This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A surety who signs as a maker may show his relation to the instrument in an action thereon between himself and the payee,1 whether he has signed such note in the usual place as maker,2 or whether he has signed his name upon the back of such note before delivery.3 An accommodation party to an instrument may show that he signed in such capacity.4 Showing such relationship does not contradict the instrument on which action is brought. It merely shows the purpose for which it was given. However, as such relationship is usually important as between the surety and the payee when the surety has been released by the payee's giving an extension of time to the principal without the consent of the surety,5 or when the jurisdiction of the court is affected by the question of suretyship, the effect of such evidence is to change the legal rights of the parties, though not the legal effect of the contract. Thus where A, the real surety, signed as maker, B, the real borrower, appeared as payee, and B endorsed to C the real lender, these facts may be shown where by reason of citizenship in different states, the United States courts would not have jurisdiction otherwise.6 If A and B have signed a contract by which they agree to purchase certain property, A may show that B signed as surety in order to show that B is not a necessary party to a cross-petition to recover for breach of warranty which A has filed in an action against him upon the notes given for the purchase price.7 The makers of a note may show that they are all sureties for a principal who never signed at all, and thus show that they are discharged because the payee has released other security.8 A wife who gives a mortgage on her own realty to secure her husband's debt can show that she was surety for him.9 In an action between the sureties,10 as a suit for contribution,11 even greater latitude in admitting extrinsic evidence to show the actual agreement between such sureties is permitted, since the contract between the sureties themselves is ordinarily not in waiting, and accordingly the action is not an action between the parties to the written contract,12 and furthermore, since the suit for contribution is not founded on contract. In an action between co-sureties for contribution, one of the sureties may show by extrinsic evidence that he signed as surety for the other surety and not for the principal debtor.13 Where a note was signed by A, B, C and D, and the word "surety" was added to D's signature, C may show that he, too, was a surety, and having paid the note, is entitled to contribution against D.14
24Hebard v. Cutler, 91 Vt. 218, 99 Atl. 879.
25 Rittenhouse-Winterson Auto Co. v. Kissner, 129 Md. 102, 98 Atl. 361.
26 Rittenhouse-Winterson Auto Co. v. Kissner, 129 Md. 102, 98 Atl. 361.
27 Rittenhouse-Winterson Auto Co. v. Kissner, 129 Md. 102, 98 Atl. 361.
28 Rittenhouse-Winterson Auto Co. v. Kissner, 129 Md. 102, 98 Atl. 361.
29 Singmaster v. Robinson, 181 Ia. 522, 164 N. W. 776; Bond v. Perrin, 145 Ga. 200, 88 S. E. 954.
1 Alabama. Compton v. Smith, 120 Ala. 233, 25 So. 300.
Arkansas. Thornton v. Bowie, 123 Ark. 463, 185 S. W. 793; Tancred v. First National Bank, 124 Ark. 154, 187 S. W. 160.
California. Daneri v. Gazzola, 139 Cal. 416, 73 Pac. 179.
Georgia. Buck v. Bank, 104 Ga. 660, 30 S. E. 872.
Iowa. First National Bank v. Dutch -er, 128 Ia. 413, 1 L. R. A. (N.S.) 142, 104 N. W. 497.
Kentucky. Youtsey v. Kutz (Ky.),
60 S. W. 857; Craddock v. Lee (Ky.),
61 S. W. 22; Brady v. Equitable Trust Co., 178 Ky. 693, 199 S. W. 1082.
Massachusetts. Weeks v. Parsons, 176 Mass. 570, 58 N. E. 157.
Michigan. Hitchcock v. Frackleton, 116 Mich. 487, 74 N. W. 720.
Missouri. Long v. Mason, 273 Mo. 266, 200 S. W. 1062.
Montana. Stanhope v. Shambow, 54 Mont. 360, 170 Pac. 752.
North Carolina. Foster v. Davis, 175 N. Car. 541, 95 S. E. 917.
Oklahoma. Stovall v. Adair, 9 Okla. 620, 60 Pac. 282.
West Virginia. Faulkner v. Thomas, 48 W. Va. 148, 35 S. E. 915.
Wisconsin. Breitenpxoss v. Farr, 100 Wis. 215, 75 N. W. 893.
2 Brady v. Equitable Trust Co., 178 Ky. 693, 199 S. W. 1082; Foster v. Davis, 175 N. Car. 541, 95 S. E. 917.
3 Thornton v. Bowie, 123 Ark. 463, 185 S. W. 793.
4Rice v. Rice, 101 Kan. 20, 165 Pao 799.
See also, Lyon County State Bank v. Schaefer, 102 Kan. 868, 171 Pac. 1159.
5 Buck v. Bank, 104 Ga. 660. 30 S. E. 872.
While such evidence is admissible as far as the parol evidence rule is concerned, it has become immaterial under the Negotiable Instruments Law in jurisdictions in which it is held that the extension of time does not release a surety who appears upon the face of the instrument to be a party primarily liable thereon. See ch. LXXXV.
6 Goldsmith v. Holmes, 36 Fed. 484, 13 Sawyer 526, 1 L. R. A. 816.
7 First National Bank v. Dutcher, 128 Ia. 413, 1 L. R. A. (N.S.) 142, 104 N. W. 497..
8 Hoffman v. Habighorst, 38 Or. 261, 53 L. R. A. 908, 63 Pac. 610.
9 Price v. Cooper, 123 Ala. 392, 26 So. 238. The Alabama code, Sec. 2529, prohibiting a wife from becoming surety for her husband.
10 Brown v. People's Bank, 127 Ark. 486, 192 S. W. 900; Frew v. Scoular, 101 Neb. 131, L. R. A. 1917F, 1065. 162 N. W. 496; Davis v. First National Bank, 86 Or. 474, 161 Pac. 93, 168 Pac. 929.
11Frew v. Scoular, 101 Neb. 131, L. R. A. 1917F, 1065, 162 N. W. 496; Davis v. First National Bank, 86 Or. 474, 161 Pac. 93, 168 Pac 929.
As far as the contract between the creditor and the surety is concerned, the parol evidence rule applies as it does in any other contract.15 The surety can not introduce parol evidence to contradict the terms of his written contract.16 On the other hand, extrinsic evidence is not admissible to show that the parties intended to enter into a contract of guaranty by the use of language which does not import such intention.17