98 Va. 580 | Va. | 1900
delivered the opinion of the court.
The controversy in this appeal is whether W. L. Olivier and twenty-five other parties who filed their petition in this cause are liable to the creditors of the Wesleyan Eemale Institute, an insolvent corporation, on certain notes made by them and now in the hands of Reeves Catt, the receiver of the court in this case. This question was referred to one of the commissioners •of the court for investigation. He reported the facts and circumstances under which the notes were made, and reached the conclusion that the makers of the notes were not liable thereon. The court confirmed his report, and from that decree this appeal was allowed. »
It appears from the commissioner’s report, which, in all material matters is, we think, sustained by the evidence, that in the year 1893 the friends of the Institute, finding that it was financially embarrassed, set about to devise means to meet its indebtedness, and to continue the school as a going concern; that the head of the movement was one W. W. Smith, an active worker in the Methodist Episcopal Church, South; that he and parties interested held a public meeting at the Young Men’s Christian Association building in Staunton for the purpose of adopting some means to accomplish that end; that the plan proposed and adopted was that subscriptions to the amount of $25,000 should be secured, of which sum $10,000 was to be raised in and about Staunton by the friends of the institute, whilst the remaining sum of $15,000 was to be secured by the friends
• It further appears that none of the conditions upon which the notes were given were, or can be, performed by the institute.
One of the grounds upon which the creditors of the institute insist that the makers of the notes are liable thereon is that the notes formed a large and material part of the assets of the corporation, and were used by it with the full knowledge and consent of the makers of the notes as a basis of credit; and that as they (the creditors) relied largely upon the notes as a valid asset of the corporation in extending such credit, it would be inequitable and illegal not to hold the makers of the notes liable.
Whatever merit there might be in this contention, if true, it is unnecessary to consider, as the evidence does not show that the creditors, the appellants here, relied upon these notes in extending credit to the corporation, or even knew of their existence, until after their debts were created and the assignment made to Oatt, trustee.
It is insisted that the notes being plain, unconditional and unambiguous proinises to pay money, cannot be varied, altered or contradicted by any verbal evidence of a prior or contemporaneous agreement between the makers of the notes and the corporation.
hTo rule of law is better settled, or°of greater importance, than that a written contract cannot be contradicted or varied by evidence of an oral agreement between the parties made before or at the time of such contract. The object of the evidence introduced in this case was not, however, for the purpose of contradicting or varying the writings in question, but to show that the conditions upon which they were to become operative never
“ In such cases,” as was said by this court in Nash, v. Fugale, 32 Gratt. 595, 609, “ the oral evidence tends to prove independent facts, which, if established, avoids the effect of the written agreement by facts de hors the instrument, but do not tend to contradict or vary it.” * * * *
And in Woodward, Baldwin & Co. v. Foster, 18 Gratt. 200, 207, Judge Joynes, in discussing the same subject, says: “So it has been held that between the immediate parties evidence may be given of a contemporaneous, agreement consistent with the written contract; as, for example, that the bill was endorsed and handed over for a particular purpose, as for collection, without giving the trustee the usual rights- of an endorsee (Manley v. Boycot, 75 Eng. C. L. 45), or that the bill was transferred as an escrow, or upon an express condition which had not been applied with.”
In Ward v. Churn, 18 Gratt. 801, 813, it was said that “when the instrument is delivered directly to the obligee, the delivery cannot be regarded as conditional in respect to- the party who makes it, unless the condition is made known to the obligee. * * * If the delivery is upon a condition made known to the obligee, his assent to it will be presumed from the acceptance of the instrument, and he will not be allowed.to repudiate the condition thus asserted, and treat the delivery as absolute and unconditional.” See, also, Solenberger v. Gilbert, 86 Va. 778; Humphreys v. Richmond & M. R. R., 88 Va. 431.
The Supreme Court of the United States held in the case of Burke v. Dulaney, 153 U. S. 228, that in an action by the payee of a negotiable note against the maker, evidence was admissible to show by parol an agreement between the parties, made at the time of making the note, that it should not become operative as
The controversy in this case is really between the same parties, for the receiver and the creditors in the case took no other or greater interest in the notes than the institute had. The evidence was not only admissible to show, but does show, we think, that the notes were made upon conditions which were never complied with; some of which, at least, if not all, were known to and recognized by the corporation.
It is also contended that the record does not show, except as to a very small number of the makers of the subscription notes, that they knew of or made their subscriptions upon the conditions named. Whilst only three of the subscribers to the fund for which the notes were given testify in the case, they prove clearly that the plan proposed and adopted for raising the mpney was upon conditions which have never been, and cannot be, complied with. The notes given, except in two instances, are of the same date, most of them payable at the same time, alike in all other respects, except as to amounts and makers; and they were kept together and treated by all parties as belonging to the same fund. The record, we think, satisfactorily shows that the notes were given for the purposes and upon conditions outlined when the plan for'raising the money was proposed and adopted.
Reitlier were those conditions waived, as it is contended, by the subsequent conduct of the makers in making payment on their notes before the conditions were complied with. They had the right to expect that the conditions would be complied with, and that the money paid by them would not be used for any other purpose than that for which they agreed to pay it. ’ That this was their expectation is shown by the fact that when Robertson, the president of the institute, used the money collected by him on the notes to pay the running expenses of the school, the attention of the Executive Committee of the Board of Trustees was called to it; when they, recognizing that the money
"Without discussing further the objections urged to the decree complained of, we are of opinion that upon the whole case the makers of the -notes, who are parties to this suit, are not liable thereon, and that the Hustings Court did not err in so decreeing, and directing their notes to be cancelled and surrendered to them.
Affirmed.