Fuller v. Parrish

By the Court, Green, P. J. On the trial of this cause in the Circuit Court, Puller gave in evidence in defence of the action, a copy of an absolute bill of sale of the wheat in question, executed by Parrish, the plaintiff below, to him, dated the third day of April, A. D. 1852, certified by the Township Clerk of the Township oí Liberty, to have been a true copy of a bill of sale, filed in the Clerk’s office of said township on the 6th day of April, 1852. The wheat embraced in the hill of sale was the undivided half of two fields, sowed by Parrish, on lands belonging to Puller, in the preceding autumn. Parrish harvested and threshed the wheat, and delivered to Puller one-half, being his share of it. Afterwards, and some time in October, 1852,’ Puller took into his possession Parrish’s portion of the wheat, amounting to one hundred and forty-four bushels, worth seventy-four cents per bushel, by virtue, of the bill of sale. The consideration of the bill of sale, was the executing by Puller, to one Daniel Peck, jointly with Parrish, of a promissory note for fifty-four dollars anil fifty-four cents, with interest, payable, by its terms, on the fourteenth day of November then next, and bearing even date with the bill of sale; which note was paid by Puller to Peck on the seventeenth day of November, the day when it became due; and on the same day Parrish tendered to Fuller the entire amount of the note, including interest, and demanded the wheat; but Puller declined to receive the money, and refused to give up the wheat. The note was given for the sole benefit of Parrish, — 213 — and was signed by Fuller as surety, and the bill of sale was executed by Parrish to Fuller, to secure him against any loss he might sustain by reason of his becoming surety on said note. The fact that the bill of sale was intended by the parties as a mortgage, was shown by the plaintiff below, by parol evidence, which was objected to on the part of the defendant below, as contradictory, or varying the terms of the written bill of sale, but was admitted by the Court, subject to the objection. It appears from the record, that on the argument in the Circuit Court, it was contended on the part of the defendant below— 1. That said parol evidence was inadmissible. 2. That if such evidence was admissible, the Court should ' abate the plaintiff’s damages, by deducting therefrom the amount of the said note. The Court held that the parol evidence objected to was admissible, and that the amount of the note ought not to be deducted from the value of the wheat, in determining the amount of the plaintiff’s damages, and accordingly rendered judgment for the full value of the wheat, as proven. The defendant below caused exceptions to be filed to the ruling and determining of the Court, and now seeks to reverse the judgment upon the same grounds which he urged in the Court below. , It is conceded on the part of the plaintiff in error, that-in a Court of Equity, it would be entirely competent to show by parol jbroof, that a deed absolute on its face was intended as mortgage, and that there, effect would be given to it according to the true intent of the parties. This has been too long and too well settled, and too distinctly recognized by our own Courts, to admit of any question. But it is contended that it is not competent in a Court of law; and why not? So far as the statute of frauds may be supposed to affect the question, that is equally binding upon, and receives the same construction, in a Court of Chancery as in a Court of law; — 214 — and so it is with, that most familiar and well established rule, that “ parol and contemporaneous evidence is inadmissible to contradict or vary the terms of a written instrument.” There are certainly some classes of cases, in which Courts, proceeding according to the course of the common law, are incompetent to grant relief. Such are proceedings to enforce the specific performance of contracts, to correct mistakes by acting directly upon and reforming the contract itself, &c. There are cases, peculiarly and exclusively of equity jurisdiction, and so in some cases of fraud, as in proceedings to set aside-conveyances as fraudulent, to remove a cloud from the title to land, &c. Rut fraud is equally cognizable in Courts of law, in all cases wherein such Courts are capable of affording an adequate remedy; and the same remark is applicable in general, to every other subject of equitable jurisdiction in this State, whatever opinions may have once prevailed in England, or in New York, where a separate Court of Chancery existed for many years. Our Courts, under the new Constitution, have been organized with particular reference to the doing away of all unnecessary distinction between the two jurisdictions, and the Legislature is expressly required, as far as practicable, to abolish distinctions between law and equity proceedings. (Constitution, Art. 6, § 5.) Formerly, a Court of Chancery possessed a very important advantage over a Court of law, in enabling the parties to reach the consciences of each other when a discovery was necessary; and it was only in a Court of Chancery that one party could make a witness of the other. Since the revision of the statutes in 1846, however, either party to a suit or proceeding in a Court of law, may compel the opposite party to testify in his behalf in regard to any facts material to the issue to be tried, which he may be unable to establish by other testimony. (R. S., 461, § 100.) It would appear very strange, then, if not absolutely absurd, for this Court to say that a Circuit Court can afford no relief — 215 — in a case of this character, when sitting as a Court of law, while at the same time it is conceded that it might do so-when sitting as a Court of Chancery, and while it is perfectly obvious that the relief would be as ample, and justice as fully' administered between the parties, on the law side as on the-' chancery side of the same Court. It would not certainly be in accordance with the progressive spirit of our jurisprudence, which seeks to administer justice between parties by the most direct and simple methods of procedure that are consistent with that order and regularity which ought to prevail in all judicial proceedings for the safety of all. If then, as it is admitted, parol evidence is admissible in a Court of Chancery to prove that a deed absolute on its face, was intended as a mortgage, such evidence is equally admissible in a Court of law. It seems hardly necessary, in this view of the case, to examine authorities upon this question. Our statute of frauds, (R. S. 327, § 10,) provides that “ every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels,” not accompanied by an immediate delivery, &c.,, shall be void as against creditors, &c., unless the mortgage, or a true copy thereof, shall be filed in the office of the town-. ship clerk of the township, or city clerk of the city where the mortgagor resides. So far, then, as the statute of frauds is concerned, a “ conveyance intended to operate as a mortgage,” is clearly recognized as good between the parties as a mortgage, and good against all others, if made in good faith and duly filed. Although this precise question has never before been presented to this Court for adjudication, it is understood that the uniform course of decision at the Circuits in this State,, has been in accordance with the unquestioned rule in Chan-, eery, that parol evidence is admissible to show that a deed' absolute on its face was intended as a mortgage; and it is be-% lieved that this is so generally understood throughout the State, that a very large portion of the securities for loans of — 216 — money, or for .other indebtedness, is given by conveyances . absolute on their face, but intended to operate as mortgages. In the case of Roach vs. Cosine, (9 Wend. 227,) parol evidence had been received before a Justice of the Peace, in summary proceedings to obtain possession of land, to show that an absolute deed was intended as a mortgage, and the Supreme Court on certiorari held that it was competent, and it does not appear that the contrary doctrine was assumed by the counsel on the part of the plaintiff in error. In Walton vs. Cronly’s Adm’r, (14 Wend. 63,) Sutherland, J., delivering the opinion of the Court, says: “ It is not denied by the counsel for the plaintiffs that parol evidence, to show that an absolute deed was intended as a mortgage, was admissible between the original parties to the contract.” The same doctrine was held by the Supreme Court in Swart vs. Service, (21 Wend. 38,) and in Webb vs. Rice, (1 Hill. 606). Bronson, J. dissenting, and contending that parol evidence was not admissible, in such cases, m a Court of law. { Vide Hayworth vs. Worthington, 5 Blackf. 361.) The decision of the Supreme Court in the case of Webb vs. Rice was reversed in 'the Court of Errors, (6 Hill. 219,) where it seems to have 'been conceded, so far as can be judged from the opinions . given, that the parol evidence of a defeasance would be ad.-missible in a Court of Chancery. In the case of Meare vs. Meare, (Cowp. 47,) referred to on the part of the plaintiff in error, the action was debt on a bond payable at a certain day. The defendant pleaded that 'the bond was given as an indemnity to the plaintiff’s testator against another bond, and that testator was not demnified. 'To this plea the plaintiff demurred, and the demurrer was sustained. Before rendering judgment in that case, Lord Mansfield said if the facts set forth in the plea were true, the defendant might move on affidavit for a stay of proceedings, and gave the defendant to understand that if the matter of .-the plea should be established, he would regard the proceed — 217 — ing as contrary to the agreement between the parties, and would grant a stay as justice should require. Whether the admission of parol evidence of a defeasance in this class of cases be regarded as an exception to the general rule, or whether it be upon the ground of fraud, as has been suggested, need not be determined. The parol proof seems to vary the effect of the written instrument, yet it is not given for the purpose of showing that its language is not precisely what the parties intended. The verbal agreement was that just such an instrument should be made, but that the property conveyed by it should be subject to redemption as in case of a mortgage. The defeasance, however, is left to rest upon the verbal understanding and agreement between the parties. Mortgages, and conveyances intended to operate as mortgages, are generally given by the necessitous to the more opulent, the debtor to the creditor, the borrower to the lender, the suppliant for favor to him who has power to make the terms upon which it shall be granted. The man whose, property is about to be sacrificed by a creditor, will not hesitate in regard to the amount of security to be given, _ nor the manner of giving it, if he can loan the money to satisfy the debt, or otherwise gain time for its payment. He will not hesitate to execute a deed or bill of sale, absolute upon the face of it, but intended to operate as a mortgage, to four times the value of the loan, without insisting upon a written deed of defeasance. To hold that parol evidence is inadmissible to show the intent that the instrument should operate as a mortgage, would enable the selfish and unfeeling creditor or money lender to gratify his avarice, by violating the plainest principles of common honesty with entire impunity. On the other hand, its admission does no injustice to the creditor, but secures to him the full amount which is Ms due. He loses nothing, but is only prevented from taking that to which in right and justice he has no claim. Admitting that this constitutes an exception to a general rule, based — 218 — upon the soundest principles of jurisprudence, what great danger is to be apprehended from it? It has long been familiar to Courts of Equity, at least, and is of as safe and easy application in Courts of law, organized as our Courts now are. In the case before us, the facts proved independently of the express verbal understanding of the parties, show that the sale of the wheat from Parrish to Puller, was not intended to be absolute. Puller placed the instrument on file as a mortgage or a conveyance of goods and chattels, mtended to operate as a mortgage. When the wheat was ripe, it was harvested and threshed by Parrish, and divided between the parties. Afterwards, and some time in October, Puller took Parrish’s portion of the wheat into his possession. These acts, which, so far as appears by the record, were done with the concurrence of both parties, are inconsistent with the assumption of an absolute sale, but entirely consistent with the intention that the conveyance should operate as a mortgage. It remains to inquire whether the Court erred in refusing-to abate from the damages of the plaintiff below, the amountr of the Peck note, which had been paid by Fuller, on the day it became due. Parrish, on the same day, tendered to Puller the amount of the note and interest, and demanded the wheat. Parrish had a right to the whole of that day, in which to pay the note, and Fuller’s payment of the money to Peck was therefore a voluntary act on his part, and did not operate as a forfeiture of the mortgage; and the tender of the amount by Parrish to him consequently discharged the lien of the mortgage, and entitled Parrish to the possession of the wheat. He might have obtained possession of it, by a writ of replevin, if it could be found and identified, or he might bring trover, to recover its value, which he has done. The lien being discharged by the tender, the indebtedness of Parrish on account of the note, had no longer any — 219 — more connection with the wheat, than any other indebtedness from Parrish to Fuller would have. It is, then, neither a case of set-off nor recoupment; and it is difficult to see upon what principle the amount of the note could have been deducted from the value of the property. The man who-refuses what is due him, but insists upon what he supposes to be his legal right, against conscience, must take the consequences, if he permits his avarice to overcome his regard for right and justice. The judgment of the Circuit-Court must be affirmed, with costs, to the defendant in error.