Burks v. Wonterline
| Decision Date | 12 October 1869 |
| Citation | 69 Ky. 20 |
| Parties | Burks v. Wonterline and wife. |
| Court | Kentucky Court of Appeals |
APPEAL FROM JEFFERSON COURT OF COMMON PLEAS.
D. W SANDERS, For Appellant,
Chitty on Contracts, 6th American edition, page 528.
Byles on Bills, 5th Amer. and 9th London edition, s. p. 234.
Burge on Suretyship, 218, 219, 224.
18 Johnson, 404, Fleming v. Slocum.
5 Bingham, 142, Stone v. Compton.
3 B. & Cress. 605, Pidcock v. Bishop.
9 B Mon. 222, Singleton v. Kennedy.
26 Maine, 149, Denny v. Gillian.
7 Wendell, 10, Allen v. Addington.
7 Met. (Mass.) 252, Kinney v. Stoddart.
2 Sandford Chancery, 636.
9 Ala. 42, Arrington and Evans v. Keeland.
10 S. & M. 1, Tucker v. Graves.
32 N.H. 60, Watriss v. Pierce.
19 Juris. 404, Willis v. Willis.
4 Am. Law Reg., Lee et al. v. Jones.
5 Dana, 82, Crutcher v. Trabue.
14 B. Mon. 15, Patton v. Shanklin.
HAMILTON POPE, For Appellees.
To an action brought by John Wonterline and his wife against John D. Ross and John Burks on a note for $1,840, dated April 4, 1867, and payable one year after date without interest, Burks pleaded by his answer and counter-claim that he was only surety for Ross in the note; and that without his knowledge Ross had advanced usurious interest at the rate of fifteen per cent. for the year during which the face of the note dispensed with any interest, and that the fact of such exaction was fraudulently concealed from him when he signed the note. Without either demurrer or reply to those allegations the court below rendered a judgment against Ross for the amount of the note, and legal interest from the 4th of April, 1868, and also against Burks for $1,674 with legal interest from the same date; thus crediting Burks with the usury. That judgment against him Burks seeks to reverse by this appeal.
As the allegations of the answer stand admitted, the question now to be decided is whether they constitute a bar to the action against the appellant, and not merely a plea of recovery, as they seem to have been considered by the court below According to the Roman law, these facts would be adjudged a fraud by the obligees on the appellant as surety, and by abundant authorities the same principles have been recognized as an element of the modern common law. As between persons standing in certain relations of confidence and trust there are peculiar temptations to disguise fraud, peculiar facilities for perpetrating it, and peculiar difficulties in proving it; and therefore modern courts, considering preventive better than remedial justice in such cases, have established the doctrine of constructive fraud, which prima facie assumes fraud in contracts in that class of cases where there is no proof of a fraudulent intent, and thus throws on the party charged with fraud the burden of disproving it. And the case of sureties authoritatively stands in that category, and is used as an opposite illustration of the principle of constructive fraud. Thus Story, illustrating that doctrine, says, in the 324th section of his Equity Jurisprudence:
Proof or admission of any one of these facts, when fraud is charged by the surety, will, without any regard to the intent to deceive him malo animo, make a case of constructive fraud, requiring the creditor to repel the legal deduction by proof of the integrity of the transaction. But in many cases of this kind the fraud is actual rather than constructive--the malus animus being inferred from circumstances characterizing the covenant of the parties. Thus the same author, in his chapter on actual fraud, says ...
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