Harlan v. Ely

McKinstry, J.: The District Court amongst other things found: “ On the 31st day of October, A. d. 1877, one D. F. Scroggins applied to plaintiffs for a loan of $3,000, and offered as security therefor his own note and a mortgage upon his crop to be grown the ensuing season, which was declined by plaintiffs; but it was finally agreed between Scroggins and plaintiffs that if he would give a note, signed by himself and the defendant, as joint and several makers, and also give the mortgage suggested, they would let him have the money.

Thereupon the note sued upon, (a copy of which is set out in the second amended answer herein) was drawn up, and Scrog-gins went with it to the defendant’s house, informed him of the arrangement with plaintiffs, and procured him, the defendant, to join him (Scroggins) in the execution of the note.

Said note was executed by said Scroggins and the defendant on that day, and on the first day of November, A. r>. 1877, Scrog-gins took said note to the plaintiffs and delivered it to them, and at the same time executed and delivered to them the mortg-ag-e of that date, (a copy of which is set out in the second amended answer herein) and received from them the sum of $3,000 in United States gold coin.

[342]The defendant never received any part of said money, and all of the aforesaid parties knew and understood that the loan was made and intended for the sole benefit of Scroggins, and that as between the defendant and Scroggins the defendant was merely a surety.

On the 15th day of June, A. D. 1878, the said Scroggins made, executed, and delivered to the plaintiffs another mortgage, a copy of which is also set out in the second amended answer; which second mortgage was executed to cure some defects, or supposed defects in the first, and also to secure the payment of another note herein set out.”

Section 2832 of the Civil Code is: “ One who appears to be a principal, whether by the terms of a written instrument or otherwise, may show that he is, in fact, a surety, except as against persons who have acted on the faith of his apparent character as principal.”

The section of the Civil Code relates to a class of cases in which the apparent differs from the real character of a contracting party. But one may be a surety merely, as between him-0 self and his co-promisor, and yet, as to the creditor, both his apparent and actual character be that of principal. It is suggested, with much plausibility, that the plaintiffs could not have acted on the faith of the defendant’s apparent, because they know his real, character. But this is a claim that a knowledge of plaintiff’s that, as between themselves, defendant was merely the surety of Scroggins, (that it was their agreement that Scroggins should pay the note) conclusively establishes an agreement on the part of plaintiffs, that defendant should be surety only as to them. If adopted as a rule, this would be to declare in effect that a man cannot promise in writing to be bound as principal, if, in fact, as to another party to the same or another instrument, he is merely the surety. However positive the declaration that the purpose was to create a primary and unconditional liability, the instrument could not be made operative in the manner intended by all the parties interested in it. Such cannot be the law.