Case ID: serg-rawl_14/html/0283-01.html
Source: Caselaw Access Project
Author: {"author": "Tilghman, C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Sunbury,
    June 28, 1826.]
    LYON and another against The HUNTINGDON BANK.
    IN ERROR.
    In an action on a single bill, the defendant may, under the plea of payment, with notice of special matter, prove that the bill was taken, subject to a parol agree-mentmade long before its date.
    On a writ of error to the Court of Common Pleas of Hunting-don county, it appeared that this was an action of debt, brought by the Huntingdon Bank, against John Lyon and Robert T Stewart, the plaintiffs in error, who were defendants below, on a single bill for seven thousand three hundred and ten dollars, dated the 20th of January, 1818. The defendants pleaded payment, with leave to give the special matter in evidence, whereupon issue was joined. Notice, agreeably to the rule of the 'Court of Common Pleas, was given by the defendants to the plaintiffs, of the special matter intended to be given in evidence. On the trial of the cause, the plaintiffs objected to the evidence, and the court sustained the objection, and rejected it. The opinion of the court was excepted to by the defendants, and the question before this court was, whether the evidence was admissible. The special matter was placed on the record; but it is necessary only to mention so much of it as is necessary to explain the opinion of the court. Some time in the year 1814 or 1815, William Patton was in possession of sundry judgment bonds from Edward B. Patton and Robert Porter, amounting to nearly eleven thousand dollars principal, besides con- . siderable arrears of interest. These bonds, were payable to William Patton, at different periods, in the years 1816, 1817, 1818, and 1819. William Patton produced the said bonds to the officers of the Huntingdon Bank, and proposed that the bank should make him a loan often thousand dollars, solely on the credit of those bonds. After some consideration, the officers of the bank informed him that he should be accommodated with ten thousand dollars,.solely on the credit of the said bonds, which were considered as sufficient security, and would be received entirely at the risk of the bank; but that it would be necessary, in compliance with the rules of the bank, for form’s sake, to put in his note for ten thousand dollars with an indorser; that neither he, nor his indorser, should ever be considered as liable on the said note, or any other note which might be put.in for the renewal of the same; that the said note might be renewed from time to time, until all the said bonds should become due, or so many of them as would be sufficient to discharge the said note, which should then be considered as cancelled; and, further, that the bank would never make any call for the payment of the said note, or any note put in for its renewal, nor would they insist on the said William Patton, or any person for him, paying the discounts on the renewals of the said note, without the consent of the said William Patton, and in no event would the said bank bring suit on the said note,, or any other which might be put. in for the renewal of it; but the said note,’and all others put in for the renewal of the same, should be considered merely matters of form, without any responsibility. On this condition, the said William Patton agreed to lake the said loan, and assigned the said judgment bonds to the bank under his hand and seal, in the presence of two subscribing witnesses. In pursuance of the aforesaid agreement, the said William Patton put into the bank his note for ten thousand dollars, indorsed by Edward B. Patton and John Lyon, one of the defendants, who, previous to their indorsement, had been informed by William Patton of all the circumstances of the agreement between the bank and him; and the .said Lyon became an indorser, in consequence of his understanding that he was never to be called on for payment, and would not otherwise have put his name on the said note. This note was from time to time renewed, with the same indorsers, until about the 3d of September, 1816, when it was reduced, by partial payments, to seven thousand three hundred and ten dollars, for which sum William Patton put in his note, with the same indorsers'. This last note was renewed several times, with the same indorsers, when William Patton became insolvent. It was then renewed, the said Edward B. Patton and John Lyon being the drawers, and Robert T. Stewart, (the defendant,) the indorser, without any alteration of the condition on which the original note was given. " Some time after this, the bank, to avoid the expense to which their debtors were put, by the stamp du.ties imposed by a law of the United States, made a rule, that notes should be put in under seal, with the former indorsers as securities. In compliance with this rule, the defendants gave their single bill without any alteration of the original terms on. which William Patton’s first note was given. The single bill of the defendants, on which this suit was brought,, was for a balance on the note for ten1 thousand dollars, originally put in by the said William Patton, indorsed by Edward B. Patton and John Lyon, as before mentioned. And, moreover, it was intended to be proved, that a very considerable loss had been sustained, in the said assigned bonds, by the negligence of the officers of the-'bdnk.
    All this evidence was rejected, on the principle of its being improper to admit parol evidence, for the purpose of altering or affecting the substance of a written instrument.
    
      Blanchard, (with whom were Greenough, Smith, and Mlison,) for the plaintiffs in error,
    being about to commence his argument, The Court desired to hear the counsel on the other side; upon which, Patter,-(with whom was Hale,') for the defendant in error, observed, that when the defendants below executed the single bill, upon which this suit is brought, they knew that no judgments had-been entered on the bonds which had been received by the bank. They knew, also, that judgments had been entered by other persons, against the obligors in those bonds. In short, they knew the principal matters upon which they now depend for their defence. The notice of special matter does not state that the obligors in this bill had any communication with the bank previous to their execution of the bill. ■ No parol evidence is admissible to destroy .a sealed instrument, such as that upon which this suit is founded. All the judges of this court have expressed their regret, at the length to which parol evidence has been permitted to go in Pennsylvania, to affect written instruments, and their determination to go no further. A review, however, of the adjudged cases, will show that they have never yet gone'the length now required. Wallace v. Baker, Í Bimi. 610 Church v. Church, 4 Yeates, 280. Thompson v. White, 1 Ball..424. Field v. Biddle, 1 Yeates, 132. MlMeen v. Owen, 1 Yeates., 138. Litle v. Henderson, 2 Yeates, 298. Dinkle v. Marshall, 3 Binn. 588. Christ v. Dijfmhach, 1 Serg. & Bawle, 464. Barndoller v. Tate, 1 Serg. & Raiole, 160. Cozens- v. Stevenson, 5 Serg. & Bawle, 424. Campbell v. MlClenachan, 6 Serg. & Bawle, j.71. 6 Serg. & Bawle, 410. 7 Serg. & Bawle, 115. The case of Heagy v. Umberger, 10 Serg. & Bawle, 339, bears a close analogy to this. There, the plaintiff sold to the defendant a horse, and received from him an assignment- of a single bill, to be taken at his risk; and parol evidence that, at the time of the execution of the assignment, the assignor undertook that the obligor in the bill should be good for the money, was rejected. There was no allegation of fraud, and the action was assumpsit.
    
   Tilghman, C. J.,

who delivered the opinion of the court, after stating the case, proceeded as follows:—

It is very true, that- it is a rule of law, subject, however, to exceptions, that a writing is to be construed according to its own words, without resort to parol evidence; also, that where there is an agreement in writing, parol evidence of the same agreement is inadmissible. But the evidence offered in this case does not fall within that rule. It was not pretended, that there was any thing wrong in the single bill, or that any alteration whatever should be made in it. The object of the evidence was, to show that it was subject to an agreement made long before its date. If that agreement had been under hand and seal, I presume it would not be contended, that this single bill would not be controlled by it. The question will be, then, whether an agreement of that kind could not have been made by parol. I can see no reason why it should not. The special matter given in evidence, under the plea of payment with leave, &c., has been compared to a bill in equity, in Robinson v. Eldridge, 10 Serg. & Rawle, 142, it was said by the court, to be in nature of a bill in equity, and if the defendant makes out a ease, which would entitle him to relief in equity, he shall have it here. ' In that case, as in the'present, the defence consisted of a number of facts which took place'at various times, but were of a connected nature, and all tended to make one whole. The counsel for the plaintiff relied strongly on the case of Heagy v. Umberger, 10 Serg. & Rawle, 339. There, the plaintiff sold to the defendant a horse, in consideration of which, he received from him an assignment of a single bill, expressly to be taken at . his own risk. The plaintiff offered parol evidence, that at the time of making the assignment, the defendant asserted and undertook, that the obligor in the assigned bill was good for the money; but the court rejected the evidence. We may perceive, at the first glance, the difference between that case, and the one before us. There, the evidence was in direct contradiction of the writing, and no fraud was alleged. The writing declared, that the assignor should not be responsible, — the evidence went to prove that he should be responsible. But. even iñ that case, if'the assignor of the bill had known that the drawer was insolvent, an action would have lain against, him for the deceit, and the parol evidence would have been admitted to prove it, because proof of the deceit would not have been in contradiction of the writing. If a bill in equity had been filed by the defendants, stating the facts contained in the notice of special matter, and the facts had been admitted, can it be doubted that they would been relieved. The Chancellor would have enjoined the bank from ever bringing suit on the bill, and if the facts had been denied, the complainant' would have been permitted to prove them by parol evidence. Could any thing be more fraudulent, more repugnant to equity and good conscience, than to prosecute an action on this bill in the very face of the agreement under which it was given? Most of the cases of parol evidence which have occurred in our courts, have been when one has been induced to execute a writing, in consequence of something which has passed immediately prior to the execution. In such cases there was fraud, and parol' evidence has been admitted for the purpose of altering and correcting the writing; and the judges have frequently said, that the evidence was to be confined to what took place at, and immediately before its execution. But it is evident that this rule cannot be applied to cases where fraud was committed, not by any thing which took place about the time of the execution of the writing, but long before. We decided at the last May Term, at Lancaster, in the case of Stubbs, Adm., v. King, that when the vendor of a tract of land had carried the vendee to the ground, and showed him false boundaries, some time before the execution of his deed of conveyance, and the vendee had afterwards accepted the deed, and given his bond for the purchase money, parol evidence might be received to prove the fraud, in an action brought by the vendor on the bond of the vendee. Indeed, there are innumerable instances where fraud must be triumphant, unless you are permitted to trace it to its source, and pursue it through aii its windings. And this can never be done, if parol evidence is excluded. In the present-instance, though no fraud might have been originally intended by the officers of the bank, yet it would be fraudulent to prosecute an action under the circumstances staled by the defendants, all of which we must presume to be true, because they offered to prove them. V/hether they could have proved them, or will be able to do so on another trial, it is not for the court to say, or even to conjecture. All that we can do, is to give the defendants an opportunity of verifying their assertions. I am of opinion that the evidence ought to have been admitted, and therefore the judgment should be reversed, and a venire de novo awarded.

Judgment reversed, and a venire facias de novo awarded. 
      
      
        Ante, page 206.