The effect of a covenant not to sue one of several co-debtors or of a release of one with a reservation of rights against the others has been considered from the aspect of the creditor. The same question may be considered from the aspect of the debtor who has received the covenant or release; and it may be premised that if the undischarged co-debtors are forced by any means without their consent to pay more than their share of the debt, they can in turn enforce a claim for contribution against the debtor or debtors who received, the covenant or qualified release.81 What then are the rights of a debtor discharged by the creditor, but thus forced to contribute by a co-debtor? The answer would seem to depend upon the construction of the covenant or release which he has received from his creditor. It seems possible for a creditor to covenant with a debtor that not only shall the covenantee be free from direct liability to the creditor, but also that he shall not be made indirectly liable by being forced to contribute on account of payments made by his co-debtors. If such is the true meaning of a creditor's covenant, the covenantee when forced to contribute by the other debtors would have an action at law against the covenantor to recover the amount of his contribution, and in order to avoid circuity of action the covenantee would be entitled to relief in equity as well as at law for the substantial enforcement of the covenant:
80 See Carroll v. Corbitt, 67 Ala. 679; New York Bank Note Co. v. Kidder Press Mfg. Co., 102 Man. 391, 408, 78 N. E. 463, and the following cases where the original liability was in tort; Chicago Ac. R. Co. v. Hines, 82 111. App. 488; O'Neil v. National Oil Co., 231 Man. 20, 120 N. £. 107; Knapp v. Roche, 94 N. Y. 334; Smith v. Dixie Parke Ac. Co., 128 Tenn. 112,119, 157 8. W. 900; Pogel v. Meilke, 60 Wis. 248, 18 N. W. 927. In Dwy v. Connecticut Co., 89 Conn. 74, 95, 92 Atl. 883, L. R. A. 1915 E. 800, the court said: "Full satisfaction is in itself a bar to further recovery. Ayer v. Aahmead, 31 Conn. 447, 462, 83 Am. Dec. 154. When the right of action is once satisfied it ceases to exist. If part satisfaction has already been obtained, further recovery can only be had of a sufficient sum to accomplish satisfaction. Anything received on account of the injury inures to the benefit of all, and operates as payment pro tanto. This is the familiar rule where consideration has been received in return for covenants not to sue or in part payment, and it is the logical and reasonable one. Snow v.
Chandler, 10 N. H. 92,95,34 Am. Dec 140; Chamberlin v. Murphy, 41 Vt. 110, 119; Bloss v. Piymale, 3 W. Va. 393, 409, 100 Am. Dec. 762; Ellis v. Esson, 60 Wis. 138, 164, 6 N. W. 618, 36 Am. Rep. 830; Musolf v. Duluth Edison Electric Co., 108 Minn. 369, 122 N. W. 499, 24 L. R. A. (N. S.) 461. In Nashville Interurban R v. Gregory, 137 Tenn. 422, 193 S. W. 1053, the court, however, refused to require a credit by the plaintiff in favor of the defendant of a sum received from another joint tort feasor in exchange for a covenant not to sue. The court somewhat confused the two distinct questions as to whether a covenant not to sue extinguished the cause of action, and whether a pay-ent received for such a covenant should be regarded as part payment on account of the joint liability of the tort feasors. It is expressly provided in some of the statutes referred to supra, Sec. 336, that credit shall be given for payments by a joint debtor.
81Hutton v. Eyre, 6 Taunt. 289; Price v. Barker, 4 E. & B. 760, 780.
"The intention of the parties is carried out by allowing the creditor to take payment [judgment?] at law, leaving the party who holds the covenant to his remedy in equity for a specific performance, by which he is fully protected, not only from paying more directly, but if there be sureties, by restraining the creditor from collecting any amount out of them, because that would subject him [the covenantee] to their action, and thus indirectly violate the covenant, or if there be other principal obligors, by restraining the collection of any more than an aliquot part of the debt, or any amount that would subject the party [covenantee] to an action for contribution."82
But this is not the necessary construction of a covenant not to sue. It is questionable whether such a covenant can be extended by implication to mean that the covenantee shall not be sued by anyone on account of the debt.83 Certainly, if the
82 Russell v. Adderton, 64 N. C. 417. Quoted with approval in Craven v. Freeman, 82 N. C. 361, 365. See also Kirby v. Taylor, 6 Johns. Ch. 242, 263, where Chancellor Kent construed a covenant not to sue one joint obligor as amounting in effect to an agreement to discharge that obligor and also to discharge a surety from liability for his debt.
83The implication was held not permissible in Mallet v. Thompson, 5 Esp. 178 (1804); and this conclusion seems necessarily involved in any unqualified statement that a covenant not to sue one joint debtor does not discharge the others, for if such a covenant were construed as meaning that the covenantee should be sued by no one, to avoid circuity of action the covcreditor by his covenant or release expressly reserves his right against the other co-debtors, the agreement must then necessarily be construed as binding the creditor to refrain only from direct proceedings against the debtor who receives the covenant or release, but not to hold that debtor harmless from such liability as may come to him indirectly after the debt has been enforced against his co-debtors. As has been seen, even though the debtor receiving the covenant or release is known to be the principal debtor, a right may be reserved against the co-debtors though known to be merely sureties.84 And the enforcement by the sureties of their right to indemnification against their principal will give the latter no right against the creditor, "for, when the right is reserved, the principal debtor cannot say it is inconsistent with giving him time that the creditor should be- at liberty to proceed against the sureties, and that they should turn round upon the principal debtor, notwithstanding the time so given him; for, he was a party to the agreement by which that right was reserved to the creditor and the question whether or not the surety is informed of the arrangement is wholly immaterial."85
But even where the creditor expressly reserves a right against other co-debtors than the one released, and therefore may in a circuitous manner compel the one released to pay a portion of the debt, by rendering him liable to a suit for contribution, or indemnity, it seems the creditor would be liable for breach of covenant if he himself should levy execution directly on the debtor to whom he had given a release.86 enantor in some cases at least ought not to be allowed to sue the others. See supra, Sec.338.
84 Bateaon v. Coaling, L. R. 7 C. P. 9. And see cases cited infra, Sec.1230.
85 Bateson v. Gosling, L. R. 7 C. P. 0, 15 (1871). To the same effect are Nevill'a Case, L. R. 6 Ch. 43, 47; Parmelee v. Lawrence, 44 111. 405, 411.
86 In Solly v. Forbes, 2 B. &. B. 38, the action was brought against joint debtors Forbes and Ellerman; the latter had been given by the creditors a release with a proviso reserving all rights against Forbes. The counsel for the defendant urged that this release discharged the claim altogether, but the counsel for the plaintiff argued (at page 45): "The present suit is quite consistent with the provisoes, for Ellerman is sued jointly with Forbes on a joint debt; Ellerman is only joined for conformity, and if he or his property be taken in execution, he has his remedy by an action for damages on this deed, taking it as a covenant not to sue." To this part of the argument the court in its opinion said: "It is
Sec. 343. Discharge of a joint right by one obligee destroys the right of all. Since each of several joint obligees is interested in the entire claim, he has power to discharge the entire claim either by release 87 or by an accord and satisfaction; 88 and so a payment of the whole debt to one obligee discharges it;89 and a tender to one is legally a tender to all.90 Where money is lent by several persons to another, the general rule in equity, however, is that they will be regarded prima fade as tenants in common, both of the claim and of any securities for it.91 "Though they take a joint security, each means to lend his own money and take back his own." 92 But in speaking of this doctrine of equity, the English Court of Appeals has said: "It is obvious that this proposition cannot be put higher than a presumption capable of being rebutted. If the money, supposing it to have been lent, were trust money, the presumption of a tenancy in common on the part of the two trustees could not, as it seems to us, arise. Survivorship is essential for the purposes of trusts and so there may be a variety of circumstances which may settle the question either one way or the other. In the present case we do not even know whether the bond was for money lent, or what was the groundwork of the obligation, and it is clear that if the presumption is that the interest in this obligation belonged in equal portions in severalty to the two plaintiffs, the plaintiff who was settled with by the accord and satisfaction has been paid his half, at all events, and it cannot be recovered again in this action." 93 The court therefore held that a denot necessary now to say anything as to any ulterior remedy the defendant may have or suppose himself to have: - In this respect he will act as he may be advised, and as circumstances may seem to require."
87 Rawstorae v. Gandell, 15 W. & M. 304; Myrick v. Dame, 9 Gush. 248; Napier v. McLeod, 9 Wend. 120.
88 Wallace v. Kelsall, 7 M. 4 W. 264; Husband v. Davis, 10 C. B. 645; United States v. Bacon, 14 Blatch. 279; Osbom v. Martha's Vineyard R. R. Co., 140 Mass. 549, 5 N. E. 486.
89 Bowes v. Seeger, 8 W. & S. 222;
Allen v. South Penn Oil Co., 72 W. Va, 155, 77 S. E. 905.
90Hoover v. Wolfe, 167 Cal. 337, 139 Pac. 794; Flanigan v. Seelye, 53 Minn. 23, 55 N. W. 115; Carman v. Pults, 21 N. Y. 547.
91 Petty v. Styward, Eq. Cas. Abr. 290; Rigden v. Vallier, 2 Ves. Sr. 252, 258; Morely v. Bird, 3 Ves. 628, 631; Steeds v. Steeds, 22 Q. B. D. 537; Powell v. Brodhurst,  2 Ch. 160.
92 Morely v. Bird, 3 Ves. 628, 631 (Lord Alvanley).
93 Steeds p. Steeds, 22 Q. B. D. 537, 541.
fence of accord and satisfaction with one joint obligee could not be stricken out by equity but must be amended by such a statement of the material facts as would enable the court to judge whether the right should be treated as joint and therefore wholly discharged, or as several, in which case half only would have been discharged. But even though a release of a joint right by one obligee is made in the exercise of clear legal power, it would seem that if the release were intended and known to be intended as a fraud on the rights of other obligees, the obligor could not be allowed to set up his legal defence as a bar to an action by the defrauded obligee.94 Just as a legal discharge of a debt is invalid where the creditor knows that the claim against him has been assigned 95 so here, a legal discharge by one obligee should be equally unavailable. It may be, also, that a joint obligation of two or more trustees with reference to the trust property cannot be discharged by payment to one of them even though the payment is made in good faith.96