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Supreme Court
No. 99-79-Appeal.
(PC 97-5548)
James W. Thomas                                                                                             :
v.                                                                                                          :
Philip N. Jacobs.                                                                                           :
Present: Weisberger, C.J., Lederberg, Bourcier, Flanders, and Goldberg, JJ.
OPINION
PER CURIAM. The plaintiff, James W. Thomas, has brought an action for contribution from
the defendant, Philip N. Jacobs, following the plaintiff’s payment of less than half the outstanding debt
that both parties jointly incurred. In deciding this case, we adopt the provision of the Restatement of
Restitution, § 82(1) (1937), that a person is entitled to contribution from another when, and only when,
that person has discharged more than his or her proportionate share of a jointly incurred debt. In so
doing, we reject the appeal.
This case came before the Supreme Court on April 11, 2000, pursuant to an order directing the
parties to appear and show cause why the issues raised on appeal should not be summarily decided.
The plaintiff has appealed an order denying his motion for summary judgment and granting the
cross-motion for summary judgment of defendant. After hearing the arguments of counsel for the parties
and examining their memoranda, we are of the opinion that cause has not been shown and that the
issues raised by this appeal should be decided at this time.
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The facts of this case are not in dispute. The plaintiff and defendant each owned 50 percent of
Protech Leather Apparel, Inc.  (Protech), a Massachusetts corporation. In a series of transactions
spanning the first half of 1995, Protech borrowed a total of one million dollars from the Bank of
Braintree (bank), in Massachusetts. Each of the transactions was evidenced by a promissory note, in
which each party was jointly and severally liable. Both parties executed personal guarantees.  On March
11, 1996, the bank notified Protech that it was in default under the terms of the notes and made demand
for payment. The payments were not forthcoming, and ultimately, in early 1997, the bank liquidated
Protech’s assets and applied the proceeds to the unpaid debts.   The outstanding indebtedness on the
loans was at least $744,241.35.
On April 30, 1997, plaintiff negotiated a settlement agreement with the bank wherein he agreed
to pay $100,000 in cash and to grant the bank a $75,000 mortgage on his personal residence in full
satisfaction of his personal obligation to the bank. The settlement agreement released only plaintiff from
liability on his guarantee; it did not relieve defendant or any other party from liability. On May 29, 1997,
defendant entered into a settlement agreement with the bank, agreeing to grant the bank a $75,000
mortgage on his personal residence in return for the bank’s agreement to release him from his
guarantees. The agreement did not absolve plaintiff or any other party from liability. Thereafter, plaintiff
made numerous demands of defendant for contribution in the amount of $50,000, representing half the
cash payment plaintiff had made to the bank. The defendant refused, and plaintiff filed this suit in
Superior Court. Both parties filed motions for summary judgment. The motion justice denied plaintiff’s
motion and granted defendant’s motion, and plaintiff’s appeal followed.
Before reaching the substantive legal issue before us, we briefly address the choice of law issue.
The parties agreed that Massachusetts law would apply to the construction of the contracts and the
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interpretation  of  the  legal  rights  thereunder.  The  following  analysis,  however,  engages  equitable
principles that are controlled by the laws of Rhode Island. See Nissenberg v. Felleman, 162 N.E.2d
304, 309 (Mass. 1959) (Massachusetts court applied the law of the place of the contract, New York,
to  the  legal  interpretation  and  enforcement  of  the  contract, but applied the law of the forum,
Massachusetts, to the equitable principles of contribution).
On appeal, plaintiff argued that the motion justice’s grant of summary judgment to defendant
constituted reversible error. It was plaintiff’s contention that the parties, as co-guarantors on the
promissory notes, were jointly and severally liable for the payment of the deficiency. Therefore, plaintiff
reasoned, he was entitled to contribution from defendant because plaintiff had paid more than half the
parties’ combined settlement amount of $250,000.
In general, “when one person guarantees the payment of an obligation and one of the guarantors
is compelled to pay the entire sum, that guarantor has a right of contribution from other co-guarantors.
This right is implied by law and governed by equitable principles.” Katz v. Prete, 459 A.2d 81, 85 (R.I.
1983). The facts of this case, however, do not fall squarely within this rule. The single issue before us is
whether plaintiff is entitled to contribution from his co-guarantor when plaintiff has paid less than half the
total amount owed and has secured a release in his name alone.
Although we have not previously addressed this issue, we have discussed the rationale behind
equitable contribution. The doctrine of equitable contribution is applied to prevent one of two or more
guarantors from being obliged to pay more than his or her fair share of a common burden, or to prevent
one guarantor from being unjustly enriched at the expense of another. Mellor v. O’Connor, 712 A.2d
375, 380 (R.I. 1998). Thus, when one of two guarantors pays the entire outstanding debt, he or she is
entitled to contribution in the amount of half the payment. Or, if the same guarantor paid three-quarters
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of the outstanding debt, the guarantor could seek contribution for the amount over and above his or her
share, namely one-quarter, of the debt. If this guarantor, instead, satisfies one-quarter of an unpaid
liability, the guarantor would not have an action for contribution because he or she has not paid more
than his or her fair share of the common burden.
The plaintiff argued that he has paid more than his share of the debt. According to plaintiff’s
calculations, the total paid in settlement was $250,000, of which amount plaintiff paid $175,000. The
plaintiff’s equation, however, is based on a faulty premise. The total amount owed was in excess of
$700,000  — plaintiff’s share of which would amount to more than  $350,000.   The payment of
$175,000, therefore, was not more than the amount that plaintiff legally was obligated to pay.
The release obtained by plaintiff evidenced the bank’s intention to accept a lesser sum from him
in full satisfaction of the amount due and owing from plaintiff. That agreement did not release defendant
from liability nor did it release any party other than plaintiff. It follows, then, that a guarantor who is able
to secure such a release has essentially renegotiated his share of the amount owed.
With respect to contribution, the general rule is that one guarantor is entitled to contribution from
his or her co-guarantor(s) only when he or she has discharged more than his or her proportionate share.
Katz, 459 A.2d at 85. Thus, our rule comports with the formulation set forth in “Time when Right to
Contribution Arises,” Restatement of Restitution, § 82(1), which we formally adopt at this time: “A
person *** is entitled to contribution from another when, and only when, he has discharged more than
his proportionate share.”1 Because neither party in this case paid more than half the outstanding debt of
more than $700,000, neither was entitled to contribution from the other party on these facts.
1  The Restatement of Restitution, § 82 cmt. b (1937), permits an exception that allows contribution
among co-guarantors when one co-guarantor has paid less than his or her fair share of the debt and has
secured a full release from the creditor for any other co-guarantor(s). Here, plaintiff did not secure a full
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Therefore, the motion justice properly granted summary judgment in favor of the defendant. See
Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1225 (R.I. 1996) (“if our review
of the admissible evidence viewed in the light most favorable to the nonmoving party reveals no genuine
issues of material fact, and if we conclude that the moving party was entitled to judgment as a matter of
law, we shall sustain the trial justice’s granting of summary judgment”).
For these reasons, we deny and dismiss the appeal and affirm the judgment of the Superior
Court, to which the papers of the case may be returned.
release for defendant. Thus, according to the exception outlined in the Restatement, plaintiff was not
entitled to contribution.
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COVER SHEET
TITLE OF CASE:                        James W. Thomas v. Philip N. Jacobs
DOCKET NO.:                           99-79 - A.
COURT:                                Supreme Court
DATE OPINION FILED:     May 2, 2000
Appeal from                                                                    County:
SOURCE OF APPEAL:                     Superior                                 Providence
JUDGE FROM OTHER
COURT:                                Thompson, J.
JUSTICES:                             Weisberger, C.J., Lederberg, Bourcier,
                                      Flanders, Goldberg, JJ.                  Concurring
WRITTEN BY:                           PER CURIAM
ATTORNEYS:                            Keith B. Kyle, Steven P. Maguire
For Plaintiff
ATTORNEYS:                            Richard W. Petrocelli
For Defendant

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Rhode Island Law