Court Opinion

ID: 9642135
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:49:38.563252+00
Date Added: 2024-06-11T11:09:02.368005
License: Public Domain

SWAN, Circuit Judge
(dissenting in part). I concur in the result of the opinion, in so far as it affirms the judgment below. I am not able to concur in that portion of the opinion which reverses the allowance to defendant of a credit of $1,375, being one-sixteenth of the Coleman misappropriation of $22,000.
As the opinion states, the state of Idaho might have proceeded against the bondsman of either Coleman or Allen. If the state had proceeded against Coleman’s surety, it would *454have reduced by $22,000 the recovery against National as surety on Allen’s bond. This would have benefited Massachusetts, as rein-surer of one-eighth of the loss on Allen’s bond. It would have prejudiced National correspondingly. It is most inequitable to allow the loss of the two insurance companies to be varied by the capricious election of the state of Idaho. While the surety upon Coleman’s bond and the surety upon Allen’s bond may not technically be cosureties, the principles applicable to cosureties should be applied to them. In 2 Story, Equity Jurisprudence (14th Ed.) § 667, the learned author says, after stating the rule that cosureties must eon-tribute:
“Any other rule would put it in the power of the creditor to select his own vietim, and upon motives of mere caprice or favoritism to make a common burden a most gross personal oppression. It would be against equity for the creditor to exact or receive payment from one and to permit or by his conduct to cause the other debtors to be exempt from payment. * * * The ground of relief does not, therefore, stand upon any notion of mutual contract express or implied, between the sureties to indemnify each other in proportion, * * * but it arises from principles of equity independent of contract.”
The disability of one joint tort-feasor to enforce contribution from the other affects only the wrongdoers themselves. It should not prevent their sureties from having equitable contribution, because the surety’s rights ,are worked out by subrogation to the rights of the creditor, who may collect full damages from either joint tort-feasor. See American Bonding Co. v. National Mechanics’ Bank, 97 Md. 598, 55 A. 395, 99 Am. St. Rep. 466; United States Fidelity, etc., Co. v. Union Bank & Trust Co., 228 F. 448 (C. C. A. 6); United States Fidelity, etc., Co. v. Citizens’ National Bank (D. C.) 13 F.(2d) 213.
If there had been a different surety on Coleman’s bond, the National, on paying the state of Idaho the loss on Allen’s bond, would have been 'subrogated to the state’s right against Coleman and his surety. Brinson v. Thomas, 55 N. C. 414. Similarly, Coleman’s surety, if it had paid the state, would have been subrogated to the state’s right against Allen and his surety. Therefore the loss should be divided between the innocent sureties, and not fall solely upon the one which the state elects to sue. If the National had obtained $11,000, half of the loss, from Coleman’s surety, this would have been a credit which would have accrued to the benefit of the Massachusetts Company under the terms. of its reinsurance. The defendant should not’ suffer because Coleman’s surety happens to be the National itself.
While no authority has been found discussing the precise point in question, the application of the equitable principles above referred to leads to an affirmance of the judgment. Globe & Rutgers Fire Ins. Co. v. Hines, 273 F. 774 (C. C. A. 2), is not inconsistent with this position, for there the insured was not in the position of the state of Idaho with rights of action against two joint tort-feasors and their respective sureties. The insured there had no right of action against any wrongdoer.
I think the judgment should be affirmed in its entirety.