Thomas v. Truscott

By the. Court, Marvin, P. J. If the plaintiff executed the mortgage in question for the benefit of, and as surety [204] for, both Thomas and the defendant, the maker and indorser of the notes, then the judgment is right, and it must be affirmed, unless an exception to the admission of evidence was well taken. The position of the defendant’s counsel is that the plaintiff became surety for Edwin Thomas solely; or that she became co-surety with Truscott, for Thomas. .Thomas was, a competent witness for his wife, the plaintiff. . Was it error to receive the evidence of Thomas, as to what passed between him and the plaintiff touching the giving of the mortgage ? Parol evidence is not admissible to contradict or vary written contracts, or their legal effect. (Norton v. Coons, 2 Seld. 33. Barry v. Ransom, 2 Kern. 462.) This rule as to legal effect is fully recognized in the latter case, but it was held not applicable to a case arising between sureties. It was held that the rule was limited to the stipulations between the parties actually contracting with each other by the written instrument. That although, in the absence of evidence, all persons becoming sureties fot a common principal are held to be liable to contribution, still, one of the sureties may prove, by parol, that another surety promised to indemnify him from loss; that such evidence does not contradict or vary the terms or legal effect of the written obligation. These cases are referred to by counsel, but I doubt whether they are applicable to the question we are considering. If it had expressly appeared from the mortgage that th'e plaintiff became surety for Thomas alone, I do not think the written contract could be .contradicted or varied by proving that she, in fact, became surety for Thomas and Truscott. Such evidence would not be admissible. Construction is given to written instruments in reference to th'e subject of the contract, and in the light of surrounding circumstances. If it becomes necessary to ascertain the subject matter to which the contract relates, and the circumstances connected there [205] with, for the purpose of understanding the contract, such subject matter or circumstances may be proved by parol, and such evidence is not in conflict with the rule touching parol evidence to contradict or vary written instruments. (Greenl. Ev. §§ 277, 278, 282, 284, 287 et seq.) Prior to the execution of the mortgage in question certain facts existed. The mortgagee held certain notes made by Thomas and indorsed by Truseott, past duo, and Truscott’s liability had become absolutely fixed; it was no longer contingent. He and Thomas were both the debtors of the bank. They both desired an extension of the time of payment, and negotiated therefor. The creditor consented to give time, and to take new notes made and indorsed as the past due notes were, in case further security should be given. These facts were communicated to the plaintiff, and she' was requested to give a mortgage upon her lands, and she consented. The condition in tho mortgage is, if Edwin Thomas, his heirs, &c. shall and do well and truly pay or cause to be paid to the mortgagee certain notes made by Thomas and indorsed by Truseott, specifying them, and to which the mortgage is declared a collateral security, then the mortgage to cease, &e. but in case of non-payment of any or either of the notes, &c. then the whole principal to be due, and the mortgagee may enforce payment by foreclosure. It seems to me that by this instrument, the plaintiff pledged her lands as security for the payment of the debt owing to the mortgagee, which then existed and-for which both Thomas and Truseott were absolutely liable, the time for paying the debt being extended, and its existence evidenced by the new notes, made and indorsed as the notes then held by the bank had been made and indorsed. The security was for the payment of the debt for which Thomas and Truseott were liable. True the condition refers to a payment by Thomas, but further on it is expressly declared that the mortgage is a collateral security to the notes, [206] which had been described as made by Thomas and indorsed by Truscott. The plaintiff’s property could only be taken “in ease of the non-payment of any or either of the said notes,” &c. A payment of all the notes by Truscott would have relieved her property from the pledge. I do not think that Truscott could have been surrogated to the rights of the bank. It is, in my opinion, too narrow a ^construction to say that the defendant became surety for Thomas alone. True, as between Thomas and Truscott, the former was the principal debtor; as to the bank both were absolutely bound. The plaintiff gave the mortgage to secure the payment of the debt. I think the referee came' to the correct conclusion in finding and deciding that the plaintiff made and executed the mortgage for the benefit and as surety for both 'Thomas and the defendant, and as collateral security to the notes, as made and indorsed. [Erie General Term, February 8, 1869. I do not think that any error was committed in the admission of evidence. Thomas communicated to the plaintiff the facts', and applied to her to give the mortgage, expressing the opinion that there was no danger of her losing her property; that he thought they would be able to pay the paper; and he told her how the notes were to ■be made, and.they were so made. There is nothing here contradicting or varying the terms or legal effect of the mortgage as properly construed, in the light of conceded surrounding circumstances. The judgment should be affirmed, with costs of the appeal. Marvin, ■lamont and Barker, Justices.]