Snyder v. Summers. part of the debt, it would be his loss. The deed should be read as if the obligation were incorporated in it. In that view, the warranty of title contained in the deed would be against all claims except the claim of the Union Bank, to the extent of the $5,000 assumed by the vendee. If, now, the land had been sold in satisfaction of the bank lien, for any part of the debt over and above the $5,000 assumed, it is clear there would have been a breach of the warranty. While the complainant might have been entitled to recover on the obligation, the defendant would also be entitled to recover on the warranty. The record shows, however, that before any sale the bank relinquished a part of the debt so as to reduce the amount below the sum which the defendant had obligated himself to pay. Legally, therefore, there could be no recovery on the warranty. But in equity the reduction thus gratuitously made by the bank must inure to the benefit of all the co-owners. If the complainant had paid the $5,000 agreed to be received by the bank-and this was what was substantially done by the sale and surrender of his property-he could only have recovered from the defendant his share of this burden, which would be in the proportion he would have been bound for the balance of the debt had there been no compromise. The whole unpaid balance on the 29th of July, 1869, was $14,740. Up to the same date the defendant's liability would have been, including interest, $7,366, almost exactly one-half. Dividing the $5,000 in that proportion would make the defendant's liability $2,500, from which must be deducted his share of the sales, $750. The residue, $1,750, is so near the sum found by the chancellor, $1,728.93, that it is not worth while to change the latter. The decree will be affirmed, leaving the costs below to go as adjudged by the chancellor. The appellants will pay the costs of this court. Decree affirmed. Rivers v. Thomas. RIVERS V. THOMAS. (1 Lea. 649.) Negotiable paper—indorsement after maturity. One who indorses an overdue note, at request of the maker, in consideration of indulgence by the payee, is liable as a guarantor. ILL in equity to hold defendant as guarantor of a note. The opinion states the facts. BILL Goodlett, House & Merritt, for complainants. Lurton, Quarles & Daniel, for defendants. COOPER, J. The bill is filed to hold the defendant, N. L. Thomas, liable as security or guarantor of the payment of a note, and to subject to the satisfaction of the recovery certain property conveyed by him to his son without consideration. It is conceded that the conveyance will not avail against the complainants' demand if established, and, consequently, that the court has jurisdiction of the whole case under the Code, section 4288 On the 14th of February, 1859, the defendant, J. J. Thomas, executed his note under seal to the testator of the complainants, payable one day after date, for $2,337. In the month of February, 1871, one of the complainants called upon the said Thomas for payment of the note, when the latter proposed, if complainants would wait on him, to give his brother, the defendant, N. L. Thomas, as "security upon the note." They, thereupon, went together to the residence of N. L. Thomas, and the said N. L. Thomas, at the request of J. J. Thomas, wrote his name on the back of the note. The testimony leaves no doubt that the object. of the visit, the obtaining of additional security on the note in consideration of forbearance of suit, was explained by the debtor to his brother before the signature of the latter was indorsed, and that the indorsing brother knew he was assuming, and intended thereby to assume, whatever responsibility the act created. The complainants did forbear to sue for about a year, the maker of the note in the meantime becoming insolvent. No demand of pay Rivers v. Thomas. ment of the note was made of the maker subsequent to the indorsement, nor, of course, was any notice of non-payment given to the defendant, N. L. Thomas. The words "I guarantee the payment of the within note were afterward written, at the instance of the complainants and by their counsel, over his name as indorsed. It is not denied that an agreement to forbear suit for an indefinite time, which would mean a reasonable time, or an actual forbearance would constitute a sufficient consideration to sustain a promise to guarantee the payment of a note. Tappan v. Campbell, 9 Yerg. 436; Johnson v. Wilmarth, 13 Metc. 416; Sto. on Prom. Notes, § 186. And the evidence shows due diligence by the complainants to collect their debt from the maker, and that the latter became insolvent before the expiration of the reasonable time of forbearance, if these facts are at all important in determining the rights of the parties. Something was said in argument upon the point whether parol testimony was admissible to show the contract between the parties. But the decisions of this State, in accord with the weight of authority in other States, are that, as between the immediate parties, parol evidence is admissible to show the actual agreement upon which an indorsement of negotiable paper is made, and that the indorsement may be filled up accordingly.. Comparree v. Brockway, 11 Humph. 360; Iser v. Cohen, 1 Baxter, 421; Dan. Neg. Instr., §§ 710, 1765; Sto. on Prom. Notes, § 459; Rey v. Simpson, 22 How. 341. And where the promise has arisen out of some new consideration of benefit or harm moving between the new contracting parties, it is not within the statute of frauds. Hall v. Rodgers, 7 Humph. 536; Sto. on Prom. Notes, § 457. The note under consideration is negotiable under our statute. Code, § 1957. The contest is, therefore, narrowed down to the liability incurred by the indorsement, either implied by law or shown by the proof. The decisions on the presumptive status of an irregular indorser of a negotiable note, in the absence of any evidence whatever of intent or contract, are irreconcilably in conflict. When nothing appears but the instrument itself bearing the name of a third person as indorser before the name of the payee, and the suit is by the indorsee for value before maturity, some courts treat such third person as a joint maker; some as a surety or guarantor in the sense of joint maker; some as secondarily liable as a guarantor; and some as a second indorser. 1 Dan. Neg. Instr., § 713. The VOL. XXVII-99 Rivers v. Thomas. 1 weight of authority is, perhaps, at this time in favor of considering him, in such case, as a second indorser. For the Supreme Court of Massachusetts, with which court the doctrine of holding such indorser as a co-maker originated, afterward conceded that, if the point were new, he should be treated by third parties simply as a second indorser, leaving the payee and himself to settle their respective liabilities according to their own agreement. Union Bank v. Willis, 8 Metc. 504. Between the payee and such indorser the weight of authority, as we have seen, is that parol proof of the facts and circumstances which took place at the time of the transactions, and of the intention and agreement, is admissible. Dan. Neg. Instr., § 711. And such is the settled doctrine of this State, while in the absence of such proof our courts have adopted the rule that the irregular indorser is to be treated only as a second indorser. Comparree v. Brockway, 11 Humph. 355; Clouston v. Barbiere, 4 Sneed, 336; Brinkley v. Boyd, 9 Heisk. 149; Iser v. Cohen, 1 Baxter, 421. In the last of these cases, which was a suit by the payee of a note against the indorser, it was accordingly held that an indorser may, by agreement, enlarge his liability, and that it is competent, upon the trial, to show by parol evidence the nature and extent of his undertaking. The indorsement sued on was made, before the delivery of the note to the payee, for the accommodation of the maker, and the evidence disclosed the fact that, when the payce objected to the form of the paper, the indorser said it was the same thing as if he had signed his name on the face of the note, and he was held liable as a co-maker. The principle of our decisions is unquestionably sound, though there may be some doubt as to the correctness of its application to the facts of one or two of the cases. In Brickley v. Boyd, 9 Heisk. 149, there was nothing to rebut the legal presumption that the defendant intended to become a second indorser. "The proof does not show," says the eminent judge who delivers the opinion. of the court, "any understanding, intention, or agreement on the part of Brinkley as to the nature of the liability assumed by him in said indorsement." To the extent of the actual rulings on the facts, the decision is sustained by the general principle, although the payee of the note may have had reason to suppose from the nature of the transaction, that the defendant intended to assume a higher grade of responsibility, or, at any rate, a responsibility to him. For it may be that the defendant was induced to indorse the Rivers v. Thomas. note for the accommodation of the maker under the assurance that he was to be second, and not first indorser. As between the payee and the indorser whatever may be the rights of innocent third parties, the former may well be required to know that the latter can only be made liable to him by agreement, either express or fairly implied from the conversation between them, or the facts and circumstances shown in proof. In Comparree v. Brockway, 11 Humph. 355, it does not appear that the payee had ever had any interview with the defendant whom he was suing as indorser, nor that the witness examined was present when the indorsement was made. The witness proved that the defendant agreed to indorse the note as accommodation indorser of the maker for the payee's benefit. It does not appear that the liability of the defendant as indorser was fixed by demand and notice, and it does appear that the blank indorsement was filled up by the plaintiff's counsel by writing above it, "for value received I promise the payment of this note to R. H. Brockway." The opinion of the court was delivered by Judge MCKINNEY, one of the most logical reasoners and accurate thinkers of the judges who have presided in this court. The logic of his argument is, that there is no sufficient proof to sustain the indorsement as filled up, that the indorsement is consequently a blank indorsement, and the defendant might have been charged as indorser. The mode he suggests by which the defendant might have been charged as indorser is that the payee could have indorsed the note, thus making it negotiable and putting it into circulation, and at the same time taking care to restrict his own liability. This suggestion is apparently sanctioned by the chancellor in the Court of Errors of New York, in Hall v. Newcomb, 7 Hill, 416. But there is a good deal of point in Senator Bockee's reply in that case to the suggestion, that "this sort of finesse and shuffling game is below the dignity of the law." And the point has been directly ruled otherwise upon a similar case to the one Judge MCKINNEY thought he had before him, namely a blank indorsement without more, before delivery to the payee, in Phelps v. Vischer, 50 N. Y. 66; 10 Am. Rep. 433. Feeling the narrowness of his standing ground Judge MCKINNEY, with commendable caution, concludes his opinion thus: "We go no further than to hold that a blank indorsement in a case like the present creates no other liability than that of an ordinary commercial indorsement; and that the indorser, in the absence of coun |