Shattuck v. Ellis

• Decision Date: 10 May 1930
• Docket Number: 5400
• Citation: Shattuck v. Ellis, 49 Idaho 330, 288 P. 162 (Idaho 1930)
• Parties: W. L. SHATTUCK, W. T. WADE, G. S. SAMSEL, L. A. HARTERT, A. J. DAY, J. W. HAYS, W. K. TUGGLE and J. D. KENNEDY, Respondents, v. J. D. ELLIS, Appellant
• Court: Idaho Supreme Court

288 P. 162

49 Idaho 330

W. L. SHATTUCK, W. T. WADE, G. S. SAMSEL, L. A. HARTERT, A. J. DAY, J. W. HAYS, W. K. TUGGLE and J. D. KENNEDY, Respondents, v. J. D. ELLIS, Appellant

No. 5400

Supreme Court of Idaho

May 10, 1930

CONTRIBUTION-RIGHTS TO.

1. To be entitled to contribution, it is unnecessary that action had been begun against person discharging legal obligation to pay.

2. In action between cosureties for contribution, statute authorizing contribution from cojudgment debtors without new action was inapplicable, as regards necessity for obtaining judgment against sureties (C. S., sec. 6940).

3. Statute authorizing contribution under certain circumstances against cojudgment debtors is not exclusive but cumulative as regards right to contribution (C. S., sec. 6940).

4. Surety's liability on bond was sufficient consideration for renewal notes executed with his cosureties, as regards their right to contribution after paying notes.

5. If sustained by sufficient evidence, verdict will not be disturbed.

6. Stockholders, cosureties with nonstockholders for corporate debt, were not primarily liable as regards their right to contribution, lacking proof they owed for unpaid stock subscriptions (C. S., sec. 4728).

7. Liability of stockholders in bank or other corporation to corporation's creditors is limited to unpaid stock subscriptions, statute enlarging liability having been held unconstitutional (C. S., secs. 4728, 5247; Const., art. 11 sec. 17).

APPEAL from the District Court of the Ninth Judicial District, for Bonneville County. Hon. C. J. Taylor, Judge.

Action for contribution. Judgment for plaintiffs. Affirmed.

Judgment affirmed. Costs to respondents.

E. A Owen and B. H. Miller, for Appellant.

It will be observed from the complaint that it is alleged as follows:

"That at the maturity of the said note, to-wit May 3, 1924, The American National Bank demanded payment thereof and the said plaintiffs were compelled to pay and did pay the whole amount due on said notes, to-wit the sum of $ 2,937.50. That no part has been received by the plaintiffs from said defendants."

From the above it will be observed that the payment of the various notes by the respondents herein was a voluntary payment and it is the contention of the appellant that a voluntary payment on the part of comaker does not entitle the payors to maintain an action for contribution against one or more of the comakers of the instrument evidencing the debt. That in order to entitle a comaker to maintain an action for contribution, he must come squarely within the provisions of C. S., sec. 6940, supra, that is to say, the debt in the first instance must have been reduced to judgment so as to fix a legal liability against the makers of the instrument, and the payment made by any comaker must have been compulsory and the comaker must himself have been under legal liability to pay the same or some part thereof. (Case v. McKinnis, 107 Ore. 223, 32 A. L. R. 167, 213 P. 422; 13 C. J. 821; 6 R. C. L. 1025; Pinell v. Roppo, 134 Wash. 158, 234 P. 1035; Newberry v. Evans, 76 Cal.App. 492, 245 P. 227; Aldrich v. Aldrich, 56 Vt. 324, 48 Am. Rep. 791; Cocke v. Hoffman, 73 Tenn. (5 Lea) 105, 40 Am. Rep. 23; Curtis v. Parks, 55 Cal. 106; Watterson v. Hill, 84 Mont. 549, 276 P. 948; 6 Cal. Jur. 504.)

O. A. Johannesen, for Respondents.

When two or more persons are jointly, or jointly and severally, bound to pay a certain sum of money, and one or more of them is compelled to pay the whole debt, or more than his or their shares, those paying may recover from those who failed to pay the proportion that the latter should have paid. (Hodgson v. Baldwin, 65 Ill. 532; 3 Page on Contracts, 3648; 98 Am. St. 31, note; 1 L. R. A. 313, note; 6 R. C. L. 1036 and 1046; 6 Cal. Jur. 498; 9 Cyc. 796; 5 Pomeroy's Equity, 5169, 5172; Cranston v. Stanfield, 123 Ore. 314, 261 P. 52; Wright v. Rumph, 238 F. 138, 151 C. C. A. 214.)

While it is necessary that payment of a joint obligation by one of the joint obligors must be compulsory in the sense that the party paying was under legal obligation to pay, it is not necessary in order to make such payment involuntary, that suit should be instituted against the person seeking contribution, or that judgment has been obtained against him on the obligation. (9 Cyc. 798; 98 Am. St. 36, note; Pixley v. Gould, 12 Ill.App. 565; Cranston v. Stanfield, supra.)

VARIAN, J. Givens, C. J., and Budge, Lee and McNaughton, JJ., concur.

OPINION

VARIAN, J.

This is an action for contribution. On June 6, 1921, the eight plaintiffs and the defendant, as sureties, executed a depository bond to the city of Idaho Falls, Idaho, each obligating himself in the penal sum of $ 10,000, to the general effect that The State Bank of Idaho Falls, principal, would safely keep, etc., all moneys of said city deposited by the treasurer thereof. The bank ceased to do business on November 23, 1921, at which time over $ 20,000 was owing from it to said city on account of deposits and interest covered by said bond. On January 16, 1922, the city of Idaho Falls notified each surety that the balance due under said depository bond was $ 20,147.17, and that demand for reimbursement would be made February 1, 1922. Under date of May 3, 1922, the nine sureties on the bond, including appellant, executed their joint and several promissory note to Walker Brothers Bankers, of Salt Lake City, for $ 10,000, which sum was paid to the city of Idaho Falls on May 10, 1922, on account. On September 21, 1922, the city notified each of the nine sureties in writing that the balance due as of September 25, 1922, was $ 11,184.92, and that "If this amount is not paid on or before September 28, 1922, it will become the duty of the City of Idaho Falls to begin legal action against each and every one of the signers of this depository bond to enforce the collection of the same."

On September 26, 1922, the nine sureties, including defendant, executed their joint and several promissory note to the American National Bank, of Idaho Falls, for $ 7,500, which was paid to the city with other moneys paid by the parties, and the obligation of the bond fully discharged. The note to Walker Brothers Bankers for $ 10,000 was paid partly in cash and partly by a joint and several note in renewal, dated November 27, 1923, for the principal sum of $ 8,000, due ninety days after date and signed by all nine of said sureties, including defendant. The note to the American National Bank of Idaho Falls, being past due, was renewed by two separate notes to said bank, for the principal sum of $ 3,750 each, falling due on May 3, 1924, and each signed by all nine of the sureties, including the defendant. When the last three (renewal) notes fell due, payment was demanded by the respective banks, and the eight plaintiffs, joint and several makers thereof with the defendant, paid off and discharged the same. Defendant refused to pay his proportion of the indebtedness evidenced by said notes, and plaintiffs brought this action for contribution, alleging that one-ninth ($ 2,388.35) of the indebtedness paid by them was due from defendant. Defendant admits paying something on account of principal and interest prior to the execution of the said three renewal notes. Defendant, in his answer, admitted the execution of the three notes and their payment by plaintiffs at maturity, and alleged that he was an accommodation maker and not liable for contribution; that plaintiffs paid the same voluntarily, without compulsion; and, as a further defense, that defendant never received any consideration for signing the notes in question; that the money borrowed thereon was borrowed by the plaintiffs as officers and stockholders of the State Bank of Idaho Falls for the purpose of paying off the indebtedness existing from said bank to the city of Idaho Falls. The cause was tried to a jury, and resulted in a verdict for plaintiffs for said sum of $ 2,388.35. Defendant appeals from the judgment entered thereon.

Appellant's principal contention is that the several causes of action set forth in the amended complaint allege, and the evidence discloses, that the notes referred to were paid on demand, at maturity, voluntarily by the plaintiffs, who are therefore not entitled to contribution; that before plaintiffs are entitled to contribution, they must allege and prove that the notes have been reduced to judgment and execution issued thereon, etc.

Contribution has been defined as:

"When there are two or more parties bound in the same degree by a common burden, equity demands, as between themselves, that each shall discharge a proportionate share, and when one of such parties has actually paid or satisfied more than his fair share of the burden, he is entitled to a contribution from each and all of the others...