of the ring being a mere condition precedent to drinking. This seems contrary to common experience. The husband, by giving her the ring, was placing temptation directly in her path. 14 It is submitted that the question of proximate cause should also have been left to the jury, as it generally is, as pointed out by the dissenting opinion. Upon this point the most important thing to be considered by the jury would be whether the act of the plaintiff, in entering into the contract with the wife, was an intervening cause so that the original negligence of the defendant was no longer the proximate cause of the injury. The majority opinion seems to have confused the question of legal cause and negligence, for in deciding that the act of the defendant was not the proximate cause of the plaintiff's injury, it says, "There was nothing in the condition of the defendant's wife when she left her home just prior to the transactions with plaintiff to have led defendant to anticipate that she would leave home or pawn her ring."15 The question of foreseeability of harm is important in determining whether there has been a breach of duty to observe care;16 but it can not determine whether there has been a break in the chain of causal relation.17 That is a separate and distinct matter. In conclusion, it seems clear that the case should have been submitted to the jury on the three grounds set forth in the dissenting opinion. Therefore, the case should be reversed, even though it is apparent that upon a rehearing the jury may reach the result now attained. Milton Weiss. Suretyship: Contribution between Co-sureties.-In Goodman v. Keel, [1923] 3 West. Law Reports (Alberta) 789, sureties on a promissory note were called upon to pay, and each payed an equal share. When signing the note, one of the sureties, the defendant, received an assignment of wages as security from the principal debtor's son, then under twenty-one years of age, who lived with and financially assisted his parents, and who was told by his father, (his mother was the principal debtor), to give the assignment. The other sureties each sued the defendant for a proportion of the sum received by the defendant under the assignment, claiming they were entitled to share in the proceeds of the security which he had. The court held for the defendant. One justice dissented. Co-sureties, by virtue of a common liability for the debt of the principal, subject themselves to an obligation to share equally in the loss, if one of them is called upon to pay the debt of the principal. This obligation of contribution is not based in any way upon the principle of contract, but is founded upon the equity maxim of 14Ehrgott v. Mayor etc., 96 N. Y. 264 (1884); 29 Cyc. 632. 15Principal case, at p. 498. 16For a discussion of this question see articles by Smith in 25 Har. L. Rev. 103 at 124 and authorities cited, and Reese in 7 CORNELL LAW QUARTERLY 95. 17Christianson v. Chicago etc., R. R. Co., 67 Minn. 94, 97 (1896). equality. For the same reason, one co-surety cannot claim for his sole benefit any part of the assets or estate of the principal, such as payments made by the latter, or collateral received from the principal. "If oneof several sureties *** obtains from the principal anything for his indemnity, such indemnity inures to the benefit of all the sureties, and the surety obtaining it immediately becomes the trustee of it for the benefit of all the sureties, even though he obtained it by his own exertion and it was intended for his sole benefit."la The reason for the rule has been stated:2 Sureties are bound to observe good faith toward each other, and when funds are placed by the principal in the hands of one surety to be applied either to the payment of the debt or for the purpose of indemnifying him against any loss that may arise from suretyship, he must be considered as holding them for the common benefit of all concerned. The giving of the fund was the act of the principal who was equally bound to indemnify all his sureties alike; and upon him, as well as upon all his means for that purpose, each of them had an equal and just claim. It is unjust and inequitable that one surety without the consent of his co-sureties, should derive any exclusive benefit from the act of the principal in giving up what he might and ought to have applied for the benefit of all. As to these principles, the authorites are in harmony. On the other hand, when the principal procures a third party to agree to indemnify one of several sureties against a personal loss, there seems to be some doubt as to whether or not the indemnified surety may be compelled to share such indemnity with the remaining sureties. In Leggett v. McClelland, the principal's wife mortgaged her separate real estate for the exclusive use and benefit of one of her husband's sureties. In the suit for contribution between the cosureties it was held that this mortgage did not inure to the benefit of the co-sureties. Such indemnity, furnished by the third party, has nothing to do with the estate of the principal. To compel the co-surety to share the security would violate the contract made by the wife. As she was under no obligation to pay the debt, and as her husband had no interest in the property liable to be taken to satisfy 1Sanders v. Weelburg, 107 Ind. 266 (1886); Reinhart v. Johnson, 62 Ia. 155 (1883); Schribner v. Adams, 73 Me. 541 (1882); Bachelder v. Fiske, 17 Mass. 463 (1821); Broussard v. Mason, 187 Mo. App. 281 (1915); Wolcott v. Hagerman, 50 N. J. L. 289 (1888); Wells v. Miller, 66 N. Y. 255 (1876); Farmers and Traders' Nat. Bank v. Snodgrass, 29 Or. 395 (1896); Agnew v. Bell, Watt. (Pa.), 31 (1835); Pile v. McCoy, 99 Tenn. 367 (1897); Hinsdill v. Murray, 6 Vt. 136 (1834). la Brandt, Suretyship and Guaranty, vol. I, p. 572. 2Agnew v. Bell, 4 Watt (Pa.) 31, 33 (1835). Based upon an implied understanding between the sureties, where one surety, in consideration of his becoming such, stipulated for and received with the consent of his co-sureties, separate indemnity from the principal, it is held that the co-sureties could only share in the surplus, after such surety has been fully indemnified. This is an exception. Moore v. Moore, 4 Hawkes (N. C.) 358, 360 (1826). 439 Ohio St. 624 (1884). the claim, neither creditor nor the co-sureties had any right to treat the indemnified co-surety as a trustee for them. The wife's contract, like any indemnity coming from a stranger, must be regarded as one merely to indemnify him against the payment of the debt. The same principle is followed in The American Surety Company v. Boyle A and B were co-sureties on a replevin bond. Pursuant to a demand made by B, the principal and the surety company executed to B an indemnity bond in the same sum as that named in the replevin bond, the same made payable to B. The motive for its execution was expressly stated to be B's desire to be indemnified, and although the amount of the indemnity bond was equal to that of the replevin bond, it did not exceed the conditional liability of B. The principal defaulted, and A and B paid their respective liabilities. The surety company paid B what he had had to pay, and A, asserting an interest in this indemnity bond, brought suit against the surety company that it remit to A what A had had to pay. The case held that the surety company was under no obligation to indemnify A as the transaction limited its obligation to B's liability. Also A could not, because of the indemnity bond, claim contribution from B to which A would not otherwise have been entitled. (unless it might be for a share of the premiums paid by the principal, which point was not decided), for such a recovery would give B a right to be indemnified further by the surety company, and so make this company indirectly liable to A. The right of a surety to procure indemnity for his sole benefit is, therefore, restricted only by the requirement that it must not be obtained to the prejudice of his co-sureties. These two Ohio cases support the principal case. Gibson v. Shehan is a case somewhat similar in facts to the Boyle case. The principal executed a bond with a surety company for the benefit of Gibson, one of his sureties. On default of the principal, the surety company on behalf of Gibson assumed and paid the entire liability incurred by the default. The suit was brought against the other co-sureties for contribution, in the name of Gibson, but for the benefit of the surety company as assignee of Gibson's claim. The case held for the defendants, on the ground that the bond "constituted a fund for the protection and indemnity of all the three of the sureties," and that Gibson held it in trust for the others. It was, therefore, concluded that Gibson could not have sued his co-sureties for contribution without bringing the amount received from the surety company into hotchpot, and that in consequence the surety company could not by assignment get any cause of action. In In re Arcedecknes C was indebted to D, and four of C's friends went his surety. D took out life insurance on the life of the debtor, C. C defaulted and H, one of the sureties, was sued for the amount of the debt, which was £13,000, and gave a mortgage to answer the debt. H kept the premiums paid on the insurance taken out by D, 65 Ohio St. 486 (1901). 65 App. Cas. D. C. 391 (1895). "Supra, n. 5. 824 Ch. Div. (Eng.) 709 (1883). and after C's death the policy was assigned to H by D. In a suit brought by H against the estate of one of his co-sureties, it was held that H could not recover without accounting for the money received from the insurance policy on the principal's life, which was £10,000. The court said, that the assignment of the life insurance was taken by H for the benefit of all the sureties. In the principal case, it is insisted that In re Arcedeckne is only authority for the proposition that one in H's position in seeking an equitable remedy must do equity, but would not support a co-surety's action against H for part of the insurance fund. In re Arcedeckne and Gibson v. Shehan are certainly distinguishable from the principal case. In both, it was declared that the indemnity was received for all the sureties. Whether, if the action had been by one of the unsecured co-sureties to reach the indemnity fund, recovery would have been allowed or not, is not clear. The court in the principal case seems rightly to have held that the assignment of the son's wages to the defendant was indemnity, coming from a stranger, and no part of the principal's assets; thus the other sureties had no claim to it, as nothing had been withdrawn from the principal debtor or appropriated to the protection of their co-surety. While co-sureties are entitled to participate equally in any indemnity which either of them may obtain from the principal, directly or indirectly, it cannot in the principal case be supposed that, because of the strong moral obligation the son owed to his parent, a payment from him was a payment indirectly from the principal debtor, his mother. The dissent in the principal case, agreeing with the principles of law in the majority opinion, asserts that the wages of the son were a part of the assets of the principal debtor; hence the co-sureties should come in for their share. If the father had been the principal debtor, this argument might have carried weight, since the father is entitled to the wages of his minor son.10 The mother, however, while the father is head of the family, has no such claim." At all events, the son's act was a gratuity, either on his part, or on the part of his father, the father having control of his son's wages, and the situation is similar to a mortgage given by a wife out of her independent estate for the sole benefit of one of her husband's sureties. 12 The wages of the son, if an aid to the family financially, cannot be considered a part of the mother's assets, but were a part of the family assets under the control of the father.13 Walter C. Garey. Shaffer v. Clendenin, 100 Pa. 565 (1882). 10 Wheeler v. State, 51 Ind. App. 622 (1912); Doyle v. Carney, 190 N. Y. 386 (1907); Schouler, Domestic Relations, vol. 2, sec. 752. Schouler, Domestic Relations, vol. 2, sec. 753. 12 Supra, n. 4. 13 Dissent in Hutchinson V. Roberts, 8 Houst. (Del.) 459 (1889). It has been argued that because co-sureties are subject to the principle of survivorship, such securities are somewhat similar to joint tenancy in real estate, and, therefore, the ownership of any security is not several but joint, and, if any one of the cosureties gets possession of such money, he has no right to apply it to his sole in-. demnity, but must acccount to his co-sureties. This argument is not sound, for it assumed that the relation of co-sureties is based upon contract, whereas this is not true, for the relation of co-sureties and the rights thereto may arise unknown to each surety, each having gone surety for the principal independent of the other. Taxation: Limitation on states: Federal instrumentalities.-In People ex rel. Astoria Light, Heat and Power Co. v. Cantor, 236 N. Y. 417 (1923), the relator and the general government during the late war entered into a contract not evidenced by a writing. The relator agreed to furnish buildings, labor and materials for the construction of gas masks; the government agreed to pay the relator the actual cost of the buildings, labor and materials furnished, plus a reasonable amount for certain overhead charges. On October 1, 1919-the taxable status day for 1920-the government owed the relator over $600,000 on the war contract which the relator had fully performed. The defendants, tax commissioners for the city of New York, included this sum as taxable assets of the relator. The latter brought a writ of certiorari, claiming that the assessment was invalid under the federal Constitution. The Court of Appeals, reversing the orders of the Special Term and the Appellate Division, held that the sum in question was not taxable. It was said that the government had incurred the obligation under its constitutional powers "to borrow money on the credit of the United States," "to declare war," and "to raise and support armies;" that the proposed tax would hinder and embarrass the exercise of these powers. In the matter of raising revenue, the individual states and the federal government have been generally considered sovereign in their respective spheres, each without the pale of control by the other. The history of the formation of the union, and specific provisions in the Constitution,5 manifest such an intention by the framers of the Constitution. One express limitation, however, is to be found in the Constitution on the right of the states to tax persons or property within their borders: a prohibition against laying duties on imports, exports and tonnage. An additional limitation was first implied in McCulloch v. Maryland. The state of Maryland had attempted by special act to tax a branch of the national bank established in the state. The court held the act unconstitutional, as an interference with the national government's power to borrow money. Marshall, delivering the opinion, laid down the broad rule that the states had no power to impede, retard, burden, or in any manner control the operations of means or instrumentalities employed by the 1Const., art. I, sec. 8 (2). Id. art. I, sec. 8 (11). 6 "I am willing to allow, in its full extent, the justness of the reasoning, which requires that the individual states should possess an independent and uncontrollable authority to raise their own revenue for the supply of their own wants. *** They would, under the plan of the convention, retain that authority, in the most absolute and unqualified sense. ."-The Federalist, No. 32; the author of which "has seldom been charged with surrendering any powers [of the general government] that can be brought fairly within the letter or spirit of the Constitution."-Mr. Justice Thompson, dissentiente, in Weston v. City Council of Charleston, 2 Pet. (U. S.) 449, 477 (1829). See Collector v. Day, 11 Wall. (U. S.) 113, 127 (1870). Art. I, sec. 8 (1); Amend., art. 10. 'Art. I, sec. 10 (2), (3). 74 Wheat. (U. S.) 316 (1819). |