Case Name: Smith and Another v. Stevens
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1852-05-27
Citations: 3 Ind. 332
Docket Number: 
Parties: Smith and Another v. Stevens.
Judges: 
Reporter: Indiana Reports
Volume: 3
Pages: 332–334

Head Matter:
Smith and Another v. Stevens.
In a suit by the payee against the makers of a note, the latter will not be allowed to show, by parol evidence, that a guaranfy indorsed upon the note was, at the time it was made, accepted by the payee in full satisfaction of the note.
An oral agreement, even for a valuable consideration, to answer for the debt of another, is void by the statute of frauds.
Thursday, May 27.
ERROR to the Jennings Circuit Court.

Opinion:
Smith, J.
Debt upon two sealed notes made by Smith, Belding, and one Edwards, as trustees for the Mount Sidney steam-mill company, in favor of Stevens, the plaintiff below. One of the notes was for 700 dollars and one was for 300 dollars; and both were payable on or before the 25th of December, 1840.
It appeared that there was on the notes the following indorsement:
" We, or either of us, guarantee and bind ourselves for the final payment of the within notes" (both of the notes being on one piece of paper), " to Thomas Stevens, with ten per cent, interest per annum from date till paid. F. C. Humble, Linzy Trowbridge, E. G. Trueblood, [seal]."
Edwards pleaded bankruptcy and was discharged.
Smith and Belding, the other defendants, offered to prove that at the time this indorsement was made, Hum ble, Trowbridge, and Trueblood were indebted to the defendants and divers other persons constituting the said steam-mill company, which was unincorporated, and had delivered their obligation to the defendants, as trustees of said company, for the payment of 1,200 dollars; that, at the time of said indorsement, the plaintifF proposed to the defendants, who were authorized to act for the said company, that if they, the defendants, would procure H., T., and T. to undertake to pay the plaintifF the amount of said notes, in consideration of the said company giving up to H., T., and T. their said obligation for 1,200 dollars, he, the plaintifF, would accept said undertaking of II., T., and T., in full satisfaction and discharge of said indebtedness of the defendants on the notes sued upon; and that the defendants did, accordingly, give up to if., T., and T. their obligation for -1,200 dollars, and the said H., T., and T., thereupon, made said indorsement on said notes, and the plaintifF, pursuant to said agreement, accepted said indorsement and undertaking of if., T., and T., in full satisfaction of the said notes of the defendants.
The Court refused to permit parol evidence of these facts to be given, and there being no other defense set up, the plaintiff had judgment.
We think the evidence thus offered was correctly excluded. The objection to it is, that it is contradictory to the written agreement of the parties as evidenced by the notes and the indorsement. It was decided by this Court in the case of Wilson v. Black, 6 Blackf. 509, that the legal effect of a written contract consisting both of a note and the indorsement, cannot be varied or qualified by a parol agreement simultaneous with the indorsement, and the same principle has been recognized in several other cases. See Harvey v. Laflin, 2 Carter's Ind. R. 477. Here the legal effect of the indorsement was not to discharge the defendants, but to render Humble, Trowbridge, and Trueblood liable as guarantors in case the notes were not paid by the principals.
It is clear that such evidence could not be available independently of the indorsement, because a verbal agree ment, such as was offered to be proved, would have been void under the statute of frauds.
J. R. Troxett, for the plaintiffs.
J. G. Marshall, for the defendant.
Per Curiam.
The judgment is affirmed, with 3 per cent, damages and costs.