Rose v. Wollenberg

39 L.R.A. 378, 44 P. 382, 31 Or. 269, 1896 Ore. LEXIS 2
CourtOregon Supreme Court
DecidedMarch 16, 1896
StatusPublished
Cited by11 cases

This text of 39 L.R.A. 378 (Rose v. Wollenberg) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rose v. Wollenberg, 39 L.R.A. 378, 44 P. 382, 31 Or. 269, 1896 Ore. LEXIS 2 (Or. 1896).

Opinion

Mr. Justice Wolverton,

after making the foregoing statement, delivered the opinion of the court.

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 [273]*273a 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 Pac. 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 iaw raises an obligation upon the part of the other 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 co-debtors 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 agree[274]*274ment 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 memoranda in writing, expressing the consideration, signed by the party to be charged: (Hill’s Ann. Laws, § 785). 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 ertablished. 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 farther, 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 B. & C. 727. It [275]*275there 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 his promise to indemnify and save him harmless, became surety for one Hadley upon a bail bond in a civil action. The defendant did not join as co-surety. The undertaking was held to be within the statute. The court distinguishes Thomas v. Cook, by reason of the fact that both the plaintiff and defendant therein joined as cosureties. Subsequent authorities have assigned as a reason for the distinction that, where the defendant is cosurety, he is, as such, and without any special promise, liable already to contribute, and that his special promise to pay the whole may be regarded as but a matter of regulation of contribution between the two sureties. In Browne on Statute of Frauds (4th ed.), § 161a, it is argued that [276]*276the reason is not well assigned because,— First, that, though called ‘regulation’ or ‘contribution,’ it is really a promise to pay what he was not otherwise liable to pay for a third party; and, secondly, that he was never liable to contribute at all except by force of the relation of cosuretyship into which he entered, and owed no antecedent debt of his own.” These cases gave rise to the subsequent divergence of opinion on the subject treated therein, and the decisions of courts of different jurisdictions are to be largely distinguished in that they have followed the one or the other of these early authorities. Reader v. Kingham, 13 C. B. (N. S.) 344, a later English case, decided in 1862, and arising out of a similar state of facts, although not overruling is in direct conflict with Green v. Cresswell. In Cripps v. Hartnoll, 4 Best & S. (Q. B.) 414, the court would not say that it could lend its support to Green v. Cresswell. But in a much later case, decided in 1874, Wildes v. Dudlow, L. R. 19 Eq. 198, Geeen v. Cresswell was expressly overruled, and Thomas v. Cook, approved and followed. In that case the son, at the request of his father, became surety for a third party, the father not signing as a cosurety; and it was held to be an original contract for indemnity, and not within the statute of frauds. By a very recent case (Guild v. Conrad, 63 Q. B. Div. 721, decided in 1894), it was held that Green v. Gresswell, was no longer binding, but that Thomas v. Cook, was good law. So that it may be said that in England the doctrines has been finally settled in harmony with the latter case.

The authorities among the states of this country [277]*277are much divided upon the subject. Among the earlier cases to be found is Chapin v. Merrill, 4 Wend. 657, decided in 1830.

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Bluebook (online)
39 L.R.A. 378, 44 P. 382, 31 Or. 269, 1896 Ore. LEXIS 2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rose-v-wollenberg-or-1896.