Court Opinion

ID: 5257805
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:33:21.817276+00
Date Added: 2024-06-11T08:28:02.266126
License: Public Domain

Greenbaum, J. (dissenting):
Upon the former appeal in this action, referred to in the prevailing opinion, the court then said per Smith, J.: “ It has generally been held that the true consideration stated in a written obligation may always be shown by parol for any purpose other than that of changing the obligations imposed by the instrument upon the other party to the contract. (Sturmdorf v. Saunders, 117 App. Div. 762; Wheeler v. Billings, 38 N. Y. 263; Arnot v. Erie R. Co., 67 id. 315; Miller v. McKenzie, 95 id. 575; Mills v. Dow, 133 U. S. 423.) Under this rule they might show what the actual purpose of the bond was and the consideration for which it was given. The actual consideration here as alleged in the complaint is the delivery of these cars, which had, in fact, been contracted for by Wardwell, to the Central Locomotive and Car Works, which would involve an inducement to this plaintiff to break this contract, admittedly made with Wardwell. This, to my mind, is an illegal consideration and an illegal purpose, which the courts will not enforce.”
The plaintiff in its amended complaint now rests its cause of action upon allegations which tend to contradict and not to explain the conditions and recitals which are expressed in the bond. The purpose of the new allegations in the amended complaint obviously is to eliminate the recitals in the bond which make it an illegal instrument. This is manifest from a perusal of the complaint and particularly paragraph “ twentieth ” thereof, in which it is calmly alleged that the recitals in the bond “ are incorrect, contrary to fact, and untrue ” without even the slightest attempt to explain or allege that these recitals were innocently or inadvertently made, that is to say, that they were not intended by the parties to be made. *661The facts were peculiarly within the knowledge of the parties and the falsity of the recitals must have been manifest to them at the time that the bond was executed. It must be assumed in view of the absence of any explanation as to how they came to have been written, that they were deliberately and knowingly made by the parties. Under these circumstances no testimony would be competent on the part of the plaintiff which would enable it to escape from the consequences of the alleged false recitals.
The prevailing opinion quotes from Wigmore on Evidence (Vol. 4, § 2433). But to my mind it seems to ignore the effect to be given to the concluding portion of the quotation which reads as follows: “ But the statement of a consideration may, on the other hand, sometimes be itself an operative part of a contractual act,— as when in the same writing the parties set out their mutual promises as considerations for each other; here the word ‘ consideration ’ signifies a term of the contract, and hence the writing alone can be examined.” The recitals of the bond in question are that the Hocking Valley Railway Company sold to the Central Locomotive and Car Works all of a certain series of cars known as thirty-ton coal cars, etc., and that: “Whereas through mistake, three hundred of said cars were subsequently sold to H. F. Wardwell, and whereas, if the Hocking Valley Railway Company will carry out its contract with the Central Locomotive & Car Works, the said Central Locomotive & Car Works is willing to enter into a bond, with security, to indemnify and save harmless the Hocking Valley Railway Company from any claim, suit or damage that may be made or claimed by H. F. Wardwell.”
We have thus a statement of a consideration between the parties in which the plaintiff promises to carry out its contract with the Central Locomotive and Car Works and to break its contract with Wardwell, in consideration of giving the bond of indemnity in suit to the plaintiff. To my mind the consideration comes within the rule expressed in Wigmore above quoted. It was a substantive part of the contract Within the rule stated in Sturmdorf v. Saunders (117 App. Div. 762; affd., 190 N. Y. 555), where the court states that “ Whenever a recital of consideration in an instrument is *662merely the evidence of a fact it is subject to explanation, but when it is a substantive part of the contract, embraced within the covenant of one of the parties, it cannot be thus contradicted.” (See, also, Cocks v. Barker, 49 N. Y. 110.)
The futility of plaintiff’s position is manifest by a reading of the bond if we omit the recitals which are stated to be untrue. The condition part of the bond would then read as follows: “The condition of the foregoing obligation is such that the said Central Locomotive & Car Works is willing to enter into a bond, with security, to indemnify and save harmless the Hocking Valley Railway Company from any claim, suit or damage that may be made or claimed by H. F. Wardwell.” Such a condition is entirely meaningless and expresses no consideration whatsoever.
The prima facie presumption of consideration raised by the seal is rebutted by plaintiff’s own contradiction of the exjpressed consideration.
The courts will not sanction such a jugglery as will here result by permitting parol proof, not in explanation of the recitals which form a consideration of the bond, but in the wiping out of the recited consideration upon the bare statement that they are false and untrue in fact without alleging any mistake of the parties or any circumstance which would indicate that the statements were inadvertently made.
It seems to me that the motion should have been granted and the complaint dismissed.
■ Order affirmed, with ten dollars costs and disbursements.