Martin v. McCune

Opinion by Smith, J., This suit was brought by the payee of a promissory note against the maker. The defense set up was that the plaintiff had been the owner of a restaurant, furniture and fixtures, situate in East Liverpool, Ohio, and had sold the furniture and fixtures to one Anderson for $1,000. Of this $600 was paid in cash and a first chattel mortgage' given for the balance. Five hundred dollars of the cash payment was borrowed from the defendant, who held a second chattel mortgage as security. Anderson did not succeed in the business and it was alleged that the plaintiff induced the defendant (with the consent of Anderson) to buy the furniture and fixtures, rent the building from the plaintiff, cancel both obligations of Anderson and give the note in suit, under a parol agreement that if the defendant did not succeed in the business he should have the right to return the property to the plaintiff, whereupon the note was to be delivered up or canceled. The defendant testified that in pursuance of this agreement he gave the note, took possession of the restaurant, and gave the business a full and fair trial; and, failing to succeed, turned over the furniture and fixtures to the plaintiff, who took possession of them, and that the note was thereby satisfied according to the agreement under which it ivas given. This alleged agreement was denied by the plaintiff, and the testimony touching the whole was submitted to the jury. The learned court instructed the jury that if they found that the parol agreement as alleged by the defendant was entered into at the time of the execution of the note, and this was fully established to their satisfaction, and that the “ note was signed under such an inducement and with such an understanding between the parties at the time .... and following that, you are satisfied that the defendant did return this property and extinguished or satisfied the note in that way,” the verdict should be for the defendant; otherwise the verdict to be for the plaintiff for the full amount of the note and interest. Under these instructions, which were given with ample discussion of the law and the evidence, the jury returned a verdict for the defendant. The plaintiff contends that the court erred in admitting proof of this contemporaneous parol agreement, and that it was not competent to affect the terms of the instrument sued on or to [88] defeat a recovery. It is further argued that the case of Wolf v. Rosenbach, 2 Pa. Superior Ct. 587, rules the present controversy in favor of the plaintiff. But the cases are clearly distinguishable. In Wolf v. Rosenbach the affidavit of defense set out a contemporaneous agreement which contradicted the express terms of the note, namely, that if the defendant was not able to pay it at maturity he was to have the right to renew it for a further period by paying the usual discount. Furthermore it was not alleged that the defendant performed or tendered performance of this contract. There was no averment that he tendered a similar note in renewal at the time the original became due or that he offered any renewal note whatever, up to the time of bringing suit. The only allegation on this point is that the defendant could secure the note of the maker of the original for the purpose of renewal; but, although the defendant was indorser on the first note, the affidavit is silent about indorsement of the second, or the payment or tender of the discount. Fraud in any form was not alleged. If the agreement set out were enforceable the affidavit failed to aver its fulfilment or tender of performance either at the stipulated time or afterward. That case was, therefore, rightly decided on its own facts. While the principles mentioned in the opinion clearly and correctly indicate the law applicable to the case, it was barely necessary to give them any controlling effect, under the facts presented. The affidavit contained no averment that the defendant was induced to sign the original note by reason of the oral stipulation, and this was sufficient in itself to warrant the entry of judgment for the plaintiff. An averment to this effect is essential where the defense relied upon implies fraud in the procurement or in the subsequent use of the instrument: Keough v. Leslie, 92 Pa. 424. The defense in the present case amounts, substantially, to payment, by the fulfilment of an agreement entered into by the parties to the note at the time it was made. This agreement is entirely consistent with the terms of the note, and both may be enforced concurrently and effectively: Insurance Co. v. Williams, 155 Pa. 405; Coal & Iron Co. v. Willing, 180 Pa. 165; Shaeffer v. Sensenig, 182 Pa. 634. The question of altering the terms of the note by proof of a parol contract does not arise in this case. The questions presented here re [89] late only to the conditions under which the defendant was induced to sign the note, and the manner in which, upon a certain contingency, it might be satisfied. No third party is interested in the issue or affected by the enforcement of tins contract. The questions of its existence and of its full performance on the part of the defendant were submitted to the jury, and they found in his favor. The plaintiff, when on the witness stand, admitted that he took possession of the property on its surrender by the defendant, and the latter says, that it was returned in payment of the note in suit. The jury have found that the parol agreement was thus executed by the parties. The plaintiff is now estopped from recovery on the note. This covers the questions raised by the specifications of error, they are all overruled and the judgment is affirmed.