Case ID: ad_56/html/0610-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Spring, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles A. Hanes, Appellant, v. Frederick B. Sackett, as Receiver of the Property of John A. Butler, Respondent.
    
      Oral agreement—when it is independent, and when it relates only to the consideration, . of a written conveyance of land.
    
    An owner of land negotiated a §500 mortgage thereon, of which the mortgagee- ■ paid him. §250 at the time of its execution, and agreed in writing to.pay the. remaining §250 when the second of two houses to be erected upon the premises should be inclosed. Thereafter -the mortgagor conveyed the premises, and at. the time of the execution of the deed entered into a parol agreement with the . grantee, by which the- latter was to receive the §250 to become due from the-'mortgagee, which agreement formed part of the consideration for the purchase. Subsequently such grantee conveyed the property to another purchaser, making, as part of the consideration for the transfer, a similar parol agreement. Held, that evidence of such oral agreements was competent, either upon the ground that such agreements were independent of the conveyances or related! solely to the consideration therefor.
    A. parol assignment of a chose in action, based upon a valuable consideration, passes the title thereto.
    McLennan, X, dissented.
    Appeal by the plaintiff, Charles A. Hanes, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Ontario on the 9th day of February, 1900, upon the dismissal of the complaint by direction of the court at the close of the evidence after a trial before the court and a jury at the Ontario Trial Term, and also from an order entered in said, clerk’s office on the 14th day of February, 1900, denying the plaintiff’s motion for a new trial made upon the minutes. ■ .
    
      This action was commenced against Sarah A. Mulholland January 20, 1899, to recover the sum of $250. That the said defendant was indebted to some one for the sum claimed and by reason of the agreement set out in the complaint is undisputed. The present receiver was appointed in proceedings supplemental to execution on a judgment against one John A. Butler, and in that capacity claimed this money in hostility to the claim of the jfiaintiif. Pursuant to an order duly made and which has been fully complied with, the said receiver was substituted as party defendant in the place of said Sarah A. Mulholland, and she was released from all liability by reason of her said agreement upon paying over the money as directed, and this action was continued against said receiver, and upon an amended complaint as provided for in the order of interpleader.
    On the 3d day of August, 1898, said John A. Butler owned a lot in the village of Border City in the town of Waterloo, Seneca county, upon which he was erecting two dwelling houses, one of which was then nearly completed. He sought to borrow $500 of said Sarah A. Mulholland, to be secured by his ■ bond and a mortgage upon said premises. Thereupon on that day they entered into an agreement in writing whereby she agreed to pay him $250 upon the execution of the bond and mortgage, and Butler agreed to complete said dwelling houses, and the agreement further provided that the remaining $250, which constituted the part consideration for the bond and mortgage, should be paid to Butler “ when the second house to be erected on said premises shall be enclosed.” The bond and mortgage were executed and delivered, and the first $250 paid that day, all conformably to said written agreement.
    On the 5th of August, 1898, said John A. Butler executed and delivered to his brother David Butler his bond, accompanied by a second mortgage upon the same premises, to secure the payment of $1,000 and interest as therein provided. At the time of the execution of this bond and mortgage the Butlers entered into a written agreement whereby David agreed to. erect "a dwelling house on said lot for the sum of $500, to be completed on or before November 20, 1898, and which is the second dwelling house referred to in the Mulholland agreement. The payment for this building Constituted a part of the consideration for such bond and mortgage from John A. to David.
    
      • On August 22, 1898, Butler conveyed the premises to James Davis by warranty deed. In that conveyance the consideration expressed is $100, and in addition the grantee assumed the payment of said two mortgages. The proof shows that at the time of the execution of the deed there was a parol agreement by which. the grantee was to receive the $250 to become due from Mrs. Mulholland when the building was inclosed, and that this agreement formed a part of the inducement and consideration for the purchase of the premises. On the 28th of September, 1898, Davis conveyed to the plaintiff, by a similar deed containing an expressed consideration of $75, and with a like assumption clause to that recited in the deed from Butler to Davis. By a parol agreement made as a part of the consideration for this transfer, Davis also assigned to the plaintiff the said claim of $250, which was to mature when said dwelling house was inclosed. On December 7, 1898, Butler gave a written order directing Mrs. Mulholland to pay said sum of $250 to the plaintiff. On the 9tli of January, 1899, Butler and Davis joined in a formal written assignment -of said claim to the plaintiff, purporting to be made, in confirmation of the preceding oral. transfers. Prior to the inclosure of the building and the written assignment and or-der, but subsequent to the parol1 transfer to the plaintiff, and on the. 3d day of October, 1898, one Jenkins recovered a judgment of $146;76, in Justice’s Court, against Butler, and proceedings supplemental-to execution were instituted on said judgment, and on November 5, 1898, Mrs. Mulholland was enjoined from paying over said money and was directed to appear and be examined as, a witness before a referee appointed in said proceedings. The proceedings culminated' in the appointment' of the defendant as receiver on said judgment February 6, 1899. With these- conveyances there was also a verbal transfer of the agreement between the Butlers,, whereby David was to erect the house on said lot, and which in-part formed the consideration of the bond and mortgage to-him. It also appears that the written agreement with Mrs.- Mulholland during all this time was in the custody of the attorney who prepared it and who refused to show it to the plaintiff.
    
      William & Moore, for the appellant.
    
      George I. Bachman, for the respondent, i
   Spring, J.:

The evidence warrants the conclusion that- when Butler sold the . land he expected to transfer also his claim against Mrs. Mulholland. His agreement with his brother for the erection of a dwelling house was not yet fulfilled. There was no undertaking in writing by him with Davis that it should be carried out, yet it is clear that that also was expected, and that expectation is best supported by the fact that David Butler did build the house pursuant to the agreement. The completion of the house was essential before Mrs. Mulholland was liable to pay the $250, and it was evidently intended that David Butler should erect the building and that Davis should then become vested with the title to the demand against Mrs. Mulholland. When he accepted the conveyance the house was in process of erection and h¿ took the risk of David Butler completing it according to his contract. If for any reason the house was not, inclosed, then Mrs. Mulholland could not be made to pay, and Davis purchased it with that condition confronting.him.

The law is well settled that an assignment of a chose in action by parol based upon a valuable consideration passes the title. (Risley v. Phenix Bank, 83 N. Y. 318; Williams v. Ingersoll, 89 id. 508, 521.) The troublesome question in this case, however, does not hinge upon that principle, but whether the oral transfer is in variation or hostility to the deed of conveyance. The transfer of the claim against Mrs. Mulholland was wholly independent of the deed to Davis. The latter was for the purpose of vesting the title to the land in the grantee. The former was to effect the sale of personal property — a chose in action. The claim of the plaintiff is that contemporaneously with the execution and delivery of the deed and resting upon the same consideration, Davis purchased this demand of Butler. Parol proof that he did make such purchase does not contradict the deed. By that conveyance he agreed to pay $100 and also to assume the payment of the two mortgages. Plaintiff does not seek to contradict or vary those facts. His contention is that aside from the conveyance there was an agreement by which Davis was to acquire the right to this $250 when it matured, and a like agreement was made when Davis conveyed.

In Hutzler v. Richter (13 App. Div. 592) the defendants purchased a tract of land of the plaintiff for $1,200, $400 of which were paid in cash and the balance was secured by the bond and mort■gage of the defendants. The defendant mortgagors agreed to keep the buildings insured as owners, for the benefit of the mortgagee in the sum of $700, which was not done, and the buildings subsequently burned uninsured. At the time of the- conveyance such buildings were insured for the sum of $700, and the policy had nearly two years of life. It was contended by the defendants that at that time the plaintiff orally agreed, aqjiart of the consideration and as an incentive for the purchase, that he would cause such policy to be transferred to the defendants as owners, but it was to be retained • by him until the mortgage wgs paid, and that- they relied upon that promise and did not obtain any insurance themselves. The buildings burned during the unexpired term of this policy, and the defendants sought to interpose these facts in defense of a suit brought by the plaintiffs tó foreclose the mortgage. This collateral agreement was wholly in parol, but this court held that, it being a separate agreement, it was susceptible of proof aud enforcement. The court say (at p. 595): “If, then, the verbal agreement does not conflict with, and is not merged into, the written one, obviously the principle upon which it must be sustained, if at all, is that it constitutes a collateral contract, separate and distinct' from the one which is contained in the mortgage, it being well settled that "proof of an independent, contemporaneous oral contract, even though it relates to the same subject-matter, in no manner violates the rule we have been considering.”

The refinements in the discussion of the subject of the admissibility of evidence of a parol arrangement which is contemporaneous to, and connected with, a written agreement, have arisen very largely where it was contended that a part Only of the agreement was reduced to writing. If it is apparent that ¿there was an entire agreement, a part only of which has found expression in the written engagement of the parties, then oral proof is permissible to complete what was left unfinished in the writing, but not to vary or contradict it. (Thomas v. Scutt, 127 N. Y. 133 ; Stowell v. Greenwich Ins. Co., 163 id. 298; Brantingham v. Huff, 43 App. Div. 414; Juilliard v. Chaffee, 92 N. Y. 529.)

The present case in no way involves that principle. In Thomas v. Scutt (supra) Judge Vann (at p. 140) makes the distinction Avhich is applicable here in the following language: “ In the foregoing classification collateral agreements are not included because they are separate, independent and complete contracts, although relating to the same subject. They are allowed to be proved by parol because they Avere made by parol and no part thereof committed to Avriting.”

The parties reduced to Avriting their agreement relating to the land. They, hoAvever, had a distinct contract, in no Avay impugning the land transaction, but based upon the consideration inhering in the conveyance. The proof of this separate agreement does not impair or affect the deed; it is collateral to it. The motives Avhich prompted the conveyance and this independent agreement are the same, but the character of the contracts is not at all identical. The enforcement of the oral agreement does not trench upon the conveyance, and does not, therefore,, come within the rule which prohibits oral proof to v-ary á written agreement. (Stokes v. Polley, 164 N. Y. 266; Gibbons v. Bush Co., 52 App. Div. 211; Engelhorn v. Reitlinger, 122 N. Y. 76 ; Brad. on Ev. [2d ed.] 305.)

If this agreement were not independent, but related solely to the consideration of the conveyance, oral proof in explanation of the consideration would be competent. (Emmett v. Penoyer, 151 N. Y. 564 Baird v. Baird, 145 id. 659; Cosgriff v. Dewey, 21 App. Div. 129.)

There is no question of the Statute of Frauds in the case. In the ■first place, the consideration for the oral agreement, as has been suggested, Avas identical with that upon which the conveyance depended. The agreement was, therefore, executed, performed by the grantee Davis and by the plaintiff, his successor in title and interest. In the second place, the answer contains no such defense.

The judgment and order should be reversed and a new trial •ordered, Avith costs to the appellant to abide the event.

All concurred, except McLennan, J., dissenting.

Judgment and order reversed and new trial ordered, with costs to the appellant to abide event.

Note.— The rest of the cases of this term will be found in the next volume 57 App. Div.— [Rep.