Case ID: ny-super-ct_59/html/0321-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ALFRED BLEWITT, Appellant v. WILLIAM B. BOORUM, et al., Respondents.
    
      Contract under seal, delivery of, parol evidence admissible to establish the fact that the delivery was conditional, and the condition never fulfilled.
    
    A sealed contract, not relating to an estate in lands, that was executed and delivered to take effect when some act had been done or condition fulfilled by one of the parties thereto, does not become binding upon the parties thereto until the act is done or condition fulfiled. Parol evidence is admissible to establish the facts relating to such conditional delivery and to the act and condition required to be done and fulfilled before the contract became of binding effect as between the parties. The contract in question was made by William H. Russell and the plaintiff, as parties of the first part, and the defendants, as parties of the second part, and by its terms the parties of the first part granted to the parties of the second part the full and exclusive right and license to manufacture, sell and use a certain invention covered by a patent, issued to Russell, during the term of the patent ; and as consideration for such grant, the parties of the second part (defendants) agreed to manufacture the patented article and to pay to each of the parties of the first part the sum of two and one-half cents on each article manufactured as a royalty. This agreement was executed by all the parties under their respective hands and seals, and one copy so executed was actually delivered to the plaintiff. The answer admits the making of the contract, but alleges, as a defence, that it was agreed between the parties, at the time of making, that it was not to take effect as to the plaintiff until after he had acquired a one-half interest in the patent by the performance of an agreement between him and Russell, the other ]Jarty of the first part to the contract, for the purchase of said half interest. That the plaintiff never carried out nor fulfilled such agreement with Russell, and never acquired a half interest in the said patent, and subsequently abandoned all attempt to gain an interest in such patent, and relinquished and transferred to said Russell all his rights and interest in this contract.
    On the trial the defendants offered to prove, and did prove, by parol testimony, against the objection of the plaintiff, the oral agreement between the parties as stated; and upon this evidence the court found, as matters of fact, that at the time of the execution of the contract it was expressly agreed between the parties that it should not take effect as a contract until the plaintiff should have acquired a one-half interest in the patent from Russell, etc., and that the plaintiff had never acquired that interest. These findings were fatal to plaintiff’s case, if the evidence upon which they rested was admissible, and the only question presented on this appeal is whether or not it was error to receive such parol evidence.
    
      The court, on review, held as follows: (1) A deed of real estate delivered to . a party or to his authorized agent, and not to a stranger, is absolute, and parol evidence of conditions qualifying the delivery, or affecting its delivery, is inadmissible. (2) Parol evidence is admissible to prove that a writ- ' ten paper, not under seal, which in form is a complete contract, although delivered, was nevertheless not to become a binding contract until the | performance of some condition or act, the proof of which rested in parol evidence. (3) It remains to be fully determined what the rule is in regard to an instrument under seal which is not a deed or conveyance and does not relate to the transfer of the possession of land. Under this last point great confusion exists among the decisions. Formerly the tendency was to distinguish generally between sealed and unsealed instruments. Of late the tendency has been to disregard the distinction between sealed and unsealed instruments whenever it can be done without a violation of some settled principle of law. The precise point at issue and now under consideration has never been put to rest.
    Á careful analysis of all the cases, with reference to the state of facts peculiar to each, shows that the existing confusion arises not so much from the decisions as from dicta which are obiter, and that the strict enforcement of the rule which rejects parol evidence qualifying the delivery, has been almost exclusively in cases of instruments under seal in which the delivery constituted or involved a symbolic transfer of the possession of land.
    
      Held, that after due consideration of all that has been urged on .both sides, the rule prohibiting parol evidence as to a qualified or conditional delivery should be confined to the class of instruments in which the delivery constitutes or involves a symbolic transfer of the title and possession of land. In this view of this case the evidence was properly admitted and the exceptions of the plaintiff are untenable..
    Before Freedman, Truax and McAdam, JJ.
    
      Decided May 4, 1891.
    Appeal from a judgment entered after a trial at special term dismissing the complaint with costs.
    
      Isaac N. Miller, attorney and of counsel, for appellant, argued:—
    . I. There was no defence to the action, all'of defendants’ testimony being inadmissible. The action was for an accounting under a sealed contract, which ¡contract was made a part of the complaint. The answer did not deny the- execution and delivery of the' contract, but alleged that plaintiff’s interest in and rights under the contract had been transferred to William H. Russell. The whole defence rests upon the evidence as to what occurred prior to the making and delivery of the sealed contract, which evidence was admitted on the theory that it might show a conditional delivery, though no conditional delivery had been pleaded. As it was uncontradicted that the contract was delivered to plaintiff, it was impossible to show a conditional delivery, as such a delivery must be made to a third party. No proposition is more thoroughly settled than this—it is •elementary law. Chitty on Contracts, § 4, Coke Litt., 36 A.; Kent’s Com., vol. 4, pp. 451-454; Cocks v. Barker, 49 N. Y. 110 ; Worrall v. Munn, 1 Seld. 233; Wallace v. Berdell, 97 N. Y. 13; Arnold v. Patrick, 6 Paige, 315; Wilson v. Dean, 74 N. Y. 531; People v. Bostwick, 32 Ib). 448; Webber v. Christian, 121 Ill. 92; Braman v. Bingham, 26 N. Y. 491; King v. Baldwin, 2 Johns. Ch. 557; Tibbitts v. Percy, 24 Barb. 39; Brown v. N. Y. C. R. R. Co., 44 N. Y. 85; Coese v. Peck, et al, 102 Ib. 515; Marsh v. McNair, 99 Ib. 180 ; Gavinzel v. Crump, 22 Wall. (U. S.) 319; Parish v. U. S., 8 Ib. 490; Green-leaf on Evidence, §§ 22, 275, 282; Coe v. Hobby, 72 N. Y. 141; Allen v. Jaquish, 21 Wend. 632; Eddy v. Graves, 23 Ib. 84; Halliday v. Hart, 30 N. Y. 493; .Hargrave v. Melbourne, 86 Ala. 270; Story on Contracts, 712-721; Seymour v. Cowing, 4 N. Y. Ct. of App. (Abb.) 205; Juilliard v. Chaffee, 92 N. Y. 534.
    II. The rule excluding oral evidence applies to all sealed instruments. The theory of defendants that this rule applies' only to deeds of realty is not sustained by a single authority. Arnold v. Patrick, et al, 6 Paige, 315 ; People v. Bostwick, 32 N. Y. 448; Van Bokkelen v. Taylor, 62 Ib. 105.
    III. Under the pleadings defendants were estopped from denying the ownership' .of plaintiff.- There being no allegation of fraud or mistake the contract amounted to an estoppel by deed, the recitals of which, alleging ownership in the parties of the first part could, not be contradicted by defendants. Herman on Estoppel, Book 2, § 575. Recitals in a deed are binding on the parties to it and those claiming under them, but not on strangers. West v. Pine, 4 Wash. C. C. 69; Bank of U. S. v. Blenning, 4 Cranch, 87.
    IV. Plaintiff was entitled to recover even upon the evidence as admitted. It is perfectly well settled that a party who seeks to avoid a contract must restore or offer to restore to the other, whatever he has received under the contract. Mumford v. Am. Life Ins. and Tr. Co., 4 N. Y. 463; Hogan v. Weyer, 5 Hill. 389 ; Fisher v. Fredenhall, 21 Barb. 82; Kneedler v. Sternbergh, 10 How. Pr. 67; Wheaton v. Baker, 14 Barb. 594; Jones v. Anderson, 82 Ala. 392. Such return or tender must be made promptly. A delay of four years is a confirmation of the contract. Fisher v. Fredenhall, supra. And a purchaser, even from a fraudulent purchaser, may object that the seller has not returned the consideration. Wheaton v. Baker, supra. Where a note has been given, the rescinding party must tender it back. Snow v. Alley, 144 Mass. 546.
    
      Putney, Bishop & Slade, attorneys, and John L. Bishop of counsel, for respondents, argued :—
    I. Upon this appeal the court can consider only the exceptions to rulings upon questions of law. The case on appeal as settled does not certify that all the evidence produced upon the trial is included in the case on appeal. In point of fact, the printed case contains in less than ten pages all of the oral evidence which the plaintiff saw fit to include in his bill of exceptions, but the oral evidence actually submitted to the judge who tried the case would easily cover five or six times as many pages. • The Court of Appeals in the case of Porter v. Smith, 107 N. Y. 531-534, considered the effect of appeal based on such a bill of exceptions, and held that, under the present Code, unless the case on appeal contained a certificate to the effect that all the evidence had been included the court could not review the findings of fact. The same question was considered by the Court of Appeals, in the second division, in Aldridge v. Aldridge, 31 State Rep. 948, where Judge Brown said: “We are of opinion that it was error for the general term to reverse the judgment upon the record before it. The case contains an exception to the finding I have quoted, but no statement that all the evidence given upon the trial is contained within it. The facts were not, therefore, before the general term for review, and the only questions it could properly consider were those of law.” And this court in Baker v. Crosby, 33 State Rep. 757, Judge Freedman writing the opinion, refused to consider exceptions to findings of fact, saying : “ Moreover, there is no certificate that the case contains all the evidence. This of itself is fatal to the contention of the appellant.” It follows, therefore, that each of the findings of fact must be taken to have been grounded, in and supported by the evidence adduced, and the question raised upon this appeal is not as to the sufficiency of that evidence, but as to whether or no the exceptions taken to the competency of the evidence were well taken. It is not open to the plaintiff to argue, as he undertook to do upon the previous hearing, that he was entitled to recover upon the evidence as admitted, because the evidence is not before the court, and because it must be conclusively presumed that the evidence admitted was sufficient to sustain the findings of fact actually made.
    II. None of the findings of the court are open to review. The findings of fact are, as we have seen, conclusive, owing to the manner in which the appeal comes up. The conclusions of law are equally conclusive. The only inquiry as to these conclusions is are they supported by the findings of fact? If the findings, of fact are correct the legal conclusions stated necessarily follow. No contention to the contrary was made on the previous hearing, and none can be fairly presented.
    III. The exceptions to the admission of evidence raise only one question, and that is, whether it was competent to prove by parol evidence that the written agreement was not to become binding until the happening of certain events, as testified to by the witnesses for defendants.
    IV. It is settled law in this state-that parol evidence is admissible to show that a written paper, which in form is a complete contract, of which there has been a manual tradition, was nevertheless not to become a binding contract until the performance of some condition precedent, resting in parol. Reynolds v. Robinson, 18 St. Rep. 235; 110 N. Y. 654; Harnickell v. New York Life Insurance Company, 111 N. Y. 390; Juilard v. Chaffee, 92 Ib. 529-535; Benton v. Martin, 52 Ib. 570 ; Abbott’s Trial Evidence, p. 294; Stev. Dig., chap. 12, art. 90; Pym v. Campbell,.6 E. & B. 370; Wilson v. Powers, 131 Mass. 539.
    ■ V. There is no exception to this rule arising from the circumstance that the signatures to the contract have seals attached to them. Language may be found in some opinions which would appear to indicate that there is a distinction to be made between sealed and unsealed instruments in the particular we are now considering, and which might convey the impression that the distinction existed, not in the purpose of the instrument, but in the mere accident of the presence or non-presence of a seal. Fortunately, upon looking into the cases it will .be found that the law is not open to the reproach, in this instance, of determining substantial rights by unsubstantial trifles. Upon an examination-of the authorities it will be found that in every instance where the judge wrriting the opinion has laid, down the rule as though a distinction existed be-, tween sealed and unsealed instruments, the remark was wholly obiter, or else the case was one of an unsealed instrument, or of a grant of land. No case. can be found, at any rate in this state, in which it; has been held as a rule of practical action determining, the rights of the parties litigant that it was incom-. petent to show a conditional delivery of an ordinary personal obligation in writing, simply from the circumstance that it had a seal attached. Cocks v. Baker, 49 N. Y. 110 ; Wilson y. Dean, 74 Ib. 531. The tendency of modern decisions has been to obliterate, more and more the distinction between sealed and unsealed instruments as not resting in any substantial rule of right, but as being merely a survival of a fiction which may have been helpful in bygone ages,, but which is no longer of practical utility. Ortman, v. Dickson, 13 Cal. 33; Barton v. Gray, 57 Mich. 634; Canal Company v. Ray, 101 U. S. 522-527; McCreary v. Day, 119 N. Y. 1; Bishop on Contracts, § 1046 ; Leake on Contracts, p. 802. Even with re-, gard to deeds, we think that an examination of the cases shows that a delivery to the grantee may be. shown to be conditional where there was no purpose to deliver the deed as an actual transfer of title., Bracket v. Barney, 28 N. Y. 333, 340 ; Ford v. James, 2 Abb. Dec. 159 ; Dietz v. Farish, 79 N. Y. 525.
   By the Court.—Freedman, J.

There is no certificate or statement that the case contains all the evidence. The facts, therefore, are not open for review and only questions of law can be considered. .

The contract sued on was made by William H. Bussell and the plaintiff, as parties of the first part, and the defendants, as parties of the second part. By it the parties of the first part granted to the parties of the second part the full and exclusive right and license to manufacture, sell and use a certain invention covered by a patent issued to Bussell during the term of the patent; and as consideration for such grant the parties of the second part (the defendants) agreed to manufacture the patented article and to pay to each of the parties of the first part the sum of two and one-half cents on each binder as royalty. The agreement was executed by all the parties under their respective hands and seals, and it was actually delivered to the plaintiff.

The answer admits the making of the contract sued on, and alleges, as a defence, that it was agreed between the parties at the time of the making of the contract that the same was to take effect as to the plaintiff only when he should have acquired a one-half interest in the patent by performance of a certain agreement that he (the plaintiff) had made with Russell, the other party of the first part to the contract in suit, whereby the plaintiff was to acquire from Russell a one-half interest in the patent; that the plaintiff never carried out such agreement with Russell, never acquired a half interest from Russell, and subsequently abandoned all attempt to obtain an interest in such patent, and relinquished and transferred to Russell all his right, title and interest under the contract.

At the trial there was no controversy as to the actual delivery of the contract, or a copy of it, to the plaintiff, but the defendants offered to prove the oral agreement between the parties as above stated and that the plaintiff had failed to acquire from Russell a one-half interest in the patent. The plaintiff duly objected to such evidence as inadmissible, but the court overruled the objection and received the evidence, to which ruling the plaintiff duly excepted. Upon the evidence thus received the court found, as a fact, that at the time of the execution of the contract sued upon it was expressly agreed between the parties thereto that the same was not to take effect as a contract until the plaintiff should have acquired a one-half interest in the patented improvement and letters patent in pursuance of the agreement between plaintiff and Russell, and that the plaintiff did not at any time acquire such half interest. The court also found, as a fact, that the contract was never delivered to the plaintiff as a subsisting legal obligation. These findings are fatal to plaintiff’s case, if the evidence upon which they rest was admissible, and the only question presented, therefore, is whether or not it was error to receive such evidence.

It is settled in this state that if a deed is delivered to a party or his authorized agent, and not to a stranger, it is absolute, and parol evidence of conditions qualifying the delivery is inadmissible. Worrall v. Munn, 1 Seld. 229, and cases there cited.

It is also settled that parol evidence is admissible to show that a written paper not under seal which in form is a complete contract, of which there has been a manual tradition, was, nevertheless, not to become a binding contract until the performance of some condition resting in parol. Reynolds v. Robinson, 18 N. Y. State Rep. 235; Harnickell v. N. Y. Life Ins. Co., 111 N. Y. 390.

It remains to be seen what the rule is as to an instrument under seal which is not a deed and does not relate to the transfer of the possession of land.

Upon this point great confusion exists in the books. Formerly the tendency undoubtedly was to distinguish generally between sealed and unsealed instruments. Of late the tendency has been to disregard the distinction between sealed and unsealed instruments whenever it can be done without a violation of some settled principle of law. The precise point now under consideration has never been put at rest. In Dietz v. Parish, 79 N. Y. 520, Church, Ch. J., even says with reference to a deed: “ The court, in Kidner v. Keith, 109 E. C. L. R. 34, announced the well-established rule. It said: There is no doubt in point of law that where by express declaration, or from the circumstances, it appears that the delivery of a deed was not intended to be absolute, but that the deed was not to take effect until some contemplated event should have happened, the deed is not a complete and perfect deed until that event has happened.”

' A review of all the cases to which our attention has been called upon this point, would serve no useful purpose. Suffice it to say that a careful, analysis of them with reference to the state of facts peculiar to each, shows that the confusion which does exist arises not so much from the decisions as from dicta which are obiter, and that the strict enforcement of the rule which rejects parol evidence qualifying the delivery,' has been almost exclusively in cases of instruments under seal in which, the delivery of the instruments constituted or involved a symbolic transfer of the possession of land. After due consideration of all that has been urged on both sides, I am of the opinion that the rule prohibiting parol evidence as to a qualified or conditional delivery should be confined to the class of instruments last referred to, and that it should not be • extended generally to all executory contracts under seal. If this view is sound, the evidence in this case was properly admitted, and the exceptions taken by the plaintiff are untenable.

The judgment should be affirmed, with costs.

Truax and McAdam, JJ., concurred.