Graves v. Johnson , 48 Conn. 160 ( 1880 )

Granger, J.

This action is founded upon a special parol agreement made by the defendant, which was in substance that if the plaintiff would sign the note of Earnum as surety, he, the defendant, would hold it until its. maturity, and not negotiate it, and that if Earnum failed to pay the note the plaintiff should not be compelled to pay it, provided he would not disclose to Earnum that he was not legally holden as surety for its payment. The plaintiff fulfilled his part of the agreement, and did not disclose to Earnum the arrangement between him and the defendant, but the latter violated liis part of the agreement, and negotiated the note to a bond fide purchaser. Farnum did not provide for its payment, and the plaintiff was sued upon the note by the holder and was compelled to pay it.

The plaintiff signed the note as surety for the sole accommodation and benefit of the defendant and at his special request, and without receiving therefor any consideration whatever. Can there be any reason in law or equity why he should not recover ? He has paid his money for the benefit of the defendant, and if any rule of law precludes him from recovering, such a rule is against all reason and justice. The defendant makes no denial that he has had the plaintiff’s money, but he says that the law is so that the plaintiff cannot recover; and the rule of law which he relies upon is the old and .salutary one, that a written instrument cannot be varied or contradicted by parol evidence. We have only to say, as Carpenter, J., says in the case of Schindler v. Muhlheiser, 45 Conn., 154—“ That rule has no appEcation to a case like this.” It has for its object the prevention of fraud and perjury in those cases where parties have put their contract in writing by excluding other evidence of the terms of the contract than the writing itself. In fact the case referred to bears a striking analogy to the present, and the reasoning in that case applies well to this. If the defendant can succeed in applying the rule, he makes it an instrument of fraud and wrong, and cheats the plaintiff out of an honest and perfectly equitable claim. See the cases cited in that case and in Thacker v. Stevens, 46 Conn., 561.

The action, as we have seen, is not founded upon the note, but upon the agreement made between the parties at the time the plaintiff became surety on the note for the sole accommodation of the defendant, and the contract was good and valid, and was in effect' a contract of indemnity to the plaintiff. It was not in writing and of necessity must be proved by parol, if provable at all, which it clearly was. But if the action was upon the note, and Johnson the payee was plain-, tiff, and Graves defendant, the latter could show by parol the circumstances under which he signed the note, that it was without consideration, and at the request and for the accommodation of Johnson. “Nothing is more common than to introduce evidence of the real and true relation of parties to each other whose names are on negotiable paper, where frimá facie the position or order of signature makes a contract different from the true relations of the parties. The proper inquiry is, who among the parties is to pay the debt.” Ellsworth, J., in Colegrove ,v. Rockwell, 24 Conn., 583.

The claim of the defendant, that the plaintiff’s claim is barred by the statute of limitations, cannot be allowed to defeat the claim. The agreement of the defendant that he would hold the note till maturity and that the plaintiff should not be compelled to pay it was of course violated by the defendant’s negotiation of it soon after it was made, which was on the 1st of August, 1873, and perhaps, so far as -his' liability to damages for the mere negotiating of the note is concerned, that liability was barred by the statute when the suit was brought on the 21st of August, 1878. It is not necessary for’us to consider this point, for the defendant also agreed that the plaintiff should not he compelled to pay the note, and this part of the agreement is set out and relied upon in the special count. This agreement of course was not violated until the plaintiff was actually compelled to pay the note, which was on the 16th of November, 1875, and less than three years before the suit was brought. Besides all this, the agreement had fixed the relation between the parties, so that whenever the plaintiff was compelled to pay the note he was paying it at the request of the defendant, and could recover the amount of him as money paid out for him, without counting upon the breach of the special agreement. That agreement had created a duty on the part of the defendant to provide for the payment of the note; this was a perpetual duty, and when the plaintiff was compelled to pay it he was paying a debt of the defendant. It was substantially a contract of indemnity, which of course holds good so long as the liability remains against which the indemnity was intended to provide.

There is no error in the judgment.

In this opinion the other judges concurred.