(dissenting). Many years ago1 the common-law judges enunciated a “rule” of law, respecting title-retaining contracts, to this effect: If the vendee failed to pay, the property might he reclaimed by the vendor, since, having title, he was merely reclaiming his own. On the other hand, the vendee had made him a promise to pay. Alternatively, then, the vendor might turn to that. But, ran the “rule,” he could not have both remedies. If he retook the chattel he canceled the debt for the contract price, or if he sued on the debt he passed title.2 The 2 remedies were thought to be inconsistent. It will be observed that the term “passing” title is merely the law’s way of saying that a contra result would be inequitable. Whatever had passed between the parties had passed long before.
Side by side with the above rule, and not inconsistent with it, grew another. It arose, as did the first, out of what were conceived to be considerations of elementary justice and fairness. It said that when one man had to pay a debt rightfully owed by another, he might have reimbursement, often called “restitution,” from that other.
In my discussion of this case, which I take to be of sufficient importance in a credit economy to warrant more than a pro forma treatment, we must make certain constructions of the pleadings, since the case was dismissed below without trial. As set up in the declaration the situation was a familiar one. A man (the defendant here) bought a truck. The purchase was “on time,” as the saying goes. He, as maker, signed a conditional sale note for the balance due on *58the cost after the down payment. His dealer, the payee (plaintiff here), indorsed the note, with recourse (guaranteeing the payment of the same and of all instalments), and discounted it to a bank. Some time later the maker defaulted on certain instalments and the indorser, he pleads, “was required” to pay them to the bank. Still later the dealer repossessed the truck (the bank having re-negotiated the note back to the dealer without recourse) and sold it. There resulted a loss to the dealer. But he is not suing for this loss. He is suing on another obligation.
The declaration was in 3 counts. The first does not concern us. The second, based upon the indorsement, is framed upon a suretyship theory, and is for the instalments paid. The third is for the loss, above-mentioned, arising on the sale. That is not now before us, the dealer apparently acquiescing in the dismissal of such count.
This appeal concerns count 2, relating to the instalments paid. As to these the declaration asserts that the maker went into default on the instalments and that the plaintiff, as indorser, was required to pay them. The maker, on the other hand, denies in his answer that he was in default and says that he has no knowledge of what the indorser was required to do. The trial judge cut this Gordian knot summarily at pretrial. The colloquies are not before us, but he ordered both counts dismissed upon the theory that “defendant’s obligation to pay the amount remaining unpaid thereon was canceled by the .plaintiff’s repossession of the motor vehicle.” The substance of what he has said is that, as a matter of law, the sum pleaded under count 2, even if paid as alleged, was canceled by the repossession. Was it! That is the issue before us. I will take the case as it now stands, assuming neither fraud upon the bank through the use of fictitious paper, nor a gift (of *59the instalments paid) by the dealer to the buyer. Neither is pleaded and the gift theory is belied by the buyer’s return to the dealer of a portion of the instalments paid, this action being for the balance.3
First, it is urged that we affirm upon the theory that the following quotation from 11 ALE 449, 453 controls the situation presented:
“If the original creditor takes up the paper thus transferred, he is remitted to his original rights, and may bring his action upon the paper or upon the original consideration, at his election.”
This text offers no support whatever for the position here taken that the party primarily liable need not reimburse his guarantor, should the latter be required to make payment. It refers to an entirely different fact situation, not presented to us, namely, a re-acquirer’s election to sue on the note or on the contract.
The obligation here sought to be enforced arises in this way: The sale of the note to the bank vested in the bank 2 separate promises, (a) that of the defendant expressed in the note and (b) that of the plaintiff as indorser, upon which promise the bank could sue if the necessary steps were taken. When an indorser makes payment (after default by the maker) it is in exoneration of this promise to the bank. The liability, and the payment, to the bank flow from the promise made by the indorser to the bank. No “authorization” by the maker to the indorser to so pay is involved. Indeed, it may be *60regarded as immaterial.4 Here the plaintiff pleads the indorser’s nsnal case. He was required to pay after the maker’s default. But in making such payments the plaintiff was doing what the maker was primarily liable to do. The payments were made by plaintiff, not as a principal debtor but as one secondarily liable.
Immediately upon making such payment an obligation arose on the part of the defendant to reimburse the plaintiff. How it has been lost, or by doing what, I cannot see. We have an independent obligation. It is not contained in the terms of the conditional sale instrument but arises from the promise to repay made by Walters, the defendant, to Gersonde, the plaintiff, when Gersonde paid Walters’ debt to the bank. What is involved, actually, is no more than a claim for restitution, and it will be imposed by law, if need be, to prevent unjust enrichment. It is no more than elementary fairness to require an automobile owner to reimburse those whose money has paid his bills, either to keep his car in operating condition (gasoline, oil, and upkeep) or in his possession (instalment payments made on his obligation). All of this has nothing to do with the “passage of title” to the car if and when the holder of the paper upon abandonment of the obligation, must make an election as to his remedy.
Nor is it any answer to say that the indorser should not have restitution from the maker for instalments paid since such instalments reduced the indorser’s liability to the bank. So they did. But *61the indorser’s liability to the bank arose only because of default by the maker. It would be odd, indeed, if the very act of the maker that forced the indorser to pay should also wipe out the maker’s liability therefor to the indorser, on the ground that the indorser had thereby merely discharged his own liability (thus wrongfully created by the maker) to the bank.
Finally, it may be urged that the indorser’s payments on the note were really car payments and, hence, that liability for these car payments, like that for any other car payments, is wiped out by repossession. The difficulty with this theory is that when a party secondarily liable upon a note is called upon to make good upon default of the maker, he, the party secondarily liable, is not “purchasing” whatever the maker spent the money for. Thus, the secondary party is not purchasing jewels, a trip to Europe, or land if, in fact, land is what the maker spent the money for. He has no interest in land, he is not liable to taxation as an owner of land, nor is he entitled to vote upon certain local issues-as such owner. He has merely discharged his obligation to the holder and he may look for reimbursement to the maker. It is equally true that when the indorser here made good on his guaranty these were not “car payments” and he is entitled to the same restitution as any other indorser who has been called upon to make good upon the maker’s default.
I share the feeling of the law student, that the more all these objections are examined the more I don’t understand them. The dealer’s money permitted this car to go on the road in the buyer’s possession. For this he is owed a debt. It may be only fair to say that if he retakes the car (as he did) he can no longer sue on the debt, save to the degree permitted by statutory change (if any there be) of the common law. But the dealer did more than put *62the car in the buyer’s possession. By making good on his own indorser’s liability to the bank, he permitted the car to remain in the service of the buyer. The exoneration of the principal obligor’s debt by the surety created in the principal an independent obligation. In such a situation it has been well said that the obligation creates and defines the contract, not, as normally, the contract the obligation. The obligation is, as we noted, independent, neither contemplated as a part of the conditional sales transaction, nor comprehended within its terms.
There can be no serious question but that an independent obligation, not within the terms of the conditional sale, is not involved in any “election” of remedies, and hence is not canceled by repossession of the car by the dealer. An example, in addition to the one before us, is the promissory note sometimes given to the dealer for the down payment. It is a separate and independent obligation. The conditional sale agreement merely furnishes the context within which it is found, but of which it is not a part. In this situation the weight of authority and of reason is clear that repossession of the car does not cancel the obligation. The repossession rule does not apply because the reasons for the rule are not present. As a court put it in a recent case where, as here, it was urged that repossession had wiped out the obligation:5
“The weight of authority is that where title is not retained as security for a note given as a down payment the note is a distinct obligation, and where it is a distinct obligation repossession of the article and enforcement of the note are not inconsistent remedies. * * * '
“The note was a separate and distinct obligation, and the triahcourt properly allowed recovery on the note.”
*63Notliing has been cited to ns, nor does onr independent research disclose anything in our statutory6 or case law warranting the conclusion that this dealer who has made good on his indorsement and, thereby, has permitted the purchaser to keep possession of the truck for a period during which it otherwise would be subject to repossession, need not he reimbursed by the maker of the note. Moreover, such conclusion is completely inconsistent with established doctrines of suretyship (an indorser is a surety)7 and restitution.8
*64The case would not be different in principle if Walters had borrowed the money from Gersonde for the very purpose of making the payments, or if there had been an express contract between Walters and Gersonde that Gersonde would make the payments and Walters would repay him. Surely we are not, at this late date, going to abandon the principle of Slade’s Case,9 or repudiate Lord Mansfield’s holding in Moses v. Macferlan,10 upon which ho much of today’s law rests.
In short, repossession of the truck by the seller did not operate with the same effect as a discharge in bankruptcy for the buyer.
The judgment should be reversed and the cause remanded for further proceedings not inconsistent herewith. Costs to appellant.
Souris, J., concurred with Smith, J.See 3 Jones, Chattel Mortgages and Conditional Sales (Bowers ed), eh 31, p 379 et seq.
Burroughs Adding Machine Co. v. Wieselberg, 230 Mich 15.
The dealer states in its brief (the buyer did not appear in our Court) that “Under the terms of the indorsement, plaintiff made 4 monthly payments to the bank on behalf of defendant. The four payments of $371.95 each totalled $1,487.80. Defendant reimbursed plaintiff the extent of $615, leaving a balance of $872.80 for which sum plaintiff seeks judgment in this action.”
“A surety who contracts with a creditor without the consent of the principal is not a volunteer. The creditor is entitled to obtain the additional security afforded by a surety. The payment by the surety in satisfaction of his own obligation, which has the effect of discharging the principal, is an unjust enrichment of the principal. He must, therefore, reimburse the surety to the extent of the enrichment.” Restatement, Security, § 104, comment h. See, also, Restatement, Restitution, § 76, infra.
Anderson v. Hiatt, 181 Cal App 2d 9, 11 (4 Cal Rptr 858).
So far as the statutory situation is concerned, we have 2 statutes relating to the instalment sales of motor vehicles, PA 1939, No 305 (CL 1948, § 566.301 et seq., Stat Ann 1959 Rev § 19.415 [1] et seq.), and PA 1950 (Ex Sess), No 27 (CL 1948, § 492.101 et seq., Stat Ann 1957 Rev § 23.628 [1] et seq.). The degree to which the first is inconsistent with the second, and hence repealed by implication, we have never in the context before us passed upon, nor is the question argued on appeal, nor is it necessary or helpful to decision. We thus, as did appellant, and the trial court in its pretrial conference memorandum, and later order, refrain from any interpretation of or reliance upon either statute. The assumption that statutory provisions reinstalment sales are pertinent to. our problem necessarily involves the assumption that the obligation asserted by appellant is within the conditional sale contract. It is the essence of appellant’s position that the obligation is not so included.
See Restatement, Security, § 82, comment Tc. As to the rights of a surety who “makes a payment or .otherwise performs on default by the principal” see the black letter statement of 8 104, which follows:
“Reimbursement by Principal : In General.
“(1) Where the surety makes a payment or otherwise performs on default by the principal, or whqre the surety’s property is used to' satisfy the principal’s duty, it is the duty of the principal to reimburse the surety to the extent of his reasonable outlay if
“(a) the surety’s obligation has been incurred, or his property has been subjected to a charge, with the consent of the principal, or
“(b) the principal has assumed an obligation which was once the primary obligation of the surety.
“(2) Where a surety who has undertaken his obligation without the consent of the principal makes a payment or otherwise performs on account of the principal, it is the duty of, the principal to reimburse the surety to the extent that the principal has been unjustly enriched.”
Restatement, Restitution, § 76:
“A person who, in whole or in part, has discharged' a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of his eon-duet.”
4 Co Rep 92b (76 Eng Rep 1074).
2 Burr 1005 (97 Eng Rep 676).