Egleston v. Knickerbacker , 6 Barb. 458 ( 1849 )

By the Court, Willard, J.

There is no doubt that the sums of money mentioned in the two receipts, actually came to the hands of the defendant before the foreclosure of his mortgage, and that they were not credited by the referee in computing the amount due on the bond and mortgage. If those sums were intended as payments, according to the terms of the receipts, they can not be recovered back, whether they were allowed1 or not. It was the duty of the defendant in the foreclosure suit to bring in the receipts before the referee, and see that they were allowed; and if the referee improperly rejected them, to except to his report. The decree, while it stands in force, is conclusive evidence that the amount therein specified was justly due; and the present plaintiff can not impeach it in this collateral way.

The question whether this money was merely delivered to the defendant as a deposit, and not to be applied to the bond and mortgage, unless Kellogg paid a like sum, and to be refunded in case Kellogg omitted to pay, was a question of fact on which, as there was conflicting evidence, the finding of the referee must be deemed conclusive. The referee has found that the money was received in payment, and that the application thereof had not been changed by the parties. Unless the referee erred in receiving testimony on this point against the plaintiff’s objection, the report can not be disturbed.

The referee probably erred in receiving, on the part of the. defendant, the examination upon oath of the defendant when, complainant in the foreclosure suit, taken in pursuance of the. 91st rule. The plaintiff attempted to prove that examination by the referee, but failed to do so; from a want of recollection, on .the part of the referee. The defendant then, against the plaintiff’s objection, proved it by his own solicitor, who was present when it was taken. The declarations of the plaintiff in. the foreclosure suit were competent evidence against him, wheth-. er taken under oath or not, but were not admissible in his favor.. The circumstance that the plaintiff attempted, without success,, to prove those declarations, did not render them admissible on, the part of the defendant.' But the facts disclosed by that examination did not prejudice the plaintiff, and in such case we. are not required to disturb the report, although the referee erred' in receiving the.evidence. (Smith v. Kerr, 1 Barb. Sup. Court Rep. 115.) Indeed, the evidence was more favorable to the plaintiff than against him.

But there was another objection, which seems not to have been made before the referee until the testimony was closed, viz. the objection against the evidence to contradict the receipts. If that evidence had been excluded, there would have been no color for the action. Unless the plaintiff could show the receipts to have been given upon condition, the referee was bound to treat them as applied according to their express terms. This leads to the inquiry as to the extent to which a receipt is open to explanation. By the general rule of evidence, independently of the statute of frauds, parol evidence can not be received to contradict a written agreement. The written instrument must be considered as containing the true agreement between the parties, and as furnishing better evidence than any which can be supplied by parol. (1 Phil. Ev. 561.) Even with respect to a receipt, it is only the consideration part which may be explained by parol; and the explanation which is admissible is that kind of explanation which is not contradictory to, but consistent with, the instrument. (McKinstry v. Pearsall, 3 John. 319.) Thus, in Tobey v. Barber, (5 Id. 68,) a receipt for 11 one hundred and sixty-three dollars in full for the second and third quarters’ rent,” was given in evidence, and the adverse party was allowed to show that the sum mentioned in the receipts embraced a promissory note for $115, given by a third person, payable at the bank, in four months, arid that the maker failed, arid took the benefit of the insolvent act, before the note became due. This evidence was not inconsistent with the receipt. It merely showed of what the consideration of the receipt was Composed, and that the plaintiff had not been benefited by it to its full extent. To the same effect is Johnson v. Weed, (9 John. 310;) Putnam v. Lewis, (8 Id. 389 ;) and Southwick v. Hayden, (7 Cowen, 334.) The case of House v. Low, (2 John. 378,) is too loosely reported to afford much light on the subject. The defendant pleaded in bar of the plaintiff’s demand a receipt in full, to which the plaintiff replied that it was given upon a condition which had not been performed by the defendant, on which issue was joined. The justice found that it wás given upon condition. The court say, “ The evidence to show that the receipt was conditional, was admissible. The parties joined issue upon that, without raising any objection; and a receipt may be explained by parol.” Whether the condition was contained in the receipt or out of it, does not appear, though the latter is to be inferred. Nevertheless it does not appear that the evidence was objected to, and the court obviously place their decision upon the ground that the parties joined issue upon that point without objection. The plaintiff should have demurred to the plea if he wished to raise the question whether a receipt absolute in terms Could be shown by parol to have been given upon condition.

The doctrine prevailed for a short time in this court that a deed absolute in its terms might be shown, in a court of law, by parol evidence, to be a mortgage. (Roach v. Cosine, 9 Wend. 227. Walton v. Cronly, 14 Id. 63. Swart v. Service, 21 Id. 36. Webb v. Rice, 1 Hill, 606.) The doctrine was strenuously resisted by some of the judges, and never met the acquiescence of the bar. Moreover, it was found in practice to be fraught with all the evils which led to the passing of the statute of frauds, and was a clear departure from the wise provisions of that statute, and the maxins of the common law. (Sternes v. Cooper, 1 John. Ch. 429.) It was at length finally overthrown by the court of errors, in Webb v. Rice, (6 Hill, 219,) by a nearly unanimous vote, and the older and better rule restored. Under the law established by the last mentioned decision it is difficult to perceive how a receipt, absolute in its terms, could be allowed to be shown by parol evidence to be conditional, except on a proceeding to reform the instrument for an error occasioned by fraud or mistake.

In Tobey v. Barber, (5 John. 68,) already cited, the action was covenatit for rent due on a lease executed by the plaintiff to the defendant. One of the receipts given in evidence by the defendant, indorsed on a counterpart of the lease, was in these words: “ Received of Uriah Coffin, five turnpike shares, depos* ited with Uriah Coffin by Ralph Barber, for me, for the last quarter’s rent, due of Ralph Barber, before the assignment, agreeable to the within lease, the said shares being in the Schoharie Turnpike.” On the trial the plaintiff was allowed to prove that the shares were received, not as payment, but upon the condition expressed in a letter of the defendant. The letter was dated a few days before the receipt, and stated that the plaintiff might receive the shares of Coffin, and keep them until April, when the defendant would redeem them. The. shares not having been redeemed, the plaintiff was allowed to show their actual value. This parol evidence was not contradictory of the receipt. The receipt did not purport that those shares were taken as an extinguishment of the rent. It did not even express the amount for which they were received, nor their value. It seemed to recognize them as deposited with a third person, for the plaintiff, for the last quarter’s rent. The defendant’s letter and the receipt were in fact but a part of one transaction, and mutually explained each other. With this explanation the case is in perfect harmony with the other cases which have been cited.

The recent case of Haddock v. Kelsey, (3 Barb. Sup. Court Rep. 100,) affords a correct illustration of the principle on which a receipt may be explained. In that case, however, the two receipts simultaneously and reciprocally given by each party to the other, should be construed together, and it then becomes obvious how the plaintiff below had received $207,20, the sum for which he sued. He had not received it in cash, but in the engagement of the defendant below to pay it, when audited and allowed by the proper department at Washington. The extrinsic evidence was entirely consistent with the whole transaction.

The decisions in other states are, for the most part, in accordance with ours, allowing an explanation by parol to a receipt, in matters not inconsistent with it. Thus, when it is without date, the time when it was executed may be shown by parol. (Troubridge v. Sanger, 4 Pick. 179;) also to show to what demand it is applicable. (Brooks v. White, 2 Metc. 283.) When a moneyed consideration is stated in an instrument, parol evidence is admissible to show that it was greater or less than is stated; (Mead v. Steger, 5 Port. 498;) and also that other-considerations than those expressed passed between the parties.

But when a receipt is in the nature of a contract, it is, so far, Within the general rule, and is not liable to be varied by parol evidence. (See 2 Cowen & Hill’s Notes, 1439, and the cases there cited.) In the present case the receipts, in terms, express the manner in which the money was to be appropriated. On principle and authority they can not, in that respect be contradicted. It was competent, however, to prove a new appropriation Of the money; but the proof fell short of the mark.

There is another view of this subject equally fatal to the plaintiff’s right of recovery. On the merits he has no greater equity to recover back this money, than the defendant has to retain it. On the sale of the premises under the decree of foreclosure, in March, 1848, they failed to bring enough to satisfy the decree, by the sum of §284,92; which sum exceeded the amount of the two receipts and interest thereon up to that day. It is not denied that the defendant is entitled to that sum from somebody. If the money mentioned in the receipts had been applied before the decree, and the premises had sold for the same sum, there would still have been no surplus money to return to the plaintiff, and the other owners of the equity of redemption. Should the decree be now opened, the only effect would be to apply the receipts on the bond and mortgage according to their terms. If the plaintiff should now move to open the decree, the defendant might answer the motion by an offer to apply the receipts upon the decree.

The plaintiff lays stress upon the fact that Merritt, in his assignment of the bond and mortgage to the defendant, guarantied the payment. This does not increase the plaintiff’s equitable title to reclaim this money. As between Merritt and the plaintiff, the equities still are that the payments made by the plaintiff should be applied on the mortgage, dood faith required that the defendant should collect his mortgage from the parties and funds primarily liable, rather than against a collateral guarantor. If the premises were worth, as is said, a much greater sum than they brought on the sale, the plaintiff should have attended and bid them up to their full value. He and the Kelloggs, the owners of the equity of redemption, would have been entitled to the surplus money, if there were no other liens.

On the whole, we think the case has been properly disposed of by the referee, and the motion to set aside his report should be denied.