Trentman v. Fletcher

• Decision Date: 11 March 1885
• Docket Number: 6416
• Citation: 100 Ind. 105
• Parties: Trentman v. Fletcher et al
• Court: Indiana Supreme Court

100 Ind. 105

Trentman v. Fletcher et al

No. 6416

Supreme Court of Indiana

March 11, 1885

Reported at: 100 Ind. 105 at 111.

Original Opinion of January 20, 1885, Reported at: 100 Ind 105.

From the Allen Circuit Court.

Judgment affirmed as to Fletcher and judgment reversed as to Lillie.

J. Morris, W. G. Colerick, H. Colerick and T. W. Colerick, for appellant.

R. S. Robertson, R. S. Taylor and J. B. Harper, for appellees.

OPINION

Mitchell, J.

The decision to be made in this case involves the validity of an oral agreement made contemporaneously with the execution of a note, between the payee and one of the makers, who signed as surety.

This note is declared on as the foundation of the action, and from a copy, which is set out in the complaint, it appears to be the joint note of the appellees Fletcher and Lillie, and is drawn in the usual form, for $ 3,299.55, due in six months, without interest, payable without any condition expressed.

Lillie answered separately in two paragraphs. The first paragraph presents, in substance, this state of facts: That at the time of the execution of the note, Fletcher was engaged in business as a merchant, and had prior thereto become indebted to Trentman, who was a wholesale merchant in the city of Fort Wayne, in the amount mentioned in the note. Fletcher desiring further credit from Trentman, which he was not willing to extend without having the indebtedness already accrued secured, it was agreed between Lillie and Trentman, that if he would secure the debt then owing by Fletcher to him, he would extend to Fletcher such further credit for goods as would enable him to carry on his business, and that he would credit on the note which Fletcher and Lillie were to give all sums of money which Fletcher should thereafter pay him until the note was fully paid, and that this agreement formed the whole consideration upon which Lillie signed the note.

The answer further avers that after the note was executed, and before it fell due, and before the bringing of suit thereon, Fletcher, "under and by virtue of said contract and agreement," paid to Trentman at different times divers sums of money, in all amounting to $ 3,380, by which payments it is averred the note was fully paid.

In the second paragraph, Lillie alleges substantially the same agreement with Trentman as the consideration upon which he signed the note, to which is added the following averments:

"That in consideration of said agreement this defendant agreed to sign said note as surety for said Fletcher; that thereupon said plaintiff prepared a pass-book for the use of said Fletcher, and entered a memorandum of said agreement therein as follows: 'August 27th--Note for $ 3,299.55, signed C. C. Fletcher and James Lillie. All money Cr. here to be applied on this note;' that under said memorandum and accompanying and contemporaneous agreement, plaintiff made divers entries at divers times of moneys so paid by said Fletcher, amounting to the sum of $ 1,220.80, and on or about the 23d of September, 1874, the plaintiff refused to enter thereon any further credits of payments made by said Fletcher, against the wish and demand of the defendants, and each of them, that he should make such entries of credits for moneys paid; that thereafter, at divers times, said Fletcher made divers payments to plaintiff under said agreement, amounting, in addition to the above named sum of $ 1,220.80, to the sum of $ 2,160, in all to the sum of $ 3,380.80, which should, under said agreement, have been applied in payment of said note; that all of said payments were made before said note became due, and before said suit was brought, whereby said note became fully paid and satisfied. Wherefore," etc.

Separate demurrers were filed and overruled to each of these answers, and it is now contended by the appellants that the ruling of the court in holding the answers good was error.

That the consideration upon which a surety or guarantor signed a note may be different from that moving between the payee and the principal debtor, can not be doubted. Whether this consideration can be averred and proved when it is not evidenced by a contemporaneous writing, so executed as to become part of it, must depend upon the nature of the agreement upon which it rests.

If to prove the consideration upon which the surety signed the note would involve the proving of an agreement which would contradict or vary any of its terms, then its proof would fall within the inhibition of the well settled rule which forbids the contradiction or variance of a note or other written instrument by parol. This rule applies as well to the surety as to the principal.

If, however, the consideration grows out of a valid agreement between the payee or obligee of a note or contract and the surety thereon, which is collateral to and not in contradiction of its terms, then the rule is that it may be set up and proved. In the case of Tucker v. Talbott, 15 Ind. 114, a surety who had signed a note for the payment of $ 437, due one day after date, sought to show that he signed it in consideration of an agreement made with the payee, that he, the payee, should retain the principal debtor in his service, as a clerk, at a stipulated salary, and that a portion of the salary was to be applied in discharge of the note. It was held that this was a contradiction of the terms of the note, and therefore not allowable, and so it plainly was, for the reason that by the terms of the writing the surety bound himself one day after date to pay a certain sum of money, and to have permitted proof of an agreement that the note might be discharged by the labor of the principal at a different time, would have been in effect to set aside the writing with proof that the surety was not to pay at all. Of like character was the agreement set up by a surety in Brush v. Raney, 34 Ind. 416.

In Campbell v. Gates, 17 Ind. 126, the surety set up as a defence that he signed the note sued on, upon the consideration that the payee of the note agreed to procure his release from another note which he had signed for his principal to a third person, which agreement, it was averred the payee had failed to perform, by reason of which the surety claimed that the consideration upon which he signed the note had failed. In that case, the answer was held good as showing a failure of consideration, and...