MacCorkell v. Whelan

Opinion by

Henderson, J.,

It is alleged in the affidavit of defense that J. M. and D. F. MacCorkell to whom the appellant gave the note sued on, with others, on account of a contract for plastering houses built by the latter “agreed and bound themselves to take the equities in five certain lots and buildings thereon in full payment and satisfaction of said notes if the deponent did not desire to pay said notes at maturity,” and the evidence of this agreement is said to exist in schedule “ B ” attached to the contract between the Mac-Corkell firm and the appellant and set forth in the affidavit of defense. This averment is the interpretation which the defendant puts on the contract, but we do not find in that document any agreement that the lots to be conveyed to the trustee were to be so conveyed in payment and satisfaction of defendant’s notes. On the contrary, the provision of the contract relating to the conveyance to the trustee declares that this arrangement was made as security to the contractors for the payment of the promissory notes. That the conveyance was intended to be a security only is further shown by the agreement that when the defendant paid one of the notes amounting to $1,900, two of the lots should be reconveyed to Whelan or his nominee free, clear and discharged from the terms of the contract. Manifestly as to these lots the title in the trustee was understood to be for security merely. Confirmation of this view is found in the stipulation in the contract that the balance, $900, which the defendant owed to the contractors was to be paid to them by a conveyance of a certain lot with a brick dwelling thereon, which the contractors agreed to accept in full payment of the said sum of $900. It seems evident that if the parties had intended that the first four lots referred to were to be taken by the contractors as payment on the debt the arrangement would have been so stated, for that is exactly what was done as to the balance not covered by the notes and the parties had in mind at the time the distinction between payment by conveyance of land and the obligations secured by the conveyance to the trustee. That this conveyance was not payment of the notes in the absence of an express agreement to that effect is shown by numerous authorities. Leas v. James, 10 S. & R. 307, and Perit et al. v. Pittfield et al., 5 Rawle, 166, state the principle involved; We understand the clause in the contract, which provides that on failure of the defendant to pay his notes or renew them as agreed the trustee shall convey the- four •above-described premises to the said contractors without recourse, to relate to the liability of the trustee. If it have any other bearing it is certainly not sufficiently clear to warrant a construction of the contract which would contradict the presumption that the transfer of the property was collateral only and the express declaration of the contract to that effect. The claim for set-off so far as the same was not sustained by the court below is not pressed in the appellant’s argument and need not be discussed. It is sufficient to say that the conclusion, of the learned judge of the court below is free from error.

The judgment is affirmed.