63 P. 610 | Or. | 1901
after stating the case, delivered the opinion of the court.
The admission of parol evidence to show the true relationship of the makers of a promissory note, and that the payee had notice thereof, does not alter or vary the terms of the original contract,' or affect its integrity. It is merely proof of an independent or collateral fact, which operates to relieve the surety from liability when the creditor, with knowledge of the fact, has changed the original or inade a new contract with the principal debtor, without the knowledge of the surety, or released any security he may hold for the payment of the debt. “The fact that one debtor is a surety for the other is no part of the contract with the creditor,” says Mr. Chief Justice Gray, “but is a collateral fact showing the relation between the debtors; and, if it does not appear on the face of the instrument, this fact, and notice of it to the creditor, may be proved by extrinsic evidence” : Guild v. Butler, 127 Mass. 386. The creditor may rely upon the note as it is made, and hold the makers thereof to a strict performance of their contract, and it cannot be contradicted or varied by parol. If a creditor, however, has knowledge that they are in fact sureties for another, he may not deal with such person in relation to the debt without incurring the risk of releasing the sureties. The right of the surety to be thus protected against the acts of the creditor does not depend upon the terms of the contract, but upon the equities arising out of the circumstances of the case, and the creditor is affected by the knowledge of the true relation of his debtors, acquired at any time before he does the act altering the position of the surety.
It is contended that, while parol evidence may be admissible to show that one or more of the makers of a promissory note are sureties, such fact, although known to the payee,
Within these principles there seems no- valid reason why it may not be shown by parol that a promissory note was in fact made to secure the debt and liability of another, and thus all the makers be entitled to the rights of a surety as to the payee of such note having knowledge of the facts. If such a note is enforced against the makers, they would clearly be entitled to be indemnified by the principal debtor; and this is given as one of the tests of suretyship. The form of the obligation would pot prevent the introduction of such evidence, because, as said by Mr. Justice Campbell, in Canadian Bank of Commerce v. Coumbe, 47 Mich. 358 (11 N. W. 196), “it is always competent to show that any obligation, whatever its form, was in fact made for the debt or liability of another; and, where this is the case, the contract is one of suretyship, and the surety, if he is held to pay it, may sue for reimbursement. * * * And when a creditor knows that his debtor is a surety he is bound to take no steps ■which will change the liability of the principal, without the surety’s consent. * * * This doctrine is too elementary to require any discussion.” Mr. Brandt says: “The sole maker of a. promissory note is sometimes entitled to stand in the position of a surety” : 1 Brandt, Sur. (2 ed.), § 38. This statement of the text writer is supported by McQuesten v. Noyes, 6 N. H. 19, in which it appeared that some time before the date of the note sued on, Noyes, the defendant, had signed a note to a bank as surety for one Wyatt; that, shortly before it became due, Wyatt, who- had gone from home, wrote to Noyes, saying that he should not be able to return
This question arose in the case of Baker v. Briggs, 8 Pick. 122 (19 Am. Dec. 311), where the surrender of a horse and