Case Name: Love, Superintendent of Banks, v. Dakin
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1927-05-23
Citations: 147 Miss. 835
Docket Number: No. 26429
Parties: Love, Superintendent of Banks, v. Dakin.
Judges: 
Reporter: Mississippi Reports
Volume: 147
Pages: 835–843

Head Matter:
Love, Superintendent of Banks, v. Dakin.
(Division A.
May 23, 1927.)
[112 So. 795.
No. 26429.]
Flowers, Brown & Hester, for appellant.
Clark, Roberts <& Hallam, for appellee.
Corpus Juris-Cyc. References: Bills and Notes, 8CJ, p. 568, n. 3S New; p. 574, n. 91; p. 1024, n. 74; p. 1041, n. 34; Evidence, 22CJ, p. 1070, n. 34; p. 1157, n. 53; p. 1160, n. 60; p. 1164, n. 74; p. 1165, n. 77; p. 1213, n. 59; p. 1215, n. 65; p. 1220, n. 99.

Opinion:
McGowen, J.,
delivered the opinion of the court. -
J. S. Love, superintendent of banks, as the officer in charge of the Bank of Commerce of Boyle, Miss., filed his declaration against Mrs. Mag'gie L. Dakin, based upon a promissory note for seven hundred fifty dollars, dated July 1, 1925, and demanded judgment for the amount of the note, interest, attorney's fees, and costs. To this declaration the defendant, Mrs. Dakin, pleaded the general issue, and also gave notice under the general issue to the effect that she would show, on the trial, that she executed the note in question as an accommodation maker for the purpose of lending her credit to Asa Moss, who was dealing with, and indebted to, the Bank of Commerce at that time; that the note in question was executed with the understanding and agreement made by C. (E,. Young, then the active officer in charge of said bank, that, from the proceeds of the cotton crop raised by Moss and turned over to the Bank of Commerce, the proceeds from the first cotton received should be applied to the payment of the note; that all the proceeds of the cotton crop, in sufficient amount to discharg-e this note, were received by the bank during the fall of 1925; and Mrs. Dakin was assured that the bank had carried out its agreement, and that her note had been paid. To'this plea the plaintiff filed a replication of denial.
The proof in the case shows that Young, representing the bank, accompanied by Moss, who desired credit, visited Mrs. Dakin on July 1st, and told her that it was necessary that Moss should have an additional credit of seven hundred fifty dollars'; that, if she would execute her note for that amount, the bank would receive the proceeds of the cotton turned over by Moss to the cotton cooperative association, and that the proceeds of the first check would be applied to the payment of this note; that Moss had to have money to finish his crop; that, under the banking laws, they could not advance him any more money. Moss was present, and also made an appeal for help. About the time the cotton began to be sold, Mrs. Dakin, her husband, and Moss, at different times, called on officials of the bank, and were all assured by said bank that the note had been paid, and would be mailed to Mrs. Dakin. There is absolutely no dispute of these facts in the record. Afterwards the bank went into liquidation and the banking department found this note among the assets of the bank and brought this suit. The court below gave a peremptory instruction for the plaintiff.
The precise question presented for decision is: Are the facts set out in the plea and proof indisputable in the case competent to overturn the written contract, the note which is the basis of this suit? Counsel for appellant thus puts the question presented for decision: Can the maker of the note "avoid liability thereon by showing the parol agreement made contemporaneously with the execution thereof by which it was understood that the note was not to be the obligation of the maker, but another whose name does not appear on the instrument?"
If that were the question, it would be easy of solution, and would be answered in the negative, but, in this case, the proof shows that the proceeds of cotton coming into the hands of payee were to be applied as a credit thereon ; otherwise, the maker of the note was liable. The proceeds of cotton did come into the hands of payee, and not only that, but the payee, and the man for whose benefit the note was executed, undertook to carry out the agreement by stating that the note was paid and would be mailed to the maker.
Counsel for appellee cite Wren v. Hoffman, 41 Miss. 616; Pollock v. Helm, 54 Miss. 1, 28 Am. Rep. 342; Baskerville et al. v. Harris, 41 Miss. 535.; Heaverin v. Donnell, 7 Smedes & M. 244, 45 Am. Dec. 302; Hawkins v. Shields, 100 Miss. 739, 57 So. 4, 4 A. L. R. 760 — all of which announce the elementary proposition that parol evidence is not admissible to contradict or vary the terms of a written instrument, and to which principle we adhere. But, when the payee of a note, as in the instant case, told the maker of the note, in pursuance of this agreement, "it [the note] has been paid, and is in the mail for you now," this oral agreement becomes pertinent and part of the consideration of the note. Moss, the beneficiary, went to the bank to insist upon the application of the proceeds of the cotton and was assured by the bank that such proceeds had been so applied, and the maker of the note was likewise assured that the note was paid; hence this constituted payment of the note, and the agreement to apply certain collateral to payment of the note was competent as showing the consideration for the note and explanation of the payment of the note. Mrs. Dakin recognized her liability by going to the bank, and by having her husband and agent go to the bank, and insist on the application of the proceeds of the cotton, is not a denial of liability, but an effort to pay. There is nothing in the proof that shows she contended, at the date she executed the note, that she did not assume full liability therefor. In the case of Meyer v. Casey, 57 Miss. 617, this court said:
"It is not admissible to vary by parol the terms of a valid written instrument. If it has a valid existence, it must stand as the sole expositor of the terms of the contract it evidences; but it is allowable to show by parol that the writing never had validity, or, that having had a legal existence, it has.for some reason ceased, to be operative." (Italics ours.)
. Likewise in Cocke v. Blackbourn, 57 Miss. 691, this court held: "It is always allowable to show that the instrument sued on never was valid, either for fraud or illegality, or want of consideration, or for failure of some condition on which the instrument was to take effect; or that, having been valid, from something occurring subsequently, it has ceased to be operative wholly or partially. It is not admissible to vary the terms of a valid written instrument by parol; but it is- allowable to attack the instrument, and seek to overthrow it as never valid or having ceased to be. The distinction is between the promise and its consideration, between the obligation and that which supports it. The former cannot be altered by parol. The latter may be. . . . The right to. show the real consideration is a qualification of the general rule of the inadmissibility of parol evidence to alter the terms of a written contract, and is as well established as the rule itself. Barker v. Prentiss, 6 Mass. 430. What I bind myself by writing to do cannot be varied by parol; but I may always show by parol what induced me to thus bind myself, and thereby test the question whether I was legally bound, as the writing imports, or whether I have been, by any cause, wholly or partially freed from my obligation."
This oral proof did not affect the promise, bnt did show the moving consideration for its execution. Neither did it affect the obligation, but it did show what supported the obligation, and the subsequent statements show that the note had ceased to be an obligation of the maker; the suit being between the original payee and the maker.
Affirmed.