SECTION II.

WHERE A PARTY SIGNS AS SURETY.

ONE may sign a note merely as surety. If he so call himself in the note, he is only a surety as to all parties. (c) If two persons sign a joint and several note, and one of them pays the whole and sues the other for contribution, this other may show by evidence that he signed only as surety for the first, who therefore has no claim on him for contribution.(d) For the note is not a written contract between the makers, although the language is prima facie evidence of their relations to each other; but it is a written contract between them and the payee. This contract is to pay money at a specified time, and on this point, at least, it cannot be varied by parol evidence. On the question whether parol evidence is admissible to show that one who signed a note as a joint, or joint and several maker, was only a surety for his co-maker, in an action by the holder against such surety, the authorities are conflicting and uncertain. It seems to be settled, that where the fact was not known to the holder previous to the maturity of the note, such evidence is inadmissible; but where this relation was known to the holder at the time of entering into the contract, the evidence is admissible in equity. But, at law, it is urged, on the one hand, that this is an attempt to vary the contract; that the parties, having called themselves joint, or joint and several, promisors in the contract, cannot assume a different

(c) See Hunt v. Adams, 5 Mass. 358, 6 Mass. 519, 7 Mass. 518; Humphreys v. Crane, 5 Calif. 173; Bryan v. Berry, 6 Calif. 394; Ex parte Wilson, 3 Mont. D. & De G. 57, supra, p. 136. A note may be accepted by one as surety; see Boyd ». Plumb, 7 Wend. 309. The signature need not be on the face of the note. Palmer v. Grant, 4 Conn. 389; Marberger v. Pott, 16 Penn. State, 9. The suretyship is sufficiently indicated by writing the word "surety," or "security," after the signature. Hunt v. Adams, supra, Robison v. Lyle, 10 Barb. 512. See Perkins v. Goodman, 21 Barb. 218. As to the iminediateness of liability to the payee of parties signing as principal and surety, these words are said to be words of description only. Harris v. Brooks, 21 Pick. 195; Davis v. Barrington, 10 Foster, 517. See further, Sisson v. Barrett, 6 Barb. 199, 2 Comst. 406; Robison v. Lyle, 10 Barb. 512; Apgar v. Hiler, 4 N. J. 812. The character in which the parties signed is presumed from the face of the note. Lord v. Moody, 41

Maine, 127.

(d) See Harris v. Brooks, 21 Pick. 195; M'Gee v. Prouty, 9 Met. 547; Lapham v. Barnes, 2 Vt. 213; Apgar v. Hiler, 4 N. J. 812.

relation or character by extraneous evidence. On the other hand, it is contended, that the note does not express the whole contract, since it depends materially upon delivery, and the pur poses for which delivery is made; that the terms of the note only offer a presumption of the relation in which the parties stand to cach other; that this is a mere collateral fact, which can be proved, and the presumption rebutted, by parol evidence. We consider that the weight of authority and principle is in favor of the admission of such evidence. (e)

(e) In Manley v. Boycot, 2 Ellis & B. 46, an action by the payee of a joint and several note against one of the makers, the defence being that the defendant was in. reality a surety, the court held a plea bad, because it did not allege that the note was delivered by the defendant to the plaintiffs, as surety, and that they agreed so to receive it from him. Lord Campbell, in delivering the opinion of the court, said: “But cases in which it can be proved that, at the time when a note was made, or a bill was accepted and handed over to the payee, the maker or acceptor being only a surety, the payee, knowing this fact, agreed to receive it from the maker as surety only, may admit of a different construction, and, consistently with our judgment, it may be held in such cases, that the maker or acceptor is discharged, by time being given to the principal debtor." In Pooley v. Harradinė, 7 Ellis & B. 431, 40 Eng. L. & Eq. 96, the defendant, a joint maker, pleaded, by way of equitable defence, that he signed the note only for the accommodation of the other promisor, and only as his surety; that the note was accepted by the plaintiff upon the express agreement that the defendant should be held only as surety; and that the plaintiff had given time to the principal debtor by a valid agreement, without the defendant's knowledge and consent, and to his prejudice. The plaintiff demurred, and the court held that the plea stated a good equitable defence at law to the action. Coleridge, J. said: "In the more recent cases at law, however, the rule in question has apparently been treated as arising out of the original contract with the creditor; and if this was a plea of a legal defence we should probably have felt bound by those authorities, and have left it to a court of error to consider the whole question, taking it into their consideration whether the same rule in such matters ought not to exist in courts of law and equity, and to decide, if there be a difference, what the rule should be. As we are, however, called upon to deal with this case as if we were sitting in a court of equity, we think we ought to decide it according to what we believe to be the doctrine of courts of equity. We give our judgment for the defendant on the present plea, on the ground that it appears to us sufficiently to state that the relation of principal and surety existed between the defendant and the principal debtor inter se, and that the plaintiff had knowledge of that fact when the notes were made and received by him, and when he entered into a binding agreement to give time to the principal debtor." We are aware of no authoritative case at law in England which expressly decides the point; though the language used in some cases tends strongly towards rejecting the evidence. See Strong v. Foster, 17 C. B. 201; Hollier v. Eyre, 9 Clark & F. 45; Pooley v. Harradine, supra; Manley v. Boycot, supra; Price v. Edmunds, 10 B & C. 578; Perfect v. Musgrave, 6 Price, 111. But it was admitted in two cases at Nisi Prius, - Hall v. Wilcox, 1 Moody & R. 58; Garrett v. Jull, 1 Selw. N. P., 11th ed., 407. In the following cases the defendant was allowed to show that he signed as surety, and that the plaintiff, having notice, had given time, or relinquished security; nor does it appear that the note was taken with such knowledge, or agreed

And if, of three who sign a note, two, A and B, call themselves sureties, and A pays the note and calls on B, his co-surety, for contribution, this co-surety may show a separate agreement between himself and A, to the effect that he signed at the request of A, who agreed to pay the whole if the principal failed, and not to call on B for contribution. (f) And we should apply the same rule if A and B were sureties in fact, but appeared on the note only as joint promisors, or joint and several promisors. But the authorities on this whole subject are conflicting, and leave the law in some uncertainty. It has been held that one who signed a note apparently as principal, but is a surety in fact, within the

to be so held. Horne v. Bodwell, 5 Gray, 457; Carpenter v. King, 9 Met. 511; Harris v. Brooks, 21 Pick. 195; Wilson v. Green, 25 Vt. 450; Grafton Bank v. Kent, 4 N. H. 221; Grafton Bank v. Woodward, 5 N. H. 99. See Pain v. Packard, 13 Johns. 174; King v. Baldwin, 2 Johns. Ch. 354; Herrick v. Borst, 4 Hill, 650; Mariners' Bank v. Abbott, 28 Maine, 280; Lime Rock Bank v. Mallett, 42 Maine, 349; Fowler v. Brooks, 13 N. H. 240; Davis v. Barrington. 10 Foster, 517. In Wheat v. Kendall, 6 N. H. 504, it distinctly appeared that the plaintiff bought the note before it became due, without notice of any suretyship, but that he subsequently, and before giving time to the principal, had notice that the defendant was a surety. Parker, J. said: The injury to the surety is the same as if the creditor had possessed the knowledge at the time the note was taken. He could not pay and take up the note within the term of the extended credit, and seek indemnity from his principal as he might otherwise have done. All that justice requires is, that such contract should not prejudice the right of the creditor against the surety until he had notice that he was surety. When he has notice of that fact, all that he is required to do is, not to undertake to continue the liability of the surety by a new agreement with the principal without the assent of the surety. This manifestly imposes no hardship upon the creditor." See Peake v. Dorwin, 25 Vt. 28; Claremont Bank v. Wood, 10 Vt 582; Artcher v. Douglass, 5 Denio. 509; Elwood v. Deifendorf, 5 Barb. 398; Gahn v. Niemcewicz, 11 Wend. 312; Branch Bank v. James, 9 Ala. 949; Lime Rock Bank v. Mallett, 34 Maine, 546; Dickerson v. Board of Commissioners, 6 Ind. 128; Burke v. Cruger, 8 Texas, 66, 11 id. 694. The burden is on the defendant to prove that the plaintiff had knowledge of the suretyship. Wilson v. Foot, 11 Met. 285. The weight of authority in America we conceive to be in favor of the admissibility of the evidence. In Ohio, the evidence is inadmissible, the remedy of the actual surety being only in equity, on the ground that this would constitute no defence to all the plaintiffs. Farrington v. Gallaway, 10 Ohio, 543; Slipher v. Fisher, 11 Ohio, 299. In Maryland, Yates v. Donaldson, 5 Md. 389. So, perhaps, in Connecticut, but this point was not decided. Bull v. Allen, 19 Conn. 101; Orvis v. Newell, 17 Conn. 97. And in California, Kritzer v. Mills, 9 Calif. 21. In Sprigg v. Bank of Mount Pleasant, 10 Pet. 257, it was held, that the defendant in an action on a single bill or bond, signed expressly as principal, was estopped from showing that the plaintiff knew him to be a surety. The fact that the surety received part of the consideration from the principal, as a gift, will not make him a joint principal. Fraser v. McConnell, 23 Ga. 368. See Wilson v. Wheeler, 29 Vt. 484.

(f) Apgar v. Hiler, 4 N. J. 812.

knowledge of the holder, and affixes his signature after the names of others as signers are forged upon the note, and while it is in the hands of him for whose benefit it is drawn, so far sanctions and affirms the genuineness of the forged signatures that he cannot take advantage of the fraud in his defence against the holder, unless he shows that the holder was privy to the fraud.(g) But where the surety, after signing the note, intrusted it to a principal to be discounted at a bank, and before presenting it at the bank the principal altered the amount to a larger sum, it was held that the surety was not liable. The principle being, that, where the plaintiff and defendant are equally innocent, the loss must fall on the party who first placed confidence in the fraudulent instrument.(h) If a surety signs a note which shows on its face that it is to be discounted at a particular bank, and which is known to the holder to be drawn for the purpose of raising money in this way, the surety will be discharged by any different negotiation of the note.(i) He has a right to require perfect good faith in all transactions involving his suretyship, whether between the principal and the parties with whom the surety expressly contracts, or between either of them and other persons. (j) Therefore, if a creditor conceal from the surety any bargains or stipulations made before the suretyship is entered into which make the contract more onerous to the principal debtor than it seems to be, this is a fraud which invalidates the suretyship.(k)

The creditor is not obliged to proceed entirely against the principal debtor, even if he be so requested by the surety. The holder is not obliged to give notice to the surety that the principal debtor has failed to pay, and that he is looked to on his suretyship. It is quite certain that mere omission to sue the principal, without request by the surety, will not discharge the surety; not even where, by the delay, the remedy of the

(g) Selser v. Brock, 3 Ohio State, 302. In an action against the surety alone, the plaintiff need not prove the signature of the principal. Bond v. Storrs, 13 Conn. 412. (h) Agawam Bank v. Sears, 4 Gray, 95.

(i) Dewey v. Cochran, 4 Jones, 184; Southerland v. Whitaker, 5 id. 5. See Smith v. Knox, 3 Esp. 46.

(j) Supra, p. 132, note j, and p. 140.

(k) Stone v. Compton, 5 Bing. N. C. 142, 6 Scott, 846; see Pidcock v. Bishop, 3 B. & C. 605; Evans v. Keeland, 9 Ala. 42; Selser v. Brock, 3 Ohio State, 302; Graves v. Tucker, 10 Smedes & M. 1; Watriss v. Pierce, 32 N. H. 560.

(1) Freen.an's Bank v. Rollins, 13 Maine, 202; Townsend v. Riddle, 2 N. IL 448;

surety is lost.(m) And the authorities would lead to the conclu. sion, that this would be the rule, even where the surety had expressly requested that demand should be made or suit brought against the principal.(n) And it is said to make no difference, if the surety offers indemnity.(o) But this, which we think the better rule, is not uncontradicted.(p) So it is said a refusal to prosecute a suit against the principal, which has been already commenced, does not discharge the surety.(g) But the authorities we cite show that the courts have found some difficulty in determining questions of this kind.(r) And we should be in

Pick, 581; Johnson v. Planters'
Calif. 173; Hartman v. Burlin-
Eyre v. Everett, 2 Russ. 381;

Baker . Marshall, 16 Vt. 522; Hunt v. Bridgham, 2 Bank, 4 Smedes & M. 165; Humphreys v. Crane, 5 game, 9 Calif. 557. See Orme v. Young, Holt, 84; Heath v. Key, 1 Younge & J. 434; English v. Darley, 2 B. & P. 61; Combe r. Woolf, 8 Bing. 156; Strong v. Foster, 17 C. B. 201; Hubbard v. Davis, 1 Aik. 296; Naylor v. Moody, 3 Blackf. 92 ; Dehuff v. Turbett, 3 Yeates, 157; Thursby v. Gray, 4 Yeates, 518; Burn v. Poaug, 3 Desaus. 596; Jordan v. Trumbo, 6 Gill & J. 103; U. S. v Simpson, 3 Penn. 437; Curan v. Colbert, 3 Ga. 239.

(m) Townsend v. Riddle, 2 N. H. 448.

(n) Page v. Webster, 15 Maine, 249; Davis v. Huggins, 3 N. H. 231; Mahurin v. Pearson, 8 N. H. 539; King v. Baldwin, 2 Johns. Ch. 554; Nichols v. McDowell, 14 B. Mon. 6; Hogaboom v. Herrick, 4 Vt. 131; Bellows v. Lovell, 5 Pick. 307; Frye v Barker, 4 id. 382; Dennis v. Rider, 2 McLean, 451; King v. State Bank, 4 Eng. 185. See Manning. Shotwell, 2 South. 584; Pickett v. Land, 2 Bailey, 608; Croughton v. Duval, 3 Call, 69; Buchanan v. Bordley, 4 Harris & M 41; Pintard v. Davis, 1 N. J. 632; Carr 7. Howard, 8 Blackf. 190; Colerick v. McCleas, 9 Ind. 245; Taylor v. Beck, 13 Ill 376; Howard v. Brown, 3 Ga. 523; Abercrombie v. Knox, 3 Ala. 728. Montpelier Bank v. Dixon, 4 Vt. 587.

(0) Adams Bank v. Anthony, 18 Pick. 238.

(p) See Bellows v. Lovell, 5 Pick. 307; Beardsley v. Warner, 6 Wend. 610; Wright . Stockton, 5 Leigh, 153; In re Babcock, 3 Story, 393.

(g) Bellows v. Lovell, 5 Pick. 307.

(r) In Pain v. Packard, 13 Johns. 174, the court held that neglect by the holder to sue the solvent principal, at the mere request of the surety, and the subsequent insolvency and absconding of the principal, discharge the surety. This was denied by Chancellor Kent, in King v. Baldwin, 2 Johns. Ch. 554, but was affirmed by the Court of Errors, in the same case, on appeal, 17 Johns. 84, overuling the Chancellor. Although this is now held to be the law in New York, it is subjected to strict limitations. Warner. Beardsley, 8 Wend. 194; see Row v. Pulver, 1 Cowen, 246; Ruggles v. Holden, 3 Wend. 216; Huffman v. Hulbert, 13 Wend. 377; Valentine v. Farrington, 2 Edw. Ch. 53; Merritt v. Lincoln, 21 Barb. 249. In Herrick v. Borst, 4 Hill, 650, Cowen, J. said that the doctrine "came into this court without precedent, was afterwards repudiated even by the Court of Chancery, as it has always been held at law and in equity in England, but was restored, on a tie, by the casting vote of a layman." See also Schroeppell v. Shaw, 3 Comst. 446; Fuller v. Loring, 42 Maine, 481; Bull v. Allen, 19 Conn. 101. In Pennsylvania the rule of Pain v. Packard has been adopted, the want of a remedy in equity in that State being mentioned as a reason. See Cope

Smith, 8 S. & R. 110; Erie Bank v. Gibson, 1 Watts, 143; Marberger v.