Egbert v. Hanson

McAdam, J. The plaintiffs, the defendant Hanson’s testator and the remaining defendant Smith, together with one Cameron, for the purpose of loaning their credit to the White Cloud Copper Mining Company, of which each of the persons referred to was a director, indorsed each of three notes, amounting in the aggregate to $10,000, for the accommodation of said company, which thereafter negotiated the notes for value. The corporation and the defendant Smith were insolvent when the obligations matured and are now insolvent, and the indebtedness was paid by the plaintiffs who seek contribution in this action from the executrix of the deceased coindorser under an alleged agreement among all the indorsers that they were to be cosureties of the accommodated party. It is well settled that an action at law may be maintained by a surety against the representatives of a deceased cosurety for contribution. Bradley v. Burwell, 3 Den. 61; Cornes v. Wilkin, 14 Hun, 428; Barry v. Ransom, 12 N. Y. 466; Johnson v. Harvey, 84. id. 363; 38 Am. Rep. 515. But it is also undoubted that successive accommodation indorsers are not to be considered as cosureties, and are not entitled to contribution among themselves unless they specially agree that they are to be bound jointly and not severally. Easterly v. Barber, 66 N. Y. 433; Kelly v. Burroughs, 102 id. 93; Pfluger v. Wilshusen, 17 N. Y. Supp. 516; McCarty v. Roots, 21 How. (U. S.) 432. Such agreement, however, may be proved by parol or be evidenced by the circumstances of the case. Easterly v. Barber, supra; Macdonald v. Whitfield, L. R. (8 App. Cas.) 733; Hagerthy v. Phillips, 83 Me. 336; Currier v. Fellows, 27 N. H. 366; Clapp v. Rice, 13 Gray (Mass.), 403. Does the evidence show an agreement by the defendant Hanson’s testator to be a cosurety with the other indorsers ? The plaintiffs endeavored to prove an oral agreement made between the parties at the times they indorsed the notes, but under section 829 of the Code the counsel for the executrix objected to such proof, and the objection was, of course, sustained. It follows, therefore, that unless the relation of cosurety between the [598] decedent and the other - indorsers may be implied from the circumstances of the case the action must fail. The facts that the indorsers were ^.directors of the accommodated party, that each note was indorsed at the same time and before the note was discounted, and the proceeds turned over to the corporation, are scarcely sufficient to constitute the indorsers cosureties. Directors are not liable for the debts of their corporation unless where they violate statutes or make themselves amenable on common-law principles. The plaintiffs having failed to prove an agreement or a condition of facts which obligated the testator to make contribution, the liabilities inter se of the indorsers must be determined according to the ordinary principles of the law merchant, whereby a prior indorser must indemnify a subsequent one. Macdonald v. Whitfield, supra; Rand. Com. Paper (2d ed.), §§ 473, 740; Daniel Neg. Inst. (4th ed.), § 1340, 4 Laws R. & R., § 1562. As there is no direct proof or legitimate inference that the testator was a cosurety with the other indorsers there must be judgment for defendants, with costs. Judgment for defendants, with costs.