Court Opinion

ID: 7968019
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:27.107007+00
Date Added: 2024-06-11T16:34:41.973209
License: Public Domain

Dickinson, J.
The plaintiff is the widow and sole legatee of John B. Mueller, whose estate has been fully administered and settled. In October, 1888, Mueller and the defendant indorsed, and became liable as sureties for one Westphal on a promissory note of the latter to one Jonas F. Brown, for $4,000, payable six months thereafter. At its maturity, in April, 1889, the note was not paid, and Westphal executed another note in its place, upon which also Mueller and Barge became sureties. When this note matured, Mueller and Barge gave their individual notes for the debt, which were subsequently paid, Mueller or his estate and Barge each paying $2,000. In the mean time, in January, 1889, Westphal gave his note for $10,000 to one Henry F. Brown, which Barge, one Van Der Horck, and another indorsed for his accommodation. At that time, Westphal, by a written instrument, executed by him, assigned to Barge and Van Der Horck certain shares of stock owned by him, which are recited to have been of the face value of $18,000, “for the purpose [as was expressed in the writing] of securing them as indorsers of my note given to Henry F. Brown, dated January 25, 1889, for the sum of $10,000; also to secure the said Jacob Barge as indorser of my note to Jonas F. Brown, for $4,000.” The pledgees were expressly authorized to make this indemnity available by a sale of the stock. Barge and Van Der Horck at length performed their obligation as indorsers by paying the $10,000, each paying $5,000. From a sale of the securities assigned to them, they realized the sum of $9,000, which they appropriated for their indemnity or reimbursement. Westphal is insolvent. By reason of the cosure-tyship of Mueller and Barge as to the $4,000 note, the plaintiff seeks ■by this action to compel contribution from Barge on account of the *318security thus received and made available by him. The court directed a verdict for the plaintiff for a specified sum.
1. The instrument by which Westphal transferred the stock to Barge and Van Der Horck was of clear and unambiguous meaning. By it the stock was pledged to them to indemnify them on account of their suretyship on both notes, generally and without discrimination. Fuller v. Hapgood, 39 Vt. 617. Van Der Horck and Barge thus accepting the pledge, the latter acquired the right to resort to the security for his indemnity, in proper proportion, with respect »:to the $4,000 note; and this benefit, upon principles of equity, Che was bound to share with his cosurety, Mueller. It is a settled principle of equity that, if one of two or more cosureties receives (from their principal) security for his own indemnity, it inures to the common benefit of his cosureties. Schmidt v. Coulter, 6 Minn. 492, (Gil. 340;) Dering v. Earl of Winchelsea, 1 Cox, 318, 1 White & T. Lead. Cas. Eq. 100, and notes; Steel v. Dixon, 17 Ch. Div. 825; Berridge v. Berridge, 44 Ch. Div. 168; Miller v. Sawyer, 30 Vt. 412; Shaeffer v. Clendenin, 100 Pa. St. 565; 1 Story, Eq. Jur. 499, and cases cited; Coleb. Coll. Sec. 230, 231, and cases cited. And this is so even though the receiving of such security was a condition by which alone he was induced to become a surety, and though his cosureties were ignorant of his receiving the security. Steel v. Dixon, supra. It follows that the defendant is liable in this action for contribution.
2. We come now to the question as to what proportion or amount of the indemnity fund the plaintiff is entitled to recover. The court directed a verdict for the plaintiff for $1,285.72, with interest. This resulted from treating the whole indemnity fund ($9,000) as applicable pro rata to both the obligations with respect to which the security was given. In such cases the security should be thus applied. Brown v. Ray, 18 N. H. 102; Moore v. Moberly, 7 B. Mon. 299.
3. The defendant offered to show that, prior to the assignment of the security, it was agreed that the same should be assigned to secure Barge and Van Der Horck as indorsers of the $10,000 note only, and that the defendant did not know that the assignment was made with reference to the $4,000 note also until afterwards. If *319this evidence had been received, it could not have affected the result. The assignment, as actually made, seems to have been accepted by the assignees, and presumably the prior agreement, which the defendant sought to show, was merged in the completed transaction evidenced by the written assignment.
(Opinion published 56 N. W. Rep. 36.)
4. The offered evidence to which the fourth assignment of error relates would not have tended to show that Mueller waived or relinquished his right to share in the security taken by the defendant, but only that he was ignorant of the existence of that right.
Order affirmed.