Thorne v. Ætna Insurance Co. of Hartford

Winslow, J. If a valid chattel mortgage had been executed by the plaintiff on her stock of goods during the life [596] of the policy, then the policy was avoided, by its terms, and she could not recover. So the question presented was simply whether the mortgage, which was in form executed to Jenner & Co., and delivered to Guernsey, was in fact an effective mortgage. If it was effective, even for a few days, it would avoid the policy. The plaintiff endeavored to avoid the forfeiture by claiming that though the mortgage was signed, delivered, and placed on file, still this was all done under an agreement that it should only be effective in case judgment upon the Jenner claim had not been entered by the clerk of the court at Waupaca, and should not be effective for any purpose in case such judgment had been already entered. The principle is quite well settled that parol evidence is admissible to show that a written contract, not under seal, of which there has been manual tradition, was not to become a binding contract until the performance or occurrence of some condition precedent resting in parol, Nutting v. Minnesota F. Ins. Co. 98 Wis. 26, and authorities there cited; Wilson v. Powers, 131 Mass. 539; Pym v. Campbell, 6 El. & Bl. 370; 2 Taylor, Ev. § 1135, Chamberlayne’s notes; 2 Jones, Ev. § 478. This rule approaches closely to an infringement upon the principle that a written contract cannot be varied or contradicted by parol, and hence it is justly observed that such a defense is subject to suspicion, and that the rule should be cautiously applied and the facts clearly proven. Reynolds v. Robinson, 110 N. Y. 654. Furthermore, it is to be observed that the rule is that it may be shown that the contract is not to become binding until the happening of some event or ascertainment of some fact, but not that the contract is to be presently binding and to become void on the happening of some event. If a contract is executed and delivered with intent to take effect, it is not to be thereafter avoided by virtue of a condition annexed to the delivery by parol. Here is the difficulty in this case: the second finding of the special verdict is that the note and mortgage were executed under an agree [597] ment that they should, be void in case judgment had been previously entered in the Jenner action. This finding is ambiguous. It may mean that they were delivered with intent to have present effect, and to be thereafter avoided in a certain contingency. If such is its meaning, then the mortgage was a valid mortgage, and the policy of insurance was avoided thereby. Much of the testimony also supports this'interpretation of the finding: Mr. Guernsey says that he asked Mrs. Thorn& for a chattel mortgage until he received, notice from the cleric of the entry of the judgment; and Mrs. Thorne says, “ Mr. Guernsey asked if I was willing to have this mortgage executed for a few dm/s, %mtil the judgment was entered, when it should be null and void, and I told him I was.” The facts, also, that the mortgage was at once filed, and the note never returned, though it was ascertained after a day or two that the judgment had been entered before the giving of the mortgage, tend persuasively to support this meaning of the finding. In fact, examination of the evidence convinces us that the clear and strong preponderance of the evidence supports this view, if in fact any agreement so improbable was ever made, and that if this finding is to be construed as meaning that it was agreed that the mortgage was not to go into effect at all unless the judgment had not been entered at the time, the finding must be set aside, as against the clear preponderance of the evidence. These remarks apply as well to the third finding of the jury, and these views necessitate reversal of the judgment. We do not think, either, that the proof as to the value of the goods destroyed and damaged was so clear and conclusive that the court was justified in setting aside the finding of the jury and awarding the plaintiff the full amount of the policy. The proof of value was far from satisfactory. By the Gourt.— Judgment reversed, and action remanded for a new trial.