GAUDER v. GAUDER

003-NLR-NLR-V-08-GAUDER-v.-GAUDER.pdf


1004.
November 30.
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GAUDER v. GAUDER.
C., Colombo, 18,949.
Co-debtors—Payment by one co-debtor of more than his proportionate shore—Right to. recover from other co-debtors a contribution pro ratft.
One of several co-debtors who are jointly and severally liable- inrespect of a debt may, upon paying more than his proportionate shareof the debt, recover from his co-debtors their proportionate shares ofthe excess, whether the entire debt has been extinguished or not by – snchpayment.
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HIS was an action brought by certain co-debtors againsttwo other co-debtors for the recovery of a sum of money
said to be due by them to the plaintiffs in respect of a paymentwhich the plaintiffs bad made to the ■ common creditor, inreduction of the debt due by all the co-debtors. It appearedthat the plaintiffs, the defendants, and three others were indebtedon the 7th March, 1903, to one Noorbhai upon four mortgagebonds for principal and interest in the sum of Rs. 22,543.83; thatthey had hypothecated for the payment of their said debt theirseveral shares in certain immovable property; that on the -7thMarch, 1903, the plaintiffs paid the creditor a sum of Rs. 13,750in part payment of the principal and interest due on the saidbonds and obtained from the creditor a full discharge of all theirliability to him on the said bonds, as also a release of their sharesof the immovable property mortgaged; and that the debt dueto the said creditor at the date of the institution of the suit wasmore than the proportionate share of the debt for which, thedefendants were liable as between the debtors themselves.
Oh the footing of these facts the' question submitted for thedecision of the District Court of Colombo was whether the plaintiffswere entitled to claim the sum of Rs. 1,472.45 as contributionfrom the defendants. The learned District Judge (Mr. J. Grenier)held as follows: —
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“I understand the action to be one for contribution, and I seenothing in the Roman-Dutch Law which limits the right to ask-forcontribution only where a co-debtor has paid the whole debt.In' this case the money that was borrowed by the co-obligorswas divided amongst them in the proportions mentioned in theplaint and admitted by the defendants, and on the 7th March,1903, plaintiffs paid to the obligee Rs. 17,350 in part paymentof principal and interest due on the bonds. The proportionateshare payable by the defendants jointly amounts to Rs. 1,472.45.
Tiie difference between plaintiffs and defendants seems to , 4904.be that the defendants say that, unless there is a complete Novemberrelease of the joint obligation, there can be no action for con-tribution. In the present instance the plaintiffs have beenreleased by the payments they have made to the obligee from allliability upon the four bonds referred to in the plaint, and theshares of the immovable property mortgaged by them have altobeen released. It is admitted, however, that the plaintiffs havepaid a larger sum than their share of the joint debt, and unlessthere is express authority to the contrary, it seems to me only just'and equitable that the defendants should contribute what theplaintiffs h*™, paid on their own account, whether there has beena complete release of the joint obligation or not. Judgment willbe entered for plaintiffs as claimed with costs. ”
The defendants appealed.
The case was argued before Layard, C.J., and Monoreiff, J., on25th November, 1904.
Domhorat, K.C., for appellant.—According to English Law, it isnecessary that the plaintiff should have paid the whole of thedebt to entitle him to recover from the defendants their propor-tionate shares of the excess. Voet (20, 4, 6) speaks of paymentin full (in toto) of the debt by one debtor to entitle him to obtaincession of action from the creditor. Van der Linden (1, 14, 9)and Other Dutch authorities also lay down that it is only a debtorwho has paid the whole debt who can recover their proportionateshares from his co-debtors. Further, the recovery of the excessbefore the satisfaction of the debt in toto would lead to a multi-plicity of actions.
Walter Pereira, K.G., for plaintiff, respondent.—The question-i»m>lved is not one as to the right of one co-debtor, who has paidflte whole debt, to demand and obtain cession of action from theCreditor. Cession of action was not absolutely necessary underthe Boman-Dutch Law fo* enable one debtor, who has paid thewhole debt, to recover from his co-debtors what he has paid inexcess of his own proportionate share. He njight recover in hisown right from each of his co-debtors his share of the debt. Nodoubt, the Boman-Dutch authorities speak of payment of the wholedebt by one co-debtor to entitle him to recover from the rest, butthere is no reason to suppose that it was intended that the rightsthat accrued to a debtor who had paid the whole, debt should notaccrue to one who had paid a part of the debt, which,, however,was id excess of his own proportionate share of the debt. As ex-plained in Pothier 2, 3, 8, 1, in the case of debt in solido, although
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1904. the debtors are debtors of the whole in respect of the creditor asNovember 30, between themselves, each is only liable pro ae as to that part of. . ' the debt of which he was the cause.
If, therefore, one debtor pays more than such part, it is butjust that he should have the right to recover the excess from hisco-debtors. The English Law would appear to allow it.
The multiplicity of actions that such a practice would seemto lead to appears to be a necessary evil, for it is absurdto expeot a co-debtor who has wiped off a portion of theprincipal, and thus prevented the interest accruing thereon, towait till he is able to discharge the balance of the debt.
Cur. adv. villt.
80th November, 1904. Layabd, C.J.—
It has been contended for the appellants in this case that theright of contribution is only given to a debtor who pays the wholeof the debt due by him and his co-debtor, and that he has no rightof action against his co-debtor until the creditor’s right of actionhas been extinguished by payment of the whole debt.
The appellant’s counsel contended that both under the EnglishLaw and our law where several persons are liable as co-debtorsfor the same debt, which as between themselves is payable inequal shares, it is only where one of the co-debtors is compelledto pay the whole lie is entitled to recover from each of the othersa contribution in proportion of the excess beyond his own share.With regard to the English Law, he stated that in England it hasbeen decided that only where several persons are liable asco sureties for the same debt and one of them has paid the wholecan he recover from his co-sureties so much as he may have paidin excess of his share. In all the English text-books on the lawof contracts I have had the opportunity of examining I find thatit is laid down that, where one co-debtor has been compelled topay not oply the whole debt, but a greater part than his share, heis entitled to recover from each of his other co-debtors a contri-bution in proportion of the excess beyond his own share, andalso if there be several sureties and one of them pays more thanhis proportion of the demand, be is entitled to contributionagainst his co-surety or co-sureties for the excess.
It has been suggested that the text writers are not supported bythe authorities cited by them, and that they have erred in extend-ing the right of contribution. to cases in which the whole debthas not been extinguished. On a reference,, however, to ^ largenumber of English cases I think that the text writers have notoverstated the law. I understand Lord Eldon to have decided in
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tb© case of Ex parte Gifford (2 B..A P. 269),- cited with approval 1904;and followed by Baron Parke in Davies v. Humpreys (6 M. & W. November 39.168), that sureties stand with regard to each other in a relation^x.
which gives rise to the right that, if one pays more than his,proportion, there shall be a contribution for a proportion of the–excess beyond the proportion which, in all events, he is to ‘pay.
Baron Parke states it might be more convenient to require thatdie whole amount should, be settled before the sureties are-permitted to call upon each other in order to prevent multiplicityof suits, but it seems clear that when a surety has paid more thanhis share every such payment ought to be reimbursed by thosewho have not paid their shares in order to place'him on the samefooting, and a right of action accrues to him to enforce such payment.
The English Law is against the appellant’s contention. The casehowever, must be decided by our won law quite irrespective of theEnglish Law. It is argued that the Boman-Dutch Law authoritiesin express terms nowhere declare that, where a co-debtor haspaid a greater part than his own share of a debt, he can bring anaction for contribution before the. debt of the creditor has beenentirely extinguished. It is suggested that he must pay the wholedebt before he is at liberty to recover the excess of his share paidby him.
Ho Boman-Dutch Law authority has been cited to us by eitherappellant’s or respondent’s counsel which expressly states that hecan or cannot recover contribution before the whole debt isextinguished. Though it is admitted by respondent’s counselthat constant reference is made in Voet ,and other Boman-DutchLaw authorities to the right to recover contribution where thewhole debt has been satisfied, there having been no actualauthority cited to us to establish that the right to recovercontribution was limited to the case in which the whole debt hadbeen extinguished, it remains for us to decide whether on generalprinciples the right should be so limited.
' Let us then examine the facts of the case and the liability of theparties to the joint contract. Here they had mortgaged propertyto which they were entitled in common. Under such a contractin our law the mortgagee-creditor is at liberty to proceed for thewhole debt against the plaintiffs’ share and the plaintiffs couldnot, by tendering him a proportion of the debt, prevent themortgagee-creditor from resorting to them for the whole of ,theshare owned by them (Voet, 20, 4, 4).*
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. The mortgagee-creditor could have sued them for the whole debtand have caused their undivided interests in the mortgagedpremises to be sold, and at such sale have acquired the plaintiffs’
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1904. share, or some third party might have purchased it and theNovember 30, mortgagee-creditor have drawn the proceeds arising from such!■».». sale. The price realized at the sale might, whilst exceeding theproportion of the debt due by the plaintiffs, be less than the fullamount of the mortgage debt. The plaintiffs could not stop thesale by tendering their proportion of the debt; consequently theywould be deprived of their property, and the mortgagee-creditor,having satisfied a portion of his debt, might not proceed anyfurther. The sale of the plaintiffs' property would have dischargedpart of the debt of his co-contractors. Plaintiffs could not compelthe creditor to take further proceedings against his co-contractors,and, possibly not having means or property to satisfy the whole ofthe mortgage debt, be would, if appellant’s counsel’s contention iscorrect, be left without any remedy to enforce his indemnity bythe contribution to which he is entitled from his co-debtors. 1cannot believe that the Boman-Dutch Law would have under suchcircumstances left the plaintiffs without any remedy. Equityappears to me to require that the plaintiffs should be entitled tohave recourse against their co-contractors, and I know of no law soequitable as the Boman-Dutch Law, and, unless express authority ■can be shown to the contrary, I shall hold that the plaintiffs areentitled to their remedy against appellants.
As I said before, no express authority has been cited to us on thepoint. Appellant’s counsel laid great stress on the frequentreference in Voet (20 4, 5) to the payment in full of the creditor’sdebt.. Here Voet appears to me to be dealing with the right of aco-debtor to obtain cession of action from the mortgagee-creditor,and not to a case like the present, where there could not possiblybe a cession of action, as the whole debt was not extinguished. Iunderstand the law to be that a cession of action can only followthe extinguishment of the entire debt.
It has been further argued for the appellants that they have beenprejudiced by the plaintiffs’ payment and release of the plaintiffs’share of the mortgaged property. I cannot see that they have inany way suffered. Their original liability was in solidum for thefull amount, and they, now remain liable in solidum for a less sumthan they were before the plaintiffs made the payment alleged inthe plaint. The mortgagee-creditor could have enforced paymentagainst the plaintiffs’ share of the land mortgaged, and theplaintiffs could not prevent him from having recourse againstthem alone; the nature of the contract entered into by plaintiffsand appellants enabled the mortgagee-creditor to have recourseagainst any party to the mortgage, and he was not bound to sue all.Their position does not appear to me to be prejudicially affected by
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the action of the plaintiffs. Should at any time, from circum- 1904.stances which may arise hereafter, the appellants or any one of themhave to/ pay more than his proportionate share of the debt, they or Layabd.C.^.he can have recourse for contribution against their or his oo-debtotB,and I cannot see that the fact that the plaintiffs have recovered inthin ease judgment for the amount of their claim will prevent theappellants from hereafter recovering from them any sum thatrespondents could rightly be charged with as their share of the•contribution to the debt created by the mortgage.
I think- the appeal should be dismissed with costs.
Monceeiff, J.—
I agree with the view of the Chief Justice. I agree that theplaintiffs, having paid more than their proportion of the debt securedby the mortgage bond, are entitled to recover rateably from theirco-obligees. The debtors under the bond were in the positionof sureties, each for the other; the rule which applies to suretiesis equally applicable to debtors in solidum (Pothier, 363). I learnfrom Voet {46, 1, 31) that a surety has recourse to the principaldebtor for everything he has been compelled to pay in hiscapacity of surety—Regressus ei contra debitorem principalemdatur in id omne, quod fidejussore nomine solvere coactus fuit.For that purpose he has the actio mandati when he becamesurety on mandate from the principal debtor, and the actionegotiorum gestorum . when he appears to have intervened with-out mandate and settled the business of the debtor advantageously—Si sine mandato interveniens utiliier negotium debitoris gessisseprobetwr. Voet goes on to say that these actions are distinct fromthose which are ceded by the creditor as against the other suretiesto a surety who has paid the whole debt—Distant hoe actiones abiis quae ■ per creditorem fidejussori solidum solventi adversusconfidejussores cessoe sunt. They are actions in id omne, quodfidejussoris nomine solvere coactus fuit; whereas, if the suretypaying the whole debt has a cessio’' of action from the creditor,he can recover no more than the cj editor could recover. •
• It seems to me that Van der Unden (Juta, 3rcl Edn. 1897, p. 122)puts the matter in the same way. In any case I can dicover noreason why a surety or debtor in solidum should not have the-actions Voet speaks of against his co-sureties pr co-debtors bnpayment of less than the whole. Part payment extinguishes adebt pro tanto. As Pothier puts it (p. 367),—“ regularly paymehtof a part of what is due extinguishes the debt as to that part;therefore, if you owe me' £10 and pay me £5, the debt is extin-guished for a moiety (L., 9, sec. 1, ff, de Sohit).”