Crouch v. Parker

• Decision Date: 17 December 1919
• Docket Number: No. 23604.,23604.
• Citation: 125 N.E. 453,188 Ind. 660
• Parties: CROUCH et al. v. PARKER.
• Court: Indiana Supreme Court

188 Ind. 660

125 N.E. 453

CROUCH et al.

v.PARKER.

No. 23604.

Supreme Court of Indiana.

Dec. 17, 1919.

Appeal from Circuit Court, Johnson County; Hugh L. Wickens, Special Judge.

Action by Jeptha Crouch and others against Hannah Parker and another to collect a promissory note. Verdict and judgment against R. H. Parker for the full amount of the note, and in favor of defendant Hannah Parker, and plaintiffs appeal. Transferred from Appellate Court pursuant to section 1399, Burns' Ann. St. 1914. Judgment affirmed.De Witt C. Wilson, of La Fayette, and White & Owens, of Franklin, for appellants.

Wm. Featherngill and Ivory J. Drybread, both of Franklin, for appellee.

WILLOUGHBY, J.

On December 29, 1908, Crouch & Son, appellants, sold and delivered to Robert H. Parker, also named as appellant, a certain stallion at the agreed price of $1,950; for which sum the said Robert H. Parker and his mother, Hannah Parker, appellee, executed their three several promissory notes each calling for $650 and interest. As a part of the contract of sale, and contemporaneously with the execution and delivery of said notes, the said Crouch & Son, hereinafter designated as appellants, executed and delivered to said Robert H. Parker their written contract, by which they warranted said stallion to be a “satisfactory sure breeder,” and agreed that, if said horse should not be as warranted, they would, on or before April 1, 1910, take him back, if delivered to them at La Fayette, Ind., and give in exchange another stallion of equal value and of the same breed.

The horse did not prove to be as warranted, and appellants were so notified prior to April 1, 1910, whereupon appellants, without the knowledge or consent of appellee, extended said warranty for a period of one year, at the expiration of which time, and on April 13, 1911, appellants entered into a new agreement with Robert H. Parker, by the terms of which appellants surrendered to said Parker the note due April 1, 1910, on which there was a balance due in the sum of $324.34, and said Robert H. Parker released said appellants from all liability on said warranty. Thereafter the last of the three $650 notes became due, was unpaid, and this action was begun by appellants against Robert H. Parker and appellee to collect said note. Appellee filed four affirmative paragraphs of answer designated as the second, third, fourth, and fifth paragraphs; also, a cross-complaint against appellants. Separate demurrers for want of facts were filed to these answers and to the cross-complaints, which demurrers were overruled, except the demurrer to the fifth paragraph of answer, which was sustained. Appellants' reply in denial to the several paragraphs of answer, and their answer in denial to the cross-complaint, closed the issues, and the cause was submitted to a jury, resulting in a verdict and judgment against Robert H. Parker for the full amount of the note, and a verdict in favor of appellee. Appellants' motion for a new trial was overruled. The errors relied on for reversal are: (1) The rulings of the court on the demurrers to the three affirmative paragraphs of answer and the ruling of the court on the demurrer to the third paragraph of the cross-complaint of appellee; and (2) the overruling of the motion for a new trial.

[1] The court having specially instructed the jury that in their deliberations they should consider only the third and fourth paragraphs of appellee's answer, there is no available error in the action of the court in overruling appellant's demurrer to the second paragraph of answer. Life Ins. Co. v. Haughton, 31 Ind. App. 626, 628, 67 N. E. 950.

[2][3] The third and fourth paragraphs of answer each aver that the note sued on and the warranty given by appellants were contemporaneously executed and delivered; that the execution and delivery of the warranty was a consideration for appellee's execution of the note as surety; that the stallion was not as warranted; and that the extension of the warranty was without her knowledge and consent, as was the new agreement of April 13, 1911. The only objection to these paragraphs of answer which appellants specified in their memorandum to the demurrers thereto is that appellee “had not executed the warranty, was not a party to it, and therefore has no right to base a defense thereon.” The question thus presented for our consideration is whether or not the changes in the original contract, which changes were made by agreement between the principal on the note and the appellants, without the knowledge of appellee, discharged appellee as surety. Appellants concede that, if appellee had been a party named in the warranty, the extension and surrender of that instrument without her consent would have released her from liability on the note; but they contend that, inasmuch as her name does not appear in the warranty, she is not released.

A contract of sale and the warranty of the chattel sold, executed at the same time, constitute one contract. La Grange v. Coyle, 50 Ind. App. 140, 98 N. E. 75;McCarty v. Williams, 58 Ind. App. 440, 108 N. E. 370;Shordan v. Kyler, 87 Ind. 38, 41.

In Allen v. Nofsinger, 13 Ind. 494, it is held that a promissory note, and the contract in writing out of which it arises, if both are executed at the same time, constitute but one agreement.

In Cunningham v. Gwinn, 4 Blackf. 342, it is held that, if a title bond be executed in such case bearing the same date with the note, they constitute one contract, and the note is subject to the same defense as if it showed, on its face, the consideration for which it was given.

In Wood v. Ridgeville College, 114 Ind. 320, 16 N. E. 619, it is held that, when, at the time a prommissory note was executed to a college for a scholarship therein, a certificate of scholarship was issued to the maker, to which was appended an agreement that the note was to be returned if $10,000 worth of scholarships were not sold within a given time, the note and the agreement constitute one contract.

In Woodward v. Mathews, 15 Ind. 339, it is held that, a written contemporaneous agreement, showing the consideration and conditions upon which a promissory note was given, may, in a suit upon the note, be given in evidence as part of the same contract.

In McDonald v. Huestis, 1 Ind. App. 275, 27 N. E. 509, it is held that an agreement in writing, executed at the same time a promissory note is executed, with reference thereto, becomes a part of the contract, and it and the note must be construed together in ascertaining the liability of the maker of such note and his surety.

In Rosenthal v. Rambo, 165 Ind. 584, 76 N. E. 404, 3 L. R. A. (N. S.) 678, the court, in construing a contract similar to the one at bar, said the promise to pay the notes was based on the corresponding promise of Crouch & Son to make good the horse as a satisfactory breeder, and the duty to pay, in whole or in part, remained inchoate during the breeding test, and until performance or default by the sellers. So blended were the transactions that no assignment of the notes, which carried upon their face notice of probable or possible defenses, could separate these equities from the terms of the contract.

The case of Hickman v. Rayl, 55 Ind. 552, was an action founded on a promissory note, and an answer to the complaint alleges that the note was executed by the defendant Silas Hickman, as principal, and by the defendant George W. Hickman, as surety for the said Silas, in consideration of the rent of a farm owned by the plaintiff, which he rented to the defendant Silas Hickman by articles of agreement made between the said plaintiff and said Silas, on the same day the note was executed, and as a part of the same agreement, by which articles the plaintiff, in consideration of the obligation of the defendant Silas, thereinafter named, agreed to rent to the said Silas the farm then owned by the plaintiff; that the note was given for the rent of the place. It is further alleged in the answer that plaintiff never delivered the premises to the said Silas Hickman as provided for in the contract.

The court in that case say the making of the note sued on and the execution of the agreement set up in the answer were simultaneous acts, done by the same parties, about the same subject-matter; the note and the agreement, therefore, belong to the same transaction, and, taken together, constitute but one contract, as much as if they were written on the same piece of paper.

In the case of Zimmerman v. Judah, 13 Ind. 286, which was a suit by the appellee against the appellant on a promissory note, it appears by the answer of defendant, appellant, that, at the same time that the note sued on was executed, Judah and Brown entered into a contract, by which Brown was to erect for Judah a certain building, to be wholly completed ready for occupancy by the 1st day of November, 1856. The agreement fixes the amount to be paid, the time of payment, etc. The last clause of the agreement is as follows:

“(5) As to the balance, 2,000 dollars, it is agreed as follows: Said Judah herewith advances to said Brown, as and for a loan on a note payable one day after date, the said sum of 2,000 dollars, which note shall be satisfied by the completion of said building as in this contract is provided; and which note, also shall not become or be payable so long as said Brown shall progress with the preparation of materials, and with the erection of said building, so as to warrant the said superintendent in the reasonable expectation of the progress and completion of the work, as is hereinbefore provided.” Dated October 13, 1855, which is the same date as the note, and signed by Brown, Zimmerman, and Judah.

The answer further allows that on the 5th day of June, 1856, the following further...