Van Alstyne v. Smith

PUTNAM, J. The action was brought for the foreclosure of a mortgage dated January 24, 1871, made by Anne E. Moore to plaintiff to secure the payment of the sum of $4,650, with interest. After the execution of the mortgage, Anne E. Moore conveyed the mortgaged premises to Christopher Smith and William H. Smith, brothers, the amount of the mortgage being deducted from the purchase price agreed to be paid said grantor, and said deed containing the. following clause immediately after the warranty therein: “Except a certain indenture of mortgage given to secure the payment of $4,650, which mortgage the said parties of the second part hereby assume to pay as a part of the purchase money of this conveyance, and the principal sum, with, interest, is. to be deducted therefrom.” When this action: was. commenced, William H. Smith had died,. Christopher Smith being Ms only heir and administrator. The lat [278] ter was made defendant in person and as administrator, and the usual judgment for a deficiency was asked for against him. He interposed an answer alleging that the above-quoted clause was inserted in the deed without his knowledge or consent; that no contract or agreement was ever made between him and his brother and Anne E. Moore for the assumption by them, in the deed, of the payment of the mortgage; that said provision was fraudulently inserted in the deed, and his first knowledge thereof was when this action was commenced. The issues raised by the pleadings were tried before a referee, who found in favor of the plaintiff, and judgment was entered for the foreclosure of the mortgage, the sale of the mortgaged premises, and against the defendant, Christopher Smith, individually and as administrator, for the deficiency, if any, on the sale. From said judgment the defendant Smith appeals. We think the evidence on the trial sufficient to sustain the conclusions reached by the learned referee on the questions of fact submitted to him. We are unable to believe that his finding that the assumption clause in the deed was inserted therein with the consent of defendant Christopher Smith and his brother was erroneous. This provision was written in the deed which the Smith brothers had accepted, put on record, and under which they had held the title of the land in question for many years. The amount of the mortgage debt was deducted from the purchase price paid by the Smiths' to Anne E. Moore. The presumption created by these admitted facts, with the testimony of the witness Silvernail, who drew the deed, and of Moore, who made the contract with the Smith brothers, we think, justified the conclusion reached by the referee. We should, hence, be of the opinion that his findings could not, under the evidence, be disturbed, and that the judgment rendered on his report should be affirmed, were it not for some rulings on the trial, which we think were erroneous. The referee did not err in overruling the defendant’s objections to the testimony of the witness Silvernail, the attorney who drew the deed, as to the instructions given him when the instrument was prepared. Such evidence was not incompetent, under the provisions of section 835 of the Code of Civil Procedure. Hebbard v. Haughian, 70 N. Y. 54; Root v. Wright, 84 N. Y. 72; Greer v. Greer, 58 Hun. 251, 12 N. Y. Supp. 778. There were other rulings of the referee, however, sustaining objections to questions asked by the defendant of witnesses upon the trial, that we think were erroneous. The defendant Smith, in his answer, claimed that the clause in the deed from Anne E. Moore to him and his brother, above quoted, was fraudulently inserted therein, without his knowledge or consent, and not in pursuance of any contract or agreement between the parties, and that he first learned of its insertion in the deed when this action was commenced. If, on the trial, he could have maintained the truth of the allegations, he would have been entitled to succeed in the action. Dey Ermand v. Chamberlain, 88 N. Y. 658; Kilmer v. Smith, 77 N. Y. 226. Whether the assumption clause was properly inserted in the deed, or not, depended upon the oral contract actually made between the parties, attempted to be reduced in writ [279] ing in the deed. If it were in fact agreed that the grantees should personally assume the payment of the mortgage, then a provision to that effect was properly put in the deed. But, if, no such agreement was made, then the insertion in the deed of such a provision was a fraud on defendant, unless at the time of the execution thereof he knew of such insertion, and consented thereto. It is well settled that, on questions of fraud in the reducing of a contract to writing, the whole of it is open to parol proof; the court disregarding the writing, and treating the whole transaction as a verbal contract. Phyfe v. Wardell, 2 Edw. Ch. 47; Rosboro v. Peck, 48 Barb. 92; Koop v. Handy, 41 Barb. 454. Here defendant claimed that a provision in the deed, which he did not know of until this action was commenced, was inserted therein fraudulently, and was not called for by the actual agreement of the parties. On the issues raised by his answer, it is clear that he should have been allowed to show just what the verbal contract was between the parties,— all that was said between them prior to the execution of the deed. The question was whether the verbal contract was carried out in the deed, and hence what the verbal contract was. The following question was asked by defendant of the witness McDowell, viz.: “Q. What was said between yourself and John H. Moore and his wife, Anne E. Moore, about buying that hotel property on behalf of the Smiths, on or about November, 1874?” This question was objected to by the plaintiff, and the objection sustained. McDowell, as agent, of the Smith brothers, made the bargain with Anne E. Moore and her husband. The defendant, by the question, sought, in the proper way, to show what the verbal contract was, and, we think, was entitled to an answer to the question. On the cross-examination of John H. Moore, a witness called by the plaintiff, and who acted for Anne E. Moore in making the bargain with McDowell and the Smith brothers for the sale of the premises to the latter, he was asked the following question: “Q. Will you swear that there was anything said in any of your negotiations for the sale of this property, either with McDowell or either of the Smiths, about putting a clause in the deed requiring the defendants Smith to assume and pay this mortgage?” The referee sustained the plaintiff's objections to such question. We think the question was proper, and that the defendant was clearly entitled to an answer thereto. The following question was asked of the witness Christopher Smith: “Q. In the negotiations this year between your brother, yourself, and Mrs. Moore in regard to the purchase of this property, was there anything said about your brother and yourself assuming and promising to pay this mortgage?” The question was objected to by the plaintiff, and the objection sustained by the referee. In consequence of the referee’s ruling in sustaining the objections to the questions as above specified, and [280] many other similar questions propounded by defendant to witnesses, he was prevented from showing what the parol contract between Anne E. Moore and himself and brother was. With that view, he sought to show what was said between the parties during the negotiations, and also that nothing was said in reference to the Smith brothers assuming the payment of the mortgage. But the evidence he offered with this view was excluded by the referee. We think the exclusion of this testimony was erroneous. Defendant should have been allowed to show what the entire parol contract was, and everything that was said between the parties, prior to the execution of the deed, tending to show the actual agreement made. The referee, on the trial, did allow some questions asked by defendant of witnesses, similar to those so excluded, to be answered; and thus the error above adverted to in such exclusion was to some extent, but not entirely (as a careful examination of the testimony will show), cured. It is suggested that no error was committed in excluding the evidence offered by defendant in relation to the parol contract, because it was shown that there was a written contract between the parties, executed prior to the delivery of the deed, and hence all previous oral negotiations were merged in such contract. But it was not proved that there was a written contract, obligatory on the defendant Christopher Smith. He testified that he never saw such a contract. And the witness Moore does not testify that the written agreement was signed by Christopher Smith, or seen by him, or show that William H. Smith, who he said executed it, was authorized to-do so for the defendant, or in fact assumed to. The alleged contract was not introduced in evidence, or its contents shown, nor did the testimony of the witness Moore show that any contract was-ever executed, to which defendant was a party. Hence, the testimony in the case failed to show, at least as against the defendant Christopher Smith, that there was any contract. . The action was; against him individually, and as administrator of William H. Smith. He testified that he had never seen any contract If he had been allowed to show, and could have proved, that, under the actual agreement made, it was not understood or agreed that he and his-brother should assume the payment of the plaintiff’s mortgage, and that the provision for such assumption was put in the deed without his knowledge or consent, the referee could have properly found that the provision was fraudulently -inserted, notwithstanding the unauthorized contract, which defendant had never seen, and which was executed without his knowledge. We conclude, therefore, that, on account of the exclusion of the evidence above referred to, by the referee, the judgment should be reversed and a new trial granted, with costs to abide the event All concur.