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they had purchased of plaintiff a large quantity of yarn. It was conceded at the trial that on the 30th July, 1884, there was a balance due from defendants to plaintiff of $4,384.66. Knower, Haines & Cooley were commission merchants in New York city and the parties to whom the goods of the defendants were consigned and who handled and sold them, and they then had on hand a large quantity of defendants' goods on consignment for sale. On the 31st July, 1884, the defendants and the superintendent of the plaintiff met at the office of Knower, Haines & Cooley, and the defendants executed and delivered to plaintiff's superintendent a check of $1,200 and an instrument of which the following is a copy:
"NEW YORK, July 31, 1884. “For and in consideration of the sum of three thousand one hundred and eighty-four dollars and sixty six cents, to us in hand paid, and the receipt of which is hereby acknowledged, we do assign, transfer and sell to the Skenandoa Cotton Company, of Utica, N. Y., all our right, title and interest to and in the goods now held by Knower, Haines & Cooley, belonging to us, and also all our right, title and interest in and to the amount due us on goods sold by Knower, Haines & Cooley for our account since July 1, 1884.
" THOMPSON & LEFFERTS."
Knower, Haines & Cooley indicated in writing their acceptance of the terms of this agreement, and plaintiff's superintendent executed and delivered to defendants a receipt, of which the following is a copy :
"NEW YORK, July 31, 1884. “$4,384.66.
"Received from Thompson & Lefferts, four thousand three hundred eighty-four and 66-100 dollars, in full account to date.
"I. R. SCOTT, Superintendent Skenandoa Cotton Company."
The referee permitted the plaintiff, over defendants, objection and exception, to give evidence of prior negotiations and of what was said at the time of the execution of the above instruments, with a view of showing that the assignment executed by defendants was only as collateral security to the debt, and that nothing was then in fact paid on the debt, the $1,200 check being paid the next day. The defendants gave evidence to the contrary. It appeared, among other things, that after the execution of the assignment and receipt, and on the same day, the defendants gave to plaintiff an order for $500 upon another commission house, payable from gains on sales of defendants' goods by that house.
The referee finds that the assignment was executed in pursuance of an agreement between plaintiff and defendants that the defendants would pay on plaintiff's account $1,200 in cash and make the assignment as collateral security for the payment of the remainder; that the receipt was given upon the execution of the assignment and check and for no other consideration, the check being paid the next day; that there was no agreement between the parties that the cash so agreed to be paid and property so transferred should be paid and transferred in full payment of the debt, and that the receipt was not intended by any of the parties to evidence the payment of the debt in full; that the $500 order was given as further collateral security. It further appears that plaintiff has received the entire avails of the property so transferred and applied it on its debt, and the recovery was for the balance.
The finding of the referee that the assignment was intended as collateral security only, and that there was no agreement to receive the cash and assignment in full payment, is fully warranted by the evidence. The appellant, however, claims that it was not competent to show by parol evidence that the assignment was in fact a mortgage or security only. Whether this position is correct is the question upon this appeal.
There is no doubt about the general rule that a conveyance, though absolute upon its face, may be shown to have been given as security merely. Coe v. Cassidy, 72 N. Y., 137; Barry v. Coville, 53 Hun, 621; 25 N. Y. State Rep., 658. The true consideration may be shown notwithstanding the recitals, McCrea v. Purmort, 16 Wend., 460; Adams v. Hul, 2 Den., 310; 2 Wharton on Evidence, § 1042, and cases cited. A receipt, though in full, may be explained or contradicted. Foster v. Neubrough, 58 N. Y., 481; White v. Parker, 8 Barb., 69; 2 Whart. Ev., $ 1064.
But the defendant claims that the assignment, the acceptance by Knower & Co. and the receipt should be considered together as one transaction, and import an agreement by the plaintiff to accept the transfer in full of the balance of the debt. The only obligation on Knower & Co. was to account to plaintiff for whatever they had or might receive of or from defendants' property in their hands. The amount was indefinite. The only agreement by plaintiff to receive this in full payment was in the ex. pression, in full, in the receipt. In Tobey v. Barber, 5 Johns., 68, the plaintiff had given a receipt for $163 in full for two quarters rent. In order to avoid the effect of this, it was held proper to prove by parol that the amount was in part for a note of a third party which had not been paid, it being said that the taking of a note, either of the debtor or of a third person, for a pre-existing debt is no payment unless it be expressly agreed to take it as payment and to run the risk of its being paid and that the inference from the form of the receipt is not enough to establish such positive agreement. This case is approved in Buswell v. Poineer, 37 N. Y., 314. In Smith v. llolland, 61 N. Y., 635, it was held that where in a promissory note is embodied also a receipt, the receipt is open to explanation the same as if it were in a separate instrument. So that in this case, whether the receipt is to be considered by itself or in connection with the other papers, it is open to explanation and there is no basis for saying that in the papers themselves there was a conclusive agreement to receive the assignment in full of the claim. If not, then the agreement in fact as to the assignment may be shown by parol.
N. Y. STATE REP., VOL. XXXVI. 9
The appellant seems to rely considerably on the cases of Marsh v. McNair, 99 N. Y., 174, and Thomas v. Scutt, 52 Hun, 343; 23 N. Y. State Rep., 432. In the Marsh case, there was an assignment absolute on its face, made by J. R. Marsh, C. H. Marsh and Mary Marsh to C. W. Gibson, of all their interest in an insurance policy and in the assignment there was the statement that it was "in consideration of crediting C. H. Marsh at the Exchange Bank of Lima $353.72, paying mortgage (on property formerly deeded by J. R. Marsh, in Avon, to C. W. Gibson) given by William F. Russell to C. H. Marsh, $110.46, and indorsing $35.82 upon a note made by C. H. Marsh, June 8, 1871, for $300.” The plaintiff, Mary Marsh, claimed that the assignment was in fact given simply as collateral security for an indebtedness of $500. It was held that the rule that a conveyance of real or personal property, absolute on its face, may be shown by parol to have been intended as a security only, did not apply, as the instrument was not an assignment, simply, but a contract containing mutual agreements and so within the rule prohibiting parol evidence to ex. plain, vary or modify it
. In the Thomas case, the plaintiffs bad given the defendant a chattel mortgage on a quantity of lumber and afterward they gave to defendant a bill of sale of a certain raft, stating in the bill that the lumber of the raft was covered by the mortgage and giving the different kinds of lumber and the amount and price of each kind and the aggregate sum, and then stating “the same to apply on the amount due on said chattel mortgage and if any mistake in amount of lumber, same to be corrected.” The defendant took possession. It was held not to be competent for the defendant to show by parol that the bill of sale was simply for security, following the McNair case. These cases do not sustain the appellant's position. We have here only an ordinary receipt for money and an ordinary assignment or transfer of property. Within well settled rules, their object and design may be shown by parol. Juilliard v. Chaffee, 92 N. Y., 535. The doctrine of explaining receipts applies rather than the doctrine forbidding the varying of a written contract by parol.
In Cassidy v. Jenkins, 16 Wk. Dig., 560, affirmed 101 N. Y., 653, the defendant gave plaintiff a receipt as follows: “Received from A. S. Cassidy twenty-five hundred dollars in full for purchase of one quarter interest in Edward Moreland's patent water meter, the right to which quarter is to be conveyed to A. S. Cassidy immediately.” It is held to be competent for plaintiff to show that the writing was security only for a loan.
We are of the opinion that the plaintiff had a right to show that the money was not paid as stated in the receipt and that the assignment was only collateral security and not received in discharge of the debt.
The appellant further suggests that under the pleadings the plaintiff had no right to show that the assignment was for security. This ground was not taken at the trial and it is not necessary to consider it here.
It follows that the judgment should be affirmed.
Judgment affirmed, with costs.
MARTIN Fahy, Respit, v. THE ROME, WATERTOWN & OGDENS
BURG R. R. Co., App'lt. (Supreme Court, General Term, Fourth Department, Filed February 20, 1891.) MASTER AND SERVANT-RAILROAD-DEFECTIVE BRAKES.
Plaintiff was a brakeman in the employ of defendant, and was injured by being thrown from the car by the giving way of a defective brake. It appeared that the brake staff was connected with the chain by a bolt that passed through it; that upon this occasion the brake gave way by reason of this bolt pulling out; that there was no nut on the bolt, which was an old rusty one, with no thread on it; that the end had been partially riveted, but not sufficiently to hold it. It also appeared that the brake had not been used on that trip prior to the accident; that the car was delivered to defendant by another road the previous day, and an inspection made. Held, that the evidence was sufficient to warrant the jury in finding that the bolt was in the same condition as when the car stated; that it was not properly inspected and if it had been the absence of the nut and improper riveting would have been discovered, and that the questions of negligence were properly left to the jury.
(Bailey v. R., W. &0. R. R. Co., 49 Hun, 377; 19 N. Y. State Rep., 656, distinguished.)
APPEAL from a judgment entered in Jefferson county on the 27th March, 1890, upon a verdict in favor of the plaintiff for $2,500 at the Jefferson circuit March, 1890, and from an order denying a motion on the minutes for a new trial.
Action for negligence. The plaintiff alleges in his complaint that on the 20th August he was in the employ of the defendant as a brakeman and that, while engaged in attempting to set a brake upon a freight car in one of defendant's trains near DeKalb station in the county of St. Lawrence, he was thrown from the car and injured by reason of a defective brake.
Edmund B. Wynn, for app'lt; Henry Purcell, for resp't.
MERWIN, J.—The freight train upon which plaintiff was injured left Norwood on the morning of August 20, 1889. The plaintiff was the rear brakeman. The train proceeded southerly, stopping at Potsdam about ten minutes, then at Canton about forty-five minutes, and as it approached DeKalb and blew for that station the plaintiff set the caboose brake and then climbed up on top of a box car next the caboose, and while he was in the act of setting the brake on that car, the brake gave way and he was thrown upon the track and injured. The brake staff was connected with the chain by a bolt that passed through the staff
, and upon this occasion the brake gave way by reason of this bolt pulling out, thus disconnecting the staff and the chain. The testimony of the plaintiff and of a fellow brakeman, who examined the brake shortly after the accident, tended to show that there was no nut upon the bolt; that the bolt was an old rusty one; that there was no thread on it or that it was rusty where the threads were; that the end of the bolt was battered or partially riveted with a view apparently of keeping it in its place in that way, but that it was not sufficiently riveted to hold it. There was also evidence tending to show that this brake had not been used after the car left Norwood up to the time of the accident. The car belonged to the Michigan Central & Canada Southern line and was delivered to the defendant about 4 P. M. of the 19th August. It was shown on the part of defendant that it was inspected upon the same afternoon by an inspector of the defendaut, but the sufficiency of his inspection was upon his evidence a question of fact.
It is claimed by the counsel of defendant that this case is quite analogous to the case of Bailey v. Rome, W. & 0. R. R., 49 Hun, 377; 19 N. Y. State Rep., 656, decided in this department, where it was held that the evidence was insufficient to sustain the find. ing of negligence against the defendant. In that case the plaintiff was a brakeman on a train of defendant made up of box and flat freight cars and was injured by the giving way of the brake on one of the flat cars while he was attempting to set it at DeKalb Junction. After the injury, it was found that the pin in the bottom of the brake rod by which the rod was held in its place was gone.
“There was no evidence which tended to show when it was broken, removed or lost, nor that the defendant or any of its employes knew of its absence before the accident; neither did the plaintiff give any evidence tending to show any omission on the part of the defendant to properly inspect the car in question. The only theory upon which the plaintiff claimed to recover was that having proved that after the accident the pin was out of the rod, the jury had the righi to infer from that fact alone that the pin was out when the train left Norwood, which was some thirty or forty miles distant, and then npon the inference thus drawn to base the further inference that the car was not properly inspected before it left that station, and upon this second inference to find that the defendant was negligent.” It was said that the proof was at least equally consistent with the theory that the pin came out when the accident occurred or after the train left Norwood, as with the theory that it was out when it left Norwood. in the brake rod, as described in the evidence in that case, was a key, a split ring, which after it was passed through the rod was bent around into a ring and lapped by like the weld in a piece of iron.
In the present case there was a different appliance. A bolt passed through the staff and it should, according to the evidence, have been fixed in its place either by a nut or by a proper riveting. There was evidence from which the jury might find that the bolt at the time of the accident was in the same condition it was when the car left Norwood; that there then was no nut on the bolt or any suitable riveting; that it was not then properly inspected and if it had been the absence of the nut and the improper riveting would have been discovered. The duty of proper inspection there at Norwood was upon the defendant, and if in that regard the defendant was negligent and the plaintiff's injury followed as the natural and proximate result there would be a basis for liability. We are of the opinion that the Bailey case was essentially different from the present and that the