Bulkeley v. House

• Decision Date: 04 February 1893
• Court: Connecticut Supreme Court
• Parties: BULKELEY v. HOUSE.

26 A. 352

62 Conn. 459

BULKELEY

v. HOUSE.

Supreme Court of Errors of Connecticut.

Feb. 4, 1893.

Appeal from city court of Hartford; Markham, Judge.

Action for contribution by William H. Bulkeley against William W. House. From a judgment for defendant, plaintiff appeals. Affirmed.

C. E. Perkins and J. L. Barbour, for appellant.

J. R. Buck, for appellee.

HALL, J. From the finding in this case it appears that, in 1871, John K. Williams and a son of the defendant were partners in business in the city of Hartford. They desired to increase their capital $6,000. The defendant advanced $3,000 for his son. Williams, in order to raise his share, procured the plaintiff, Bulkeley, and D. A. Rood to execute with him a joint and several note for $3,000, payable to the Society for Savings of Hartford. Williams then took the note to the Society for Savings for the purpose of obtaining the money on it. The savings society objected to loaning the money, on the ground that the principals of the note were all engaged in active business, and insisted that some person of means who had retired from active business should sign the note as surety for Williams, Bulkeley, and Rood. Williams then left the note with the savings bank, and the next day applied to the defendant, and told him that "he, (Williams,) Bulkeley, and Rood had made a joint and several note for $3,000, which was at the Society for Savings, and that the money could not be obtained on the note without a satisfactory surety to the principals, and requested the defendant to go to the savings bank, examine the note, and sign it as surety for the principals. This information by Williams was the first knowledge the defendant had that such a note had been contemplated or executed. On the same or the following day, pursuant to Williams' request, the defendant went to the savings bank, examined the note, and being further requested by the savings bank to sign as a surety for Williams, the plaintiff, and Rood, and believing the statement of the note itself to be true and that Williams, Bulkeley, and Rood were joint and several makers and principals thereof, signed the note as surety for the apparent principals. He affixed his signature several lines below their signatures, and prefixed to his name the word "Surety." The note, as formally signed, was as follows: "$3,000. Hartford, Feby. 21st, 1871. On demand, for value received, we jointly and severally promise to pay to the Society for Savings, at the office of said society in Hartford, three thousand dollars, with interest semiannuallv. John K. Williams. William H. Bulkeley. D. A. Rood. Surety: Wm. W. House." Williams obtained and used the money in his business, became bankrupt, and obtained a discharge in bankruptcy. The sum of $400 was realized from his bankrupt estate on the note, and the balance was paid in equal shares by the plaintiff and Rood on a judgment obtained against them and the defendant by the bank. The plaintiff brings this action to compel contribution from the defendant.

Upon the trial of the action in the court below the plaintiff offered parol evidence to prove that, although his name appeared on the note as a principal, yet he had an understanding with Williams, the first signer of the note, that he should be a surety for him. To the introduction of this evidence the defendant objected, on the ground that it did not appear that the defendant had any knowledge that either of the signers of the note had signed it, or agreed to sign it, in any other capacity than that indicated by the note itself at the time he (the defendant.) signed it. The court sustained this objection, and rejected the testimony, but offered to admit the same if the plaintiff could show that the defendant had knowledge, when he signed the note, that either the plaintiff or Rood had in fact signed the note as surety for Williams, or that there was any agreement or understanding between the defendant and either the plaintiff or Rood that they, or either of them, were to sign the note as surety for Williams. The record shows that the plaintiff attempted to prove such knowledge, agreement, or understanding on the part of the defendant, but failed; and the court expressly finds "that from all the evidence in the case the defendant had no knowledge that the plaintiff and Rood, or either of them, bad signed the note in any other capacity than as joint and several makers with Williams." The action of the court in rejecting the evidence offered by the plaintiff, and in rendering judgment for the defendant upon the facts found, are the errors assigned in the reasons for appeal.

In considering the questions involved it should be borne in mind that this is an action for contribution. Contribution does not rest upon contract, but on the broad equitable principle that equality is equity. Justice and fair dealing demand that where one or more parties sign the same obligation, and become equally obligated in precisely the same degree thereby, and stand upon the same footing as to their liabilities thereunder, one of the number shall not be compelled to assume the whole burden for his associates, but may compel them to share equally with him any loss that may occur as the result of their joint liability. In actions for contribution, therefore, the principle seems now to be well established that parol evidence is admissible to show the true relations existing between the several parties bound by a written obligation. Under this rule some of the apparent principals may be shown to be sureties, and all apparent sureties may be shown to he principals. Thus in Robison v. Lyle, 10 Barb. 512, the court held that, "as between the makers of a promissory note and the holders, all are alike liable,—all are principals; but, as between themselves, their rights depend upon other questions, which are the proper subject of parol evidence. On the trial of an action, therefore, between the signers of such a note, it is right to receive extrinsic proof to show which of the parties signed the note as principal and which as sureties." See, also, to the same effect, Brandt, Sur. § 226; 2 Rand. Com. Paper, §908; Apgar's Adm'rs v. Hiler, 24 N. J. Law, 815; Fernald v. Dawley, 26 Me. 470, 474; Manslield v. Edwards, 136 Mass. 15; Thompson v. Taylor, 12 R.I. 109; Adams v. Flanagan, 36 Vt. 400; Barry v. Ransom, 12 N. Y. 462. Such evidence is not offered to contradict or vary the contract contained in the writing, but simply to show the actual relations subsisting between the joint makers of the note, and the real nature of the contract between them. Such facts are not a part of the contract, and do not affect its terms, but are wholly collateral to it. To support his claim for contribution, therefore, the plaintiff clearly had the right to show his true relations to the note, and this without regard to the knowledge of the defendant; and in rejecting this evidence the court below erred. We are satisfied, however, from the other facts found by that court, that the exclusion of this evidence did the plaintiff no harm, for, in order to hold the defendant liable for contribution, it was incumbent on the plaintiff to prove not only that he was a surety for Williams, as he claimed, but also the further fact that the defendant was a cosurety with him for Williams. This latter proposition the finding of the court below distinctly negatives. If the plaintiff was unable to prove that the defendant had agreed to become a surety for Williams only, upon what theory of justice or morals can the plaintiff demand that the defendant share with him aliability which he never assumed? It is an unyielding principle of equity that the action of contribution shall never be used to enforce an unjust and inequitable demand. Brandt, Sur. § 208, and cases cited. But the plaintiff claims that the defendant, by his act of signing the note as he did, legally bound himself for the same obligation and to the same extent and degree that he was obligated, and that it is of no consequence, as affecting the defendant's liability in this action, whether he knew that the plaintiff was a surety for Williams or not. We are aware that it is laid down in the books that the right of contribution is not affected by the fact that the surety seeking contribution, or from whom it is sought, had no knowledge that the other had assumed the obligation of a surety for the same thing. This is undoubtedly good law. But can it be seriously contended that the facts in this case show that the defendant's contract and undertaking was the same as that of the plaintiff, even if it be assumed that the plaintiff's claim as to his being a surety only for Williams is correct ?

Let us see what the record discloses. That the defendant in this action had no knowledge of the execution of the note in question until informed by Williams is expressly found. That he was informed and believed the note to be the joint and several note of Williams, Bulkeley, and Rood, as it appeared to be on its face, is also found. Under such circumstances, and with such information and belief, he was asked by the bank to sign the note as surety for Williams, the plaintiff, and Rood, the apparent joint and several makers of the note, and did so, prefixing the word "Surety" to his signature. That the defendant never agreed to become a surety for Williams alone appears conclusively from the facts found by the court below. The three other parties had signed the note, and assumed the whole liability incurred by that act, without his knowledge, and without any expectation on their part that he was to share their responsibility. Although he went to the bank at Williams' request, yet his undertaking was with the bank alone, and not with Williams or the plaintiff. He did not assume the same degree of obligation that the plaintiff had assumed. The fallacy of the plaintiff's claim is in the assumption that the defendant had agreed to become a surety for the debt...