American Building & Loan Ass'n v. Dahl

Vanderburgh, J. The defendants Fagan and Cleveland are sued as the sureties of defendant Dahl in a certain bond, in and by which they undertake, upon the consideration recited, that the defendant Dahl, as principal, shall pay and discharge all claims for labor employed or material furnished in the construction of certain buildings on the premises described in the complaint. Their defense, which prevailed in the trial court, is that set up in the answer of these sureties, viz.: “That at the execution of said bond, of which said ‘Exhibit A’ is a copy, it was mutually agreed by and between all parties to this action, and said bond *358 was executed by these defendants and was by said plaintiff accepted and received, upon the express condition that said plaintiff should, out of the moneys agreed to be loaned said Ole Dahl, retain an amount sufficient to pay and- satisfy in full the alleged and pretended claim of I. P. Lennon & Co., in said complaint referred to, and that plaintiff should pay the same to said I. P. Lennon & Co. in satisfaction thereof.” And the court charged the jury at the trial that, unless it found from the evidence that at the time of the execution of the bond in question the plaintiff, through its attorney, made the agreement in question with these defendants, sureties, they must find for the plaintiff; but, if they found the same established by the evidence, they should find for the defendants. The exception to this instruction presents the question raised here. The agreement referred to, which the evidence in the case tended to establish, was a verbal one, and the plaintiff claims that evidence thereof was inadmissible, because tending to vary the terms of the written agreement or bond executed by the defendants. This objection, however, is clearly not well taken. If the agreement set up in the answer had been in writing, it would have been valid as an independent agreement between the parties upon a sufficient consideration; but the agreement, not being a collateral undertaking, was not within the statute of frauds, and was equally valid as if in writing. It did not tend to vary the terms of the bond, but shows the inducement and conditions upon which the defendants executed the same. It relates to the execution of the bond, and not to the terms or conditions appearing-on the face thereof. The distinction is obvious, and decisive of the case, and the rule as laid down by the trial court is well settled. Brandt, Sur. (2d Ed.) § 405. (Opinion published 56 N. W. Rep. 47 .) Order affirmed. ■