First National Bank of Trenton v. Burney

• Decision Date: 20 April 1912
• Docket Number: 16,569
• Citation: 136 N.W. 37,91 Neb. 269
• Parties: FIRST NATIONAL BANK OF TRENTON, APPELLANT, v. LINK L. BURNEY ET AL., APPELLEES
• Court: Nebraska Supreme Court

136 N.W. 37

91 Neb. 269

FIRST NATIONAL BANK OF TRENTON, APPELLANT, v. LINK L. BURNEY ET AL., APPELLEES

No. 16,569

Supreme Court of Nebraska

April 20, 1912

OPINION on motion for rehearing of case reported in 90 Neb 432. Former judgment vacated, and judgment of district court affirmed.

AFFIRMED.

FAWCETT J. BARNES, J., dissenting.

OPINION

FAWCETT, J.

This case was argued and submitted upon a motion for rehearing, our former opinion being reported in 90 Neb. 432. The issues will be found clearly stated in the opinion there reported. It will be observed that the controversy here is between the plaintiff bank and defendant Britton, who was surety upon the note in suit.

The case turns upon the proposition as to whether or not defendant Britton could rely upon the contemporaneous oral agreement set up in his answer, and the performance of the terms and conditions of that agreement, as a defense to the note. The evidence offered by defendants shows that the oral agreement, so far as defendant Britton was concerned, was contemporaneous with the execution by him of the note in suit. The evidence as to the making of the oral agreement and as to what was said and done by the officers of the bank and Burney, after the returns upon the Clarinda shipment had been received, is conflicting. Upon one point, however, there is no conflict, viz., that the draft for the entire proceeds of the shipment was received by the bank. The evidence as to the making of the oral agreement, and of its subsequent performance, being conflicting, that issue was submitted to the jury. The finding of the jury was in favor of defendant Britton. If, therefore, the evidence was properly received, the verdict of the jury must stand. This leaves nothing but the question of law to be considered by us.

Jones, Evidence (2d ed.) sec. 495 (507) says: "The exceptions to the general rule which excludes parol evidence to explain written instruments apply in respect to negotiable paper, as well as to other contracts. We have seen in a former section that wide range is given to the proof when the issue of fraud is raised. On the same principle, illegality, alteration and want of consideration may be shown. As between the original parties, the conditional delivery of a note may be shown, as that it was delivered in escrow. So it may be shown, as between the original parties, that the note had been discharged by the performance of an oral agreement, or that the delivery was conditioned upon a certain event. * * * It is also admissible to show by parol the capacity and true relations of the parties, such as that a signer of a note is a surety, and that this was known to the plaintiff. * * * Nor is it any violation of the rule to show by extrinsic evidence an entirely distinct and collateral contract, or to show whether the instrument was given in satisfaction of a former note, or as security therefor; or that the note has been discharged by the performance of an agreement."

In Walters v. Walters, 34 N.C. 28, it is held: "Where A gave B a bond for fifty dollars, and, at the same time, it was agreed by parol, that, whenever A paid certain costs in a suit then pending between the parties, the bond should be surrendered and given up, and A after wards paid the costs; held, that this was competent and sufficient evidence of the discharge of the bond."

In Howard v. Stratton, 64 Cal. 487, 2 P. 263, it is held: "In an action upon a promissory note, parol evidence is admissible to show that it was given to secure the performance of an agreement whereby the payee conveyed certain lands to the maker in consideration that the latter should support him during the residue of his life, and that the defendant had performed the conditions of the agreement."

In Maltz v. Fletcher, 52 Mich. 484, 18 N.W. 228, in an opinion by the eminent Chief Justice Cooley, it is said: "It is always competent to show that a contract sued upon is without consideration. And no rule or policy of the law is violated by allowing proof to be made of the purpose for which negotiable paper was given or that the purpose does not require that payment should be enforced."

In Clark v. Ducheneau, 26 Utah 97, 72 P. 331, it is held: "Where, in an action on a note, defendant admitted its execution, parol evidence that it was not given for a loan, as plaintiff contended, but to secure performance of defendant's verbal agreement to purchase certain mining stock for plaintiff, and was to be surrendered on delivery of such stock, and that defendant had fully performed such agreement, was not objectionable as tending to vary or contradict the terms of the note."

In Oakland Cemetery Ass'n v. Lakins, 126 Iowa 121 101 N.W. 778, it is held: "Where a note was executed in consideration of other prior agreements between the parties, parol evidence is admissible in an action on the note, to show the entire agreement and that it has been performed." In the opinion by Deemer, C. J., it is said: "The general rule of inadmissibility of parol evidence to contradict, change, or vary the terms of a written instrument, and the reasons underlying the same, are well understood; but there are certain exceptions to that rule, which are not so...