Jorgensen v. Aetna Casualty & Surety Co.

DURHAM, Justice

(dissenting):

I dissent. The plain language of section 15-4-3 governs the result in this case. Utah Code Ann. § 15-4-3 (1986) states:

The amount or value of any consideration received by the obligee from one or more of several obligors, or from one or more of joint or of joint and several obligors, in whole or in partial satisfaction of their obligations shall be credited to the extent of the amount received on the obligation of all co-obligors to whom the obligor or obligors giving the consideration did not stand in the relation of a surety.

This statute governs the allocation of the amount remaining from the supersedeas bond after outstanding interest was paid. Clay, on whose behalf the payment was made, gave to Jorgensen consideration which, according to the statute, “shall be credited ... on the obligation of all co-obli-gors.” § 15-4-3. Thus, the remaining $140,175.03 should first be credited to Aet-na and Clay’s joint obligation of $75,000. Aetna’s obligation as a joint debtor, and not as a surety, under the trial court’s judgment is therefore satisfied.

The majority opinion argues that the remaining amount can be credited to Clay’s separate obligation before being credited to Aetna and Clay’s joint obligation. This result does not fully account for the language found in section 15-4-3. First, the statute operates when any consideration is received by a judgment debtor. Second, the statute clearly contemplates debts owed by several, and not only joint, obli-gors when it includes consideration received by the obligee “from one or more several obligors.” Finally, the majority’s construction renders the statute useless. If an obligor is able to specify the allocation of his payment, section 15-4-3 serves no purpose.

All funds left after satisfying the joint debt should be allocated to Clay’s several obligation. Hence, subtracting the joint debt ($75,000) from the remaining funds paid on the supersedeas bond ($140,175.03) leaves $65,175.03. This amount may be credited to Clay’s several obligations (consisting of the judgment amount of $191,-463.40 minus the joint debt of $75,000, or $116,463.40). Thus, after applying the bond first to interest, then to joint obligations, and then to several obligations, $51,288.37 of the original judgment remains to be satisfied. This amount, however, is part of the purely several obligation owed by Clay to Jorgensen. Aet-na’s duties as a joint debtor were fulfilled and its obligations satisfied when the amount received by Jorgensen on the su-persedeas bond was, after allocation to accrued interest, divided according to section 15-4-3.

*817I would therefore reverse the trial court’s order holding Aetna liable to Jor-gensen for $60,337.68 plus interest owed after April 17, 1984.