JULIUS A. HAYDEN, APPELLANT,
v.
BARTON H. THRASHER ET AL., APPELLEES

Fla. | 1882-01-01
18 Fla. 795 Florida Supreme Court (1882) Positive Treatment
Cited by 18 cases

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Synopsis

A surety who paid promissory notes at the request of a co-surety may seek equitable relief to compel the principal obligors to discharge the debt, even without a prior judgment at law. The Florida Supreme Court reversed the dismissal of the bill and held that a surety may pursue equity to recover amounts paid and protect against unpaid obligations.


Holding

A surety may file an equitable bill to compel a principal to discharge debt obligations without first recovering judgment at law. The bill is not improper as prolix or multifarious where it seeks one general right—reimbursement and protection from liability—even though multiple persons and transactions are involved. The court has equitable power to reach any assets of the principal to satisfy the surety's claim.


Key Quotes

“When one of two sureties becomes such at the request of his co-surety, and upon his promise that he would be put to no loss, he may recover the whole of what he may have been compelled to pay of his co-surety”

Establishes the principle that a surety induced to assume liability by a co-surety's promise of indemnification may recover the entire amount paid from that co-surety.

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Facts & Procedural History

Hayden became an indorser of promissory notes totaling $14,500 at the express request of B. H. Thrasher, who represented that the makers (the Thrasher…

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Opinion of the Court
The Chief-Justice

The Chief-Justice

delivered the opinion of the court.

It is a well established rule that where one of several sureties pays a debt for which all the sureties are liable, the *805party so paying may compel contribution from the other .sureties pro raía, and this he may do at law or in equity. It is further established that in equity he may compel thé solvent sureties to contribute pro rata according to the number of such solvent sureties. See Story’s Eq. Jur., §§494, 497, and notes.

From the nature of the transaction by which the liability was created there may arise an exemption of one of the sureties from becoming liable to make contribution, as where one surety becomes so at the express solicitation of another who has paid the debt. Ib., §498.

Parker, C. J., in Taylor vs. Savage, 12 Mass., 102, says that it would be competent to a defendant even in an action' of assumpsit, which is founded on principles of equity, when called upon to contribute, to show that the plaintiff, although apparently a surety, was in fact the real debtor,- and that he would thus successfully resist the claim. “ It is settled that when a surety joins in the bond at the request of him who sues for contribution, he shall not be held to pay.” The Supreme Court of New Hampshire, in Cutter vs. Emery, 37 N. H., 567, 575, also say: “ If two persons sign the same obligation as sureties for a third, one of them at the request of the principal and the other at the request" of the first surety, they are not co-sureties as between themselves, but the first surety stands in the relation of principal to the second, is responsible to him for whatever he may be compelled to pay, and has, in no event, any claim against him for contribution.” A formidable array of authorities is there cited sustaining this position, from Mass., N. Y., N. J., N. Car., Ky., Md., and from text-books.

• When one of two sureties becomes such at the request ot his co-surety, and upon his promise that he would be put to no loss, he may recover the whole of what he may have been compelled to pay of his co-surety, and such promise may be shown by parol. Apgar vs. Hiler, 4 Zabriskie, 812.

*806In the ease at bar the bill shows that complainant became an indorser of the notes upon which the liability arises at the express request and solicitation of B. H. Thrasher, and upon his representation that the maker, W. L. Thrsaher, B. H. Thrasher and A. M. Thrasher (brothers), indorsers, were perfectly solvent and would indemnify him, and for that purpose gave him a mortgage upon property represented by B. EL Thrasher to be unincumbered. He thereupon became their security by indorsing with them the notes for the amount of $¡14,500. It turned out that the property so mortgaged was incumbered to a large amount, and was sold under executions against the Thrashers, and the security was therefore worthless.

With these notes, and upon the responsibility of Hayden, the money was obtained, and the Thrashers, who made and indorsed the notes,, together with E. W. Thrasher, their father, came to Florida and invested it in the real estate and securities mentioned in the bill. The entire transaction on the part of the Thrashers is charged to have been fraudulent, and that there was a conspiracy between them to obtain his indorsement and raise the money on the notes, and invest it covertly to their advantage without paying the notes ; and that they were and are insolvent.

The facts thus stated in the bill show, as strongly as language can be made to show, that as to the Thrasher brothers, and especially B. EL Thrasher, who is stated to have been their spokesman, they were the principals in relation to Hayden, and he their surety.

When the notes became due suits were commenced against him, and judgments recovered to the amount of over $6,500, which he was compelled to pay; and suits were pending against him for the recovery of the money due upon the residue of the notes.

. He now seeks to compel payment by B. H. Thrasher, *807whom he finds in Florida, of the amount he has already, been compelled to pay, and also the other notes.

It is here objected that the bill will not lie because judgment at law has not been recovered against Thrasher. But however this may be in the case of an ordinary creditor’s bill, it is not the rule in a case of this character. At. law Hayden might recover what he has paid on account of those notes. In equity he may file his bill to compel his principal to discharge him from his liability. “ Although the, surety is not troubled or molested for the debt, yet, 'at anytime after the money becomes payable, the court will decree the principal to discharge it.” 2 Leading Cases in Equity, p. 1896, Fourth Ed., 1877, citing 1 Vern, 188; 3 Merivale, 579; Mosely, 318.

After the satisfactory examination of the question by-this court in West vs. Chasten, 12 Fla., 315, 328 to 331, we cannot consider the matter open to discussion upon the facts stated in this bill. The complainant has a standing here which not only entitles him to re-imbursement for thq money he has already paid for the Thrashers as their surety, but he has a right to be protected against the notes unpaid. For this purpose such a surety may, when necessary, have the a,id of the equity powers and process of the court tq reach any funds, securities or property available to that end, which, in law or in equity, should be so subjected, and in whosesoever hands the same may. be found. From the statements in the bill the complainant is warranted in asking the aid of the court and the exercise of such power as maybe appropriate to reach any such assets and make them available.

The first and fourth grounds of demurrer are that the bill is prolix and multifarious. We do not think it liable to such objection. Though it includes and charges several persons and transactions, its entire scope and purpose is, *808like a creditor’s bill, to reach certain property which, it is alleged, should be applied to relieve the complainant, and which, it is alleged, has been fraudulently ’ placed beyond the reach of the ordinary process of the law. A bill is not multifarious where one general right is claimed by the plaintiff’, although the defendants may have separate and distinct rights. 20 Pick., 368; 4 Allen, 341; 29 Mo., 350; 1 Ired., 389; and numerous cases cited in Dan. Ch. Pl. and Pr., 3 Am. Ed., 345.

The second and third grounds of .demurrer are that there is no equity in the bill, and that the plaintiff has not recovered judgment at law against B. II. Thrasher and other indorsers of the notes. • These grounds have been already disposed of by the consideration of the whole ease made by the bill.

As to the security to be exacted upon the issuing or continuance of an injunction, except to stay proceedings at law, neither the statute nor the rules prescribe the amount or the conditions. These are left to the sound discretion of the court.

The conclusion is that the decree of the Chancellor dismissing the bill must be reversed and the injunction're-instated, and the cause is remanded with directions that such further proceedings be had as may be agreeable to equity and the practice of the court.


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Citator

Cited By

  • Robinson v. The Springfield Co., 21 Fla. 203 (Fla. 1885)
  • Bailey v. Inman, 105 Fla. 1 (Fla. 1932)
    …For this reason, the bill of complaint for receiver, injunction, accounting, exoneration, reimbursement, contribution and subrogation was properly founded in equity, and was not within the rule of the case above referred to. See Hayden v. Thrasher, 18 Fla. 795; West v. Chasten, 12 Fla. 215. Pepple vs. Rogers, et al., decided at the present term. But as to the merits of the case as shown at the final hearing, we are of the opinion that the decree was properly rendered for the defendants. While the grante…

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