Rose v. Wollenberg

• Decision Date: 16 March 1896
• Citation: 44 P. 382,31 Or. 269
• Parties: ROSE v. WOLLENBERG. [1]
• Court: Oregon Supreme Court

44 P. 382

31 Or. 269

ROSE v. WOLLENBERG. ^[1]

Supreme Court of Oregon

March 16, 1896

Appeal from circuit court, Douglas county; J.C. Fullerton, Judge.

Action by Aaron Rose against Hyman Wollenberg. From a judgment of nonsuit, charging plaintiff with costs, he appeals. Reversed.

The facts out of which this case arose are, in effect, as follows:

On June 21, 1892, the plaintiff and defendant became sureties upon the official bond of one V.L. Arrington, who had theretofore been elected treasurer of Douglas county. Arrington defaulted, and on December 23, 1893, judgment was taken against him and his bondsmen, which was satisfied by plaintiff and defendant each paying one-half, or $11,828.65. As touching the contractual relation of the parties with each other, the plaintiff alleges "that, at the time plaintiff and defendant so became such sureties on said official bond of V.L. Arrington, it was agreed and stipulated by and between plaintiff and defendant that their liabilities, as between themselves, as sureties on said official bond of V.L. Arrington, should not be joint or equal, but that the liability of plaintiff should be a one-third proportion, and that of the defendant should be a two-thirds proportion, of any liability that might occur under said bond, to said sureties." Plaintiff, by this action, seeks to recover the difference between one-third and one-half of the liability incurred, amounting to $4,003.55. The following is a copy of the bond, omitting matter of inducement and formal parts:

"We V.L. Arrington as principal, and Aaron Rose and Hyman Wollenberg, hereby undertake that if the said V.L. Arrington shall not faithfully pay over, according to law, all moneys that may come into his hands by virtue of said office, that we, or either of us, will pay the state of Oregon the sum of thirty thousand (30,000) dollars.

"V.L. Arrington. [Seal.]

"$10,000.00. Aaron Rose. [Seal.]

"H. Wollenberg. [Seal.]"

The sureties joined in the justification; the plaintiff justifying for $10,000, and the defendant for $20,000.

The allegation above quoted having been put in issue by the answer, a jury was called, whereupon the plaintiff, after putting the bond in evidence, testified as a witness, in his own behalf, in substance, that Arrington, Wollenberg, and the county clerk, G.A. Taylor, were present when he signed the bond, and that the figures "$10,000.00" were placed in front of his name at the time he signed, and, continuing said: "I was to assume $10,000, and Wollenberg $20,000. This is the way I understood it." And upon cross-examination he further said: "All the contract I suppose I had was when I signed for one-third, and he for two-thirds. I suppose I had to pay one-third, and him two-thirds. That is all the contract. *** I signed for security for Mr. Arrington, and at the same time I said distinctly, that I would not go for more than one-third, and Mr. Wollenberg said he would go for $20,000." Arrington testified as follows: "Two or three days before the signing of the bond,--several days before,--I went to Marks' store, there, and asked him if he was willing to sign as my surety again; and I went into the bank, and asked S.C. Flint if he was willing to go on my bond. Mr. Wollenberg was there, and he expressed himself there voluntarily; says 'I am willing, and will go on your bond.' He asked me who else were going on. I told him Aaron Rose and Asher Marks. *** I asked them all to meet me there [at the clerk's office] on the 21st of June, so as to put the jurat on the bond. I asked Rose and Wollenberg to meet me there on that morning to justify on the bond. When this matter in regard to the signing occurred, Mr. Marks was not there. I went into my room, out of the clerk's office, for my hat, to go and get Mr. Marks to complete the business. When I came out of the room, Mr. Wollenberg met me in the corridor, and said: 'You need not go for Mr. Marks. I will take the rest of the bond.' " The witness further stated, in effect, that, after the defalcation, Wollenberg admitted his liability on the bond to the extent of $20,000, and, upon cross-examination, that at the signing, and in the presence of Taylor, Wollenberg, and himself, "Mr. Rose said he would be liable for one-third of the bond, and instructed Mr. Taylor to prefix the figures '$10,000,' as he would sign for one-third of the bond." G.A. Taylor, the clerk, gave his version of the execution of the bond as follows: "As near as I can remember the matter, these parties came into the office, and wished to fix the bond out before me,--the justification; and they told me--I do not know which one it was told me--how they wanted it fixed, and how it should read; and, according to the instructions received from the parties at that time, I filled it out, and fixed it in the amount of $10,000 and $20,000, and put the figures '$10,000' in front of Mr. Rose's name at the request of the parties. I do not know which one told me to do that." This is, in substance, all the testimony offered; and, the plaintiff having rested, the defendant moved for nonsuit, which was granted by the court, and judgment entered against plaintiff for costs, from which he appeals.

R. Mallory and W.W. Cardwell, for appellant.

J.W. Hamilton, for respondent.

WOLVERTON, J. (after stating the facts).

The question presented by this record is whether the alleged agreement between the plaintiff and defendant "that the liability of plaintiff should be a one-third proportion, and that of the defendant should be a two-thirds proportion, of any liability that might occur under said bond to said sureties," not having been entered into in writing, is within the statute of frauds and perjuries, and therefore void; and, if not, another question arises, and that is whether the evidence presents a prima facie case, sufficient to go to the jury. It is settled by Durbin v. Kuney, 19 Or. 71, 23 P. 661, that as between cosureties, where one of their number has paid more than his proportion of the common liability, no special agreement having been entered into between themselves, the law raises an obligation upon the part of the cosureties to repay him the excess which he has been compelled to pay, upon the principle that, where there is a common liability, equality of burden is equity. Formerly equity alone entertained jurisdiction to compel contribution, but latterly courts of law, having borrowed the jurisdiction, are competent, in most cases, to administer relief. It is said in the case cited "that the doctrine of contribution does not depend upon contract, but is bottomed and founded upon principles of natural justice. The contract upon which they are codebtors or sureties only expresses the relation between them and their creditor, and is entirely distinct from the right of contribution, which exists between themselves." While the law, upon principles of natural justice, raises the obligation of equitable contribution among cosureties, it by no means follows that they are inhibited from fixing or determining their relative liabilities by express contract or agreement among themselves. Indeed, the right to enter into any agreement in respect of such liability as their discretion or judgment may dictate is not questioned. The important question is whether such contracts or agreements are within the statute of frauds, requiring all contracts for the debt, default, or miscarriage of another to be contained in some note or memorandum in writing expressing the consideration, signed by the party to be charged. It is well settled that the true relations existing between joint, or joint and several, promisors or obligors upon a note or bond, or other instrument of writing, can be shown by parol, whether principals or sureties. The writing is paramount, and fixes liability, as it pertains to the payee or obligee; but, as between the makers or obligors, their correlative undertakings, whether in the capacity of principals or sureties, may be otherwise established. The principal, who has obtained the benefit of the contract, or suffered the forfeiture of his bond or obligation, is always bound to indemnify his surety who has sustained loss upon his account, and he cannot interpose the statute of frauds to prevent it. But when we go a step further, to the proposition which involves the undertaking of one surety to indemnify another, in whole or in part, against liability upon their principal's obligation, or, as is alleged in the case at bar, an agreement between themselves fixing upon a different ratio of liability than that which the law raises or implies, we find much contrariety of opinion and authority, as respects the enforcement of such undertaking or agreement where it rests in parol.

The earliest case to which our attention has been called is that of Thomas v. Cook, 8 Barn. & C. 728. It there appeared that one person requested another to become surety with him for a third party, under promise of indemnity against payment. In deciding it, Bayley, J., says: "Here the bond was given to Morris, as the creditor, but the promise in question was not made to him. A promise to him would have been to answer for the default of the debtor. But it being necessary for W. Cook, since deceased, to find sureties, the defendant applied to the plaintiff to join him in the bond and bill of exchange, and undertook to save him harmless. A promise to indemnify does not, as it appears to me, fall within either the words or the policy of the statute of frauds." This was in 1828. In 1839 Green v. Cresswell, 10 Adol. & E. 453, was decided by the same court. which may be taken to have overruled Thomas v. Cook. At least, the reasoning of that case was severely criticised. The case was this: The plaintiff, at the request of defendant, and under...