127 Va. 101 | Va. | 1920
delivered the opinion of the court.
This is an appeal from a decree dismissing a bill in equity brought to enjoin a trustee from selling certain real estate conveyed to him by deed of trust to secure a loan of money. The bill, after alleging that the complainants, George N. and Mary D. Rector, are the joint owners of one hundred acres of land in Henrico county, proceeds as follows:
“(2) That on the 19th day of May, 1911, they conveyed to R. A. Lancaster, Jr., the above described property in trust to secure to the holders of the notes the payment of the sum of $2',120.00, evidenced by three negotiable notes, date May 19, 1911, drawn by your complainants and payable at the National Bank of Virginia, Richmond, Virginia, to the order of your complainants. and endorsed by them, as follows: One principal note for $2,000.00, payable one.year after date, and two interest notes for $60.00 each, payable six and twelve months after date, respectively.
“ (3) The said loan, secured as above described, was made by N. J. Hancock, who thereupon became the owner of said notes and is now the owner of said notes.
“ (4) That at the time the said loan was made an agreement was entered into between said N. J. Hancock and your complainants to the effect that said Hancock would take possession and control of the said real estate during the term of the said loan and manage the same for his benefit, taking all the rents and profits arising therefrom for his own use, and that your complainants would remain on the*105 property in the employment of said Hancock during the term of the loan and serve him and perform services thereon without compensation, except their board and keep, and in consideration therefor the said Hancock then and there agreed that at the maturity of the said loan he would fully release the same unto your complainants and have the property conveyed in trust to secure the same fully discharged and released from the lien of the deed of trust herein described. Your complainants aver that the said Hancock took exclusive possession and control of said property under and pursuant to the foregoing agreement and not only took the rents and profits of the said property for the term immediately succeeding the said loan, but did not give up possession and control-until the spring of 1915; that during all of said time your complainants fully and faithfully performed all of the terms of the foregoing agreement on their part to be performed and faithfully labored for and served the said Hancock in and about all matters connected with his operation of the said property under and pursuant to the aforesaid agreement.
“(5) That at the expiration of the said two (?) years immediately succeeding the .date of said loan, your complainants repeatedly requested the said Hancock to comply with his agreement and fully discharge and acquit them from the foregoing deed of trust debt and release their real estate herein described from the lien of said deed of trust, but though often so requested the said Hancock had failed and refused to do so and your complainants aver that he on the-day of May, 1917, ordered and requested R. A. Lancaster, Jr., trustee in the deed of trust herein described, to sell at public auction the property of your complainants for the satisfaction of the debt secured in said deed of trust, alleged by the said Hancock to be now due and unpaid to him, with the interest thereon.”
The defendant, Hancock, construing the alleged collateral
The infirmity in this position is that there had never been any acceptance of the possession of the land and the services of the complainants as a payment of the notes. The situation is illustrated by the case of Doody v. Pierce, 9 Allen (Mass.) 142, in which it was contended that the note
In the case of Brent v. Richards, 2 Gratt. (43 Va.) 542, it was held that where a slave had been sold under a written bill of sale which appeared to be formal and complete, the vendor might prove a contemporaneous parol agreement on the part of the vendee giving the former the right to repurchase the slave on- certain conditions. It -may not be altogether easy to.harmonize the decision in that case -with some of the subsequent decisions in this State dealing with the parol evidence rule, but the case cited gives no trouble here, because the opinion was based upon the ground that the parol agreement “was neither inconsistent with nor contradictory of the bill of sale,” and. further, that the bill of sale represented exclusively a stipulation of the vendor, while the parol agreement related to a collateral and not inconsistent undertaking on the part,of the vendee. In the present case the alleged parol agreement embodied an undertaking on the .part of the makers of the notes, and one, too, which is in direct conflict with the manner of payment provided for therein. By the notes they, agreed to pay in money; by the parol contract they were not to pay in money but in labor.
Again, Mr. Wigmore, discussing the application of the parol evidence rule to negotiable instruments, says (sec. 2444) : “An extrinsic agreement as to the mode of payment, or the amount of payment, must be, by the foregoing tests, ineffective, since the parties have expressly dealt with these matters in the instrument; and although an agreement to concede a credit or counter-claim, as offsetting the obligation of the instrument, would be a separate transaction and therefore valid, yet- the distinction between the two may sometimes be hard to draw.”
In Clement v. Houck, 113 Iowa 504, 85 N. W. 765, there was an action on a promissory note. The case brings out and illustrates clearly the distinction under discussion here. The defendant claimed that, by an oral agreement prior
“I. On the trial the defendant offered to prove that the alleged oral agreement was entered into at the time he purchased the goods; that he exposed and offered the goods for sale at the proper season, and. that said goods proved to be unsuited for the trade supplied by him. That after diligent effort to sell the same at a reasonable profit, he offered to return said goods to the plaintiff, and packed and set aside the same, and has since held them subject to the order of the plaintiff. The price of said goods, as charged to defendant, was $803.75. Defendant also, offered to prove that at the time he gave the note in suit he expressly reserved his rights under said agreement. To these offers plaintiff objected as seeking to vary by parol the terms of the note, and the objection was sustained. Under a well established and undisputed rule of law this evidence was not admissible to vary or contradict the terms of the note, and therefore not admissible in support of the defense pleaded. The note is payable in money, not in goods; and to entertain this defense as such, and to admit the evidence in support thereof, would clearly vary the terms of the note by making it payable in goods, instead of money.*112 There was no error in excluding this evidence, so far as the • alleged defense is concerned, nor in withdrawing the defense from the consideration of the jury.
“II. We now inquire whether the defendant was entitled to introduce the offered evidence in support of his first counter-claim. His counter-claim shows a cause of action against the plaintiff! for a money recovery, which he is entitled to have setoff against the amount due the plaintiff, unless by giving the note in suit he has waived said right. * * * If it is true, as defendant offered to prove, that his • rights under the agreement were expressly reserved at the time the note was given, then there was neither waiver nor settlement of those rights. It is insisted that this evidence is not admissible, because it varies the terms of the note. Defendant, in this counter-claim, does not question the plaintiff’s right to a money judgment for a balance due on the note, but he is in the attitude of saying that, because of the matters alleged in the counter-claim * * * the plaintiff owes him a sum of money, which he asks to have set-off against that, confessed to be due to the plaintiff. If these rights were not waived nor settled, then the defendant has a cause of action against the plaintiff, the enforcement of which as a setoff does not vary the terms of the note, ■ though it may operate as any other rightful setoff would, as a partial or total payment of the amount due to the plaintiff. * * * We conclude * * * that the court erred in excluding this offered evidence in support of the first counter-claim, and in withdrawing that counter-claim from the consideration of the jury.”
In Stein v. Fogarty, 4 Idaho 702, 43 Pac. 681, there was an action on a promissory note. The defendant admitted the execution of the note, but alleged that contemporaneously with its execution he and the plaintiff mutually agreed that the note should be paid by the defendant in work and labor as a plumber, at the usual rates, upon a house then
See also to the same effect, Munford v. Tolman, 157 Ill. 258, 41 N. E. 617; Vradenburg v. Johnson, 3 Neb. (Unof.) 326, 91 N. W. 496; Linville v. Holden, 2 McArthur (D. C.) 329; Thornburgh v. Newcastle Railroad Co., 14 Ind. 499; Lang v. Johnson, 24 N. H. 302; Roundtree v. Gilroy, 57 Tex. 176; Holt v. Chandler, (Tex. Cr. App.), 29 S. W. 532.
For the reasons stated, we are of opinion that the court did not err in dismissing the complainants’ bill, and the decree complained of is,' therefore, affirmed.
Affirmed.