Russell v. Kinney , 1843 N.Y. Misc. LEXIS 40 ( 1843 )

The Assistant Vice-Chancellor.

The complainant establishes his right to a decree, in the first instance, by the production of a mortgage for the payment of $1500, with interest, in one year from its date, duly acknowledged and recorded. The statement in his bill of a particular mode of paying the consideration, for which the mortgage was given, does not deprive him of the benefit of the prima facie evidence of a paid consideration, furnished by the mortgage itself. If the statement be proved, it is very well. If not, then the admission of a consideration in the mortgage, is evidence that there was a consideration paid in some manner. The defendants cannot be permitted to estop the complainant by his statement, and at the same time deny the truth of the statement itself. The bur-then of invalidating this security, therefore, rests upon the defendants.

In attempting to show its invalidity, they claim that the agreement, set up in their answer, if made by parol, constitutes a sufficient defence.

To this proposition I cannot assent. It is true that our courts have proceeded far beyond the courts of any other state or country in which the common law prevails, in the admission of parol evidence to invalidate contracts in writing and under seal; but I believe they have never gone as far as is insisted upon here, and it is not for me to extend the dangerous innovation. The admission of such evidence to the extent now established, has been deprecated and opposed by several of our learned judges ; and in the last reported case at law to which I have been referred, one of the ablest judges that ever adorned our bench, dissented from the opinion of his brethren; while the latter avowedly acted upon prior adjudications, against their own convictions of the impropriety of the evidence. Swart v. Service, (21 Wend. 36.)

The authorities are, to my mind, conclusive against the admission of parol evidence of the agreement or condition set up in this case.

In Mease v. Mease, (Cowp. 47,) in an action on a bond for the payment of money, a plea setting up that the bond was given as an indemnity to the plaintiff’s testator against another bond, and that he had not been damnified, was held to be clearly bad.

In Wells v. Baldwin, (18 Johns. 45,) which was an action on a similar bond, the defendant plea ded that the bond together with a mortgage, were given as collateral security for the performance of a contract for clearing land, which contract provided for an arbitration between the parties in the case of a difference, that the arbitration had been held, and an award made finding that the plaintiff had not performed the contract. The plea was held to be bad.

In Jackson d. Dox v. Jackson, (5 Cowen, 173,) in ejectment by(a mortgagee, it was held, that the heir of the mortgagor could not be permitted to prove that the mortgage was given as an indemnity for becoming special bail for the mortgagor, and that no damage had ensued to such bail. And see Patchin v. Pierce, (12 Wend. 61.)^(a) It may be suggested that the cases cited were at law, and before our statute permitting an inquiry into the consideration of sealed instruments. But the rule in equity is the same as at law, except where there is fraud or mistake, surprise or accident. Stevens v. Cooper, (1 J. C. R., 425.) Pym v. Blackburn, (3 Ves. Jr., 34 and 38, note.) Thus, in Parker v. Vick, (2 Dev. & Batt. Eq. R. 195,) it was held that evidence would not be received to show a parol agreement contradictory to and varying from a written agreement made at the same timé, when no reason is shown why the former was not incorporated into the latter.

I will refer to a few other of the numerous cases in equity on this point.

In Movan v. Hays, (1 J. C. R. 339,) the attempt was made to prove that a mortgage for the payment of money, was executed as a counter security for a re-conveyance of land. The parol evidence was excluded. Chancellor Kent says, that “to “ permit such a clear, intelligible and ordinary transaction, to be “ changed by parol proof, into the special agreement set up by “ the plaintiffs, would be, in effect, to repeal that part of the “ statute of frauds to which I have referred.”

Meads v. Lansingh, (Hopk. R. 124,) was a suit to foreclose a mortgage for $>1,000. The defence was, that the mortgage was given to secure the re-conveyance of a lot of land, which the mortgagee had lent to the mortgagor, and parol evidence with circumstances was relied upon to sustain the defence. It was held to be inadmissible.

In Denston v. Morris, decided May 2, 1843, a parol agreement was set up whereby the mortgagees, under peculiar circumstances, undertook to retain a mortgage executed for the purchase money, until the expiration of five years, as a security against any defect of title. Chancellor Walworth held that the agreement was inadmissible, and says: “ Where there has “ been no fraud, and the parties have consummated their agree- “ ment by the execution of a conveyance of the land, and the “ taking back of a bond and mortgage for the unpaid purchase “ money, it would be dangerous to permit parol proof to entirely “ vary the agreement from that which is evidenced by the written “ instruments relating to the transaction.”

The provision of the Revised Statutes, permitting an inquiry into the consideration of sealed instruments, is not understood as changing or affecting the rule of law relative to the admission of parol evidence to contradict the terms of instruments in writing. McCurtie v. Stevens, (13 Wend. 527;) 2 Cowen & Hill’s Notes to Phill. Ev. 1438.

The rule prohibiting such evidence is applicable to agreements not under seal. McDoual v. Beckly, (2 Rep. Const. Court, So. Car. 267, Mills’ ed.)

The defendants therefore cannot rely upon any agreement resting in parol, by which the condition of this bond and mortgage is so materially altered from its written terms.

(The court then examined the testimony in the cause, and decided that there was no proof of the existence of any written instrument or defeasance qualifying the bond and mortgage, or that any such instrument had ever existed; and concluded as follows.)

In every view of the case, according to my judgment, the defence to the mortgage fails.

I have not laid any stress upon the estoppel insisted upon by the complainant, arising from Mrs. Sloat’s having taking a conveyance expressly subject to this mortgage. I consider that clause in her deed as an admission of the existence of the mortgage ; and as subjecting her to its force, exactly as it was in truth. If it were a mortgage with a condition or defeasance contained in another writing, Or if it were partly paid, she was entitled to the benefit of the defeasance or the payment; and her admission by accepting the deed, is not inconsistent with her availing herself of such defence.

The complainant is entitled to the usual decree for a computation of the amount due, and a sale of the mortgaged premises.^(a)

(a) Nelson v. Sharp, 4 Hill’s (N. Y.) Rep. 584. Webb v. Rice, 6 ibid. 219.

(a) This decree was affirmed by the Chancellor on appeal.