. Winchelsea, 2 Bos. & Pul. 270.
The fifth section of the bankrupt act was obviously designed to embrace the same claims which were authorized to be proved under such a commission by the statute 6 Geo. 4. The cases in *296the English courts under their statute on the question whether the claim of a surety against a co-surety is barred by a certificate in bankruptcy are very decisive and applicable. In Birge on Suretyship 488, the rule is given, that “ upon the bankruptcy of one surety, if a co-surety after the bankruptcy pay the debt, the co-surety has a demand against the' bankrupt surety, which is not barred by the certificate which the latter may obtain; ” Clements v. Langley, 5 B. & Ad. 372; Brown v. Lee, 6 B. & C. 689; Wallis v. Swinbourne, 1 Exchq. 203. Upon the authorities, therefore, both English and American, we think the plaintiff’s claim for contribution is not discharged by the defendant’s certificate.
The judgment of the county court is reversed and the case remanded.