Chapter 13. Joint And Several Promisors And Promisees (288-301)

Question 1

A, B and C sign a paper reading “Each of us guarantees to D that he shall be duly repaid $100, which he has this day lent E.” A, B and C promise the same performance, the payment of the whole sum of $100 to D. What is needed to discharge the duties of A, B, and C?

Answer 1

Performance by one of them discharges the duties of the others to D, though the guarantors who have not paid may be liable for contribution to the one who pays. Restatement 2d of Contracts § 288(c)

Question 2

A and B sign a written contract which provides “A and B will take charge of C’s plant and provide it with proper management.” What should the quoted words be taken to mean?

Answer 2

In the absence of any contrary indication, the quoted words will be taken to mean that A and B promise the same performance and that each is to be fully responsible for the proper management of the plant. Restatement 2d of Contracts § 288(c)

Question 3

A and B, “the railroad companies,” and C, “the coal company,” enter into a written agreement under which “the railway companies hereby purchase” a specified quantity of coal, and “the railroad companies agree to remit” in a specified way. What should the quoted words be taken to mean?

Answer 3

In the absence of any contrary indication, the quoted words will be taken to mean that A and B promise the same performance, and that each is to be fully responsible for the price of the coal. The words “one-half bill to each” would be a sufficient contrary indication. Restatement 2d of Contracts § 288(c)

Question 4

A, B and C sign a subscription contract reading “A, B and C hereby undertake to pay the following sums.” Opposite the name of each signer is a separate sum. What should the quoted words be taken to mean?

Answer 4

Each promises only a separate performance, the payment of the sum opposite his name. Restatement 2d of Contracts § 288(c)

Question 5

A and B sign a written promise “A and B severally promise C $100.” What should the quoted words be taken to mean?

Answer 5

A and B are each bound to the extent of $100, but the quoted words are ambiguous as to whether payment of $100 by one is to discharge the duty of the other. Restatement 2d of Contracts § 288(d)

Question 6

A and B owe $100 to C jointly, and C obtains a judgment against A and B for $100. How may execution be levied?

Answer 6

Execution may be levied wholly on the property of either A or B, or partially on the property of each. Restatement 2d of Contracts § 289(a)

Question 7

A and B severally promise to pay C the same $100. How may execution be levied?

Answer 7

C may obtain separate judgments against each for $100, and may levy execution under either judgment until $100 is collected. Restatement 2d of Contracts § 289(a)

Question 8

A and B and several others make a written offer to guarantee the repayment of loans to be made to C by D, “provided that our total liability shall not at any time exceed $4,000 and our individual liability shall not exceed $200.” D lends C $100 in reliance on the guaranty. What is each signer responsible for?

Answer 8

Each signer of the guaranty is responsible for the entire $100, whether the liability is joint, several, or joint and several. Restatement 2d of Contracts § 289(a)

Question 9

A, B and C sign a contract stating that “A as principal, and B and C as sureties, promise” a certain performance. A, B and C are jointly bound. Can the quoted words be taken to create several duties or joint and several duties?

Answer 9

In the absence of statute, the statement of the suretyship relation does not manifest an intention to create several duties or joint and several duties. Restatement 2d of Contracts § 289(c)

Question 10

A and B sign a contract in these terms: “We, and each of us, promise D that C shall be paid the sum of $100” on a certain date. What should the quoted words be taken to mean?

Answer 10

This creates joint and several duties on the part of the signers. Restatement 2d of Contracts § 289(c)

Question 11

A, B and C sign a contract in writing in these words: “I promise to pay D $100” on a certain date. What should the quoted words be taken to mean?

Answer 11

This creates joint and several duties on the part of A, B and C to see that D is paid $100. Restatement 2d of Contracts § 289(c)

Question 12

A, B and C sign a paper reading: “Each of us guarantees to D that he shall be duly repaid $100, which he has this day lent E.” What should the quoted words be taken to mean?

Answer 12

A, B and C promise the same performance, but their duties are several. Restatement 2d of Contracts § 289(c)

Question 13

A makes a negotiable promissory note payable to B and C. B and C indorse and sell the note to D. In what way are B and C liable to D? What if B and C are partners?

Answer 13

Under Uniform Commercial Code § 3-118(e), B and C are jointly and severally liable to D. If B and C are partners, notice of dishonor to one is notice to each under Uniform Commercial Code § 3-508(5). But Uniform Partnership Act § 15 provides that partners are liable jointly. Restatement 2d of Contracts § 289(d)

Question 14

A and B are jointly indebted to C. C sues A, who makes no objection to the nonjoinder of B. What, if anything, is C entitled to?

Answer 14

C is entitled to judgment against A for the full amount of the debt. Restatement 2d of Contracts § 290(c)

Question 15

A and B are jointly indebted to C. C sues A, who makes a proper objection to the nonjoinder of B, and C joins B by amendment. What, if anything, is C entitled to?

Answer 15

C is entitled to judgment against A and B. Restatement 2d of Contracts § 290(c)

Question 16

A, B and C jointly contract to pay money to D. C was an infant when he made the promise, or has since been discharged in bankruptcy, or has a defense under the statute of limitations. If D sues, is D required to join C to A and B as a defendant?

Answer 16

D may sue A and B without joining C as a defendant. Restatement 2d of Contracts § 290(c)

Question 17

A sues B and C on their joint promise. B asserts performance as a defense. C denies making the promise. Findings are made for B and against C on these issues. For whom will judgment be rendered?

Answer 17

Judgment will be rendered for both B and C. Restatement 2d of Contracts § 291(a)

Question 18

A sues B and C on their joint promise. B pleads a contract not to sue as a defense. For whom and against whom will judgment be given?

Answer 18

Judgment may be given for B and against C. Restatement 2d of Contracts § 291(b)

Question 19

A sues B and C on their joint promise. They deny that any promise was made. What jury instruction is called for in this case?

Answer 19

An instruction to the jury that verdict must be for or against both is called for. And, a verdict for one and against the other should be set aside on motion of an aggrieved party. Restatement 2d of Contracts § 291(c)

Question 20

A borrows $100 from D for the common benefit of A, B and C in equal shares, and A, B and C promise that D will be repaid. A pays $25 to D pursuant to an express agreement that it shall apply only to A’s duty and shall not limit D’s rights against B or C. Is any duty discharged? What rights, if any, does D have against A, B, and/or C?

Answer 20

D’s rights against B and C, as well as his right against A, are reduced by $25. Restatement 2d of Contracts § 293(a)

Question 21

A borrows $100 from D for the common benefit of A, B and C in equal shares, and A, B and C promise that D will be repaid. A delivers to D a set of books worth $25, and D accepts the books in full satisfaction of A’s duty. Is any duty discharged? What rights, if any, does D have against A, B, and/or C?

Answer 21

A, B and C are discharged. Restatement 2d of Contracts § 293(a)

Question 22

A borrows $100 from D for the common benefit of A, B and C in equal shares, and A, B and C promise that D will be repaid. A delivers to D a set of books worth $200, and D accepts the books in satisfaction of $25 of A’s duty. Is any duty discharged? What rights, if any, does D have against A, B, and/or C?

Answer 22

D’s rights against B and C, as well as his right against A, are reduced by $25. Restatement 2d of Contracts § 293(a)

Question 23

A, B and C are bound jointly, or jointly and severally, to D for the payment of an unliquidated claim. A and B agree with D to liquidate the claim at $100, reserving C’s rights. D subsequently sues C on the claim, recovers a judgment for $75 without prejudice to his claim against A and B, and collects $75 from C. Does this affect the liability of A and B?

Answer 23

The liability of A and B is reduced to $25. Restatement 2d of Contracts § 293(a)

Question 24

A as principal and B as surety owe C $100 for money lent to A. B pays C $25 for a contract not to sue B, under an agreement that the payment is not to be deducted from the amount of the debt. What claim, if any, might C have against A? Is B entitled to anything?

Answer 24

C may enforce the full claim for $100 against A. Unless otherwise agreed, B is entitled to any amount over $75 which C receives from A. Restatement 2d of Contracts § 294(g)

Question 25

A and B owe C $100 for money lent for their common benefit in equal shares. B pays C $75 for a contract not to sue B, under an agreement that only $50 is to be deducted from the amount of the debt. What claim, if any, might C have against A? Is B entitled to anything?

Answer 25

C may enforce the claim for $50 against A. Unless otherwise agreed, B is entitled to any amount over $25 which C receives from A. Restatement 2d of Contracts § 294(g)

Question 26

A, B, and C are partners or engaged in a joint venture. D promises to pay them $100 for goods sold by the partnership or joint venture. What is D’s duty? What kind of rights, if any, do A, B, and C have?

Answer 26

D’s duty is to make a single payment, and the right of A, B and C is joint. Restatement 2d of Contracts § 297(b)

Question 27

A, B, C and D own four separate tracts of adjoining land. D contracts with A, B and C to build a flood-control dam to protect all four tracts. D fails to build, and flood damages the tracts of A, B and C in varying amounts. Are their claims for damages are separately enforceable?

Answer 27

Their claims for damages are separately enforceable unless the contract provides otherwise. Restatement 2d of Contracts § 297(b)

Question 28

A contracts with B and C to pay an annuity to D, B’s mother. A’s duty is to render a single annual performance. What kind of rights, if any, do D, B, and C have?

Answer 28

The right of B and C is joint. D has a several right. Restatement 2d of Contracts § 297(b)

Question 29

A and B, joint owners of property, convey it to C in exchange for a cash payment and C’s promise to develop the property and pay to A and B a percentage of the profits. What right, if any, does A have?

Answer 29

A can join B as a party and recover damages for a breach by C even though B objects, but cannot maintain an action to rescind the contract if B in good faith refuses to join. Restatement 2d of Contracts § 298(c)

Question 30

A owes $1000 to B and C jointly. At B’s request A in good faith renders services and delivers goods worth a total of $1200 to B and third persons in satisfaction of the debt, having no reason to know that C is not getting the benefit of the goods and services. Is A’s obligation discharged?

Answer 30

A’s obligation to both B and C is discharged. Restatement 2d of Contracts § 299(c)

Question 31

A promises to convey property to B and C jointly in exchange for $10,000, and B and C each pay A $5,000. On A’s failure to convey the property, he repays $5,000 to B in return for a release of B’s interest in the contract and a covenant not to sue thereon. Is C’s right discharged?

Answer 31

C’s right to return of the $5,000 paid by him is not discharged. Restatement 2d of Contracts § 299(c)

Question 32

A owes a single payment of $1,000 to B, C and D. As A knows, B, C and D have agreed to share the money equally. In exchange for a discharge by A of $1,000 owed him by B individually, B purports to release A from the obligation to B, C and D. To what extent is the release operative?

Answer 32

The release is operative only to the extent of B’s one-third interest. Restatement 2d of Contracts § 300(b)