Adams v. Morgan

| Mass. | Nov 26, 1889

Knowltont, J.

The plaintiffs insist that the writing which the bill was brought to enforce is on its face a contract for the sale of real estate by a warranty deed, in consideration of the cancellation of a promissory note for nineteen hundred and thirty-one dollars, and that no evidence can be introduced to show that it is anything else. But it is familiar law, that, in interpreting contracts, it is always proper to put ourselves in the situation of the parties so far as to understand the subject matter to which the contract relates. Oftentimes this involves knowledge of the circumstances under which the contract was made, and of facts not referred to in it, which may be supposed to have been in the minds of the parties when they made it, and which throw light upon its meaning.

It appears in the present case that Peleg Adams owned the Mansion-House property, worth about eighty thousand dollars, on which were mortgages amounting to fifty thousand dollars, and that before the death of his son, John A. Adams, he made and deposited in the hands of the defendant Packard a warranty deed of it, subject to two mortgages which the grantee was to assume, to be delivered after the grantor’s death, unless it should previously be withdrawn from Packard’s possession. After John A. Adams’s death, Peleg Adams obtained this deed from Packard, and made and deposited with him another like it, except that it ran to the plaintiffs, the widow and children of John A. Adams, to whom the deed was to be delivered after the grantor’s death, unless it should be recalled and taken out of Packard’s hands before that time. The plaintiff Charlotte E. Adams knew that a deed of that kind was in Packard’s possession, but she did not know its provisions. She held, as administratrix of her husband's estate, a note for -nineteen hundred and thirty-one dollars against Peleg Adams, which it was her official duty to collect for the benefit of herself and her children. On May 19, 1882, the writing set out in the plaintiff’s bill was signed by the parties, and that and the note were “ given to Packard under an agreement that he should put them with the -deed and keep them all together, and that, if she wanted the note at any time, she might have it, and if Peleg Adams wanted the deed at any time, he might have it. Peleg Adams offered to show her the deed, but she said she did not cave to see it.” It was distinctly arranged that she should keep the note alive, and not let it be outlawed; and for that purpose, about five years afterwards, she collected a payment upon it. In the light of these facts, so far as they are competent to be considered, we are to interpret the writing set out in the bill.

It seems to have been the purpose of the parties, in executing the writing, to make an agreement in regard to the note, in view of their understanding and expectation as to the deed of the real estate. Both knew that Packard held a deed from Peleg Adams running to the plaintiffs as grantees. Both knew that that deed might or might not become operative; for Peleg Adams had delivered it subject to a right to withdraw it at any time during his life, and it was stated when they were all together, that if he wanted the deed at any time he might have it, as Charlotte E. Adams might have her note at any time if she wanted it. We understand this statement to have meant that either party was at liberty at any time to withdraw the paper that he or she had deposited, and that thereupon the arrangement would be terminated. But in view of her expectation that the deed would at some time come into her possession, she seems to have been willing to forego collection of the note, — apparently in accordance with his wish, — and to leave it in Packard’s hands, to be kept alive there until it should be known whether she was to have the deed. So they made a voluntary arrangement — which was not binding for the future, but was subject to be terminated by either of them — that the note should remain in Packard’s hands, and the deed should also remain there until one or the other should see fit to terminate the arrangement, she by withdrawing her note, or he by withdrawing the deed, or until the arrangement should be terminated in accordance with the expectation of both parties by a delivery to her of the deed. In view of this understanding, which did not affect the rights of either party, but left Peleg Adams’s rights and Packard’s duties in relation to the deed precisely as they were before, they made an agreement in writing to fix their rights in relation to the note so long as the arrangement should continue. Without reciting the details, they stated what they “ understood ” or expected would occur under the arrangement, and named that as an inducement to a contract in regard to the note; and they then stipulated that the note should remain in full force and effect unless the deed should be delivered or put on record, and that in that event it should be cancelled.

What they said when they put the writing in Packard’s hands was equivalent to a declaration that they delivered it, not as a contract of sale of real estate, but as a memorandum of their agreement in regard to the note so long as the note should be held under the arrangement.

We find nothing in these facts which contradicts or varies the terms of the writing. When the facts appear, the writing is found to be properly applicable to them. There can be no doubt, when we look at the circumstances surrounding the transaction, that the deed referred to in the paper was that which Packard then held, and that the agreement should be construed as if the words “ now in the hands of Rufus A. Packard” had been inserted in it after the words “ warranty deed of the Mansion-House property.” It is argued that the deed which Packard held was not a warranty deed, and so that the writing cannot be shown to have referred to that. We. think so much else appears to show what deed was intended, that, even if the word “ warranty ” gave an absolutely false description in this part of the instrument, which is a mere recital, it could be rejected. Clark v. Houghton, 12 Gray, 38. Johns v. Church, 12 Pick. 557. But while it is inaccurate, it is not utterly false and misleading. The deed was in form a warranty deed, containing all the covenants and provisions usually found in such an instrument, although its legal effect was changed by an exception of the two mortgages in one of the covenants, with a statement that the grantees were to assume and pay them. Such a deed is often spoken of as a warranty deed made subject to mortgages to. be assumed. Upon the question whether the oral testimony was competent, the case is not as if the evidence had made the agreement contradictory, and wholly inapplicable to the facts as shown.

It is always competent to show by paroi whether an instrument was delivered or not, and if its terms are equally consistent with both, it is competent to show either an absolute or a qualified delivery. So, if its language is capable of one kind of interpretation as applied to one state of facts, and equally capable of a different interpretation as applied to other facts, it is always competent to show what were the facts in reference to which it was made. We think the facts introduced in evidence in this case were competent, and we are clearly of opinion that the plaintiffs are not entitled to a deed of the Mansion-House property free from the mortgage incumbrances upon it.

The offer to prove by Charlotte E. Adams what Peleg Adams said to her at different times, before and after making the written agreement, in regard to his purpose to give her a clear title to the property, was rightly rejected. It was merely an attempt to affect a written instrument by introducing prior and subsequent declarations of the maker as to the kind of instrument he intended to make. Bill dismissed with costs.