Wallace v. Richards

Miner, J.: Plaintiff brought this action to recover upon a promissory note, of which the following is a copy: “$1,000. Ogden, Utah, May 10, 1893. One year after date, for value received, we promise to pay to the order of W. W. Wallace, $1,000, payable in U. S. gold coin at the Commercial National Bank of Ogden, Utah, with interest at ten per cent, per annum, payable semiannually, from date until paid, both before and after judgment; and, if not paid at maturity, we agree to pay a reasonable attorney’s fefe for collection. [ Signed ] Frank D, Richards. Wm. H. Sells. B. H. Fisher. Due May 10, ’04.” The due execution and delivery of the note were admitted in the answer. The case was tried before the court without a jury, and the note received in evidence. It appears from the bill of exceptions that the defendant Richards was called as a witness for the defendants. From his testimony, it appears that he talked with one John D. Murphy, of Ogden City, concerning the loan of some money, in May, 1893, and that Mr. Murphy told him that he thought he could procure the money for him; that afterwards he signed the note to plaintiff, Wallace, and received $1,000 from Mr. Murphy; that he had and received all the money for himself; and that defendants Sells and Fisher had no part of it, but that they signed the note with him as accommodation makers. Plaintiff’s attorney made objection to the admission of certain testimony, and the court allowed him to make his motion concerning the testimony at the close of the case. The witness gave further testimony to the effect that, before and at the time the note was signed, “ I understood from Mr. — 55 — Murphy that the note should be extended from maturity at least one or two years. I negotiated with Mr. Murphy with reference to making the loan, and gaye him the note, when executed. He was the only person I had anything to do with. Murphy determined upon the acceptability of the other parties who signed the note. I understood that Mr. Wallace, the plaintiff and payee, lived in Chicago, but I have never seen him. About the time of the maturity of the note, I said to Murphy that I would like to have it extended, and at that time he remembered the conversation we had before. Q. Was the note extended? A. I understood so. Q. Well, what was said? A. I am uncertain just what was said, but that was the understanding. Mr. Murphy, at the time the note was due, said it would be all right, or something to that effect.” It was presented for payment of interest about six months after it was due, and for payment about a year after. Defendants’ attorney announced this was all the testimony for defendants, - so far as Murphy’s agency was concerned. Plaintiff’s attorney moved to strike out the defendants’ testimony on the ground that the proofs made did not constitute any defense to the action. The motion was denied, and the plaintiff duly excepted. On cross-examination of the witness, it appears that he had a talk with Murphy about getting the money two or three weeks before the note was given, when Murphy said he would try and get the money from an Eastern party. "I knew 1 from wdiom I was getting the money wThen the note was executed. When the note matured, Murphy said it would be extended. I paid nothing for his promise to extend the note, and nothing was paid for that at any time. When the note was executed, Murphy thought it would be made for more than one year. I said, ‘ We wall take it for one year, wdtli the privilege of an extension, as part — 56 — of tbe contract.’ I wrote tbe note myself, and did not put anything in it about tbe privilege of extension. I paid nothing for tbe promise to extend tbe note.” Defendants Sells and Fisher testified, in substance, that they bad no notice or knowledge of any agreement between Murphy and Bicharás as to extending tbe time of payment oí tbe note; that they signed tbe note as accommodation makers, and had no part of tbe money; that the note was not presented for payment until about a year after it was due. No testimony was offered on the subject that plaintiff knew that Sells and Fisher were accommodation makers. At tbe close of tbe testimony, plaintiff’s attorney moved for judgment against Sells and Fisher upon tbe grounds (1) that, as to defendants’ understanding with Mr. Murphy, tkei’e is no testimony showing that be was authorized to make such agreement as tbe witness Bicharás testified at tbe time said note was executed, and that all of tbe testimony was admitted in violation of tbe rule of law prohibiting tbe varying of a written contract by a contemporaneous parol agreement; (2) that tbe testimony of Richards shows that there was no consideration for tbe extension which he claims was granted in May, 1894, which said agreement, being without consideration, was void; (3) that all of the testimony given on behalf of said defendants constitutes no defense in law to this action. This motion being by the court overruled, plaintiff duly entered his exception. The court thereupon made its findings of fact and conclusions of law, and rendered judgment against the defendant Richards, and dismissed the complaint against defendants Sells and Fisher, to all of which findings plaintiff excepted. It does not appear from defendants’ testimony that Mr. Murphy, as the agent of the plaintiff to loan the money, — 57 — bad any authority from the plaintiff to extend the time of payment of the note, either before, at the time, or after its execution, or in any way vary the terms of the written contract; and, if such agreement existed, it appears that there was no consideration paid for such proposed or promised extension. If the agreement was made before! or contemporaneously with the note, such agreement was not in writing. There was no absolute promise to extend the note. There was no definite time agreed upon to w-hich the note should be extended after its execution. The note was a joint note, and the plaintiff wras not informed that Sells and Fisher were accommodation makers wdien the note was executed and delivered. No fraud or mistake is alleged or proven. The testimony offered and admitted violated the well-established rule of law that parol testimony is not admissible to vary, change, or contradict the terms of a written instrument, made at the time of a written contract. “If the agreement to extend was contemporaneous, the agreement must be in writing. If otherwise, the rule of evidence? would be violated which prohibits the admission of parol evidence to vary or contradict the terms of a written Instrument, unless the parol evidence is intended to- show that by-accident, fraud, or mistake, the agreement wmw unintentionally omitted from the body of the instrument.” If the agreement to extend was made before the note was executed, the presumption follows that all the results of the negotiations were embodied in the written instrument, in the absence of fraud and mistake. If extended afterwards, the time was not definitely and certainly fixed or agreed upon. The testimony as to what Murphy said, after the note was executed, wdth reference to the extension or renewal of the note, was clearly inadmissible, as no agency wras shown, and no consideration — 58 — paid for the extension. Tied. Com. Paper, §§ 42, 43/424; 2 Daniel, Neg. Inst. §§ 1316, 1318; Bank v. Foote, 12 Utah. 157; Davis v. Stout (Ind. Sup.), 25 N. E. 862; Abstract Co. v. Bahn (Tex. Civ. App.), 27 S. W. 1047. The note in question was made payable at the Ogden Commercial National Bank, and could have been paid when due. There was nothing in the note to indicate that Sells and Fisher were accommodation makers, and no notice of this fact was given to the plaintiff, so far as appears from the defendants’ testimony. It was competent for the defendants to show they were accommodation makers, but this relation, when shown, would not relieve the sureties from responsibility because this note was not presented for payment until after it was due, unless an extension of time had been granted the principal maker by the owner and payee of the note, or by his direction, for a valuable consideration, and for a time reasonably certain, without the knowledge and consent of the sureties. The agency of Murphy ended with the delivery of the money, and the taking and transmission of the note to the plaintiff as it was drawn. Mr. Richards drew the note himself, and there is no question of fraud or mistake presented with reference to its execution or terms. The case of Gillett v. Taylor, 14 Utah 190, cited and relied upon by the defendants, is based upon a different state of facts from those presented in this'record. We'are of the opinion that the court erred in not granting the plaintiff’s motion to strike out defendants’ testimony with reference to the agency of Murphy. We are also of the opinion that the court erred in refusing to grant the plaintiff’s motion for judgment against defendants Sells and Fisher, and in dismissing the complaint against them. For the errors referred to the'judgment — 59 — appealed from is reversed and set aside, and a new trial granted. ZaNB, C. J., and Bartch, J., concur.