Court Opinion

ID: 6739850
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:21:05.354542+00
Date Added: 2024-06-11T16:01:55.490106
License: Public Domain

Bird.zell, C. J.
(concurring in part and dissenting in part). I concur in the order of reversal and remand, and in a portion of the reasoning upon which the conclusion is based in the principal opinion. There are two propositions, however, upon which I am not in accord with the views of the majority of the court as expressed in that opinion. It is held that the trial court should have permitted an amendment to the answer, submitting an issue as to a conditional delivery of the note. The first amendment offered was to the effect that it was agreed at the time of the giving of the note that the defendants were not to be held personally liable thereon, and that plaintiff would rely solely upon the real estate security referred to in said note to make payment of the indebtedness thereby represented. The court, while denying this motion to amend in the first instance,, afterwards permitted evidence to be introduced as though the amendment had been allowed. Later, during the progress of the trial, the defendants’ attorney sought to show that the defendants sent the note in suit to Mary A. Nelson, mother of the defendant A. J. Nelson, to be by her delivered to the plaintiff on condition that the plaintiff would agree to look solely to the real estate security for payment. This evidence was objected to and the objection sustained on the ground that neither the answer nor. the amendment, which the court had in effect allowed, submitted any issue as to conditional delivery. Whereupon the defendants’ attorney made an offer of proof to the effect that the defendants authorized Mary Nelson to deliver the note to Leach if he wiould agree to rely solely on the real estate security, that this condition was communciated to Leach, and he agreed thereto.
The original answer submitted as defenses a release from personal liability on the note through the sale of the equity of redemption in reliance upon a release and discharge from further liability on the note. Also that plaintiff’s loss, if any, was due to his own carelessness and neglect in allowing the property to be foreclosed without making redemption. I can see no error in the refusal of the trial court to permit the amendments offered at the trial, in so far as there was a refusal. In my opinion, neither of the amendments presents a defense; the first, because the evidence in support of it would contradict the terms of a written instrument. The written promise of the defendants is a promise to pay money, and of course evidences a personal obligation to that effect. *1057If it can be shown that there was an oral agreement whereby they should not be held liable for the payment of money, any other purported obligation of the writing could be as effectually contradicted, and there would be nothing left of the so-called parol evidence rule, and no sanctity to. the written obligation. It is' difficult to conceive of evidence more strongly contradictory of the terms of a note than that presented in the instant case. The note purports to be an obligation to pay money; but the evidence offered would establish that, instead of its being such an obligation, it was nothing more than a contract to allow the payee to dispose of an equity of redemption through the foreclosure of a mortgage, It could be as readily shown that a parol agreement was made whereby stock was to be received as the equivalent of the cash. This clearly could not be shown. Perry v. Bigelow, 128 Mass. 129.
The nature of the question is not altered, in my opinion, by the statement of substantially the same defense in terms of conditional delivery, as was done in the second amendment offered. The defendants offered to show that the condition was assented to. Hence, at the time the note was in fact delivered, it was delivered to become .as effective as it ever would be at any subsequent time, and it would never become effective as an obligation to pay money. Nothing could happen in the future that would enlarge or restrict its effect under the agreement sought to be shown. The agreement, being inadmissible because repugnant to the contract contained in the note, does not become any the less repugnant by being stated in terms of conditions. To illustrate: If a contemporaneous agreement between A, and B. that a certain note delivered by A. to B. might be dischárged by the delivery of a cow cannot be shown because repugnant to the note, neither could it be shown that, at the time the note was delivered, A. stated that he would not deliver it unless B. would agree to accept a cow in lieu of the money. The note being in fact delivered, the agreement in the second instance is just as repugnant to the note as in the first. The essence of the whole matter is that the so-called parol evidence rule is supposed to prevent encroachment upon the definite terms of written agreements by showing that wholly different terms were in fact agreed upon. • It seems to me to be clear that the trial court did not err in denying the amendments.
There is another holding in the principal opinion with which I am not in accord. It is said that it was the plaintiff’s duty to preserve and protect the security so that the sureties might not suffer loss, and that if through his neglect there was loss, the plaintiff might be held ac*1058countable therefor. While I recognize the soundness of this principle, it seems to me that, in view of the facts in this case, there is danger of it being misapplied. It must be conceded under the facts here that the only neglect or failure to preserve or protect the security was that found by the jury in the special verdict, and consisted in the failure of the plaintiff to redeem from the foreclosure of the first mortgage. I am of the opinion that where a creditor holds a second mortgage as security for an obligation for which sureties are also liable to him, he would not, under ordinary circumstances, lose his rights against the sureties by failing to redeem from a first mortgage foreclosure. In other words, a creditor is not bound to advance his own funds to redeem from a first mortgage foreclosure sale in order to protect his second mortgage at the peril of losing rights against sureties who are also liable to him on the obligation secured by the second mortgage.
I am of the opinion, however, that the note in suit was legally discharged as the personal obligation of the makers if, at the time the property was sold, it was agreed between the parties that the payee would look to the property alone, and this was followed by a settlement on the basis of such contract. Under facts somewhat similar to those in the instant case, the Supreme Court of Massachusetts said (First National Bank v. Watkins, 154 Mass. 385—387, 28 N. E. 275, 276:
“An agreement to ‘look to the mortgaged property alone for the payment of the note’ would be, in effect, an agreement to discharge the defendant from all liability upon it, which if made upon a valuable consideration, would be a good defense to a suit for payment of it; although a new and independent contract, it would be unreasonable to permit a plaintiff who has made such an agreement to collect his note of the maker, and to compel the maker to seek his remedy by a suit to recover back from the payee as damages the sum which was paid. * * *
“If there was an agreement purporting to be made in reference to the defendant’s sale of the equity of redemption in the mortgaged property in the form of an offer that the defendant might, if he chose, refrain from paying the note, and from taking measures to secure payment of it out of the proceeds of the mortgaged property, and that the plaintiff would look to the property alone for the payment of it, and the defendant, relying upon the offer, did refrain from making any effort to have the property applied to the payment of the note when it became due, and thereby suffered detriment, there would be a sufficient consideration for the agreement.”
*1059This reasoning, in my opinion, is applicable under the facts in the instant case.
I agree that § 7007, C. T. 1913 (§ 122, Negotiable Instruments Taw), requiring renunciation to be in writing, does not apply. In my opinion, however, § 7004 (§ 119, Negotiable Instruments Taw), which provides that a negotiable instrument may be discharged “by any other act which will discharge a simple contract for the payment of money” does apply.
Christianson, J., concurs.