Labbe v. Bernard

• Decision Date: 26 November 1907
• Citation: 82 N.E. 688,196 Mass. 551
• Parties: LABBE v. BERNARD et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

196 Mass. 551

82 N.E. 688

LABBE v. BERNARD et al.

Supreme Judicial Court of Massachusetts, Bristol.

November 26, 1907

COUNSEL

Hugo

A. Dubuque, for plaintiff.

John W Cummings and Charles R. Cummings, for defendant.

OPINION

SHELDON J.

The plaintiff and the defendants were co-sureties upon a bond given by one Rodgers, for the performance of an agreement made by him to grade some land for a third party for a fixed price. Rodgers entered upon the performance of the contract and completed a little more than onehalf of the work, received a part of the agreed price, and then abandoned the contract and absconded. Thereupon the plaintiff as one of the sureties of Rodgers finished the work, at an expense of more than $800, and either received or became entitled to receive from the third party a sum slightly above this, being the balance of the contract price over what had been paid to Rodgers. The plaintiff now seeks by his bill to compel the defendants to contribute ratably to the amount thus paid by him to complete the work called for by the contract, without giving any credit for the amount which he received for doing it.

If these were all the facts, it is sufficiently manifest that the bill could not be maintained. When the sureties should be called upon to make good the default of Rodgers and should complete the work which he ought to have done, they would become subrogated to all his rights under the contract and entitled to receive whatever part of the contract price had not been paid to him. And the plaintiff, having alone completed the work and received what remained due of the contract price, might indeed charge against his cosureties ratably with himself, the cost of completing the work, but he must give like credit for the amount which he received therefor. Whatever he received by reason of his suretyship whatever security or advantage he derived from the work done in consequence of his suretyship upon this obligation, he must apply to the relief of his co-sureties as well as to his own relief. New Bedford Institution for Savings v. Hathaway, 134 Mass. 69, 75, 45 Am. Rep. 289; Kelly v. Page, 7 Gray, 213, 214; Bachelder v. Fiske, 17 Mass. 463; Owen v. McGehee, 61 Ala. 440; Stanwood v. Clampitt, 23 Miss. 372; Arcedeckne, In re, 24 Ch. D. 709; Steel v. Dixon, 17 Ch. D. 825.

But the plaintiff's bill avers also that, after Rodgers had begun the work and before he abandoned it, he borrowed money of the plaintiff to enable him to carry it on, and as security therefor assigned to the plaintiff all his claims and demands under the contract. And the plaintiff claims that while he completed the work as a surety and so is entitled to call upon his co-sureties to share the expense thus incurred, he was entitled to the price received therefor as assignee of Rodgers, and so need not bring this into the account for the benefit of the defendants. In our opinion this contention cannot be maintained.

While it is true that the rights of the sureties to the remedies of the principal do not become complete and are incapable of present enforcement until they shall have discharged their principal's obligation, yet their right became an inchoate one as soon as they have entered into the relation of suretyship; and their equitable assignment of their principal's rights and remedies, when completed by their performance of his obligation, relates back, as against each other and their principal, to that earlier time. Rice v. Southgate, 16 Gray, 142; Lewis v. Faber, 65 Ala. 460; Wood v. Lake, 62 Ala. 489; Conner v. Howe, 35 Minn. 518, 29 N.W. 314; McArthur v. Martin, 23 Minn. 74; Forbes v. Jackson, 19 Ch. D. 615. And all persons who have in the meantime received any such securities or payments from either party to the principal contract, with notice of the facts and of the surety's responsibilities and consequent rights, must in equity hold them for his benefit. Norton v. Soule, 2 Greenl. 341; Atwood v. Vincent, 17 Conn. 575; Green v. Ferrie, 1 Desaus. 164; Drew v. Lockett, 32 Beav. 499. The plaintiff being himself one of the sureties...