Walters v. Armstrong

5 Minn. 448 | Minn. | 1861

By the Gowrt

Atwatbe, J.

The Plaintiff Armstrong brings his action to foreclose a mortgage against the Defendant, securing two promissory notes — one for the sum of $2,108, and one for the sum of $464. The execution of the notes and mortgage is admitted by the Defendant, but the answer claims that the Defendants should be credited on the note of $2,108 at its date, with the sum of $578.78, which the Plaintiff refused to allow.

Amotion was made by the Plaintiff to strike out as irrelevant and immaterial, so much of the answer as set uj> the facts upon which the Defendant relied as entitling him to such credits, which motion was granted, and from the order thereon the Defendants appeal to this Court.

The portion of the answer which is material in the consideration of the points raised on this appeal is as follows — (the notes in suit being the amount as claimed, of two other notes previously held by Plaintiff):

“ That on the 30th day of December, 1858, the said Armstrong proposed to said Walters to compute the amount due upon said two notes above described, and that the amount actually due thereon should be placed in a new note, to be secured by a mortgage upon the real estate in said complaint described.

“That thereupon said Armstrong estimated the amount claimed by him to be due upon said two notes at $2,108, to which computation the said Catharine (Walters) and said Edward then and there objected; the said Catharine, whose property was about to be mortgaged to secure the amount due to said Armstrong, insisting that said amount was not legally due, and that she had made inquiries as to the amount, and that the said amount' so claimed was more than the amount legally due, and thereupon it was agreed by and between the said Plaintiff and said Edward M. and Catharine, that the amount claimed by said Armstrong should be included in one note; and that if said amount of $2,108 was more than the amount legally due upon said'two notes herein first above described as given to said Merritt and Armstrong, that said Walters should be credited upon said $2,108 note and mortgage with a sum equal to such difference, and so as only to leave due upon said note at its date a sum equal to the amount legally due, and no more.

There is but one question which we deem it necessary to examine in the disposition of this case. The answer in substance alleges that at the time of the execution and delivery of the note of $2,108 there was a verbal agreement between the parties that an endorsement of the same date should be made upon it of $518. Can this parol agreement be set up as a defence %

The rule that a parol agreement contemporaneous with a written contract cannot be set up to contradict or vary the terms of the latter, is too well settled to admit of discussion or require the citation of authorities. That the effect of the agreement pleaded in the answer is to vary the terms of the note cannot be doubted. The note admits on its face an indebtedness at the time of the execution thereof, of $2,108.. The offer is to show by parol that such indebtedness on the part of the Defendant did not exist, but only the sum of $1,529.22.

The counsel for the Defendant however urges that the defence here offered does not conflict with the rule above stated — that it is not sought to vary the terms of the note, but to have a certain amount endorsed upon it. This is a distinction without a difference. The real fact sought to be proved is that at the time the note was given the amount of indebtedness therein specified did not in fact exist, and we cannot see that it makes any difference in substance whether it was agreed that that fact should be evidenced by an endorsement upon the note, or by a change in the language of the note itself. The effect is the same in either case. The idea attached to an endorsement upon a note is that of a payment. But it is not claimed in this case that the endorsement was a payment, but that the note was given originally for too large a sum. The Defendant urges that this case is the same as though a sale had been made of articles, and a note given for the purchase money, under the supposition that the articles are in existence, and it turns out that the articles are not in existence, then there can be no recovery upon the note because there is no consideration for it. That is a case of total want of consideration, and there is no doubt but that such "a defence may always be set up. But such-is not the case at bar, since a consideration in this case is admitted in the answer! Nor is this a case of failure or partial failure of consideration, which presupposes the whole consid-: eration to have been in existence at the iuception of the note. It is a case (admitting the allegations of the answer to be true) of partial want of consideration. There are some authorities which hold that a partial want of consideration may be interposed as a defence to an action on a promissory note, but the weight of authority aud strength of reasoning I think is clearly opposed to allowing such defence. In Johnson v. Titus, 2 Hill, 606, it was held that mere inadequacy of consideration, without warranty or fraud, is no defence to a promissory note, but entire want of consideration is a defence to any executory contract. The reasons for this rule are well stated in Oakley vs. Boorman, 21 Wend. 593, 594, and in Edwards on Bills and Promissory Notes, 333, are cited authorities sustaining the same rule. The authorities in most of the States, so far as we have had access to them, sustain the same principle, though in some of the States, by statutory provision a partial failure of consideration is allowed as a defence to an action npon a note, and some of the authorities seem to make no distinction between a partial failure and partial want of consideration. Tbe subject is examined at considerable extent by Chancellor Kent, in his Commentaries, 2d vol., 472, et seq., and many authorities cited.

As we hold the evidence sought to be introduced under the allegations of the answer objected to to be inadmissible, there was no error in striking out these allegations, and the judgment below should be affirmed.