Wong Tin Look v. Goo Wan Hoy

OPINION OF THE COURT BY QUARLES, J. January 14, 1913, J. J. Byrne, assignee of O. Q. Yee Hop & Co., commenced an action of assumpsit against Lee Chan, Young Chan, Lee Look, Lee Nan and L. O. Akana, alleging them to be co-partners doing business under the firm name and style of Hang Eong Company, and sued out a writ of attachment which was, on said day, levied upon certain chattels belong — 541 — ing to the partnership. January 15, 1913, the defendants, Lee Chan and Young Ohan, doing business as co-partners under the name and style of Hang Fong Company, as principals, ,and Wong Tin Look, plaintiff here, and Goo Wan Hoy, defendant here, as sureties, to obtain the release of said attachment upon said chattels, executed a bond in words and figures as follows: “This Bond given by Young Chan and Lee Chan, partners, doing business in Honolulu, City and County of Honolulu, Territory of Hawaii, under the name of Liang Fong Company, as principals, Goo Wan Hoy and Wong Tin Look as sureties, to J. J. Byrne, of the said Territory of Hawaii, Witnesseth: “Whereas, in a suit, No. 7692, in the Circuit Court of the First Judicial Circuit, Territory of Hawaii, brought by J. J. Byrne, Blaintiff, against said principals and others, Defendants, a Writ of Attachment was issued, and “Whereas, William Henry, High Sheriff of said Territory of Hawaii, has levied upon the goods, chattels and property of said Hang Fong Company and Young Chan under the said Writ of Attachment, and “Whereas, said defendants, Hang Fong Company and Young Chan, desire to secure the discharge of said writ and the release of said goods, chattels and property from said levy, and said High Sheriff has agreed to release the same, upon the giving of this bond. “Now, Therefore, said principals and sureties are hereby held and stand firmly bound under said J. J. Byrne, and their assigns, in the sum of Fourteen Hundred Dollars, the payment of which to said J. J. Byrne, and their assigns, said principals and sureties do hereby jointly and severally bind themselves and their respective heirs, executors and administrators. “The Condition of this Bond is such that in ease, said defendants in said suit shall perform the judgment of the court therein, this bond shall be void, otherwise to remain in full force and virtue. “In Witness 'Whereof, said principals and sureties have hereunto set their hands and seals this 15th day of January, A. D. 1913. (Sig.) “HANG FONG CO., “By LEE CHAN. — 542 — “Approved (Sig.) “WM. HENRY, “High Sheriff.” (Sig.) “GOO AVAN HOY, “AVONG TIN LOOK.” The defendants filed their joint answer, which was a general denial. Thereafter the plaintiff amended his complaint and voluntarily discontinued the action as to Lee Look, Lee Nan and L. O. Akana. The action was tried, and a judgment entered in favor of the plaintiff and against the defendants Lee Chan and Young Ohan, có-partners doing business under the firm name and style of “Hang Fong Company,” for the sum of $1,085.15, including costs. Upon said judgment an execution issued, certain chattels were sold, and the execution returned satisfied to the extent of $120.05, and unsatisfied as to the balance of $965.10. Thereafter, and on the 17th day of October, 1913, said plaintiff, Byrne, commenced an action upon the said bond against the principals and the two sureties who executed it; the principals answered and the sureties filed their joint demurrer to the said complaint upon the ground that it appeared upon the face of the said complaint that the judgment in the original action was against only two of the defendants sued as co-partners, by reason of which the sureties were released from all liability upon the said bond. Thereafter, and before trial of the last mentioned action, the surety, Wong Tin Look (the plaintiff here), paid the balance of said judgment, and the said action was thereupon discontinued. The plaintiff thereafter commenced this action against his co-surety to recover one-half of the amount paid upon said judgment, to secure which, said bond was given. .To the complaint in this action the defendant answered, his answer being a general denial, the action was tried, and judgment rendered in favor of the defendant, the court deciding in his favor on the idea that the voluntary discontinuance of the original action against the three defendants mistakenly sued as members of the co-partnership — 543 — of Hang Fong Company, increased the liability of thé sureties on the performance bond whereby they were released from liability on the bond. Where one co-surety voluntarily pays the debt of his principal, to be entitled to contribution from his co-surety he must be prepared to show that the obligation was a legal and binding one. In case of a bond whereby the sureties undertake to pay, in a pending action, the judgment that may be rendered against the principal, a judgment against the principal fixes their liability, and they caimot go behind the judgment (Wm. W. Bierce, Ltd., v. Waterhouse, 219 U. S. 320; Robinson v. Kaae, ante, 403). But, where two sureties undertake that their principal shall perform the judgment of the court in a certain action, and a money judgment is rendered against the principal therein, one surety makes a prima facie case against his co-surety for contribution by showing that such judgment was rendered, that the principal did not perform it, and that he has performed it, and the burden is then upon the non-performing co-surety to show a defense, if any there be, to the action against him for contribution. In the case at bar the defendant relied, as a defense, solely upon the dismissal of the three defendants who were not members of the partnership of Hang Fong Company, at the request of the plaintiff in the original action. If the exceptions here are overruled (one is to the admission of certain evidence, one to the decision of the trial court, and the other to the judgment, the latter two on the ground that the decision and judgment are contrary to law and the evidence), it must be upon the ground that the' amendment of the complaint in the original action by striking out thereof the names of Lee Look, Lee Nan and L. O. Alcana as defendants, changed the obligation of the sureties, and released them from liability. It is unnecessary to discuss the first exception, and the last two raise only the one question. We hold that the amendment of the complaint in the original — 544 — action by striking ont tbe names of three persons sued as defendants under tbe mistake that they were members of tbe co-partnership debtor, under tbe facts in this case, did not release tbe sureties on tbe 'performance bond from liability. Tbe amendment introduced no new party, nor cause of action. A reading of tbe bond shows that it was recited therein that Lee Chan and Young Chan, co-partners doing business under tbe firm name of Hang Eong Company, are principals. Tbe defendant then, when be signed tbe bond, knew tbe facts; knew that tbe co-partnership of Hang Fong Company was sued; knew that tbe members of that firm were Lee Chan and Young Chan; knew that tbe said principals desired to obtain a release of their attached property, and to enable them to do so, signed tbe performance bond herein set out in full. Tbe sureties on that bond are considered/ in law, as having executed it with full knowledge of tbe right of tbe plaintiff to have tbe original action dismissed as to tbe three defendants erroneously alleged to be members of tbe partnership, and as having contracted with a view of having such right exercised. Tbe law, section 2371, R. L. 1915, expressly authorizes tbe amendment made. Suing persons who are not bound, with others who are bound, on an obligation does not defeat tbe right of recovery against those who are bound, and tbe dismissal of an action against one not bound does not preclude a recovery against defendants who are bound. Smithies v. Colburn, 20 Haw. 138; Kalanianaole v. Smithies, 226 U. S. 462. In tbe latter case tbe United States supreme court said: “Tbe joinder of tbe executor was simply a mistake that did no barm. See Bierce v. Hutchins, 205 U. S. 340, 347.” In tbe original action tbe plaintiff and defendant here were, as sureties, represented by their principals, and are bound by tbe judgment against their principals. Tbe object of giving tbe bond, that is, tbe release of tbe property attached, was accomplished to the detriment of tbe plaintiff in tbe original action. No fraud or imposition was practiced upon tbe sureties. — 545 — The defense here is purely a technical one. In executing the bond in question the defendant knew who the proper parties defendant to the action were, and who were not proper defendants, and is charged with knowledge that the action would be dismissed as to those improperly joined. He was liable on the bond to the obligee therein named. His co-surety, likewise bound, was rightfully entitled to discharge the whole obligation, when sued, and was not bound to litigate the same, and had the right to contribution from the defendant, who should not be permitted to escape that liability on the technical mistake made in the complaint in the original case, especially when the recitals in his bond show that he knew the facts and was not misled by any statement in that pleading. These views are sustained by the following authorities: Robinson v. Kaae, ante 403; Wm. W. Bierce, Ltd., v. Waterhouse, 219 U. S. 320; Heynemann v. Eder, 17 Cal. 433; Hood v. Mathis, 21 Mo. 308; Ball v. Claflin, 5 Pick 304; Lord v. Clark, 14 Pick. 223; Smith v. Brown, 14 N. H. 67; Sharpe v. Morgan, 144 Ill. 390; Salomon v. Buehler, 129 Ill. App. 178; Poole v. Dyer, 123 Mass. 363; Newell v. Norton, 3 Wall. 257; Waldrop v. Wolff, 114 Ga. 610, 40 S. E. 830; Gilmore v. Crowell, 67 Barb. 62. Considering the object and design of the statute permitting the defendant whose property is attached to have the attachment released .upon giving, with sureties, a performance bond, to pay the judgment that may be rendered in the action, the intent of the statute, and the intent of the obligors in giving the bond, the undertaking of the sureties fairly covers any judgment that may be rendered against any of the defendants in the action upon the cause of action therein sued upon, notwithstanding that by amendment the names of some defendants have been stricken. We regard the cases of Gilmore v. Crowell, supra; Salomon v. Buehler, supra, and Poole v. Dyer, supra, as practically on all fours with the case at bar. We therefore hold that the amendment of the complaint by striking out the names — 546 — o'f the three persons erroneously sued as members of the debtor partnership did not release the sureties on the bond. The bond was given in lieu of the security of the attached property, and the plaintiff creditor was entitled to look to it as security for his judgment, afterwards obtained, on the cause of action sued on. W. B. Lymer for plaintiff. J. Lightfoot for defendant.- The trial court was of the opinion that all of the parties to the bond should have been made parties to this action. We do not think so. Section 2374, R. L. 1915, provides that in suits upon promissory notes, agreements and other instruments therein named, all joint obligors shall be joined “in suing for nonpayment, nonaccepiance, or nonfulfilment thereof.'” This action was not upon the bond, but upon the obligation of the defendant to reimburse the plaintiff, pro tanto, by way of contribution, resting upon the old equitable rule, since crystalized into law, which makes a nonpaying surety liable to his paying co-surety for a proportionate part, hence the statute cited does not apply. The plaintiff could not join his principals with his co-surety, as defendants, in this action for contribution. 32 Cyc. 299; 16 Enc. Pl. & Pr. 961. We think the exceptions should be sustained. * As this cause depends upon a question of law, herein decided in favor of the plaintiff and against the defendant, and nothing remains except to enter a proper judgment, the cause is remanded to the circuit court with instructions to enter judgment in favor of the plaintiff and against the defendant for one-half of the amount shown to have been paid by the plaintiff upon the judgment in the original attachment action, with costs. Costs of appeal awarded to the plaintiff. Exceptions sustained.