Court Opinion

ID: 6579757
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:37:19.683219+00
Date Added: 2024-06-11T15:57:13.964236
License: Public Domain

Phelps, J.
This case comes before us by way of an amicable suit reserved by the Superior Court at the request of the parties for the advice of this court, on the question whether the defendant, whoso name is last signed to the note, is co-surety with two others, of the principal, so as to be liable to *558contribute to one of them who has paid the whole debt. It appears from the agreed facts that the loan was made to and for the sole benefit of George A. Monson, and that the creditor at the time the loan was made required the signature of Frank S. Monson and Stiles F. Monson to the note, and that they all signed it upon its face and before its delivery to the payee, and so far as appears from the paper itself intended to be, and were, joint and several makers of it. The payee nine months afterwards became dissatisfied with the responsibility of the names then attached to the note and required the principal to furnish additional security either by mortgage or the name of some other responsible party; whereupon the defendant, at the request of the principal, placed his name upon it under the others, and took from him mortgage security on property belonging to his wife. After the defendant’s signature the note read as follows:—
“ Woodbury, March 17th, 1868.
“ For value received I promise to pay Daniel S. Lemmon sixteen hundred dollars, with interest at six per cent, and all taxes. - George A. Monson.
Frank S. Monson.
Stiles F. Monson.
Robert I. Drakeley.”
Stiles F. Monson has since been compelled to pay the note, and he now claims that the defendant should contribute towards the amount so paid.
The case might have been so presented as in all respects to entitle the plaintiff to the benefit of every equitable consideration, but as the record stands we are simply requested to advise whether the defendant is bound to contribute one third of the sum actually paid in discharge of the note by Stiles F. Monson; and no claim is made or advice asked with reference to the liability of the defendant to transfer, for the benefit of other parties, the security which he holds, or, in consequence of the insolvency or removal of either of them from the state, to establish a different and more equitable basis of apportionment.
An inspection of the paper discloses nothing inconsistent *559with the fact that the signatures were all written at the same-time, upon the same consideration, and for the same purpose. Although the promise is expressed by the use of the singular pronoun “ I,” the intention of all the signers to become joint and several original makers is uncontradicted by anything on the face of the note, and such is the legal interpretation of such a promise signed at the same time by several, when the character and object of their signatures is unexplained. Hemmenway v. Stowe, 7 Mass., 58; Chaffee v. Jones, 19 Pick., 263; Story on Prom. Notes, § 466. The record however farther shows that as between themselves George A. Monson was in fact principal, and Prank S. Monson and Stiles P. Monson only sureties.
What is the legal effect of the defendant’s signature ? Bid he thereby become a joint and several maker with the other parties to the note, or a surety with Prank S. Monson and Stiles P. Monson of George A. Monson the principal and real maker, or a guarantor of the maker, or a surety for all the preceding signers of the note ?
The answer to this four-fold inquiry must very materially depend on the intention of the defendant to be gathered from his signature and from the attending circumstances. A party is at liberty to qualify his signature by the addition of such technical or other words as are apt and effectual to indicate his intention and describe his true character and relationship to the transaction. If he does so his obligation is measured by the words so used according to their legal import, and ho is not bound beyond the liability which attaches to a signature so made. He may thus make himself a guarantor or special surety for some particular party as he jileases/ or an original principal, provided ho becomes a party to the paper at the time of its inception. But if he signs without qualification or addition, he is presumed to intend what the law under the circumstances implies from such a signature.
A party cannot subsequently to the execution and delivery of a note, unless in pursuance of an arrangement at the time of the execution or delivery, become a joint promissor and maker of it. The original consideration is past and executed, *560and with respect to that he is a stranger, and no new and independent consideration can then be imported into the original contract so as to give the payee the right of recovery against him as a joint maker. The original contract is complete, and the note can in no sense be considered an inchoate, but must be regarded as a perfected instrument, and therefore cannot be said to be subsequently made by the addition of another signature. Such subsequent undertaking is independent of, and collateral to the original, and must be construed to be either a contract of guaranty or suretyship, according to the consideration and circumstances. Miller v. Gaston, 2 Hill, 191; McCaughey v. Smith, 27 N. York, 41; Tenney v. Prince, 4 Pick., 385; Union Bank v. Braintree, 8 Met., 509, 510; Bentham v. Judkins, 13 id., 265; McConey v. Stanley, 8 Cush., 85; Stone v. White, 8 Gray, 593; Green v. Shepard, 5 Allen, 590; Story on Prom. Notes, § 474, and notes.
Upon the precise question before us we have no case in point in our own decisions, and have looked in vain for any elsewhere in all respects exactly analagous. The general principle that the right of mutual contribution exists only among those who are sureties for the same thing and bound for the same debt or duty is fully recognized, and in determining the question of co-suretyship equity has respect to substance rather than form, and to the engagements which the parties have entered into more than to the instruments by which their engagements are evidenced. If several persons or sets of persons enter into contracts of suretyship which are the same in their legal operation and character, though by different instruments, at different times, and without the knowledge of each other, they will be bound to mutual contribution. 1 Leading Cases in Eauity, 156, and cases there eited.
So far as mutuality in contribution in fact exists, it docs not depend on the relation of joint makers of an obligation, but entirely on that of co-suretyship. The signature of a surety is not joint in its character but several, and co-sureties may sign the paper at different times, and indeed different. *561papers, and in ignorance of tlie undertakings of each other, and still preserve their mutuality with respect to contribution. A party may be so situated as not to be liable to the holder as a maker, and therefore not in a condition to seek contribution from other parties who are sureties, and still retain to them such a relation that in the event of payment by one of them he will be liable to contribute. We think we have shown that a person may sign an obligation after its original execution and delivery and not thereby render himself liable to the payee as a joint maker, yet if he intends to become a co-surety with others, who as to the payee are joint and several makers, and as to each other co-sureties, he will be liable to contribution: and we think that is the precise situation of the defendant, if lie is liable at all.
With respect to the technical distinctions in legal character and effect between a surety, guarantor, indorser, and maker, of promissory notes, there is so much nicety of refinement as often to lead to great uncertainty as to the real nature of the distinctions, and especially as to tlie principle on which some of the assumed distinctions rest. In many cases the shades of legal difference between a guarantor and surety are so subtle and readily blended as to be almost impossible of separate and satisfactory discrimination, and sometimes also between an indorser, guarantor, and surety, and in some instances tlie question whether a party was maker, guarantor, or surety, has been found not free from difficulty upon any clearly defined and well-settled principles.
The practical difficulty mainly arises in attempting to determine tlie real character of the parties, but when that is clearly ascertained their proper legal rights and obligations can generally be readily affixed, A guarantor of the ability of the maker is in no sense in privity with the sureties. His undertaking is collateral to theirs and independent of it. He is not chargeable by them with contribution, neither can lie claim it from them, and if he pays the debt his remedy is that of indemnity against the principal, by whose default he has been injured. A supplemental surety for all the prior parties, including the principal as well as sureties, has entered into a¡ *562still different engagement. His liability is to the holder in case of the default of all those parties. Like a guarantor he is not liable to contribute to the other sureties because his engagement extends to their responsibility as well as to that of the maker. As between himself and the other sureties there is no mutuality and if he is subjected his only remedy is indemnity. A co-surety undertakes with another to be responsible for the debt or duty of a third person. Their obligation though several is not collateral, but is for the same thing. While they have also a right of indemnity against their principal in case they are damnified, there is generally such mutuality between them as to render the right and duty of contribution reciprocal.
The defendant signed the note for and at the request of the principal, and for his sole benefit, without arrangement with and concurrence of the sureties, and so far as appears, without their solicitation or knowledge. He supposed it would operate to continue the term of credit of the principal as it in fact did, and was thereby beneficial to him. Under those circumstances he can hardly be said to have signed for the benefit of all the prior parties. His security came from the pi'incipal, and the consideration arising out of it moved entirely from him and not from the payee. The payee required of the principal some kind of additional security, and that requirement resulted in the defendant’s signature. There was no arrangement whatever between the payee and the defendant. TJie payee did not agree to forbear suit against the principal, and was under no legal obligation to have done so. Possibly the fact- that he did may have been sufficient, in connection with the circumstances, to constitute a valid consideration for the defendant’s undertaking, so as to enable the payee to have maintained an action on that undertaking, even though it was only operative to the payee through the medium of the principal, but it is obvious that he could not have done so by simply declaring against the defendant as a joint maker of the note. But even if the defendant’s signature was in no way available to the payee, it was so only through his own negligence. He might have required a different kind of security, *563or a different undertaking. If lie was willing to rely on this, and delay the collection of the note, it was not the defendant’s fault, nor the result of any contract between the payee and himself; and upon the facts as conceded to exist, we see no reason to attribute to the defendant an intention to contract for the benefit of any one but the principal maker of the note.
This conclusion narrows the case to the inquiry whether the defendant was a guarantor of the ability of the maker upon an undertaking collateral to that of Frank S. Monson and Stiles F. Monson, or whether his engagement was in substance identical with theirs. It is clear that it was with and to the same party, and the fact that he took security from that party is perhaps as consistent with one relation as the other.
There are undoubtedly authorities which favor our holding the defendant to the character of a guarantor, in which event he would not be liable to contribution, but the special circumstances of the case as evincive of intention should receive their proper weight, and the law must be applied in view of them. We are unable to see our way to a result as clearly as we could wish because those circumstances are not of absolutely controlling force, and we are left to choose between presumptions of which neither is necessarily conclusive. We consider it of some importance to observe that the defendant is a near connexion of the principal and his sureties, and when he signed the note and took security from one of them we think he may be taken to have been conversant with their relation to the paper and to each other with respect to it, and, in the absence of all farther explanation, that we may under the circumstances hold the law to presume that, by placing his name under those of the other sureties, and attaching to it no legal character or qualification, he intended to do precisely what they had previously done; and that if the contract of the defendant was reduced to writing it would show a promise by him to George A. Monson, in consideration of the security given, to become a surety for him with Frank S. Monson and Stiles F. Monson in his obligation as the maker of the note. We believe the preponderance of facts, and of legal presump*564tions as applicable to them, to lie in that direction, and in view of the circumstance of the defendant’s holding security from the principal we are satisfied that we shall on the whole by this result better subserve the purposes of riatural justice and equality in equity, which are said to be the foundation on which the principle of contribution rests.
We have gone thus fully into the questions involved because of their importance, and of the peculiarity of some of the features of the case, and append the following list of the principal authorities considered in our examination of it. Dering v. Earl of Winchelsea, 1 Cox, 318; Craythorne v. Swinburne, 14 Vesey, 163; Cooper v. Twynam, 1 Turn. & Russ., 426; Breckenridge v. Taylor, 5 Dana, 110; McNiel v. Sanford, 3 B. Monr., 11; Stout v. Vance, 1 Rob. (Va.), 169; Harrison v. Lane, 5 Leigh, 414; Daniel v. McRae, 2 Hawks, 590; Thompson v. Sanders, 4 Dev. & Bat., 404; Bell v. Jasper, 2 Ired. Eq., 597; Cutler v. Emory, 37 N. Hamp., 567; Whitehouse v. Hanson, 42 id., 9; Lapham v. Barnes, 2 Verm., 213; Langley v. Griggs, 10 Pick., 121; Chaffee v. Jones, 19 id., 260; Warner v. Price, 3 Wend., 397; Harris v. Warner, 13 id., 400; Norton v. Coons, 3 Denio, 130; S. C., 2 Selden, 33; Campbell v. Mesier, 4 Johns. Ch., 334.
We advise the Superior Court to decree that the defendant is liable to contribute to the plaintiff the sum and proportion claimed by him.
In this opinion Seymour, C. J., Park and Poster, Js., concurred.
Carpenter, J. It seems to me that the defendant may more properly be regarded as a guarantor and thex-efore not liable to contribution ; but I am disposed to acquiesce in the result, on the ground that, having signed the note as maker, he intended to become liable as such, and that the other parties so understood it. That being so, there is no injustice in holding him responsible on his contract according to the intention of the parties. If he is to be regarded as a maker ■ at all, I thixxk he is a maker for all pux’poses, and liable, not only to contribution, but also to the holder directly. • .