Legal Definition of Contribution
A partition by which the creditors of an insolvent debtor divide among themselves the proceeds of his property to the amount of their respective credits.2 min read
A partition by which the creditors of an insolvent debtor divide among themselves the proceeds of his property proportionably to the amount of their respective credits.
Contracts. When two or more persons jointly owe a debt, and one is compelled to pay the whole of it, the others are bound to indemnify him for the payment of their shares; this indemnity is called a contribution.
The subject will be considered by taking a view: 1. Of right of the creditors where there are several debtors; 2. Of the right of the debtor who pays the whole debt; 3. Of the liabilities of the debtors who are liable to contribution; 4. Of the liability of land owned by several owners, when it is subject to a charge; 5. Of the liability of owners of goods in a vessel, when part is thrown overboard to save the rest.
Right of Creditors
- 1. The creditor of several debtors, jointly bound to him, has a right to compel the payment by any he may choose; but he cannot sue them severally, unless they are severally bound.
Right of Debtor
- 2. When one of several debtors pays a debt, the creditor is bound in conscience, if not by contract, to give to the party paying the debt all his remedies against the other debtors.
Liabilities of Debtor
A debtor liable to contribution is not responsible upon a contract, but is so in equity. But courts of common law, in modern times, have assumed a jurisdiction to compel contribution among sureties in the absence of any positive contract, on the ground of an implied assumpsit, and each of the sureties may be sued for his respective quota or proportion. The remedy in equity is, however, much more effective. For example, a surety who pays an entire debt, can, in equity, compel the solvent sureties to contribute towards the payment of the entire debt. But at law he can recover no more than an aliquot part of the whole, regard being had to the number of co-sureties.
Liability of Land
- 4. When land is charged with the payment of a legacy, or an estate with the portion of a posthumous child, every part is bound to make contribution.
Liability of Owners
- 5. Contribution takes place in another case; namely, when in order to save a ship or cargo a part of the goods are cast overboard, the ship and cargo are liable to contribution in order to indemnify the owner of the goods lost, except his just proportion. No contribution can be claimed between joint wrong doers.