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When Joint Maker of Note May Be Shown to Be a Surety by Parol Evidence

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WHEN JOINT MAKER OF NOTE MAY BE SHOWN TO BE A SURETY BY PAROL EVIDENCE. Where several parties sign a joint, or joint and sev,-m'al note, not under seal, if one or more of them are sureties, and the creditor is cognizant of the fact, parol evidence is admissible to show that they were sureties and that the creditor had knowledge of their signing as such, and this is true though there is nothing in the note to indicate that any of the parties are sureties. Such parties are sureties to all intents and purposes, and the creditor must deal with them as regards protecting their rights as in the case of any other surety. Any act by the creditor which would discharge a surety will discharge them. (Sefton v. Hargett, 113 hid., 592; Piper V. Newcomer, 25 Ia., 221; Higdon v. Bailey, 26 Ga., 426.) The apparent change in the terms of the contract made by the introduction of such parol evidence is held to be but the proof of a collateral fact and not a controverting of the terms of the contract. (Rose v. Williams, 5 Kans., 438; Carpenter v. King, 9 Met., 511.) By a number of cases it is held that a joint maker of a sealed note may show that he was in fact a surety and that the creditor had notice of the fact. (Creigh v. Hedrick, 5 W. Va., 14o; Forbes v. Shep ard, 98 N. C., in.) Other cases deny that parol evidence may be introduced for this purpose when the instrument is under seal, in actions at law, but admit such evidence in courts of equity. (Burke v. Cruger, 8 Tex., 66; Levy v. Hampton, i McCord, L. [S. C.], 145.) And, in general, where the creditor at the time of doing an act which will discharge an ordinary surety, has knowledge that a party is in reality a surety, this will discharge such party, though the creditor did not know beforehand that such party was in fact a surety. Thus where the holder of an instrument did not know that one of the parties was a surety at the time of taking it, but was after. wards, and before doing the act operating as a discharge of the surety, informed of it; held, that the surety was discharged. (Bank of Mo. v. Mat son, 26 Mo., 243; Pooley v. Harradine, 7 E. & B., Parol evidence is also admissible to charge a party who had added the word "surety" or the like to his signature to a promissory note as a princi pal. Such addition to a signature is held to be simply presumptive evidence of suretyship, and may be rebutted by proof of the fact. (Rose v. Madden, 1 Kans., 445; Boulware v. Admrs., 83 Va., 679.) But where a surety in terms binds himself as a principal by adding the word "principal" after his name, he cannot by parol evidence show that he was in reality a surety. Thus where three persons signed a note, joint and several, and one added "principal" to his signature and the other two adding "surety" to theirs, it was held that the party using the word principal could not show by parol evidence that he was a surety and known as such by the creditor. The addition of such word indi• cates a waiver of his rights as surety. (Picot v Signiago, 22 Mo., 587; Derry Bank v. Baldwin, 41 N. H., 434 )

creditor, party, discharge, held and principal