Appellant instituted this action against appellees to recover amount due on the two promissory notes executed by appellee Fred E. Arndt as principal and appellees Louis C. Arndt and Amiel T. Schrader as sureties. In addition to answers of denial and suretyship, the defendants pleaded payment. Appellee Louis C. Arndt also filed a separate answer, the theory of which was that his signature as surety was procured by fraud.
Trial resulted in a verdict and judgment for all defendants.
The only question which will require consideration by this court is the sufficiency of the evidence to sustain the verdict.
On the trial, the execution of the notes was admitted; and from an examination of the record it is apparent that the judgment, which is in favor of all defendants, can be sustained, if at all, upon the theory that the notes had been paid. As is correctly stated in appellees' brief, "the record discloses that the verdict of the jury was based upon the answer of payment." It is *Page 599 not contended that payment was in cash. The contention at the trial was, and now is, that a deed for certain real estate was accepted by appellant in payment of the notes.
The material facts established by competent evidence are, that long prior to the execution of the notes, appellee Fred E. Arndt had purchased from appellee Louis C. Arndt a certain farm, subject to a mortgage lien of $3,800, and in part payment gave to Louis C. Arndt a second mortgage on the farm for $5,800. The debt represented by the notes in suit was not paid when due, and in response to appellant's demand for security, Fred E. Arndt conveyed the farm, subject to the mortgage indebtedness thereon, to appellant. As a part of the transaction, the parties agreed in writing that appellant was to hold the title of the real estate, to collect the rents and apply them to the payment of the taxes, insurance and interest; and, in the event the farm was sold, receive the proceeds and apply same: (1) To the payment of the liens in the order of their priority; (2) to the payment of the notes; and (3) remainder, if any, to Fred E. Arndt. The contract closed with the following special provision: "But nothing in this contract shall be construed as releasing any person whomsoever from liability on account of any of the notes or other obligation herein referred to."
In considering the deed and contract as evidence, the two instruments must be construed together, and when so construed, their meaning, in so far as the question presented by this appeal is concerned, is not in doubt. It was a part of the agreement of the parties that nothing in the contract should be construed as releasing any person from liability on the notes. Further discussion is unnecessary.
The verdict is not sustained by the evidence.
Reversed. *Page 600