Fant v. Sprigg

Robinson, J., delivered the opinion of the Court. This bill is filed by William O. Sprigg, to enjoin a suit at law, brought by the Bank of the Yalley, in Virginia, on a single hill for $3000, signed by him and others as sureties for the firm of Grill, Hardman & Stephens. ⁵⁵⁶ It appears that in September, 1855, Gill representing the firm of Gill, Hardman & Stephens, in company with Sprigg the complainant, went to Romney, Virginia, for the purpose of adjusting an indebtedness due by said firm to the bank After a conference between Gill and the officers of the bank, an agreement was executed between Gill, Hardman & Stephens and the hank, whereby the former were to give to the bank, four single hills of $3000 each, payable in one, two, three and four years, one of the single hills to be signed by Sprigg, the complainant, and Samuel A. Pancoast and George Keiter as sureties; and the remaining three by Pancoast and Keiter. Certain collaterals enumerated in the written agreement were also pledged by Gill & Co., with the proviso, that “in case of failure to pay the several bonds to be given for the annual payments as they shall become due, or the failure to pay the interest on the whole debt semi-annually, the hank shall he at liberty to sell the collaterals thus pledged, so that the whole of the debt and interest due to said hank he paid.” The single bill signed by Sprigg, the complainant, being due and unpaid, the collaterals were sold at public auction for the sum of $2911.20; and the hank claims the right under the written agreement, to apply the same at its discretion to the several single bills mentioned in said agreement. The complainant on the other hand claims, that the entire proceeds shall he applied primarily, to the payment of the single hill signed by him as surety of Gill & Co. in pursuance of an agreement between the bank and himself, and upon the faith of which he was induced to sign the same.

Conceding then, that according to the legal construction of the written agreement, the hank would have the right to apply the proceeds from the collaterals to the ⁵⁵⁷ payment of either, or to all the single hills, the question is, whether it is competent for the complainant to set up a parol agreement between the hank and himself in regard to the application of such proceeds, inconsistent with the written agreement? As between the parties to a written agreement, parol evidence as a general rule is inadmissible to contradict or vary the terms of the instrument. Here however, it is admitted that the complainant was not originally a party to the agreement of September 19th; hut the argument is, that having been read in his presence, if he afterwards signed the single bill, he must he presumed to have assented to the application of the proceeds from the collaterals, according to the terms and stipulations of said agreement. One, it is true, may assent to and he hound by the terms of a written agreement, although the same may not he signed by him.

But if it is proposed to make the complainant a party to the written agreement between the hank and Grill & Co., on the ground that he signed the single hill with knowledge of the contents of the agreement, it is surely competent for him to prove that although the agreement was read in his presence, he refused to sign the single hill, unless the hank would agree to apply the collaterals primarily to the payment of said single hill. Such an agreement it is true, may he inconsistent with the written agreement between the hank and Grill & Co., hut then the