v.
C. E. Price
This agreement witnesseth as follows: Whereas, on September 29, 1907, a certain note for $4,500.00, due six months after date, was executed and delivered to the Commercial National Bank of Council Bluffs, Iowa, for $4,500.00; and, whereas, said note was given for what is called the syndicate laud near Stuart, Nebraska, in which Charles E. Price, cashier of the Commercial National Bank of Council Bluffs, Iowa, has an equal interest with James F. Record, R. Hudspeth and A. T. Flickinger; and, whereas, the note of which this is a renewal was signed by Charles E. Price, and represents his interest in the said syndicate land; and, whereas, it is deemed best to have this said note signed only by A. T. Flickinger and R. Hudspeth, for reasons best known to himself: Now, therefore, the said Charles E. Price agrees with the said A. T. Flickinger and R. Hudspeth that he is jointly liable with them on this said note (same being bank number 9484, and for $4,500.00, dated September 29, 1907, and due in six months after date), and executes to the said Flickinger and Hudspeth aforesaid, this agreement to show his. liability on said note, same being an undivided one-third (%) interest in said note with the said parties aforesaid; this agreement shall also cover any renewals of this said note. Witness my hand at Council Bluffs, Iowa, this 8th day of January, 1908. Chas. E. Price.
The note referred to in the foregoing contract became due March 29, 1908. At that time Hudspeth was insolvent. Flickinger, therefore, took up said note and executed in lieu thereof a note for like amount signed by himself alone. This note was subsequently taken up by Flickinger by the execution of another renewal note, signed by himself alone. This last renewal note was dated January 18, 1909, and was for [*573] the original amount, $4,500. At the time of the execution of the last renewal note, Price admitted his liability for one-third thereof. Such admission was put in writing by Flickinger. Whether it was actually signed by Price is a matter of dispute, which will be referred to in a subsequent paragraph hereof. Price, however, paid on such note the sum of $1,500 and interest. In a suit thereon the payee bank later recovered a judgment against Flickinger for the balance remaining. Commercial National Bank v. Flickinger, 145 Iowa, 418. This judgment was fully paid by Flickinger.
Plaintiff’s claim that Price was co-surety with him for Hudspeth’s share of the debt is predicated upon the written contract above set forth. It is the plaintiff’s contention that said contract was the equivalent of a signing of the $4,500 note by Price, and that his liability arising therefrom is precisely the same as it would have been if he had signed the renewal note as he had signed the original note.. On the other hand, it is the contention of the defendant that the contract set forth expressly limited his liability to one-third of the amount of the note, and that he did not by such contract assume to become surety for the other parties. The trial court held with the plaintiff’s contention, and the defendant complains that the trial court thereby wholly ignored that provision of the contract which limited the defendant’s liability to one-third of such note. It is undisputed that the defendant received the benefit of one-third of the consideration, and he has never denied his liability for one-third thereof as a principal. To give effect to defendant’s contention would be to hold that his liability on the note was several and separate, and not joint. This would contradict the express provision of the contract “that he is jointly liable with them on this said note.” We do not think that there is any inconsistency in the terms of the contract.
Looking for a moment at the note of March 29, 1907, which was signed by the three parties, they were all liable thereon jointly and as principals. As between themselves, [*574] however, each was liable for one-third, and each was surety for the others as to the remaining two-thirds. This was the necessary effect of their joint execution of the note, the consideration for which had been received by them in equal parts. We think the legal effect and the manifest purpose of the contract in question was to maintain the status quo of the parties as made by the joint execution of the first note in the inception of the debt. This statement in the contract that the intent of the agreement was to ‘ ‘ show his liability on said note, same being an undivided one-third interest in said note, with the said parties aforesaid,” is entirely consistent with defendant’s joint liability. As between him and his co-makers, this was his measure of liability on the note. His liability for contribution through the default of one of his co-makers was a contingency which might or might not arise. It had not arisen at the time the contract in question was executed. If it should arise, the cause of action created thereby would be separate and distinct from a cause of action upon the note for which defendant had rendered himself jointly liable. A cause of action for contribution could not arise to the plaintiff except by the payment and satisfaction of the note as to Hudspeth. Novak v. Dupont, 112 Iowa, 334.
The trial court submitted this question to the jury, with an instruction to the effect that if they found that Price did sign the writing in question, a verdict should be rendered for the defendant, and, if not, that a verdict should be rendered for the plaintiff. The appellant complains of this instruction, and contends with much force that the signature of the defendant to the writing in question was so manifest and so conclusively proved that the question ought not to have been submitted at all. The jury having found against the defendant at tfiis point, it is urged by him that the verdict should have been set aside as contrary to the evidence. If the case could properly be made to turn on this question as submitted to the jury, we should give more consideration to appellant’s specific complaint in relation thereto. It is manifest to us, however, that this branch of the ease was tried and submitted upon an incorrect theory in a legal sense, and that both parties to the ease were, in large measure, responsible for such error. The defendant contended that the effect of this new contract above set out was to limit the liability of the defendant to the sum of $1,500 on the new note that day executed. The defendant having subsequently paid $1,500 on such note, he contended that he was thereby fully discharged from further obligation thereon. This defense, thus set up by the defendant, was met by the plaintiff simply with a denial of the signature of the defendant to the contract thus set up. Hence the submission by the court of the issue thus made by the [*577] parties. Careful analysis of the contract set up by the defendant as a defense renders it clear, however, that it presented no legal defense to plaintiff’s cause of action. Whether the defendant signed it, therefore, was not a decisive question. Assuming the fact of the execution of the writing as contended for by the defendant, there was nothing in its terms which negatived the pre-existing obligation of the defendant to the plaintiff to make contribution for plaintiff’s payment of Hudspeth’s debt. When did the obligation of the defendant, if any, to make contribution to the plaintiff as a co-surety, arise? Manifestly, on March 29, 1908. This is the date on which Hudspeth as an insolvent defaulted, and the plaintiff took up his canceled note. Novak v. Dupont, supra.
It was entirely immaterial whether the plaintiff responded to his suretyship by the payment of currency or by the execution of his own note. From that date Hudspeth was released. from his liability on the note previously executed by him, and became thereby indebted to the plaintiff, as a principal whose debt had been paid by his surety. Necessarily the defendant’s obligation as co-surety arose at the same time. The liability of Hudspeth to the plaintiff in such a case was not expressed by any note or formal promise to pay. The plaintiff would have been entitled to sue, and take judgment against Hudspeth. His cause of action, however, would be based, not upon a note, but upon the fact of his payment of Hudspeth’s previous debt under the circumstances shown. In like manner the liability of the defendant to make contribution as a co-surety was not expressed by any express promise to pay as hereinbefore indicated. A suit for contribution would not be a suit upon any note, either the canceled note or a subsequent renewal. As indicated in the previous paragraph, such liability rests upon legal implication, and is necessarily founded upon the fact of co-suretyship and the fact that the plaintiff as surety has been compelled to pay the debt of the principal. The contract pleaded by defendant does not in terms contradict this fact. Nor does it purport to deal [*578] therewith in any manner. It only purports to measure the liability of the defendant on the 'note of January 18, 1909. It is not inconsistent in a legal sense with defendant’s, alleged pre-existing liability for contribution. Defendant’s liability, if any, for such contribution lay quite outside of the note of January 18, 1909. The contract pleaded by the defendant inured to the benefit of the holder of the note of January 18, 1909, as well as to the plaintiff. It could have been enforced by the holder of the note. But the pre-existing liability of the defendant to the plaintiff for contribution did not inure to the benefit of the holder of the note. It could not have been enforced by the holder of the note as such. This was a liability to plaintiff alone, and was not affected in a legal sense by the fact that the defendant admitted his liability .as principal for one-third of the last renewal note. To put it in briefly, the pre-existing obligation of the defendant to make contribution to the plaintiff as co-surety was not a liability upon the note of January 18, 1909, nor upon the preceding note of March 29, 1908.
It is urged that the effect of this writing was to show that plaintiff was liable for two-thirds of the last renewal note. Granted. For that very reason, he is deemed to have paid Hudspeth’s debt, and thereby to have become entitled to contribution from the defendant. We do not overlook the significance of the above writing as a circumstance of great weight bearing upon a question of fact which will be referred to in a later paragraph.
All that we hold here is that the contract relied on by the defendant as a complete defense is in a legal sense not inconsistent with defendant’s pre-existing liability to the plaintiff for contribution. It is manifest, therefore, that the defendant was not entitled to the submission of this defense as such. Upon this issue the plaintiff was entitled to a directed verdict, although he did not ask it. Therefore, though the issue was erroneously submitted, it could not be prejudicial to the defendant. Even though we should find with the de [*579] fendant on the issue of fact'as to the signature, we would not thereby be warranted in ordering a new trial, the fact thus found being insufficient to save the defense. In other words the defendant was not entitled to have such defense submitted at all. He is therefore in no position to complain of particular errors in the method of submission, such errors being necessarily nonprejudicial. The plaintiff as appellee is under no burden here to show appropriate objection or exception on his own part. If he had been beaten below, a very different situation would be presented in that respect.