Pecos Valley Bank v. Evans-Snider-Buel Co., 107 F. 654

Pecos Valley Bank v. Evans-Snider-Buel Co.

107 F. 654 | 5th Cir. | 1901

Lead Opinion

McCORMICK, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

As is shown by the foregoing statement of the case, there is some apparent discrepancy as to the grounds on which the objections to the testimony of the witness Tom King were sustained by the court. In the bill of exceptions No. 1 it is stated that this evidence was objected to by the plaintiff and excluded by the court on the ground that it varied the terms of the written mortgages, and because no authority was shown authorizing Atwater to hind the plaintiff. This relates to the ruling announced when the testimony was first offered by the defendant. After the defendant had closed its testimony, and the plaintiff had introduced numerous witnesses in rebuttal touching the agreement (or absence of any such agreement, as was claimed by the defendant, and sought to be supported’by the testimony of the witness King), that witness was recalled by the defendant, which again sought to show by him the facts that it had offered to prove by him when he was first on the stand, with such elaboration as the rebutting testimony which had been offered by the plaintiff invited. Thereupon the plaintiff renewed its objection, stating as the grounds thereof (1) that the witness showed that there was a written memorandum of the agreement, and that it was the best evidence of what the agreement was; that, as the plaintiff had not been notified to produce the written memorandum, parol evidence was not competent to show its contents; and (2) that the testimony of the witness was incompetent because it, varied the terms of the written mortgages, “which first objection was by the conrt sustained, and defendant was hot permited to introduce the testimony.” From this it would seem that the circuit court held that the nature and extent of the proof offered by the plaintiff in rebuttal waived the objection placed upon the ground that the proof varied the terms of the written mortgages, and the objection not being based in any measure on the ground that no authority was shown authorizing Atwater to bind the plaintiff, and it then for the first time appearing that at the time of the negotiations between the witness and Atwater, in the fall of 1898, to which the offered testimony related, Atwater made a short memorandum of their agreement (which was not signed by any person, but *659was road by tlio witness), the objection taken that, as the witness showed there was a written memorandum made at the time of the agreement, it was the best evidence of wliat the agreement was, and that, as the plaintiff had not been notified to produce it, parol evidence was not competent to show its contents, was the objection which was sustained, and on this ground the testimony was excluded.

The plaintiff, in its pleadings, seeks to support its claim or right to recover on the two mortgages taken by it from King & Fowler, and from the wording of the second ground of the objection made to the introduction of Tom King’s testimony when it was last offered, at the very close of the trial, it would seem that the trial was conducted on (he theory that the plaintiff’s claim was supported by the contract of the parties evidenced, by each of the mortgages, or by both of them considered together; for the language of the second ground of the objection is, “because it varied the terms of the written mortgages,” using the plural number. The rejected testimony tended to prove that in September Tom King, repesenting King & Fowler, and A. T. Atwater, representing the plaintiff, had agreed some time in the month of September, 1898, that King & Fowler might use whatever wool had been shorn, or that should be thereafter shorn, from any of the sheep covered by the mortgage that had been executed, for the purpose of procuring feed, supplies, and raising means for paying the running expenses of the sheep, and that the wool should he free from the lien of these mortgages. The second or renewal mortgage given by King & Fowler to the plaintiff was not given until October 28, 1898, prior to which date the wool in question was mortgaged to the defendant below for cash in hand paid to a larger amount than the proceeds of the sale thereof received by the defendant, and for which the plaintiff recovered judgment in this case. If, therefore, the fact was. as the excluded testimony tended to show, that such an agreement was had between the plaintiff and King & Fowler some time in the month of September, 1898, and that, acting on that agreement, King & Fowler procured money from the defendant: on the mortgage to it executed and delivered, and the money thereon received before the making of the second or renewal mortgage to the plaintiff, the execution and delivery of that mortgage could not affect the lien and right which the defendant acquired by .its contract of the earlier date. Bo far as relates to the rejection or admission of this excluded testimony, the plaintiff below can rely only on its original mortgage. That instrument, bearing date IMarch 25, 1898, by its express terms includes not only the sheep described, but the wool and fleece thereon when shorn. It provides that the same may be shorn by the mortgagors; that the wool may be marketed, with the consent of the mortgagee, given in writing; that the proceeds shall be applied to the indebtedness described in the mortgage; and that the mortgagee shall have the right: to seize or recover the wool, or the proceeds thereof, for the purpose of applying the same upon the indebtedness and other purposes of the mortgage. These provisions of the mortgage it was competent for the parties thereto to annul or modify by parol agreement subsequently made, and the rule invoked by the objection that the testimony offered varied the terms of the written mortgages *660was not applicable as to the terms of the first mortgage. If we should assume, for the sake of the argument only, that the plaintiff’s case was supported in any measure by what is termed in the record the “second mortgage” (that is, the second mortgage given the plaintiff, of date October 28, 1898), the written memorandum of the agreement previously made would be as incompetent to contradict or vary the terms of that mortgage as any parol testimony. And it would seem that an objection to parol evidence offered, that it was not competent to prove the agreement sought to be established, because it showed that a memorandum in writing of the agreement was made at the time, and the adverse party had not been notified to produce the written memorandum, must be without force, when it appears that the memorandum in writing, if produced and offered, would not be admissible, over objection, to alter the terms of the mortgage in question; both the writing and the parol proof of its contents being subject to the graver objection. The rule of evidence that, where the parties to a contract have reduced their agreement to writing, parol evidence shall not be received to alter or contradict the written terms, is familiar, and the reasons which support it elementary. 1 G-reenl. Ev. §§ 275-286. It is often invoked in cases to which it is not applicable, and it is sometimes suggested, and acted upon in the moving progress of a trial before a jury, to conditions of offered testimony to which on first impression it appears to be applicable, and is therefore then enforced. It has doubtless been observed by those called to consider such matters that the first impression of good lawyers and of good judges seems to accept it as a universal rule that, where written evidence of a fact exists, all parol evidence of the same fact must be excluded. But such is not the rule. Keene v. Meade, 28 U. S. 1, 7 L. Ed. 581. The fact sought to be established in this case is the agreement of the plaintiff to allow the mortgagors to use the wool covered by the first mortgage to obtain means to meet the necessary expense of the management of the herds of sheep mortgaged to it. This the defendant offered to prove by the testimony of one of the acting parties, who, in stating the time and circumstances and terms of the agreement, referred, as a part of the res gestae of that transaction, to a pencil memorandum made by the other acting parly thereto, and read by the witness, which had for its purpose, as the witness claimed, the instructing of those who were to draft the renewal mortgage. This memorandum was wanting in essential elements of a written contract, and was so merged into the contract that thereafter was written as, in the absence of fraud or of other conditions not necessary here to name, lost any force it may ever have had to determine the rights and relations of the parties as fixed by the renewal mortgage. It did not, however, lose its force as a part of the res gestae to support the parol testimony offered to evidence the agreement claimed to have been made in September, 1898, — the issuable fact in this case, — and, if the writing had been produced and offered for that purpose, would have been admissible. It does not follow that because it would have been admissible, and had been reduced to writing, its existence, production, and offer would exclude the other parol testimony relating to the same subject. It was not *661pi'oduced, and it is objected that its contents embrace not only the best but the only admissible evidence oí the terms of the agreement to which it relates, and that oral testimony of its contents could not be given because notice had not been given to the adverse party to produce it. The excluded evidence tended to show that the written memorandum was not in the possession or control of the defendant; that when seen by the witness it was in the possession axid control of the secretary of the plaintiff. The plaintiff had intx-oduced that officer as a witness, and he had testified that no such memorándum ever existed. Numerous other witnesses had testified to their connection with the plaintiff and with (hese transactions, and that they ha.d no knowledge of the existence of any such written memorandum. In (his condition of the proof, granting that it was such a paper as ordinarily would require the giving of notice to produce it, as a condition precedent to offering parol testimony as to its contents, it is clear that the rule requiring such notice in proper cases has no application here. The testimony given by the plaintiff was by deposition of its different officers and employés, taken in ample time before the trial, and showing clearly it would be not only unnecessary but futile to require the giving of a more formal notice to the plaintiff to produce á paper which these incarnations of the corporation substantially concurred in swearing did not exist. “Evidence, when offered at the trial, must be assumed to exist, and to be true, for the purpose of determining the question of its admissibility.” The pencil memorandum in question was not offered by the defendant, nor did the defendant offer to prove its contents to support or establish its defense; but it offered to prove a parol agreement made by the plaintiff with the mortgagors, King & Fowler, after the execution of the mortgage in contemplation of a renewal thereof, to the effect that the wool already shorn or to be shorn might be used to meet the expense of “runxdng the sheep,” and that the wool should not be included in the renewal mortgage, in connection with which testimony, and as a part of it, the witness referred to the fact that the representative of the plaintiff at the time of making this pai'ol agreement made the pencil memox*andum in question for the instruction and guidance of the parties at the plaintiff’s office in Ft. Worth, where the renewal mortgage was to be made. The plaintiff cannot recover in this suit on the renewal mortgage, for the reasons already given. The defendant does not claim under either of the mortgages. Therefore the renewal mortgage and the pencil memorandum to which the testimony relates can only be considered as extrinsic evidence to support or contradict the other testimony offered to show that in September, 1808, the plaintiff had agreed that King & Fowler should use the wool shorn from tihe mortgaged sheep to meet the expense of “running the sheep.” Whatever may he the sound construction of the renewal mortgage as to its giving, or not, a lien on the wool and fleece of the flocks, it is manifest that the language of that mortgage is not identical with the language of the first mortgage in relation to that subject. And while, if fixe action was on tlxe second mortgage, its sound construction by the court might exclude any parol proof tending to modify its tei-ms, when used — as it can only be used in this *662case — as extrinsic evidence to sustain or oppose the contention of the defendant, the inferences of fact to be deduced from the difference in its language and the language of the original mortgage are for the consideration of the jury. Barreda v. Silsbee, 62 U. S. 146, 16 L. Ed. 86. Also, whether any such pencil memorandum was ever written, and what, if written, it contained, presented a question of fact depending on the credibility of the witnesses; and that question of fact was for the consideration of the jury, and not for the determination of the court. Dunbar v. U. S., 156 U. S. 185, 15 Sup. Ct. 325, 39 L. Ed. 390.

We conclude that the trial court erred in rejecting the testimony of the witness King, and in directing a verdict for the defendant. Therefore the judgment of the circuit court is reversed, and the cause is remanded to that court, with direction to award the defendant a venire facias de novo.

Dissenting Opinion

SHELBY, Circuit Judge

(dissenting). The record shows that the plaintiff in error offered to prove by Tom King that, at the time the arrangements were made for the extension of the loan and the execution of the second mortgage, he had an agreement with A. T. Atwater “that the wool should not be included in the second mortgage.” The assignment of error is that the court erred in refusing to permit the witness to testify to an agreement “that the wool already shorn and to be shorn from the sheep should not be included in the second mort-' gage.” The pleadings, the evidence, and the assignment of error seem to me to raise the plain question whether or not the negotiations preceding the execution of the second mortgage can be received in evidence to show that it should have been so written as to release certain property described in the first mortgage. It seems to me that this question should be answered in the negative, and that it would necessarily follow that the circuit court did not err in excluding the evidence. No principle of evidence is better settled than that, when persons put their contracts in writing, it is, in the absence of fraud, accident, or mistake, “conclusively presumed that the whole engagement and the extent and manner of their undertaking was reduced to writing.” Bast v. Bank, 101 U. S. 93, 25 L. Ed. 794, 9 Notes U. S. Rep. 915; Lanes v. Squyres, 45 Tex. 382. I think the judgment should be affirmed.