Case ID: ky_24/html/0084-01.html
Source: Caselaw Access Project
Author: {"author": "Judge Robertson", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fishback, &c. vs. Woodford.
    
    OhAncert.
    Case 27.
    Error to the Clarke Circuit; George Shannon, Judge.
    
      Parol evidence. Written instrument. Fraud. Mistake» Depreciated bank paper. Sale at auction. Currency. Dollars.
    
    February 4.
    Statement of the case.
    Complainant’s bill charges sale by adm’r of intestate’s estate,to have been for csm’th’s bank paper; but noto “inadvertantly” exesuted for dollars.
   Judge Robertson

delivered the opinion of the Court.

The appellants, as administrators of Jacob Fishback, deceased, sold at auction, the personal estate of the decedent, in October, 1821, and among others who purchased at the sale, the appellee bought property to the amount of $101 12 1-2, and executed his note with security, at twelve- months credit, for one hundred and one dollars twelve and a half cents.

Judgment being obtained on this note, against the appellee, he filed his bill in chancery for an injunction and final relief; charging, that the sale was for commonwealth’s paper, or the common currency of the state; that this was the general understanding of the purchasers and others, at the sale, was announced as one of the terms by the crier, and frequently repeated during the sale, by the administrators; that the property which he purchased at the sale, was high, even in bank paper, which was the only medium then in general circulation, and that the note was "inadvertantly” drawn for dollars.

Def’s answer lhhe • beeVfor piper, or that the n°te was ^ecuied1.”^

Examination of the deposithe" bill,

Testimony in support of the answer.

No immoncileable distbePde°osin tioss.

The answer admits, that the administrators received paper of some other purchasers, on the day of sale, and of others, when their notes became due, at the rate of exchange at the time of sale; but denies that the sale was for paper, or that there was any mistake, or inadvertance in the drawing or execution of the note.

Many depositions were taken, exhibiting some contrariety of facts and opinions: but there is a decisive preponderance in numbers, as well as in the intrinsic probabilities attested, in favor of the allegation, that it was the general understanding, that the property was selling for current paper. Many witnesses swear, that the crier stated publicly during the sales, that they were for the common currency, but that gold or silver would not be refused. Others, on the same side, .swear, that the administrators said, during the sale, that it was not for specie, but for the common currency. This, however, is not proved to have been published generally.

For the administrators, sundry persons, who were at the sale, swear, that they heard no suggestion from any person, that the sale was for paper; that they heard the administrators reply to inquiries made on that subject, by individuals, that they could not make any agreement, which could compel them to receive depreciated paper; but that they would receive whatever would pay debts, and satisfy the distributees.

These are the prominent facts exhibited in the testimony; other subordinate circumstances are proved, which have some influence on the principal facts; but it is useless to extend this opinion by recapitulating them.

There is no discrepancy in the various opposing depositions, which cannot be reconciled. The facts proved by the administrators, are chiefly negative, and do not essentially conflict with the affirmative facts established by the appellee. An analysis ®f the, facts contained in each deposition, would clearly shew, that there is nothing irreconcilable in the testimony. We are well convinced, that the appellee, and a large majority of the persons at the sale, understood that it was for current paper; and we have as little doubt, that this understanding was authorized by the crier and administrators. We believe, too, that the administrators stated to many, who individually applied to them, that they could not be bound to receive paper unconditionally. And from all the circumstances, we are bound to believe, that the administrators were willing, that the impression should be made- on the croud, that the sale was for paper, to enhance the amount of sales; and perhaps connived at suggestions by the crier and others, which had a delusive effect; intending, if possible, to have it in their power, either to receive the paper, or to coerce specie on a replevin of two years: and we believe, that this was the understanding of some of the witnesses.

The views of the administrators.

Decree of the circuit court.

Parol evidence competent to prove fraud or mistake, in the execution of any written instrument.

The circuit court perpetuated the injunction for one half of the amount of the note, which was the ratio of depreciation, when the note became due.

This decree seems to accord with the abstract justice of the case. But general principles of equity and fixed rules of law, being indispensable to the wholesome administration of justice, if the decree cannot be sustained, without relaxing or violating some of them, it must be reversed; and if this shall be the case here, we shall only see another illustration of the maxim, every where and every day exemplified, that the general good is secured, at the expense of individual hardship.

We have never doubted, that parol evidence is competent to prove fraud or mistake, in the execution of any written contract. We are only surprised, that-for years past, it should have been deemed necessary by court or lawyer, to employ argument, or cite authorities, to prove a doctrine so well and so long established. The case of Inskoe vs. Proctor, contains nothing new. Its principles had been so well understood, that in the prfevious case of Baugh vs. Ramsey, the court seem to consider them too plain, to need the support of reasons or cases. We know of no case in modern jurisprudence, in which any enlightened chancellor has refused relief against a writing, in the execution of which, fraud or mistake had been established. But, must not the fraud or mistake be alleged, and clearly-proved? Public policy and private security require, that on appropriate allegations to let'in parol proof, that proof should be very strong and clearly convincing.

The allegations of the bill insufficient.

The fraud or mistake must be in the execution of the instrument, for parol proof, to contradict the terms of it, or «ary its stipulations.

Proof of paper consideration, of a note for dollars, does not per se, prove a mistake or fraud.

For parol evidence to alter or modify the terms of a written instrument; it is necessary to establish some fact independent of the consideration, establishing fraud or mistake.

There is no allegation in this bill, of fraud in the procurement of the note: nor is any mistake in its execution, distinctly averred. We are willing, however, to allow, that by the expression “inadvertantly drawn,” mistake is intended, and may be understood. But the mistake or the fraud, must be in the execution of the note. It is not proved, that the language or import of the note, was not well understood; or that either was different from what was intended by the parties, when it was written and signed. Proving the consideration, as is satisfactorily done in this case, might conduce very forcibly to confirm slight circumstances, tending only remotely, to the establishment of fraud or mistake, and which circumstances, without some subsidiary fact, would be clearly insufficient. But evidence of a paper consideration, however clear and conclusive, does not per se prove a mistake or a fraud, in the execution of the note given on that consideration, for dollars or money. There must be some substantive fact established, independent of the consideration, before the chancellor can set aside or modify the legal import or effect of a solemn written contract. If an obligor understands the language and effect of a note when he signs it, and executes it willingly, and without being seduced by the fraud of the obligee, he ought not to be, he never is, permitted to dispute or deny its obligation, according to its rational and legal construction. In such a case, there is no fraud, and certainly no mistake; and parol evidence cannot resist, alter or control the writing, which is the highest evidence of the contract.

In this case, the subscribing witness has not proved, that the note was not drawn as it was directed to be drawn; or that it was not understood as drawn; or that there was any expectation when it was signed* wor<^ dollars, without the adjunct “in specie” or “commonwealth paper,” would mean paper. There is no proof whatever, of any mistake, in the execution no^» except what is furnished by evidence of the consideration, it is not proved, that the word “dolIars,” at the date of the note, was understood by the PeoP^e generally, or by the contracting parlies, to mean paper or specie dollars, indifferently; so as to shew, by proving this equivocal popular import of the Word, when used in contracts at a particular period, and in a particular place, that it did not necessarily mean, when inserted in a note, specie dollars; and that, therefore, proving by parol evidence clearly, that ^10 consideration was paper, might not contradict or detract frorp the note. Nor has it been proved, that at the date of the note, when contracts were made for specie, they were literally so expressed: nor, indeed, has any circumstance in aid of the relief sought, been attempted to be proved, except that the sale was for paper. To what extent other proof might operate, we cannot judicially pre-determine; it is enough, that it is wanting in this case.

•No proof m mi-take6or'"3 fraud, except what is dcriterm^orthe6 sale and the consideration of the note, deemed'siiffi1-6 cienttoexonerate the theTe^aUd^1 feet of his written stipu‘^loIlars°”^a^

Decree reversed, and cause remanded.

Hanson, for plaintiff; Depew and Barry, for defendant.

Cases like this, are seldom, if ever, skilfully prepared; and are generally lost for want of proper preparation. It would not often happen, that specie could be coerced on a note founded on a paper consideration, if all the facts which might be averred and proved, were properly presented. But we must decide on cases, as they appear on the record before us; and in doing so, we must adhere to general and fundamental principles, on the inflexible application of which, depend the rights of the people. We must decide the law, as we understand it; and by applying this test to the case before us, we are constrained to reverse the decree of the inferior court, and remand the case fora final decree, dissolving the injunction, and dismissing the bill.

Petition for a re-hearing.

Messrs. Barry and Depew, presented a petition for a rehearing.

PETITION FOR A RE-HEARING.

This court seem to predicate their opinion in this case, upon the ground, that the allegations of the bill are not sufficient to open the door for the admission of the parol proof exhibited by Woodford-.

The bill states, that the plaintiffs in error, as the administrators of Jacob Fishback, deceased, sold at auction, the personal estate of the decedent, in October, 1821; that the defendant in error purchased property at the sale, to the amount of $101 12i, for which he executed his note with security, ata credit of twelve months; that before he bid for the property,.he understood from one of the administrators, and the public declarations of the crier, that the property was to be sold for commonwealth’s bank paper; in consequence of which, he bid the highest paper prices for the property he bought; that at the time of the sale commonwealth paper was at a depreciation of 50 per cent, and 100 when the note became due; that his note was executed t#inadvertently” for dollars, without specifying that it was for commonwealth’s papery that Jesse Fish? back, one of the administrators, knew that he understood the sale to be for bank paper, and if such were not the terms of the sale, he wrongfully permitted him to labor under the mistake; that the administrators had recovered judgment at law for $101 12¿, the amount of the notes, and were threatning to coerce from him the amount thereof in silver.

The administrators', in their answer, admit, that the note was given for the property which defendant purchased at their sale; that they had obtained judgment at law for the amount of the note, and wished to coerce payment in silver; that commonwealth’s paper was at the depreciation alleged; but they deny, that the sale was for commonwealth’s paper, or that the crier or either of the administrators, made such representations to the defendant. They allege that the property sold fora fair price in silver; that they took the note for dollars, by which they meant dollars of the current coin of the United States, and that the note was. drawn and executed, according to the contract of sale, and the intention of the parties.

Petition for a re-hearing.

The bill and answer, substantially present to the consideration of the chancellor, the question whether the plaintiffs in error had or had not, through fraud or mistake, obtained from the defendant in error, a note materially different from the contract between the parties, or a note for double the amount he was to pay by his agreement. This is all that is required, according to the opinions of the most enlightened chancellors of England, or this country.

in Simpson vs. Vaughn, 2 Atkins, 32, the bill charges, “that (he bond, which was intended to be a joint and several one, was filled up by Baker, one of the obligors; that, omitting “severally bound,” was done by him fraudulently, or through ignorance and mistake,” and that it should be decreed a joint and several bond, according to the intention of the parties. Lord Hardwicke heard parol proof and granted relief.

Joynes vs. Statham, 3 Atkins, 388, was a bill for the specific execution of a lease. The defendant insisted in his answer, that it ought to have been inserted in the agreement, that the tenant should pay the rent clear of taxes; that the plaintiff, having written the agreement himself, had omitted to insert that provision, and offered parol proof, to shew that this was part of the agreement. Lord Hardwicke received the evidence, and refused a decree for specific execution.

In South Sea company vs. D’Oliff, cited in Pitcairn vs. Ogbourne, 2 Ves. Sen. 377, Sir John Strange says: “The company, by agreement, was not bound to answer for any irregularity by supercargoes, unless information was given in two months after return home. The instrument was not drawn up until on board the ship, and in a great hurry, and executed there by the party, who, when he got out to sea and read it over, found it was six months instead of two, and brought bis bill to be relieved against the variation in the instrument. Lord King admitted parol proof, on the ground, that it would be a fraud in the party, to avail himself of the variance between the agreement and the writing, declaring that parol proof must be admitted, to shew the variation between the writing and the true agreement; “otherwise, if it could be gbt into black and white, there would be no relief.”

Petition for a re-hearing.

in Washburn vs. Merrills, 1 Day’s Rep. 139, the bill states, that the complainant, being indebted to the defendant in the sum of £162 15s., executed his note therefor, to him; and also, a deed for fifty acres of land, as collateral security; that this deed was intended as a mortgage, but through mistake and accident, was drawn and executed as an absolute deed; that the mistake was not discovered until some time after the deed was delivered^ and prayed that the complainant might be allowed to redeem, upon payment of the debt and interest. Parol proof was admitted, to shew that it was a mortgage, as intended by the parties, and a decree permitting redemption upon paying the £162 15s., with interest.

In the case of Gillespie vs. Moon, 2 Johnson’s Chancery Cases, 586, which was a bill brought to correct a mistake in a deed of 250 acre's of land, to obtain a re-conveyance and possession of fifty acres, and an account for the rents and profits thereof, the only allegation of fraud or mistake, is stated by Chancellor Kent, in the. following language: “That the description and bounds in the deed to the defendant, were copied literally from the description in the former deed, except as to the number of acres-, and through mistake or frauds was made to comprise within the bounds, the whole 250 acres conveyed to Mrs. Mann, and including the fifty acres leased to Cable, and which were not intended to be included.” Most of the material allegations of the bill were denied in answer. Parol evidence was offered, to shew the variance between the deed and the agreement of the parties, under the head of mistake. Its admission was zealously opposed by counsel, who cited many authorities in support of the position they assumed. But Chancellor Kent, after an able review of all the cases in the English Chancery, admitted the parol proof, and granted the relief.

In Gartin and wife vs. Chandler, 2 Bibb, 240, the bill alleged, that the drawer of the note made a mistake in the manner of writing ft. By virtue of this allegation, as to the mistake, the court of appeals admitted the parol proof; but refused relief, because the evidence was not sufficient to overcome the denial in the answer.

Petition for a re leariug.

the case of Inskoe vs. Proctor, decided at the pa]i terrrii 1827, the bill charges, that the contract was ^ the sale of a tract of land at $600, to be paid in. paper of the bank of the commonwealth, then depreciated to about two dollars in paper for one in silver; that William B. Lerty was called upon to draw the writings, and, by mistake or accident, or not knowing that it was necessary to insert i» the notes, that they were payable in paper of the bank of the commonwealth, he drew them for dollars, omitting to say what kind of money. This is the only allegation in the bill, as to mistake, at the execution of the writings. The answer denies most of the material allegations in the bill. The court of appeals admitted the psefbl 'proof, and granted relief.

None of the many eminent chancellors, who have had-this subject under consideration, have refused parol evidence, because the allegations in the bill were insufficient. The questions, which they have so ably and learnedly discussed, are, whether the parol proof could be admitted to contradict the answer, and was sufficient to satisfy the mind of the chancellor, as to the existence of the mistake, or rather, variance, by mistake or accident, between the writing and the true agreement of the parties.. They seem to have been satisfied with the allegations of the bill,' in all cases where the variance has been alleged to have taken place, through mistake and accident, or through fraud or mistake.

In the case of the King against Horne, which was a writ of error in the House of Lords, to a judgment of the court of King’s Bench, upon an information for a libel, Lord Chief Justice De Gray, delivered to the House of Lords, the unanimous opinion of the twelve Judges, in the following language: “The charge must contain such a description of the crime, that the defendant may know what crime it is, which he is called upon to answer; that the jury may appear to be warranted in their conclusion of‘guilty’ or ‘not guilty,’ upon the premises delivered; and that the court may see such a definite crime, that they may apply the punishment which the la.w prescribes.” “Whatever circumstances are necessary to constitute the crime imputed, must be set out; and all beyond are surplus-age.” His Lordship further said: “The true rule to go by, is laid down by my Lord King, in the case of Rex vs. Mathews, which is this: ‘That the court and jury must understand the record, as the rest of mankind do.’n

Petition for a re-hearing.

Let the record in this case, be tested by these principles, and we feel Confident, that this court will say, it contains enough to justify the decree of the court below. • The record clearly shews, that the plaintiff in error, obtained from the defendant, a note for double the amount he had agreed to give for the property, by taking his note for dollars, instead of bank paper dollars; and that the note was procured in this form, by the fraud of the plaintiffs, and the “inadvertence” 02-mistake of the defendant. Take the bill and answer together, and no other construction can be put upon the record, by chancellors, lawyers, or “the rest of mankind.” Justice and policy, equally forbid the establishment of a rule, which will confine the parties, in their allegations and proofs, to the time and place of executing the writings. The temple of chancery should have its doors wide open, for‘the admission of proof, to shew flraud or mistake. It is not material, whether the witnesses were in the room where the writings were executed, or in an adjoining room, or in the streets, or the open fields. If they heard the •agreement, or the admissions of either party, as to the terms of the agreement, their evidence should be received. The only‘enquiry should be, whether by accident, mistake or fraud, there is a substantial variance, .between the writing and the agreement of the parties.

But if the parties are to be confined to the time and place of the execution of the writings, they will be denied relief in ninety-nine, cases out of one hundred. It will be vain and useless for them to proceed, under the direction of learned and experienced counsel. Their proof cannot correspond with the allegations of their bill. They confided in the person with whom they contracted. He reduced the contract to writing; they read and signed it, without the interchange of a word, as to the terms of the agreement.

rehearing*1 &

Such a doctrine would roll back the whole current of authorities in the English-and American chancery, from the time of Lord Hardwicke until the present But if we should be mistaken in their view case’ ^ believed that the mandate of'the court is incorrect. This court should have sent the case back to the court below, for proper parties, &c. and upon failure of the defendant in-error, to comply with the rule of the court below, on that subject, that his bill should be dismissed without prejudice. See 3 Bibb, 111, 284; 4 Bibb, 26, 187, 239, 267-8, 257-8, 543-4,; 1 Marshall, 556; 2 Marshall, 501-2; 5 Littell, 18, 19, 34, 42, 48 and 135.

A re-hearing of the cause is, therefore, respectfully asked by the counsel, for the defendant in error..

Petition for a r.e-hearing overruled..