Case ID: miss_15/html/0622-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Samuel D. Lauderdale and Elias E. Byrn and Joseph Waddle, Administrators of Addison Peel, vs. Charles Hallock and Gilbert Bates.
    A deed of trust made by P. to secure all judgments outstanding and un- ' satisfied against P. or the firm of B. & P., cannot be held to embrace a judgment against L. & P.
    Parol testimony, to explain or vary the terms of -written instruments, is received with great caution and distrust; yet such evidence is admissible to explain mistakes in a deed.
    P. executed a deed of trust to secure, first, all judgments outstanding and ; unsatisfied against P. himself, or B. & P.; secondly, a note to C. executed by L. & P.. and indorsed by S. D. L. and others, and after that to pay certain other specified debts; H. & B., who held an. unsatisfied judgment against L. & P., filed a bill to recover from S. D. L. about "$ 1300, paid to ;him out of the trust fund on account of the note tb C., alleging that by the terms of the deed’of trust they were preferred to ’S. IK L. or to C.; it was proved by the draftsman of the deed of trust, who Was also one of the attorneys who recovered the judgment in favor of H. & B., that the judgment of H. & B. was not intended to be secured by the deed of trust; and if the words of the deed embraced that judgment, it was a mistake of the draftsman of the deed: Held, that the judgment of H. & B. was not secured by the deed of trust, arid their bill should be dismissed.
    Error, from the district chancery court at Columbus; Hon. Joseph W. Chalrfiers, vice-chancellor.
    On'the 28lh day'of June, 1841, Charles Hallock and Gilbert Bates, coparthérs, under the name and firm of Hallock & Bates, filed in the district chancery court at Columbus; their bill against Elias E. Byra and Joseph Waddle, administrators of Addison Peel, deceased, and Samuel D. Lauderdale, alleging that complainants recovered judgment in the circuit court of Lowndes county, on the 20th day of October, 1838, against James S. Lauderdale and Addison Peel, who were merchants and partners in trade, under the name and style of Lauderdale & Peel, for the sum of four thousand six hundred and twenty-seven dollars and ninety-six cents, upon w.hiph judgment various writs of fieri facias had been issued, and all returned nulla bona, except the last, and upon that only, one hundred and thirty-five dollars and forty cents was mad;e; and that the residue of the judgment was still unpaid ; a transcript of the record in the case in which the judgment was rendered was made an exhibit to the bill; that on the 23d day of March, 1838, Addison Peel transferred and assigned to Joseph W. Byrn all his goods and chattels, rights and credits, to sell and collect the same, and apply the proceeds thereof to the payment, — first, of all judgments then outstanding and unsatisfied against him, Peel, and afterwards to various purposes therein specified; and he made a copy of the deed of trust an exhibit to the bill; that at the time the deed of trust was executed the judgment in favor of complainants was the only one in existence against Peel; that Byrn has, since the execution of the deed of trust, died, and Elias E. Byrn and Joseph P. Waddle administered upon his estate, and took upon themselves the burden of the trust, and proceeded to execute the same, and raised from the trust fund the sum of three thousand dollars, or thereabouts, which should have been applied to the payment of complainant’s judgment; but instead of doing so the administrators paid it over to Samuel D. Lauderdale; that complainants have demanded the money from the administrators, and from Samuel D. Lauder-dale, and they refused to pay it over, pretending that Lauder-dale was entitled to it under the provisions of the deed of trust. The prayer was, that the administrators be compelled to state and show what amount of money had been realized from the trust fund, how much remained on hand, what amount of assets were not sold or collected ; and that they and Samuel D. Lauder-dale be compelled to pay to complainants whatever money had been received from the trust property, and for general relief.
    The defendants filed a joint and several answer, which admitted the execution of the deed of trust by Peel, apd that thirteen hundred, and fifteen dollars had been realized from the trust property, and paid over to Samuel D. Lauderdale; that judgment was confessed by James S. Lauderdale and Addison Peel, as partners under the firm of Lauderdale & Peel, at the time and for the sum stated. But the answer averred, that at the time of confessing the judgment, Lauderdale & Peel informed the attorney of complainants, that they were the owners of a tract of land situate in the county of Oetibbeha; that they desired the judgment to be satisfied and confessed the same upon the express agreement, on the part of the attorney of the complainants, that he would cause execution to issue upon the judgment and have the same levied upon said lands and apply the proceeds arising from a sale thereof to the payment of the judgment. Lauderdale & Peel and the attorney of complainants all at that time believed the land would .sell for enough to satisfy and extinguish the judgment; that execution issued upon the judgment and was levied on the land, which was sold, and produced only $ 135 40. Respondents further say that at the time of making the assignment, Lauderdale & Peel fully believed that the land would sell for enough to satisfy the judgment of complainants; that Addison Peel did not intend first to provide for the payment of the judgment in favor of the complainants, but on the contrary it was his avowed and express purpose and intention to exclude their judgment from the benefit of the assignment, until Samuel D. Lauderdale should be fully indemnified against the liabilities mentioned in the assignment; which intention and purpose was avowed and made known to the attorney of complainants; that the true intention and object of the assignment, was first to provide for the payment of a certain judgment in favor of Maltby and Starr, against Addison Peel, and secondly to indemnify Samuel D. Lauderdale as indorser of Lauderdale & Peel. And respondents aver that the clause contained in the assignment which provides for the satisfaction of all judgments then outstanding against Addison Peel, was not intended to embrace complainants’ judgment against Lauder-dale & Peel, nor any other judgment, except the one of Maltby & Starr. And if the assignment shall be construed as embracing judgments against Lauderdale & Peel, the same was so made by mistake. That the sum of $2250 only, has been raised under the assignment, all of which has been paid to the preferred creditors and the residue of the property named in the assignment is valueless.
    The defendant proved by Samuel F. Butterworth, that the object of the deed of trust, after paying expenses, was first, to secure to Maltby and Starr, of Mobile, Alabama,, the amount of a judgment due to them from Peel, and second, to secure to the Commercial Bank of Columbus the note mentioned in the deed of trust, on which Samuel D. Lauderdale was security. . The avowed object of Peel, at the time of executing the deed of trust, was to secure Samuel D. Lauderdale before all other persons except Maltby & Starr; that some time before the deed of trust was made, Peel confessed judgment in favor of complainants, and the judgment was entered against Lauderdale & Peel. Peel then stated to deponent (who was attorney for complainants, that he owned a valuable tract of land in Octibbeha county, which he was willing to give to complainants in payment of their demand. To effect this, deponent advised the confession of the judgment above mentioned, in order that the lands might be sold under the judgment, and the complainants thereby obtain a clear and perfect title. There was no specific agreement between deponent and Peel that the land should be taken by complainants in satisfaction of their judgment, but both Peel and deponent believed that the land would sell for enough to pay the judgment. The deed of trust, mentioned in the answer, was drawn by deponent. Peel refused to .execute it unless Samuel D. Lauderdale was secured next after Maltby & Starr.
    On cross-examination, he stated that when the deed of trust was executed, no mention was made of any judgment except that of Maltby & Starr, and the first clause in the deed was to provide for that judgment; Peel expressed no intention to exclude any judgment from the deed of trust, but he avowed the intention to prefer no claim to Samuel D. Lauderdale except Maltby & Starr.
    Tilghman M. Tucker proved that he knew of no inducement to Peel to make the deed of trust, but to provide for Samuel D. Lauderdale as security for Lauderdale & Peel; that he was consulted as to the best manner of indemnifying Samuel D. Lauderdale, and he advised the execution of the deed of trust as the best; that he was one of the attorneys of Hallock & Bates, and recollects that it was expected by Peel, when he confessed said judgment, that a tract of land owned by him in Oc-tibbeha would be received, or the proceeds of the sale thereof, in payment of the judgment so confessed; deponent thinks that no doubt was entertained by Peel, or by deponent, or Butter-worth, who was then associated with deponent in the practice of the law, that the land would be received in satisfaction of the judgment, and would fully pay it, as it was supposed to be of at .least the value of the judgment, and most probably of greater value. Deponent thinks that Peel understood that the tract of land was to be received in discharge of the judgment, and that the attorneys of complainants, Tucker and Butter-worth, had agreed with him to receive the tract of land in payment of the judgment, which was not the fact. Deponent recollects that Tucker and Butterworth were anxious to save complainants’ debt, and deemed it almost the only means to effect that object, to get the judgment confessed at the time it was done; and deponent recollects that he then was of opinion that getting the judgment, confessed at the time would effectually secure the payment of the debt by being a lien on said tract of land. For some reason, which deponent does not recollect, if he ever knew, complainant did not take the land for the debt, and the land was sold under the judgment, and for some reason, perhaps some supposed defect of Peel’s title, the land sold for a very small sum of money; he did not think the deed of trust was intended to secure the payment of complainants’ judgment.
    The reason deponent has for believing that judgment was not intended to be secured by the deed of trust, was, that the lien on the land would be ample security. Peel was peculiarly anxious to secure Samuel D. Lauderdale from liability as security for himself and his partner James S. Lauderdale.
    On cross-examination, he said he knew of no other reason why the judgment of Maltby & Starr was included in the deed of trust, than that it was in judgment, and was a lien on the grantor’s property, and did not know that that was the reason. The object of the deed of trust was to secure Samuel D. Lau-derdale.
    On the 10th day of November, 1842, the vice-chancellor rendered a final decree, ordering Samuel D. Lauderdale to pay to the complainants twelve hundred and eighty dollars, that being the amount due him by the administrators, and in default of payment that execution issue therefor; and also that the administrators pay to the complainants one hundred and fifty-seven dollars, money paid out by them without authority. To reverse that decree, the defendants now prosecute this writ of error.
    
      R. Evans, for plaintiffs in error.
    
      Adam Y. Smith, for defendant in error,
    cited 1 How. 333, 334; 2 How. 718; 1 Bro. 94; 6 Yes. 332, 333, and 328 ; 2 J. C. R. 596 ; Rankin v. Atherton, 3 Paige, 143.
   Mr. Justice Clayton

delivered the opinion of the court.

In March, 1838, one Addison Peel made a conveyance of all his estate and effects, consisting mostly of choses in action, in trust, first, to pay all judgments outstanding and unsatisfied against said Peel, and against the late firm of Brichell & Peel. Secondly, to secure a note to the Commercial Bank of Columbus, Mississippi, executed by Lauderdale & Peel, with Samuel D. Lauderdale and others as sureties, and after that to pay certain other specified debts. Before the date of this deed of trust, the appellees, Halloek & Bates, had recovered a judgment in the circuit court of Lowndes county, against James S. Lauderdale and Addison Peel, partners under the style of Lauderdale & Peel, for $4,600. But a small portion of this judgment was made under their execution.

The trustee under the deed of trust, collected some three or four thousand dollars, and paid first, a judgment in favor of Maltby & Starr, and next, about $1300 to S. Lauderdale, on the note due the Commercial Bank at Columbus, which is the debt provided for in the second clause. This bill is filed against Samuel Lauderdale and others, to recover the sum so paid by the trustee, upon the ground that it was a mis-apjfiication of the trust fund, and that their debt was of the first class, and entitled to priority under the deed.

The answer denies this right of priority of the complainants. It states that the judgment in their favor was confessed by Addison Peel, under an agreement with their attorney, that the judgment should be satisfied by a tract of land, owned by Peel, in Octibbeha county; but that the land was afterwards sold for a very small sum. It insists that the intention of Peel was to secure the defendant next to the judgment of Maltby So Starr, and that if the judgment of the complainants be em-bráced in the general description contained in the deed, it was by mistake.

The depositions of Tucker So Butterworth, who were the attorneys of Hallock So Bates in procuring the judgment, and one of whom likewise drew the deed of trust, were taken. They were both consulted, and they both fully sustain the answer, that the great leading object of executing the deed of trust was to secure Samuel D. Lauderdale, and that the claim on which he was indorser was therefore placed next the judgments. Tucker also states, that Peel understood the agreement with the attorneys of Hallock <fc Bates to be, that the tract of land was to be received in discharge of the judgment, and that he knew of no object for executing the deed, but to secure S. D. Lauderdale.

The vice-chancellor decreed in favor of the complainants, from which decree an appeal is taken to this court.

The contest is for priority between the respective parties. It is to be observed, in the first place, that the judgment of the complainants is against the firm of Lauderdale So Peel, and so does not fall literally within the trust deed, the provisions of which are for judgments against Peel himself, or Brichell & Peel. The kind of judgment entitled to priority under the deed, is the very pivot and turning-point of the controversy, and -we cannot say that a judgment against Lauderdale So Peel was intended to be embraced by the deed.

If the depositions in the cause be looked to, then the intention to exclude the judgment of complainants, is still more apparent. The attorneys who were consulted on the occasion and who drew the deed, testify positively that it was the intention to give preference to Lauderdale. If the deed do not secure the object, it is so drawn by mistake.

Parol testimony to explain or vary the terms of a written instrument, is received with great caution and distrust. It is admissible even in equity, only in a few instances. Pegens v. Mosby & Kyle, MS.; Gresley’s Eq. Ev. 205. But mistake is one of the exceptions in which it is admissible.

Here the answer alleges, that if the deed bears the construction contended for by the complainants, it was so drawn by mistake. The testimony clearly establishes the fact. Viewing the testimony with all the caution and distrust, which we are admonished by the authorities it is proper to exercise in cases of this sort, we are still led to the conclusion, that this evidence does fully sustain the answer. We adopt this conclusion, too, the more readily, because it accords with the literal terms of the deed.

The complainants do not, in their bill, at all rely upon their judgment lien, but go entirely upon the deed of trust. Our opinion, therefore, rests upon the construction of the deed alone, without reference to the judgment lien, if under the circumstances they have any. No facts are set out to elicit an opinion upon such point.

The decree of the court below is reversed, and the bill dismissed.