Juniata Building & Loan Ass'n v. Hetzel , 1883 Pa. LEXIS 200 ( 1883 )

Mr. Justice Tbunkey

delivered the opinion of the court,

No principle is better settled than that parol evidence is admissible to show a verbal contemporaneous agreement, which induced the execution of a written obligation, though it may vary or change the terms of the written contract. Therefore it was competent for the defendant to prove, if he could, that it was agreed before and at the time he signed the bond, that it should not be resorted to until after the security of the mortgage was exhausted, and that the security of the mortgage was lost through the plaintiff’s negligence. But evidence of the practice or custom of the association in dealing with other persons was incompetent. There was no proof, nor offer of proof, of either a general or local custom; nor was there any usage of trade or previous like dealings between the parties to the bond. It was error to admit so much of the offer which constitutes the first assignment, as relates to and is founded upon an alleged custom.

The facts from which inferences are to be drawn are to be detailed by the witnesses, and the work of inference is for the jury. Under the rule admitting parties to testify in their own behalf, where the character of the transaction depends on the intent of the party, it is competent for him to testify what his intention was. His answer is, of course, not conclusive, but to be considered with other evidence: Thurston v. Cornell, 38 N. Y. 281; Cortland Co. v Herkimer Co., 44 Id. 22; Snow v. Paine, 114 Mass. 520. Where a plaintiff had conveyed property to his wife, and it was sought to impeach the deed, on the ground that it was' fraudulently made, it was held that, inquiry into his intention and motive in making the deed to her being relevant and material, it was competent for him to testify that he made the deed in good faith: Thacher and wife v. Phinney, 7 Allen (Mass.) 146. In a carefully considered case it was remarked that the authorities that intent may be testified show no more than this. When the doing of the act is not disputed, but is affirmed, and whether the act shall be held valid or invalid hangs upon the intent with which it was done, which intent, from its nature, would be formed and held without avowal, then he, upon whom the intent is charged, may testify whether he secretly held such intent when he did the act. This does not apply to the making of contracts, and a party to a contract shall not testify his undisclosed purpose or intention to nullify words and acts relied upon by others, which in themselves prima facie evidence the agreement. Minds cannot meet where one keeps to itself what it means to do. Where the oral bargain goes before the written agreement, signed and delivered without qualification, one of the parties shall not testify that he meant something else: Dillon v. Anderson, 43 N. Y. 231. In that case the defendant alleged a verbal agreement that another person was also to sign the bond, and he was not allowed to answer the question, “Did you intend to make an individual contract ?”

In a suit on bonds the defendant was asked in chief : “ What was the inducement that led you to sign the bonds and mortgage?” “Did you sign these bonds and the mortgage relying at the time upon the, contemporaneous agreement in parol ?” “ In consequence of the acts and declarations of Mr. Colt, did yon sign these papers ?” which were overruled, but he was per'mittcd to state all that was said and done before and at the time of the execution of the bonds. This court held that no principle would have justified the court below in admitting such interrogatories; that testimony of the unexpressed intent, motive or belief of the defendant was inadmissible ; and that the thoughts of one party to a contract cannot be proved to bind the other: Spencer v. Colt, 89 Pa. St. 314.

The defendant being a witness in his own behalf was allowed to testify that he would not have signed the bond unless it had been agreed that the real estate of Taylor and wife should be mortgaged as security for the loan, and be first liable for its repayment. That was error, and the second assignment must be sustained.

The plaintiff’s by-laws provided that the treasurer shall have c-hafge of all deeds, bonds, mortgages, &c. on which money is loaded ; that the treasurer iand solicitor shall pi’epare all bonds, mortgages, contracts and other writings to be given or taken ; that the borrower “ shall secure the re-payinent of said loan with legal interest, by satisfactory bond or mortgage upon real estate' in the county of Bedford and that the president, secretary and solicitor shall examine all papers offered as security for loans. These regulations were for guidance of the officers, and to a great extent the observance of them was a matter that alone concerned the association and its officers. They authorized the officers to take either a bond or mortgage for a loan — both could be taken without wrong. If both were taken, with sureties on tlie bond, the presumption' would be that the officers relied upon the security of both, and that the association was not restricted to the pursuit of one before the other.

At a meeting of the association, Taylor, by proxy, bid for money, and was a successful bidder; the proxy gave the name of J. w. Trimbath as surety; the board of directors resolved that “ when papers are properly executed, Taylor is to have the money.” Iletzel, the defendant, was a director of the association, attended and took part in the meetings ; he was Taylor’s proxy. At a subsequent meeting of the board, the solicitor brought in the mortgage, signed by Taylor and wife, acknowledged before John A. Gump, a justice of the peace, who was vice-president of the association. Trimbath refused to go on the bond, for which cause the papers were reported incomplete. After the meeting, Taylor arranged with iletzel to become surety with Mrs. VVea veiling, and he signed below her name, knowing at the time that the vice-president had taken the acknowledgment of the mortgage. He sets up an agreement of which he thus testifies : “ Q. What was agreed and understood with reference to the security on the real estate ? A. My name was not mentioned in connection with the security.” “ Q. What was understood and agreed? A. It was understood that this farm belonged to Hosanna Taylor, and the mortgage was to be on it.” “ Q. Was or was not your subsequent action in reference to that argument ? A. It was based entirely on what took place in the board of directors that night.” •“ Q. What, did you do ? A. After this time I signed this bond of John K. Taylor for $600, as I understood.” “Q. Was there any agreement as to how this loan was to be secured, and if so what was said ? A. That John K. Taylor comply with the constitution and'by-laws was the agreement.” “ Q. In what particular? A. That the mortgage should be given on real estate as security, in addition thereto. That, there should be a judgment bond with additional security.” This is his statement of what was done and said to constitute an agreement. None was made with Trimbath. None was made with himself. The meetings were all before he signed the bond — at them his name was not mentioned as security. It was afterwards that Taylor asked him to sign the bond. All that the directors did was to pass the resolution. Neither resolution nor by-laws declare that the mortgage shall be primary security, and that the bond shall only be security for the sufficiency of the mortgage. Ho repeatedly declared in his testimony that he would not have signed the bond had it not been for that agreement; but as already seen, it was inadmissible for him to so testify ; neither was it competent for him to infer an agreement. Taking the statement of the defendant as to what was actually said and done as true, the plaintiff’s point should have been affirmed.

Although we consider the competent testimony of the defendant, even if supported by many witnesses and corroborating circumstances, utterly insufficient to establish a verbal contemporaneous agreement, to avoid misapprehension, we remark the question,-whether an equitable claim can be established by the uncorroborated testimony of the claimant, when denied by the opposite party on oath. The defendant seeks to escape liability on the ground of a verbal agreement that induced him to sign the bond, because it shifted his position, as it appears on the face of the bond, to a secondary one which cannot be reached until after exhaustion of another security. He sets up an equitable defence, and contends that if the testimony of himself stands alone, and is contradicted by a dozen witnesses, it remains for the jury to determine the facts involved. This is true as respects every question of fact in any claim at law; but every right founded upon a claim which is strictly equitable, whatever the form of procedure, .should be supported by evidence that would satisfy a chancellor. If a fact be averred in the bill and denied in the answer, it cannot be pretended that, the uncorroborated testimony of the plaintiff would be sufficient to establish such fact in a court of equity. In an ejectment for specific performance, it was remarked by Chief Justice Gibson : “ It is true that the verdict in an ejectment like the present may be well found on the oath of a single witness, because there is no opposing oath of the defendant; and it is also true that unlike a chancellor the court cannot give judgment non obstante veredicto ; but rather than give judgment in conformity with it, when found on insufficient evidence, it would be proper to grant new trials forever, and to save the vexation of suclTuseless litigation, it is equally proper to indicate beforehand the measure of evidence the chancellor would require Brawdy v. Brawdy, 7 Pa. St. 157. In that case the court below had directed a verdict for the defendant on the ground that the plaintiff’s evidence was insufficient to warrant a decree, and the judgment wTas affirmed. That doctrine applies as well when a defendant sets up an equitable claim. How that parties are competent witnesses, each may oppose his oath to the other’s, and certainly when written contracts or obligations are sought to be impeached by defences purely equitable, the reason is stronger than formerly for enforcing the rules of evidence applicable to cases in equity.

Judgment reversed, and venire facias de novo awarded.